CREDIT AGREEMENT
among
O'REILLY AUTOMOTIVE, INC.,
as Borrower,
NATIONSBANK, N.A.,
as Administrative Agent,
NATIONSBANC MONTGOMERY SECURITIES, LLC,
as Syndication Agent,
and
the Lenders named herein
January 27, 1998
TABLE OF CONTENTS
ARTICLE 1 - Definitions
Section 1.1 Definitions
Section 1.2 Other Definitional Provisions
Section 1.3 Accounting Terms and Determinations
Section 1.4 Time of Day
ARTICLE 2 - Revolving Credit Facility
Section 2.1 Revolving Commitments
Section 2.2 Notes
Section 2.3 Repayment of Revolving Loans
Section 2.4 Use of Proceeds
Section 2.5 Revolving Commitment Fee
Section 2.6 Termination or Reduction of Revolving Commitments
Section 2.7 Letters of Credit
(a) Commitment to Issue
(b) Letter of Credit Request Procedure
(c) Letter of Credit Fees
(d) Funding of Drawings
(e) Reimbursements
(f) Reimbursement Obligations Absolute
(g) Issuer Responsibility
ARTICLE 3 - Term Loan
Section 3.1 Term Commitments
Section 3.2 Term Notes
Section 3.3 Repayment of Term Loans
Section 3.4 Use of Proceeds
ARTICLE 4 - Interest and Fees
Section 4.1 Interest Rate
Section 4.2 Determinations of Margins
(a) "Base Rate Margin"
(b) "Commitment Fee Rate
(c) "Libor Rate Margin"
Section 4.3 Payment Dates
Section 4.4 Default Interest
Section 4.5 Conversions and Continuations of Accounts
Section 4.6 Computations
ARTICLE 5 - Administrative Matters
Section 5.1 Borrowing Procedure
Section 5.2 Minimum Amounts
Section 5.3 Certain Notices
Section 5.4 Prepayments
(a) Mandatory
(b) Optional
Section 5.5 Method of Payment
Section 5.6 Pro Rata Treatment
Section 5.7 Sharing of Payments
Section 5.8 Non-Receipt of Funds by the Administrative Agent
Section 5.9 Participation Obligations Absolute; Failure to Fund
Participation
ARTICLE 6 - Change in Circumstances
Section 6.1 Increased Cost and Reduced Return
(a) Increased Cost
(b) Capital Adequacy
(c) Claims under this Section
Section 6.2 Limitation on Libor Accounts
Section 6.3 Illegality
Section 6.4 Treatment of Affected Accounts
Section 6.5 Compensation
Section 6.6 Withholding Taxes
Section 6.7 Withholding Tax Exemption
Section 6.8 Replacement of Affected Lender
ARTICLE 7 - Conditions Precedent
Section 7.1 Initial Loan and Letter of Credit
(a) Deliveries
(b) Closing Date Availability
(c) Attorneys' Fees and Expenses
(d) Consummation of Tender Offer
(e) Minimum Shares
(f) Payment of Existing Hi-Lo Financing Agreement
(g) Government Approvals
(h) Related Transactions
(i) Absence of Legal Action
(j) Additional Documentation
Section 7.2 All Loans and Letters of Credit
(a) No Default
(b) Representations and Warranties
ARTICLE 8 - Representations and Warranties
Section 8.1 Corporate Existence
Section 8.2 Financial Condition
(a) Financial Statements
(b) Projections
Section 8.3 Corporate Action; No Breach
Section 8.4 Operation of Business
Section 8.5 Litigation and Judgments
Section 8.6 Rights in Properties; Liens
Section 8.7 Enforceability
Section 8.8 Approvals
Section 8.9 Debt
Section 8.10 Taxes
Section 8.11 Margin Securities
Section 8.12 ERISA
Section 8.13 Disclosure
Section 8.14 Subsidiaries; Capitalization
Section 8.15 Agreements
Section 8.16 Compliance with Laws
Section 8.17 Investment Company Act
Section 8.18 Public Utility Holding Company Act
Section 8.19 Environmental Matters
Section 8.20 Transaction Documents
Section 8.21 Broker's Fees
Section 8.22 Employee Matters
Section 8.23 Solvency
Section 8.24 Year 2000 Compliance
ARTICLE 9 - Positive Covenants
Section 9.1 Reporting Requirements
(a) Annual Financial Statements
(b) Quarterly Financial Statements
(c) Compliance Certificate
(d) Notice of Litigation
(e) Notice of Default
(f) ERISA Reports
(g) Notice of Material Adverse Effect
(h) Proxy Statements, Etc.
(i) Articles and Certificate of Merger
(j) General Information
Section 9.2 Maintenance of Existence; Conduct of Business
Section 9.3 Maintenance of Properties
Section 9.4 Taxes and Claims
Section 9.5 Insurance
Section 9.6 Keeping Books and Records
Section 9.7 Compliance with Laws
Section 9.8 Compliance with Agreements
Section 9.9 Further Assurances
(a) Further Assurance
(b) Subsidiary Joinder
Section 9.10 ERISA
Section 9.11 Inspection
Section 9.12 Acquisition Agreements
ARTICLE 10 - Negative Covenants
Section 10.1 Debt
Section 10.2 Limitation on Liens and Restrictions on Subsidiaries
Section 10.3 Mergers, Etc.
Section 10.4 Restricted Junior Payments
Section 10.5 Investments
Section 10.6 Limitation on Issuance of Capital Stock
Section 10.7 Transactions With Affiliates
Section 10.8 Disposition of Assets
Section 10.9 Sale and Leaseback
Section 10.10 Lines of Business
Section 10.11 Acquisition Agreement
ARTICLE 11 - Financial Covenants
Section 11.1 Funded Debt to Adjusted EBITDA
Section 11.2 Tangible Net Worth
Section 11.3 Current Ratio
Section 11.4 Fixed Charge Coverage Ratio
Section 11.5 Capital Expenditures
ARTICLE 12 - Default
Section 12.1 Events of Default
Section 12.2 Remedies
(a) Acceleration
(b) Termination of Commitments
(c) Judgment
(d) Foreclosure
(e) Rights
Section 12.3 Cash Collateral
Section 12.4 Performance by the Administrative Agent
Section 12.5 Setoff
Section 12.6 Continuance of Default
ARTICLE 13 - The Administrative Agent
Section 13.1 Appointment, Powers, and Immunities
Section 13.2 Reliance by Administrative Agent
Section 13.3 Defaults.
Section 13.4 Rights as Lender
Section 13.5 INDEMNIFICATION.
Section 13.6 Non-Reliance on Administrative Agent and Other Lenders
Section 13.7 Resignation of Administrative Agent
Section 13.8 Administrative Agent Fee
Section 13.9 Several Commitments
ARTICLE 14 - Miscellaneous
Section 14.1 Expenses
Section 14.2 Indemnification
Section 14.3 Limitation of Liability
Section 14.4 No Duty
Section 14.5 No Fiduciary Relationship
Section 14.6 Equitable Relief
Section 14.7 No Waiver; Cumulative Remedies
Section 14.8 Successors and Assigns
(a) Binding Effect
(b) Assignment
(c) Register
(d) Participations
(e) Pledge to Federal Reserve
(f) Delivery of Information
Section 14.9 Survival
Section 14.10 ENTIRE AGREEMENT
Section 14.11 Amendments and Waivers
Section 14.12 Maximum Interest Rate
Section 14.13 Notices
Section 14.14 Governing Law; Venue; Service of Process
Section 14.15 Counterparts
Section 14.16 Severability
Section 14.17 Headings
Section 14.18 Non-Application of Chapter 15 of Texas Credit Code
Section 14.19 Construction
Section 14.20 Independence of Covenants
Section 14.21 WAIVER OF JURY TRIAL
Section 14.22 Confidentiality
INDEX TO EXHIBITS
Exhibit Description of Exhibit
"A" Revolving Note
"B" Term Note
"C" Swingline Note
"D" Assignment and Acceptance Agreement
"E" Compliance Certificate
"F" Guaranty
"G" Joinder Agreement
INDEX TO SCHEDULES
Schedule Description of Schedule
2.7 Previously issued Letters of Credit
8.2 Projections
8.5 Litigation and Judgments
8.14 Subsidiaries; Capitalization
8.19 Environmental Matters
8.21 Broker fees
10.1 Debt
10.2 Liens
10.12 Restrictions on Subsidiaries
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement"), dated as of January 27, 1998, is
among O'REILLY AUTOMOTIVE, INC., a corporation duly organized and validly
existing under the laws of the State of Missouri (the "Borrower"), each of the
banks or other lending institutions which is or which may from time to time
become a signatory hereto or any successor or assignee thereof pursuant to
Section 14.8(b) hereof (individually, a "Lender" and, collectively, the
"Lenders"), NATIONSBANK, N.A., a national banking association, individually as a
Lender and as Fronting Bank and as administrative agent for itself and the other
Lenders (in its capacity as administrative agent, together with its successors
in such capacity, the "Administrative Agent"), and NATIONSBANC MONTGOMERY
SECURITIES, LLC, as syndication agent (in its capacity as syndication agent,
together with its successors in such capacity, the "Syndication Agent").
R E C I T A L S:
The Borrower has requested that the Lenders extend credit to the Borrower
in the form of a revolving credit facility and a term loan facility. The Lenders
are willing to extend such credit to the Borrower upon the terms and conditions
hereinafter set forth. NOW THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following terms
have the following meanings:
"Account" means either a Base Rate Account or a Libor Account.
"Acquisition Agreements" means any documents entered into with a Target
and/or the seller of a Target in connection with a Permitted Acquisition.
"Adjusted EBITDA" means, for any period (the "Subject Period"), the total
of the following calculated without duplication on a consolidated basis for such
period: (a) the Borrower's EBITDA; plus (b) on a pro forma basis, the pro forma
EBITDA of each Prior Target or, as applicable, the EBITDA of a Prior Target
attributable to the assets acquired from such Prior Target in the Subject
Period, for any portion of such Subject Period occurring prior to the date of
the acquisition of such Prior Target or related assets but only to the extent
such EBITDA for such Prior Target or related assets can be established based on
financial statements of the Prior Target prepared in accordance with GAAP; minus
(c) the EBITDA of each Prior Target or related assets and, as applicable but
without duplication, the EBITDA of the Borrower and each Subsidiary attributable
to all Assets disposed of during such Subject Period, in each case for any
portion of such Subject Period occurring prior to the date of the disposal of
such Prior Target or related assets.
"Adjusted Libor Rate" means, for any Libor Account for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal to the quotient
obtained by dividing (a)the Libor Rate for such Libor Account for such Interest
Period by (b)1 minus the Reserve Requirement for such Libor Account for such
Interest Period.
"Adjustment Date" has the meaning specified in Section 4.2.
"Administrative Agent" has the meaning set forth in the introductory
paragraph of this Agreement.
"Affiliate" means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person; (b)that directly or indirectly
beneficially owns or holds ten percent (10%) or more of any class of voting
stock of such Person; or (c) ten percent (10%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means the possession, directly or indirectly, of
the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, in no event shall Administrative Agent or any
Lender be deemed an Affiliate of the Borrower or any Subsidiaries.
"Agents" means the Administrative Agent and the Syndication Agent.
"Agreement" has the meaning set forth in the introductory paragraph of this
Agreement, as the same may be amended or otherwise modified.
"Applicable Lending Office" means, for each Lender and for each Type of
Account, the "Lending Office" of such Lender (or of an affiliate of such Lender)
designated for such Type of Account on the signature pages hereof or such other
office of such Lender (or an affiliate of such Lender) as such Lender may from
time to time specify to the Administrative Agent and the Borrower by written
notice in accordance with the terms hereof as the office by which its Accounts
of such Type are to be made and maintained.
"Applicable Rate" has the meaning set forth in Section 4.1 hereof.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and its assignee and accepted by the Administrative Agent pursuant
to Section 14.8(b) hereof, in substantially the form of Exhibit "D" hereto.
"Bankruptcy Code" has the meaning set forth in Section 12.1(f).
"Base Rate" means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate for such day plus one-half of one percent (.5%) and
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.
"Base Rate Account" means a portion of a Loan that bears interest at a rate
based upon the Base Rate.
"Base Rate Margin" has the meaning specified in Section 4.2.
"Borrower" has the meaning set forth in the introductory paragraph of this
Agreement.
"Business Day" means (a) any day excluding Saturday, Sunday and any day
which either is a legal holiday under the laws of the States of Missouri, New
York and Texas or is a day on which banking institutions located in any such
States are closed, and (b), with respect to all borrowings, payments,
Conversions, Continuations, Interest Periods, and notices in connection with
Loans subject to Libor Accounts, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollar deposits
are carried out in the London interbank market.
"Calculation Period" has the meaning specified in Section 4.2.
"Capital Expenditures" means, for any period, all expenditures of the
Borrower and its Subsidiaries which are classified as capital expenditures in
accordance with GAAP including all such expenditures associated with Capital
Lease Obligations but excluding, to the extent included, any such expenditures
made in connection with a Permitted Acquisition.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Capitalization Documents" means, collectively: (a) any or all of the stock
certificates representing the capital stock (or other evidence of ownership) of
the Borrower and each Subsidiary; (b) each other document governing the issuance
of, or setting forth the terms of the capital stock (or other evidence of
ownership) of the Borrower and each Subsidiary; (c) any stockholders agreement
(or partnership agreement) among the holders of the capital stock (or other
evidence of ownership) of the Borrower and each Subsidiary.
"Closing Date" means January 27, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment Fee Rate" has the meaning specified in Section 4.2.
"Commitment Percentage" means, as to any Lender, the percentage equivalent
of the amount of the Commitments of such Lender (or the Commitment in question)
divided by the aggregate amount of all the Commitments of all of the Lenders (or
the Commitment in question of all the Lenders).
"Commitments" means, as to each Lender, the commitments hereunder such
Lender holds which may be a Revolving Commitment, a Term Commitment or any
combination of the two and, with respect to all Lenders, all such commitments.
"Compliance Certificate" means a certificate in substantially the form of
Exhibit "E" hereto, properly completed and executed by the chief financial
officer of the Borrower.
"Continue", "Continuation", and "Continued" shall refer to the continuation
pursuant to Section 4.5 hereof of a Libor Account from one Interest Period to
the next Interest Period.
"Continuing Director" means, at any date, an individual who was a member of
the board of directors of the Borrower on the date of this Agreement or who
shall have become a member thereof subsequent to such date after having been
nominated or otherwise approved in writing by at least a majority of the
Continuing Directors then members of the full board of directors of the
Borrower.
"Contract Rate" has the meaning specified in Subsection 14.12(a).
"Control Group" means Charles H. O'Reilly, Sr., his immediate family and
direct or indirect descendants, trusts for the benefit of any thereof and
executive management of the Borrower as of the Closing Date and the respective
Affiliates and co-investors of each of the foregoing entities.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 4.5 or Article 6 of one Type of Account into another Type of
Account.
"Current Assets" means, at the time of determination and without
duplication, all amounts which, in conformity with GAAP, would be included as
current assets on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"Current Liabilities" means, at the time of determination and without
duplication, all amounts which, in conformity with GAAP, would be included as
current liabilities on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"Debt" means as to any Person at any time (without duplication): (a) all
obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments; (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable of such Person arising in the ordinary
course of business that are not past due by more than ninety (90) days or that
are being contested in good faith by appropriate proceedings diligently pursued
and for which adequate reserves have been established to the satisfaction of the
Administrative Agent; (d) all Capital Lease Obligations of such Person; (e) all
Debt or other obligations of others Guaranteed by such Person; (f) all
obligations secured by a Lien existing on property owned by such Person, whether
or not the obligations secured thereby have been assumed by such Person or are
non-recourse to the credit of such Person; provided, however, that the amount of
such Debt of any Person described in this clause (f) shall, for purposes of this
Agreement, be deemed to be equal to the lesser of (i) the aggregate unpaid
amount of such Debt or (ii) the fair market value of the property or asset
encumbered, as determined by the Administrative Agent in its reasonable
discretion; (g) all reimbursement obligations of such Person (whether contingent
or otherwise) in respect of letters of credit, bankers' acceptances, surety or
other bonds and similar instruments (including those outstanding with respect to
Letters of Credit); (h) all liabilities of such Person in respect of unfunded
vested benefits under any Plan (excluding obligations to deliver stock in
respect of stock options or stock ownership plans); and (i) all vested
obligations of such Person for the payment of money under any noncompete,
consulting or similar agreement entered into with the seller of a Target or any
other similar arrangements providing for the deferred payment of the purchase
price for a Permitted Acquisition or an acquisition consummated prior to the
date hereof.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan, any
Reimbursement Obligation, or any other amount payable by the Borrower under any
Loan Document which is not paid when due (whether at stated maturity, by
acceleration, or otherwise), a rate per annum during the period commencing on
the due date until such amount is paid in full equal to the sum of two percent
(2%) plus the Applicable Rate for Base Rate Accounts as in effect from time to
time (provided, that if such amount in default is principal of a Loan subject to
a Libor Account and the due date is a day other than the last day of an Interest
Period therefor, the "Default Rate" for such principal shall be, for the period
from and including the due date and to but excluding the last day of the
Interest Period therefor, two percent (2%) plus the interest rate for such
Account for such Interest Period as provided in Section 4, and, thereafter, the
rate provided for above in this definition).
"Designated Asset Dispositions" has the meaning specified in Section
5.4(a)(iii).
"Designated Equity Issuance" has the meaning specified in Section
5.4(a)(iv).
"Dollars" and "$" mean lawful money of the United States of America.
"EBITDA" means, for any period and any Person, the total of the following
calculated without duplication for such Person on a consolidated basis for such
period: (a) Net Income; plus (b) any provision for (or less any benefit from)
income or franchise taxes deducted in determining Net Income; plus (c) interest
expense (including, without limitation, the interest component of Capital Lease
Obligations) deducted in determining Net Income; plus (d) amortization and
depreciation expense deducted in determining Net Income; plus (e) other noncash
charges deducted in determining consolidated net income and not already deducted
in accordance with clause (d) above or clauses (b) and (c) of the definition of
Net Income; minus (f) noncash credits included in determining consolidated Net
Income and not already excluded in accordance with the definition of Net Income.
"EBITDAR" means, for any period and for any Person, the sum of the
following calculated without duplication for such Person on a consolidated basis
for such period: (a)EBITDA; plus (b) Rental Expense.
"Eligible Assignee" has the meaning specified in Subsection 14.8(b)(i).
"Environmental Laws" means any and all federal, state, and local laws,
regulations, and requirements pertaining to health, safety, or the environment,
as such laws, regulations, and requirements may be amended or supplemented from
time to time.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses, (including,
without limitation, all fees, disbursements and expenses of counsel, expert and
consulting fees and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand,
by any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any Environmental Law,
permit, order or agreement with any Governmental Authority or other Person,
arising from environmental, health or safety conditions or the Release or
threatened Release of a Hazardous Material into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations issued thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower.
"Event of Default" has the meaning specified in Section 12.1.
"Existing Hi-Lo Indebtedness" means that certain indebtedness of Hi-Lo Auto
Supply, L.P. in an aggregate principal amount not to exceed Sixty Million
Dollars ($60,000,000) incurred pursuant to that certain Financing Agreement by
and among The CIT Group/Business Credit, Inc., as agent and lender, and Hi-Lo
Auto Supply, L.P., as borrower and certain lenders named therein, dated October
23, 1996, as amended on December 20, 1996 and September 16, 1997.
"Existing Hi-Lo Financing Agreement" means that certain Financing Agreement
evidencing the Existing Hi-Lo Indebtedness.
"Existing Letters of Credit" means the outstanding letters of credit
identified on Schedule 2.7 previously issued by Dai Ichi Kangyo Bank for the
account of the Borrower.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by the Administrative Agent.
"Fiscal Quarters" means the three (3) month periods falling in each Fiscal
Year ending March 31, June 30, September 30, and December 31.
"Fiscal Year" means a twelve (12) month period ending December 31.
"Fronting Bank" means NationsBank, N.A. or such other Lender which is a
commercial bank as the Borrower and NationsBank, N.A. may mutually designate
from time to time which agrees to be the issuer of a Letter of Credit.
"Funded Debt" means, at the time of determination, the sum of all the Debt
of the Borrower and the Subsidiaries, other than Debt consisting of liabilities
in respect of unfunded vested benefits under a Plan, determined on a
consolidated basis.
"Funded Debt to Adjusted EBITDA Ratio" means the ratio of Funded Debt to
Adjusted EBITDA calculated in accordance with Section 11.1.
"GAAP" means generally accepted accounting principles, applied on a
"consistent basis" (as such phrase is interpreted in accordance with Section 1.3
hereof), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
"GM" means General Motors Corporation and its Affiliates.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person or indemnifying such other Person for an obligation and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (b)entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect the obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guarantee of any guaranteeing Person shall be deemed
to be the lesser of (i) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee is made or (ii) the
maximum amount for which such guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Guarantee, unless such primary obligation
and the maximum amount for which such guaranteeing Person may be liable are not
stated or determinable, in which case the amount of such Guarantee shall be such
guaranteeing Person's maximum reasonably anticipated liability in respect
thereof as mutually determined by the Borrower and the Administrative Agent in
good faith. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranty" means the guaranty of the Subsidiaries in favor of the
Administrative Agent and the Lenders, in substantially the form of Exhibit "F",
as the same may be modified pursuant to one or more Joinder Agreements and as
the same may be otherwise modified from time to time.
"Hazardous Material" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law as a result
of its hazardous or toxic nature.
"Hedge Agreements" means any and all agreements, devices or arrangements
designed to protect the Borrower from the fluctuations of interest rates,
exchange rates or forward rates applicable to its assets, liabilities or
exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap, swap or collar protection agreements, and forward
rate currency or interest rate options, as the same may be amended or modified
and in effect from time to time, and any and all cancellations, buy backs,
reversals, terminations or assignments of any of the foregoing.
"Hi-Lo" means Hi-Lo Automotive, Inc., a corporation duly organized and
validly existing under the laws of the State of Delaware.
"Hi-Lo Acquisition" means the purchase of all of the issued and outstanding
shares of common stock of Hi-Lo, par value $.01 per share (including all of
Hi-Lo's subsidiaries) pursuant to and in accordance with the Merger Agreement.
"Hi-Lo Acquisition Documents" means the Merger Agreement, all documentation
executed pursuant to the terms thereof and all documentation executed and
delivered to consummate the Hi-Lo Acquisition, as the same may be amended or
otherwise modified from time to time; excluding, however, the Loan Documents and
the Capitalization Documents.
"Interest Expense" means, for any period and for any Person, the sum of (a)
interest expense of such Person calculated without duplication on a consolidated
basis for such period in accordance with GAAP, plus (b) expenses paid under
interest rate Hedge Agreements during such period, minus (c) payments received
under interest rate Hedge Agreements during such period.
"Interest Period" means with respect to any Libor Accounts, each period
commencing on the date such Account is established or Converted from a Base Rate
Account or the last day of the next preceding Interest Period with respect to
such Libor Account, and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the Borrower may
select as provided in Section 4.5 or 5.1, except that each such Interest Period
which commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month. Notwithstanding the foregoing: (a) each Interest Period which
would otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or if such succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); (b)any Interest
Period which would otherwise extend beyond the Termination Date shall end on
such Termination Date; (c) no more than fifteen (15) Interest Periods shall be
in effect at the same time; (d) no Interest Period for any Libor Account shall
have a duration of less than one (1) month and, if the Interest Period would
otherwise be a shorter period, the related Libor Account shall not be available
hereunder; and (e) no Interest Period in respect of the Term Loans may extend
beyond a principal repayment date thereof unless, after giving effect thereto,
the aggregate principal amount of such Loan subject to Libor Accounts having
Interest Periods that end after such principal payment date shall be equal to or
less than the aggregate principal amount of such Loan to be outstanding
hereunder after such principal payment date.
"Investments" has the meaning specified in Section 10.5.
"Joinder Agreement" means an agreement which has been or will be executed
by a Subsidiary adding it as a party to the Guaranty, in substantially the form
of Exhibit "G" hereto, as the same may be amended or otherwise modified.
"Lender" has the meaning set forth in the introductory paragraph of this
Agreement.
"Letter of Credit Liabilities" means, at any time, the sum of (a) the
aggregate undrawn face amount of all outstanding Letters of Credit plus (b) all
unreimbursed drawings under Letters of Credit.
"Letters of Credit" has the meaning specified in Section 2.7(a).
"Libor Account" means a portion of a Loan that bears interest at a rate
based upon the Adjusted Libor Rate.
"Libor Rate" means, for any Libor Account for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Libor Rate" shall mean, for any Libor Account for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%).
"Libor Rate Margin" has the meaning specified in Section 4.2.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation, assignment, preference, priority, or other encumbrance of
any kind or nature whatsoever (including, without limitation, any conditional
sale or title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan Documents" means this Agreement, the Notes, the Guaranties and all
other promissory notes, security agreements, deeds of trust, assignments,
guaranties, letters of credit, and other instruments, agreements and other
documentation executed and delivered pursuant to or in connection with this
Agreement, as such instruments, agreements and other documentation may be
amended or otherwise modified; excluding, however, the Hi-Lo Acquisition
Documents and Capitalization Documents.
"Loans" means Revolving Loans and Term Loans.
"Material Adverse Effect" means (a) a material adverse effect on the
business, condition (financial or otherwise), operations, or properties of the
Borrower and the Subsidiaries taken as a whole; or (b) a material adverse effect
on the ability of the Administrative Agent or any Lender to enforce a material
provision of the Loan Documents.
"Maximum Rate" means, at any time and with respect to any Lender, the
maximum rate of nonusurious interest under applicable law that such Lender may
charge the Borrower. The Maximum Rate shall be calculated in a manner that takes
into account any and all fees, payments, and other charges contracted for,
charged or received in connection with the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to the Borrower at the time of such change in
the Maximum Rate. For purposes of determining the Maximum Rate under Texas law
to the extent applicable, if at all, the applicable rate ceiling shall be the
indicated rate ceiling described in, and computed in accordance with, the Texas
Credit Code.
"Merger" means the merger of Shamrock into Hi-Lo pursuant to and in
accordance with the terms of the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger dated December
23, 1997, among Shamrock, Hi-Lo and the Borrower, as the same may be further
amended or otherwise modified.
"Minimum Shares" means more than fifty percent (50%) of the Shares.
"Multiemployer Plan" means a multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Income" means, for any period and any Person, such Person's
consolidated net income (or loss) determined in accordance with GAAP, but
excluding: (a) the income of any other Person (other than its subsidiaries) in
which such Person or any of it subsidiaries has an ownership interest, unless
received by such Person or its subsidiary in a cash distribution; (b) any
after-tax gains or losses attributable to an asset disposition; and (c) to the
extent not included in clauses (a) and (b) above, any after-tax extraordinary,
non-cash or nonrecurring gains or losses.
"NationsBank" means NationsBank, N.A.
"Net Proceeds" means (i) with respect to any disposition of assets, the
cash proceeds received by the Borrower or any Subsidiaries from such disposition
(including payments under notes or other debt Securities received in connection
with any such disposition, but only as and when received) net of (a) the costs
of such disposition (including reasonable, out-of-pocket professional fees and
expenses, taxes, notarial fees, survey costs, title insurance premiums, required
escrow deposits and purchase price adjustments and other customary fees and
expenses, in each case attributable to and actually paid in connection with such
disposition) and (b) amounts applied to repayment of Debt (other than the
Obligations) secured by a lien, security interest, claim or encumbrance on the
asset or property disposed and (ii) in connection with any equity Securities
issuance, the cash proceeds received from such issuance, net of all costs of
such issuance (including reasonable, out-of-pocket professional fees and
expenses, notarial fees, underwriting discounts and commissions and other
customary fees and expenses) actually paid.
"Notes" means the Revolving Notes, the Term Notes and the Swingline Note
referred to in Section 2.2.
"Obligated Party" means the Borrower, each Subsidiary (whether now existing
or acquired or created after the Closing Date) or any other Person who is or
becomes party to any agreement that guarantees or secures payment and
performance of the Obligations or any part thereof.
"Obligations" means any and all (a) obligations, indebtedness, and
liabilities of the Borrower to the Administrative Agent and the Lenders, or any
of them, arising pursuant to any of the Loan Documents, whether now existing or
hereafter arising, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including, without
limitation, the obligation of the Borrower to repay the Loans, the Reimbursement
Obligations, interest on the Loans and Reimbursement Obligations, and all fees,
costs, and expenses (including attorneys' fees) provided for in the Loan
Documents and (b) obligations, indebtedness and liabilities of the Borrower
under Hedge Agreements that it may enter into with NationsBank, N.A., or any
other Person, if and to the extent that such Hedge Agreements are permitted in
accordance with Section 10.1(i).
"Outstanding Revolving Credit" means, at any time of determination, the sum
of (a) the aggregate amount of Revolving Loans then outstanding (inclusive of
the Swingline Advances); plus (b) the aggregate amount of Letter of Credit
Liabilities (or when calculated with respect to a Lender, including the
Administrative Agent as a Lender, such Lender's prorata share of the Revolving
Loans then outstanding and participation or other interest in such Letter of
Credit Liabilities).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permitted Acquisitions" shall mean acquisitions after the Closing Date of
all the shares, other equity Securities or other evidence of beneficial
ownership of a Person or assets which constitute a significant portion of an
existing business of a Person, in each case, in a transaction that satisfies all
the applicable criteria set out in Section 10.5(a) which have not otherwise been
waived by the Required Lenders.
"Person" means any individual, corporation, business trust, association,
company, partnership, joint venture, Governmental Authority, or other entity.
"Plan" means any employee benefit plan established or maintained by the
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Prime Rate" means the per annum rate of interest established from time to
time by NationsBank, N.A. as its prime rate, which rate may not be the lowest
rate of interest charged by NationsBank, N.A. to its customers.
"Principal Office" means the principal office of the Administrative Agent,
located at 901 Main Street, 66th Floor, Dallas, Texas.
"Prior Assets" means assets that have been disposed of by a division or
branch of the Borrower or a Subsidiary in a transaction with an unaffiliated
third party approved in accordance with this Agreement which would not make the
seller a "Prior Company" but constitute all or substantially all of the assets
of such division or branch.
"Prior Company" means any Subsidiary whose capital stock or other equity
interests have been disposed of, or all or substantially all of whose assets
have been disposed of, in each case, in a transaction with an unaffiliated third
party approved in accordance with this Agreement.
"Prior Target" means all Targets acquired or whose assets have been
acquired in a Permitted Acquisition.
"Pro Forma means the unaudited pro forma consolidated balance sheet of the
Borrower and its Subsidiaries which give effect to the Related Transactions
occurring on or about the Closing Date.
"Prohibited Transaction" means any transaction set forth in Section 406 or
407 of ERISA or Section 4975(c)(1) of the Code for which there does not exist a
statutory or administrative exemption.
"Projections" means the Borrower's forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, all materially consistent with the Borrower's
historical financial statements, together with appropriate supporting details
and a statement of underlying assumptions.
"Purchase Price" means, as of any date of determination and with respect to
any acquisition, the purchase price to be paid for the equity interests issued
by the Target or the assets of the Target, including all cash consideration paid
(whether classified as purchase price, noncompete payments, consulting payments
or otherwise and without regard to whether such amount is paid at closing or
paid over time but excluding (i) customary working capital or other purchase
price adjustment, (ii) the amount of any finance charges attributable to
deferred payments and (iii) any reasonable amounts payable as salary and
benefits under any employment agreement entered into with any seller or officer
or employee thereof for the purpose of retaining such seller as an active
officer or employee of the Borrower or a Subsidiary) and the Dollar value of all
other assets to be transferred by the purchaser in connection with such
acquisition to the seller or sellers (including the value of all capital stock
of the Borrower or its Subsidiaries issued or to be issued to the seller), all
valued in accordance with the applicable Acquisition Agreements, and including
(without duplication) the amount of any Debt incurred, assumed or acquired by
the Borrower or any of its Subsidiaries in connection with such acquisition.
"Quarterly Payment Date" means the last day of March, June, September and
December of each year, the first of which shall be March 31, 1998.
"Register" has the meaning specified in Subsection 14.8(c).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to any Lender, any change after the
date of this Agreement in United States federal, state, or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives, or requests applying to a class of lenders
including such Lender of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"Reimbursement Obligations" means all indebtedness, liabilities and
obligations of the Borrower to reimburse the Administrative Agent for any demand
for payment or drawing under a Letter of Credit in accordance with Subsection
2.7(e).
"Related Transactions" means the Tender Offer, Hi-Lo Acquisition, the
Merger, the execution and delivery of the Transaction Documents, the funding of
the Loans on the Closing Date, and the payment of all fees, costs and expenses
associated with the foregoing and, with respect to each advance under the
Revolving Commitments used to fund a Permitted Acquisition, the Permitted
Acquisition funded with the proceeds thereof.
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or out of
property owned by such Person, including, without limitation, the movement of
Hazardous Materials through or in the air, soil, surface water, ground water, or
property in violation of Environmental Laws.
"Remedial Action" means all actions required under applicable Environmental
Laws to (a) cleanup, remove, treat, or otherwise address Hazardous Materials in
the indoor or outdoor environment, (b) prevent the Release or threat of Release
or minimize the further Release of Hazardous Materials, or (c) perform
pre-remedial studies and investigations and post-remedial monitoring and care
but shall not include such actions taken in the normal course of business and in
material compliance with Environmental Laws.
"Rental Expense" means, for any period and for any Person, the rental or
lease expense of such Person under operating leases calculated without
duplication on a consolidated basis for such period as determined in accordance
with GAAP.
"Required Lenders" means Lenders having (a) more than sixty-six and
two-thirds percent (66 b%) of the sum of the Revolving Commitments and the
outstanding principal amount of the Term Loans or (b) if the Revolving
Commitments have terminated or have otherwise been fulfilled, more than
sixty-six and two-thirds percent (66 b%) of the outstanding principal amount of
the Loans and participations in the Letters of Credit.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Libor Accounts, "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Libor Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Libor Accounts. The Adjusted
Libor Rate shall be adjusted automatically on and as of the effective date of
any change in the Reserve Requirement.
"Revolving Commitment" means, as to each Lender, the obligation of such
Lender to make advances of funds and purchase participation interests in (or
with respect to the Fronting Bank as a Lender, hold other interests in) Letters
of Credit in an aggregate principal amount at any one time outstanding up to but
not exceeding the amount set forth opposite the name of such Lender on the
signature pages hereto (or if applicable, the most recent Assignment and
Acceptance executed by it) under the heading "Revolving Commitment", as the same
may be reduced or terminated pursuant to Section 2.6, Section 5.4, Section 6.8
or Section 12.2. The aggregate amount of all the Revolving Commitments as of the
Closing Date equals One Hundred Twenty-Five Million Dollars ($125,000,000).
"Revolving Loans" means, as to any Lender, the advances made by such Lender
pursuant to Section 2.1.
"Revolving Notes" means the promissory notes provided for by Section 2.2
and all amendments or other modifications thereof.
"Revolving Termination Date" means January 27, 2003.
"Securities" means any stock, shares, options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person or any bonds, debentures, notes or
other evidences of indebtedness for borrowed money, secured or unsecured.
"Seller Note" means Debt owed to the seller of a business as consideration
for the purchase of such business.
"Shamrock" means Shamrock Acquisition, Inc., a corporation duly organized
and validly existing under the laws of the State of Delaware and a Wholly-Owned
Subsidiary of the Borrower.
"Shares" means the issued and outstanding shares of Hi-Lo common stock, par
value $.01 per share.
"Subsidiary" means any corporation (or other entity) of which at least a
majority of the outstanding shares of stock (or other ownership interests)
having by the terms thereof ordinary voting power to elect a majority of the
board of directors (or similar governing body) of such corporation (or other
entity) (irrespective of whether or not at the time stock (or other ownership
interests) of any other class or classes of such corporation (or other entity)
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by the
Borrower, Hi-Lo and/or one or more of the Subsidiaries of either of them.
"Swingline Advances" has the meaning specified in Section 2.1.
"Syndication Agent" has the meaning set forth in the introductory paragraph
of this Agreement.
"Tangible Net Worth" means, at the time of determination and without
duplication, the remainder of (a) all amounts which, in conformity with GAAP,
would be included as shareholders' equity on a consolidated balance sheet of the
Borrower and its Subsidiaries minus (b) all amounts which, in conformity with
GAAP, would be classified as intangible assets on a consolidated balance sheet
of the Borrower and its Subsidiaries, including, without limitation, unamortized
debt discount and expense, unamortized deferred charges, unamortized
organizational costs and goodwill.
"Target" means the Person who is to be acquired or whose assets are to be
acquired by the Borrower or a Subsidiary in an acquisition governed by Section
10.5.
"Taxes" has the meaning specified in Section 6.6.
"Tender Offer" means that certain tender offer made by Shamrock to acquire
all of the issued and outstanding shares of common stock, par value $.01 per
share, of Hi-Lo for $4.35 per share.
"Tender Offer Documents" means the Schedule 14D-1 pursuant to Section
14(d)(1) of the Securities and Exchange Act of 1934 and Schedule 13-D under the
Securities and Exchange Act of 1934 of the Borrower to purchase shares of Hi-Lo
and all documentation executed pursuant to the terms thereof and all
documentation executed and delivered to consummate the Tender Offer, as the same
may be amended or otherwise modified from time to time.
"Term Commitment" means, as to any Lender, the obligation of such Lender to
make an advance of funds on the Closing Date in the principal amount set forth
opposite the name of such Lender on the signature pages hereto under the heading
"Term Commitment." The aggregate amount of all of the Term Commitments equals
Fifty Million Dollars ($50,000,000.00) on the Closing Date. "Term Loans" means,
as to any Lender, the Loans made or held by such Lender pursuant to Section 3.1
hereof, and as to all Lenders making such Loans, all such Loans made or held by
such Lenders pursuant to Section 3.1.
"Term Notes" means the promissory notes provided for by Section 3.2 and all
amendments or other modifications thereof.
"Term Termination Date" means January 27, 2003.
"Termination Date" means the Revolving Termination Date or the Term
Termination Date.
"Total Liabilities" means, at the time of determination and without
duplication, all amounts which, in conformity with GAAP, would be included in
total liabilities on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"Transaction Documents" means the Tender Offer Documents, the Hi-Lo
Acquisition Documents, the Loan Documents, the Capitalization Documents and the
Acquisition Agreements.
"Type" shall mean either type of Account (i.e., a Base Rate Account or
Libor Account).
"UCC" means the Uniform Commercial Code as in effect in the State of Texas.
"Wholly-Owned Subsidiary" means any Subsidiary that (i) is owned 100% by
the Borrower and/or a Subsidiary, and (ii) is organized under the laws of a
state within the United States of America.
"Year 2000 Problem" has the meaning set forth in Section 8.24 hereof.
Section 1.2
Other Definitional Provisions. All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms defined. The
words "hereof", "herein", and "hereunder" and words of similar import referring
to this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise specified, all Article and Section
references pertain to this Agreement. Terms used herein that are defined in the
UCC, unless otherwise defined herein, shall have the meanings specified in the
UCC.
Section 1.3 Accounting Terms and Determinations. Except as
otherwise expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Administrative Agent and the
Lenders hereunder shall be prepared, in accordance with GAAP, on a "consistent
basis" with those used in the preparation of the financial statements referred
to in Section 8.2. All calculations made for the purposes of determining
compliance with the provisions of this Agreement shall be made by application of
GAAP, on a "consistent basis" with those used in the preparation of the
financial statements referred to in Section 8.2. Accounting principles are
applied on a "consistent basis" when the accounting principles applied in a
current period are comparable in all material respects to those accounting
principles applied in a preceding period. Changes in the application of
accounting principles which do not have a material impact on calculating the
financial covenants herein shall be deemed comparable in all material respects
to accounting principles applied in a preceding period. To enable the ready and
consistent determination of compliance by the Borrower with its obligations
under this Agreement, the Borrower will not change the manner in which either
the last day of its Fiscal Year or the last days of the first three Fiscal
Quarters of its Fiscal Years is calculated without the prior written consent of
the Required Lenders. In the event any changes in accounting principles required
by GAAP, recommended by the Borrower's certified public accountants or requested
by the Borrower (or that the Borrower otherwise requests and the Administrative
Agent and Required Lenders agree to accept, such agreement not unreasonably to
be denied) and implemented by the Borrower occur and such changes result in a
change in the method of the calculation of financial covenants under this
Agreement, then the Borrower, the Administrative Agent and the Required Lenders
agree to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such changes with the desired result that
the criteria for evaluating such covenants shall be the same after such changes
as if such changes had not been made. Until such time as such an amendment shall
have been executed and delivered by the Administrative Agent, the Borrower and
the Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such changes had
not occurred.
Section 1.4 Time of Day. Unless otherwise indicated, all references in this
Agreement to times of day shall be references to Dallas, Texas time.
ARTICLE 2
Revolving Credit Facility
Section 2.1 Revolving Commitments. Subject to the terms and conditions of
this Agreement, each Lender who has agreed to provide a Revolving Commitment
severally agrees to make advances to the Borrower from time to time from and
including the Closing Date to but excluding the Revolving Termination Date in an
aggregate principal amount at any time outstanding up to but not exceeding the
amount of such Lender's Revolving Commitment as then in effect; provided,
however, (a)the Outstanding Revolving Credit applicable to a Lender shall not at
any time exceed such Lender's Revolving Commitment, minus such Lender's
Commitment Percentage of the Swingline Advances then outstanding and minus such
Lender's Commitment Percentage times the amount available to be drawn against
the Existing Letters of Credit and (b) the Outstanding Revolving Credit of all
of the Lenders shall not at any time exceed the aggregate Revolving Commitments,
minus the Swingline Advances then outstanding and minus the amount available to
be drawn against the Existing Letters of Credit. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the Borrower
may borrow, prepay and reborrow hereunder the amount of the Revolving
Commitments and may establish Base Rate Accounts and Libor Accounts thereunder
and, until the Revolving Termination Date, the Borrower may Continue Libor
Accounts established under the Revolving Loans or Convert Accounts established
under the Revolving Loans of one Type into Accounts of the other Type. Accounts
of each Type under the Revolving Loan made by each Lender shall be established
and maintained at such Lender's Applicable Lending Office for Revolving Loans of
such Type. Notwithstanding anything to the contrary contained in this Agreement,
the Borrower may from time to time request, and NationsBank may at its
discretion from time to time advance (but shall in no event be obligated to
advance), Revolving Loans which are to be funded solely by NationsBank (the
"Swingline Advances"); provided, however, that (i) the aggregate principal
amount of the Swingline Advances outstanding at any time shall not exceed
$10,000,000 and the aggregate principal amount of the Revolving Loans
outstanding at any time (inclusive of the Swingline Advances) shall not exceed
the aggregate principal amount of the Revolving Commitments, (ii) all Swingline
Advances shall be and shall remain Base Rate Loans or shall be fixed rate loans
at a rate to be agreed by the Borrower and NationsBank, and (iii) NationsBank
shall give the Administrative Agent and each Lender written notice of the
aggregate outstanding principal amount of the Swingline Advances upon the
written request of the Administrative Agent or any Lender (but no more often
than once every calendar quarter). Furthermore, upon one Business Day's prior
written notice given by NationsBank to the Administrative Agent and the other
Lenders at any time and from time to time (including, without limitation, at any
time following the occurrence of a Default or an Event of Default) and, in any
event, without notice on the Business Day immediately preceding the Revolving
Termination Date, each Lender (including, without limitation, NationsBank)
severally agrees, as provided in the first sentence of this Section 2.1, and
notwithstanding anything to the contrary contained in this Agreement, any
Default or Event of Default or the inability or failure of the Borrower or any
of its Subsidiaries or any other Obligated Party to satisfy any condition
precedent to funding any of the Revolving Loans contained in Article 7 (which
conditions precedent shall not apply to this sentence), to make a Revolving
Loan, in the form of a Base Rate Account, in an amount equal to its Commitment
Percentage of the aggregate principal amount of the Swingline Advances then
outstanding, and the proceeds of such Revolving Loans shall be promptly paid by
the Administrative Agent to NationsBank and applied as a repayment of the
aggregate principal amount of the Swingline Advances then outstanding.
NationsBank agrees to use all reasonable efforts to cause Swingline Advances
which have been outstanding for 15 days or more to be refinanced by Revolving
Loans in the form of Base Rate Accounts or Libor Accounts in accordance with
this Section 2.1 if and to the extent that such refinancing may occur given the
minimum borrowing amounts set forth in Section 5.2.
Section 2.2 Notes. The Revolving Loans made by a Lender shall, if requested
by a Lender, be evidenced by a single promissory note of the Borrower in
substantially the form of Exhibit "A" hereto, payable to the order of such
Lender, in the maximum principal amount equal to its Revolving Commitment as
originally in effect (or, if greater, its Revolving Commitment thereafter
increased) and otherwise duly completed provided, however, that the Swingline
Advances made by NationsBank shall be evidenced by a single promissory note of
the Borrower in the maximum original principal amount of $10,000,000 payable to
the order of NationsBank in substantially the form of Exhibit C hereto, dated
the Closing Date.
Section 2.3 Repayment of Revolving Loans. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, the outstanding principal
amount of all of the Revolving Loans on the Revolving Termination Date.
Section 2.4 Use of Proceeds. Subject to the terms of this Agreement, the
proceeds of the Revolving Loans shall be used by the Borrower for general
corporate purposes arising in the ordinary course of business of the Borrower
and its Subsidiaries, the refinancing of the Existing Hi-Lo Indebtedness, the
financing of a portion of the purchase price for, and the fees and expenses
arising in connection with, the Hi-Lo Acquisition and the other Related
Transactions, the financing of Permitted Acquisitions, the financing of working
capital requirements and capital expenditures of the Borrower and its
Subsidiaries and the payment of Reimbursement Obligations.
Section 2.5 Revolving Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee on the
daily average unused amount of such Lender's Revolving Commitment for the period
from and including the Closing Date to and including the Revolving Termination
Date, at a per annum rate equal to the Commitment Fee Rate, computed on the
basis of a year of 360 days and the actual number of days elapsed (including the
first day but excluding the last day) provided that for purposes of calculating
such fee the amount of outstanding Letters of Credit shall constitute use of the
Revolving Commitment. Notwithstanding anything to the contrary contained in this
Agreement, any and all Swingline Advances outstanding from time to time shall be
wholly excluded, and shall not count as used or funded amounts, for purposes of
determining the unused or unfunded amount of each Lender's Revolving Commitment
in accordance with this Section 2.5. Accrued commitment fees under this Section
2.5 shall be payable in arrears on each Quarterly Payment Date and on the
Revolving Termination Date.
Section 2.6 Termination or Reduction of Revolving Commitments. The Borrower
shall have the right to terminate fully or to reduce in part the unused portion
of the Revolving Commitments at any time and from time to time, provided that:
(a) the Borrower shall not have the right to terminate or reduce in part any
unused portion of the Revolving Commitments that could or may be required to be
advanced by the Lenders to refinance Swingline Advances then outstanding; (b)
the Borrower shall give the Administrative Agent at least one (1) Business Day
notice of each such termination or reduction as provided in Section 5.3 hereof;
and (c) each partial reduction shall be in an aggregate amount at least equal to
Ten Million Dollars ($10,000,000) or a greater multiple of One Million Dollars
($1,000,000). The Revolving Commitments may not be reinstated after they have
been terminated or reduced.
Section 2.7 Letters of Credit.
(a) Commitment to Issue. The Borrower may utilize the Revolving
Commitments by requesting that the Fronting Bank issue, and the Fronting
Bank, subject to the terms and conditions of this Agreement, shall issue,
standby commercial and/or documentary letters of credit for the Borrower's
account (such letters of credit being hereinafter referred to as the
"Letters of Credit", which may be for the benefit of a subsidiary);
provided, however, (i) the aggregate amount of outstanding Letter of Credit
Liabilities shall not at any time exceed Five Million Dollars ($5,000,000);
(ii) the Outstanding Revolving Credit shall not at any time exceed the
remainder of aggregate Revolving Commitments; minus the Swingline Advances
then outstanding and (iii) the Outstanding Revolving Credit applicable to a
Lender shall not at any time exceed the remainder of such Lender's
Revolving Commitment minus such Lenders Commitment Percentage of the
Swingline Advances then outstanding. Upon the date of issue of a Letter of
Credit, the Administrative Agent shall be deemed, without further action by
any party hereto, to have sold to each other Lender who holds a Revolving
Commitment, and each such other Lender shall be deemed, without further
action by any party hereto, to have purchased from the Administrative
Agent, a participation to the extent of such Lender's Commitment Percentage
(calculated with respect to the Revolving Commitments only) in such Letter
of Credit and the related Letter of Credit Liabilities. Upon termination of
the Revolving Commitments, any Letter of Credit then outstanding which has
been fully cash collateralized to the satisfaction of the Administrative
Agent and the Fronting Bank shall no longer be considered a "Letter of
Credit" as defined in this Agreement and any participating interest
heretofore granted by the Fronting Bank to the Lenders holding Revolving
Commitments in such Letter of Credit shall be deemed terminated but the
letter of credit fees payable hereunder shall continue to accrue to the
Fronting Bank with respect to such Letter of Credit until the expiry
thereof.
(b) Letter of Credit Request Procedure. Except for Letters of Credit
issued on the Closing Date, the Borrower shall give the Administrative
Agent at least three (3) Business Days prior notice (effective upon
receipt) specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice the
Administrative Agent shall promptly notify the Fronting Bank and each other
Lender who holds a Revolving Commitment of the contents thereof and of such
Lender's Commitment Percentage (calculated based on the Revolving
Commitments only) of the amount of the proposed Letter of Credit. Each
Letter of Credit shall have an expiration date that does not extend beyond
a date which is thirty (30) days prior to the Revolving Termination Date,
shall be payable in Dollars, must support a transaction entered into in the
ordinary course of business of the Borrower or its Subsidiaries, must be
reasonably satisfactory in form and substance to the Administrative Agent
and the Fronting Bank, and shall be issued pursuant to such documentation
as the Administrative Agent and the Fronting Bank may reasonably require,
including, without limitation, the Fronting Bank's standard form letter of
credit request and reimbursement agreement; provided, that, in the event of
any conflict between the terms of such agreement and the other Loan
Documents, the terms of the other Loan Documents shall control.
(c) Letter of Credit Fees. The Borrower will pay to the Administrative
Agent for the account of each Lender who holds a Revolving Commitment a
letter of credit fee on such Lender's Commitment Percentage (calculated
with respect to the Revolving Commitments only) of the daily average amount
available for drawings under the Letters of Credit, such letter of credit
fee (i) to be paid in arrears on the first Quarterly Payment Date occurring
after the date of the issuance of the first Letter of Credit and on each
Quarterly Payment Date thereafter until the date of expiration or
termination of all Letters of Credit and (ii) to be calculated at a rate
per annum equal to the Libor Rate Margin applicable to the Revolving Loans
on the basis of a year of 360 days and the actual number of days elapsed
(including the first day but excluding the last day); provided, however,
that for documentary letters of credit such letter of credit fee shall be
calculated based on 50% of such Libor Rate Margin. After receiving any
payment of any letter of credit fees under this clause (c), the
Administrative Agent will promptly pay to each Lender that holds a
Revolving Commitment the letter of credit fees then due such Lender. The
Borrower will also pay to the Fronting Bank for its account only a fronting
fee on the daily average amount available to be drawn under all outstanding
Letters of Credit, such fronting fee (i) to be paid in arrears on the first
Quarterly Payment Date occurring after the date of the issuance of the
first Letter of Credit and on each Quarterly Payment Date thereafter until
the date of expiration or termination of all Letters of Credit and (ii) to
be calculated at a rate per annum equal to one-eighth of one percent
(.125%) on the basis of a year of 360 days and the actual number of days
elapsed (including the first day but excluding the last day). The Borrower
will also pay to the Fronting Bank, for its account only, all customary
fees for amendments to and processing of the Letters of Credit.
(d) Funding of Drawings. Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment or other drawing under such
Letter of Credit, the Fronting Bank shall promptly so notify the
Administrative Agent and the Administrative Agent shall promptly so notify
the Borrower and each Lender that holds a Revolving Commitment as to the
amount to be paid as a result of such demand or drawing and the respective
payment date. Not later than 2:00 p.m. on the applicable payment date if
the Borrower has not reimbursed the Fronting Bank for the amount paid as a
result of such demand or drawing, each Lender will make available to the
Administrative Agent, at the Principal Office, in immediately available
funds, an amount equal to such Lender's Commitment Percentage (calculated
based on the Revolving Commitments only) of the amount to be paid as a
result of such demand or drawing which has not been reimbursed even if the
conditions to a Loan under Article 7 hereof have not been satisfied and the
Administrative Agent shall promptly pay such amounts to the Fronting Bank.
(e) Reimbursements. The Borrower shall be irrevocably and
unconditionally obligated to immediately reimburse the Fronting Bank
(through the Administrative Agent) for any amounts paid by the Fronting
Bank upon any demand for payment or drawing under any Letter of Credit,
without presentment, demand, protest, or other formalities of any kind. All
payments on the Reimbursement Obligations shall be made to the
Administrative Agent not later than 2:00 p.m. on the date of the
corresponding payment under the Letter of Credit by the Fronting Bank;
provided, that the Administrative Agent has provided notice to the Borrower
prior to 11:00 a.m. on such day that such payment is due. In the event such
notice is received after 11:00 a.m. on a Business Day, such payment shall
be due not later than 1:00 p.m. on the next succeeding Business Day.
Subject to the other terms and conditions of this Agreement, such
reimbursement may be made by the Borrower requesting a Revolving Loan in
accordance with Section 5.1 hereof, the proceeds of which shall be credited
against the Borrower's Reimbursement Obligations. The Administrative Agent
will pay to each Lender participating in a Letter of Credit such Lender's
Commitment Percentage (calculated based on the Revolving Commitments only)
of all amounts received from the Borrower for application in payment, in
whole or in part, to the Reimbursement Obligation in respect of any Letter
of Credit, but only to the extent such Lender has made payment to the
Administrative Agent in respect of such Letter of Credit pursuant to clause
(d) of this Section 2.7.
(f) Reimbursement Obligations Absolute. The Reimbursement Obligations
of the Borrower under this Agreement shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms
of the Loan Documents under all circumstances whatsoever and the Borrower
hereby waives any defense to the payment of the Reimbursement Obligations
based on any circumstance whatsoever, including without limitation, in
either case, the following circumstances: (i) any lack of validity or
enforceability of any Letter of Credit or any other Loan Document; (ii) the
existence of any claim, set-off, counterclaim, defense or other rights
which any Obligated Party or any other Person may have at any time against
any beneficiary of any Letter of Credit, the Fronting Bank, the
Administrative Agent, any Lender or any other Person, whether in connection
with any Loan Document or any unrelated transaction; (iii) any statement,
draft or other documentation presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(iv)payment by the Fronting Bank under any Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; or (v) any other circumstance whatsoever,
whether or not similar to any of the foregoing; provided that Reimbursement
Obligations with respect to a Letter of Credit may be subject to avoidance
by the Borrower if the Borrower proves in a final nonappealable judgment
that it was damaged and that such damage arose directly from the Fronting
Bank's willful misconduct or gross negligence in determining whether the
documentation presented under the Letter of Credit in question complied
with the terms thereof.
(g) Issuer Responsibility. The Borrower assumes all risks of the acts
or omissions of any beneficiary of any Letter of Credit with respect to its
use of such Letter of Credit. Neither the Fronting Bank, the Administrative
Agent nor any Lender nor any of their respective officers or directors
shall have any responsibility or liability (in the absence of gross
negligence or willful misconduct in connection therewith) to the Borrower
or any other Person for: (i) the failure of any draft to bear any reference
or adequate reference to any Letter of Credit, or the failure of any
documents to accompany any draft at negotiation, or the failure of any
Person to surrender or to take up any Letter of Credit or to send documents
apart from drafts as required by the terms of any Letter of Credit, or the
failure of any Person to note the amount of any instrument on any Letter of
Credit, each of which requirements, if contained in any Letter of Credit
itself, it is agreed may be waived by the Fronting Bank; (ii) errors,
omissions, interruptions or delays in transmission or delivery of any
messages; (iii) the validity, sufficiency or genuineness of any draft or
other document, or any endorsement(s) thereon, even if any such draft,
document or endorsement should in fact prove to be in any and all respects
invalid, insufficient, fraudulent or forged or any statement therein is
untrue or inaccurate in any respect; (iv) the payment by the Fronting Bank
to the beneficiary of any Letter of Credit against presentation of any
draft or other document that does not comply with the terms of the Letter
of Credit; or (v) any other circumstance whatsoever in making or failing to
make any payment under a Letter of Credit. The Borrower shall have a claim
against the Fronting Bank, and the Fronting Bank shall be liable to the
Borrower, to the extent of any direct (but not indirect, consequential or
punitive) damages suffered by the Borrower which the Borrower proves in a
final nonappealable judgment were caused by (A) the Fronting Bank's
misconduct or gross negligence in determining whether documents presented
under any Letter of Credit complied with the terms thereof or (B) the
Fronting Bank's willful failure to pay under any Letter of Credit after
presentation to it of documentation strictly complying with the terms and
conditions of such Letter of Credit. The Fronting Bank may accept documents
that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the
contrary.
ARTICLE 3
Term Loan
Section 3.1 Term Commitments. Subject to the terms and conditions of this
Agreement, each Lender who holds a Term Commitment severally agrees to make an
advance or advances of funds to the Borrower from time to time from and
including the Closing Date to but excluding the 120th day following the Closing
Date (unless extended by mutual agreement of the Administrative Agent, the
Syndication Agent and the Borrower) in an aggregate principal amount not to
exceed the amount of such Lender's Term Commitment as then in effect. The
Borrower may not borrow, repay and reborrow advances under the Term Loan. The
Borrower may establish Base Rate Accounts or Libor Accounts thereunder and,
until the Term Termination Date, the Borrower may Continue Libor Accounts
established under the Term Loan or Convert Accounts established under the Term
Loan of one Type into Accounts of another Type. Accounts of each Type
established under the Term Loans made by each Lender shall be made and
maintained at such Lender's Applicable Lending Office for Accounts of such Type.
Notwithstanding anything else herein or elsewhere to the contrary, the
Administrative Agent and Syndication Agent may determine, in their sole and
absolute discretion, not to extend the period for advances to be made pursuant
to this Article 3 beyond the 120th day following the Closing Date.
Section 3.2 Term Notes. The Term Loan made by a Lender shall, if requested
by Lender, be evidenced by a single promissory note of the Borrower in
substantially the form of Exhibit "B" hereto payable to the order of such
Lender, in the maximum principal amount equal to its Term Commitment and
otherwise duly completed.
Section 3.3 Repayment of Term Loans. The Borrower shall pay to the
Administrative Agent for the account of the Lenders who hold Term Loans the
aggregate principal amount of the Term Loans advanced in installments as
follows:
(a) Seventeen (17) consecutive quarterly principal installments due
and payable on each Quarterly Payment Date in accordance with the following
schedule:
- --------------------------------------- ---------------------------------
Quarterly Payment Dates Installment
- --------------------------------------- ---------------------------------
September 1998 $1,000,000
December 1998 $1,000,000
March 1999 $2,000,000
June 1999 $2,000,000
September 1999 $2,000,000
December 1999 $2,000,000
March 2000 $3,125,000
June 2000 $3,125,000
September 2000 $3,125,000
December 2000 $3,125,000
March 2001 $3,125,000
June 2001 $3,125,000
September 2001 $3,125,000
December 2001 $3,125,000
March 2002 $3,750,000
June 2002 $3,750,000
September 2002 $3,750,000; and
(b) one final installment in the amount of all unpaid principal of the
Term Loans due and payable on the Term Termination Date.
Section 3.4 Use of Proceeds. Subject to the terms of this Agreement, the
proceeds of the Term Loans shall be borrowed and re-advanced by the Borrower to
Shamrock to finance the Hi-Lo Acquisition and the Merger and to pay transaction
interest, fees and expenses associated with the Related Transactions which occur
on or before May 26, 1998, and for no other purpose.
ARTICLE 4
Interest and Fees
Section 4.1 Interest Rate. The Borrower shall pay to the Administrative
Agent for the account of each Lender interest on the unpaid principal amount of
each Loan made by such Lender for the period commencing on the date of such Loan
to but excluding the date such Loan is due, at a fluctuating rate per annum
equal to the Applicable Rate. The term "Applicable Rate" means:
(a) during the period that such Loans or portions thereof are subject
to a Base Rate Account, the Base Rate plus the Base Rate Margin; and
(b) during the period that such Loans or portions thereof are subject
to a Libor Account, the Adjusted Libor Rate plus the Libor Rate Margin.
Section 4.2 Determinations of Margins. The margins identified in Section
4.1 hereof and the Commitment Fee Rate shall be defined and determined as
follows:
(a) "Base Rate Margin" shall mean zero percent (0%).
(b) "Commitment Fee Rate" shall mean (i) during the period commencing
on the Closing Date and ending on but not including the first Adjustment
Date (as defined below in this Section 4.2), one-quarter percent (0.25 %)
per annum; and (ii) during each Calculation Period, the percent per annum
set forth in the table below in this Section 4.2 under the heading
"Commitment Fee Rate" opposite the Funded Debt to EBITDA Ratio calculated
for the completed four (4) Fiscal Quarters which immediately preceded the
beginning of the applicable Calculation Period.
(c) "Libor Rate Margin" shall mean (i) during the period commencing on
the Closing Date and ending on but not including the first Adjustment Date
(as defined below in this Section 4.2) seven-eighths of one percent
(0.875%) per annum for Revolving Loans and Term Loans and (ii) during each
Calculation Period, the percent per annum set forth in the table below in
this Section 4.2 under the heading "LIBOR Rate Margin", under the heading
for the applicable Loan and opposite the Funded Debt to EBITDA Ratio
calculated for the completed four (4) Fiscal Quarters which immediately
preceded the beginning of the applicable Calculation Period.
The following is the table referred to in clauses (a), (b) and (c) of this
Section 4.2:
================ ================= ============
BASE RATE LIBOR RATE MARGIN COMMITMENT
MARGIN FEE
===================================================== ================ ================= RATE
Funded Debt to Revolving Loans Revolving Loans
EBITDA Ratio and Term Loans and Term Loans
===================================================== ================ ================= ============
Greater than or equal to 3.0 x 0% 1.25% 0.35%
===================================================== ---------------- ----------------- ============
Greater than or equal to 2.5 x but less than 3.0 x 0% 1.00% 0.30%
===================================================== ---------------- ----------------- ============
Greater than or equal to 2.0 x but less than 2.5 x 0% 0.875% 0.25%
===================================================== ---------------- ----------------- ============
Greater than or equal to 1.5 x but less than 2.0 x 0% 0.75% 0.25%
===================================================== ================ ================= ============
Less than 1.5 x 0% 0.50% 0.20%
===================================================== ================ ================= ============
Upon delivery of the Compliance Certificate pursuant to Subsection 9.1(c)
in connection with the financial statements of the Borrower and the Subsidiaries
required to be delivered pursuant to Subsection 9.1(b) after the end of each
Fiscal Quarter commencing with such Compliance Certificate delivered for the
Fiscal Quarter ending June30, 1998, the Base Rate Margin, Commitment Fee Rate
and the Libor Rate Margin shall automatically be adjusted in accordance with the
Funded Debt to EBITDA Ratio set forth therein and the tables set forth above,
such automatic adjustment to take effect retroactively as of the first day of
the then existing Fiscal Quarter during which such Compliance Certificate is
delivered. The term "Adjustment Date" shall mean each such day as of which such
margins are deemed to change pursuant to the immediately prior sentence or the
next following sentence. If the Borrower fails to deliver such Compliance
Certificate with respect to any Fiscal Quarter which sets forth the Funded Debt
to EBITDA Ratio within the period of time required by Subsection 9.1 (c): (i)
the Base Rate Margin shall automatically be adjusted to zero percent (0%) per
annum for Revolving Loans and Term Loans, (ii) the Libor Rate Margin (for
Interest Periods commencing after the applicable Adjustment Date) shall
automatically be adjusted to one and one- quarter percent (1.25%) per annum for
Revolving Loans and Term Loans and (iii) the Commitment Fee Rate shall
automatically be adjusted to thirty-five one hundredths of one percent (0.35%).
The automatic adjustments provided for in the preceding sentence shall take
effect retroactively as of the first day of the then existing Fiscal Quarter and
shall remain in effect until subsequently adjusted in accordance herewith upon
the delivery of such Compliance Certificate.
Section 4.3 Payment Dates. Accrued interest on the Loans shall be due and
payable as follows: (i) in the case of Loans subject to Base Rate Accounts, on
each Quarterly Payment Date and on the Termination Date of such Loan; (ii) in
the case of Loans subject to Libor Accounts and with respect to each such
Account, on (A) the last day of the Interest Period with respect thereto, (B) in
the case of an Interest Period greater than three months, at three-month
intervals after the first day of such Interest Period, and (C) on the
Termination Date of such Loan.
Section 4.4 Default Interest. Notwithstanding the foregoing, the Borrower
will pay to the Administrative Agent for the account of each Lender interest at
the applicable Default Rate on any principal of any Loan made by such Lender,
any Reimbursement Obligation, and (to the fullest extent permitted by law) any
other amount payable by the Borrower under any Loan Document to or for the
account of the Administrative Agent or such Lender, that is not paid in full
when due (whether at stated maturity, by acceleration, or otherwise), for the
period from and including the due date thereof to but excluding the date the
same is paid in full. Interest payable at the Default Rate shall be payable from
time to time on demand.
Section 4.5 Conversions and Continuations of Accounts. Subject to Section
5.2 hereof, the Borrower shall have the right from time to time to Convert all
or part of any Base Rate Account in existence under a Loan into a Libor Account
under the same Loan or to Continue Libor Accounts in existence under a Loan as
Libor Accounts under the same Loan, provided that: (a) the Borrower shall give
the Administrative Agent notice of each such Conversion or Continuation as
provided in Section 5.3 hereof; (b) subject to Section 6.3 hereof, a Libor
Account may only be Converted on the last day of the Interest Period therefor;
(c) except for Conversions into Base Rate Accounts, no Conversions or
Continuations shall be made without the consent of the Administrative Agent and
the Required Lenders while a Default has occurred and is continuing, and (d)
Base Rate Accounts which constitute Swingline Advances may not be so converted.
Section 4.6 Computations. Interest and fees payable by the Borrower
hereunder and under the other Loan Documents shall be computed on the basis of a
year of 360 days and the actual number of days elapsed (including the first day
but excluding the last day) in the period for which interest is payable unless
such calculation would result in a usurious rate, in which case interest shall
be calculated on the basis of a year of 365 or 366 days, as the case may be.
ARTICLE 5
Administrative Matters
Section 5.1 Borrowing Procedure. The Borrower shall give the Administrative
Agent, and the Administrative Agent will give the Lenders, notice of each
borrowing under the Commitments in accordance with Section 5.3 hereof. Not later
than 1:00 p.m. on the date specified for each borrowing under the applicable
Commitment, each Lender obligated with respect to such Commitment will make
available the amount of the Loan to be made by it on such date to the
Administrative Agent, at the Principal Office, in immediately available funds,
for the account of the Borrower. The amounts received by the Administrative
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower by 3:00 p.m. at the Borrower's direction by
transferring the same, in immediately available funds by wire transfer,
automated clearinghouse debit or interbank transfer to (a) a bank account of the
Borrower designated by the Borrower in writing or (b) a Person or Persons
designated by the Borrower in writing.
Section 5.2 Minimum Amounts. Except for prepayments and Conversions
pursuant to Section 5.4(a) and Article 6 hereof, each Base Rate Account
applicable to a Loan and each prepayment of principal of a Loan shall be in a
minimum principal amount of Five Hundred Thousand Dollars ($500,000) (or, with
respect to Swingline Advances, $250,000) or any larger amount in increments of
Two Hundred Fifty Thousand Dollars ($250,000). Each LIBOR Account applicable to
a Loan shall be in a minimum principal amount of One Million Dollars
($1,000,000) or any larger amount in increments of Five Hundred Thousand Dollars
($500,000).
Section 5.3 Certain Notices. Notices by the Borrower to the Administrative
Agent of terminations or reductions of Commitments, of borrowings and
prepayments of Loans and of Conversion and Continuations of Accounts shall be
irrevocable and shall be effective only if received by the Administrative Agent
not later than 11:00a.m. on the Business Day prior to (or, with respect to Base
Rate Accounts, on) the date of the relevant termination, reduction, borrowing,
Conversion, Continuation or other repayment specified below:
Notice Number of Business Days Prior
- ------------------------------------------------------------------------------ -----------------------------
Termination or reduction of Commitments 1
Borrowing of Swingline Advances, Loans subject to Base Rate Accounts,
prepayment or repayment of Loans subject to Base Rate Accounts, or Conversions 0
into Base Rate Accounts
Borrowing, prepayment or repayment of Loans subject to Libor Accounts, 3
Conversions into or Continuations as Libor Accounts
Notwithstanding the forgoing, the Borrower may give an effective notice of
borrowing of Revolving Loans subject to Base Rate Accounts if the proceeds will
be used to satisfy Reimbursement Obligations in accordance with Section 2.7(e)
not later than 12:00 noon on the Business Day of the proposed borrowing. Any
notices of the type described in this Section 5.3 which are received by the
Administrative Agent after the applicable time set forth above on a Business Day
shall be deemed to be received and shall be effective on the next Business Day.
Each such notice of termination or reduction shall specify the applicable
Commitments to be affected and the amount of the Commitments to be terminated or
reduced. Each such notice of borrowing, Conversion, Continuation, or prepayment
shall specify (a) the Loans to be borrowed or prepaid or the Accounts to be
Converted or Continued; (b) the amount (subject to Section 5.2 hereof) to be
borrowed, Converted, Continued or prepaid; (c) in the case of a Conversion, the
Type of Account to result from such Conversion; (d) in the case of a borrowing,
the Type of Account or Accounts to be applicable to such borrowing and the
amounts thereof (and with respect to Base Rate Accounts, whether any of such
Base Rate Accounts will be Swingline Advances); (e) in the event a Libor Account
is selected, the duration of the Interest Period therefor; and (f) the date of
borrowing, Conversion, Continuation, or prepayment (which shall be a Business
Day). Any notices by the Borrower of the type described in this Section 5.3 may
be made orally or in writing and, if made orally, must be confirmed in writing
not more than two (2) Business Days after the notice is given. The
Administrative Agent shall notify the Lenders of the contents of each such
notice on the date of its receipt of the same or, if received on or after the
applicable time set forth above on a Business Day, on the next Business Day. In
the event the Borrower fails to select the Type of Account applicable to a Loan,
or the duration of any Interest Period for any Libor Account, within the time
period and otherwise as provided in this Section 5.3, such Account (if
outstanding as a Libor Account) will be automatically Converted into a Base Rate
Account on the last day of the preceding Interest Period for such Account or (if
outstanding as a Base Rate Account) will remain as, or (if not then outstanding)
will be made as, a Base Rate Account. The Borrower may not borrow any Loans
subject to a Libor Account, Convert any Base Rate Accounts into Libor Accounts,
or Continue any Libor Account as a Libor Account if the Applicable Rate for such
Libor Accounts would exceed the Maximum Rate.
Section 5.4 Prepayments.
(a) Mandatory.
(i) Revolving Loans. If at any time the Outstanding Revolving
Credit exceeds the aggregate Revolving Commitments, the Borrower
shall, within one (1) Business Day after the occurrence thereof,
prepay the outstanding Revolving Loans by the amount of the excess or,
immediately pledge (in form and substance and under conditions
satisfactory to the Administrative Agent) to the Administrative Agent
cash or cash equivalents in an amount equal to the excess as security
for the Obligations.
(ii) Prepayments from Asset Dispositions. Within five (5) days of
receipt of the Net Proceeds from any Designated Asset Disposition, the
Borrower shall prepay the Loans in an amount equal to the Net Proceeds
of such disposition. The term "Designated Asset Disposition" means any
voluntary disposition of assets by the Borrower or any Subsidiary
other than the dispositions permitted by clauses (a) through (g) of
Section 10.8.
(iii) Application of Mandatory Prepayments. Mandatory prepayments
made pursuant to Subsection 5.4(a)(ii) shall be applied as follows:
(A) first, to installments due under the Term Loans, pro
rata to such installments; and
(B) second, to the Revolving Loans, and first to the
Revolving Loans which constitute Swingline Advances (until such
advances are paid in full) and then to the remaining Revolving
Loans. Prepayments applied to the Revolving Loans pursuant to
this clause (B) shall have the effect of permanently reducing the
Revolving Commitments by the amount of the prepayment.
Notwithstanding the foregoing, in the event that the Borrower
reasonably expects the proceeds of a disposition of assets which are
required to be used to make prepayments under Subsection 5.4(a)(ii) to
be reinvested within one hundred eighty (180) days in productive
assets of a kind then used or usable in the business of the Borrower
or its Subsidiary, then, instead of the applications described above,
the Borrower shall utilize the Net Proceeds therefrom to make a
prepayment on the Revolving Loans in an amount equal to the sum of the
amount needed for such reinvestment within such time period (with any
excess being applied as described above) and such prepayment shall not
have the effect of reducing the Revolving Commitments. Each prepayment
under Subsection 5.4(a)(ii) shall be accompanied with accrued interest
on the amount prepaid to the date of prepayment, any amount due under
Section 6.5 as a result of such prepayment and a certificate from the
Borrower detailing the application thereof to the Loans as required by
this clause (iii).
(b) Optional. Subject to Section 5.2 hereof and the provisions of
this clause (b), the Borrower may, at any time and from time to time
without premium or penalty upon prior notice to the Administrative
Agent as specified in Section 5.3 hereof, prepay or repay any Loan in
full or in part. Any optional prepayment of the Revolving Loans shall
be applied to the Revolving Loans which constitute Swingline Advances
(until such advances are paid in full) and then to the remaining
Revolving Loans. Any optional prepayment of the Term Loans shall be
accompanied with accrued interest on the amount prepaid to the date of
prepayment. Any partial prepayments of the Term Loans shall be applied
to installments due under the Term Loans, pro rata to such
installments. Loans subject to a Libor Account may be prepaid or
repaid only on the last day of the Interest Period applicable thereto
unless (i)the Borrower pays to the Administrative Agent for the
account of the applicable Lenders any amounts due under Section 6.5
hereof as a result of such prepayment or repayment or (ii)after giving
effect to such prepayment or repayment, the aggregate principal amount
of the Libor Accounts applicable to the Loan being prepaid or repaid
having Interest Periods that end after such payment date shall be
equal to or less than the principal amount of such Loan after such
prepayment or repayment.
Section 5.5 Method of Payment. Except as otherwise expressly provided
herein, all payments of principal, interest, and other amounts to be made by the
Borrower or any other Obligated Party under the Loan Documents shall be made to
the Administrative Agent at the Principal Office for the account of each
Lender's Applicable Lending Office in Dollars and in immediately available
funds, without setoff, deduction, or counterclaim, not later than 1:00 p.m. on
the date on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day). The Borrower shall, at the time of making each such payment,
specify to the Administrative Agent the sums payable under the Loan Documents to
which such payment is to be applied (and in the event that the Borrower fails to
so specify, or if an Event of Default has occurred and is continuing, the
Administrative Agent may apply such payment to the Obligations in such order and
manner as it may elect in its sole discretion, subject to Section 5.6 hereof and
provided that when applying any such amounts to any Loans, Loans subject to Base
Rate Accounts shall be prepaid in full prior to any application to Loans subject
to Libor Accounts); provided, however, that, unless NationsBank expressly agrees
to the contrary, such payments shall be applied first to any outstanding
Swingline Advances until such advances are paid in full. Each payment received
by the Administrative Agent under any Loan Document for the account of a Lender
shall be paid to such Lender by 3:00 p.m. on the date the payment is deemed made
to the Administrative Agent in immediately available funds, for the account of
such Lender's Applicable Lending Office. Whenever any payment under any Loan
Document shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of the payment of
interest and commitment fee, as the case may be.
Section 5.6 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each Loan shall be made by the Lenders holding Commitments for such
Loan, each payment of commitment fees under Sections 2.5 hereof and letter of
credit fees under Subsection 2.7(c) hereof shall be made for the account of the
Lenders holding Revolving Commitments, and each termination or reduction of the
Commitments shall be applied to the Commitments of the Lenders holding the
applicable Commitments, pro rata according to their respective Commitment
Percentages (calculated with respect to the Commitments for the Loans in
questions only); (b)the making, Conversion, and Continuation of Accounts of a
particular Type (other than Conversions provided for by Section 6.4 hereof)
shall be made pro rata among the Lenders holding Accounts of such Type according
to their respective Commitment Percentages (calculated with respect to the
Commitments for the Loans in question only); (c)each payment and prepayment of
principal of or interest on Loans or Reimbursement Obligations by the Borrower
shall be made to the Administrative Agent for the account of the Administrative
Agent or the Lenders holding such Loans or Reimbursement Obligations (or
participation interests therein) pro rata in accordance with the respective
unpaid principal amounts of such Loans or participation interests held by the
Administrative Agent or such Lenders; provided that as long as no default in the
payment of interest exists, payments of interest made when Lenders are holding
different types of Accounts applicable to the same Loan as a result of the
application of Section6.4, shall be made to the Lenders in accordance with the
amount of interest owed to each; and (d)the Lenders holding Revolving
Commitments (other than the Administrative Agent) shall purchase from the
Administrative Agent participations in the Letters of Credit to the extent of
their respective Commitment Percentages (calculated with respect to the
Revolving Commitments only). If at any time payment, in whole or in part, of any
amount distributed by the Administrative Agent hereunder is rescinded or must
otherwise be restored or returned by Administrative Agent as a preference,
fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar
law, then each Person receiving any portion of such amount agrees, upon demand,
to return the portion of such amount it has received to the Administrative
Agent.
Section 5.7 Sharing of Payments. If a Lender shall obtain payment of any
principal of or interest on any of the Obligations due to such Lender hereunder
directly (and not through the Administrative Agent) through the exercise of any
right of set-off, banker's lien, counterclaim or similar right, or otherwise, it
shall promptly purchase from the other Lenders participations in the Obligations
held by the other Lenders in such amounts, and make such other adjustments from
time to time as shall be equitable to the end that all the Lenders shall share
the benefit of such payment pro rata in accordance with the unpaid principal of
and interest on the Obligations then due to each of them. To such end, all of
the Lenders shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if all or any portion of such excess
payment is thereafter rescinded or must otherwise be restored. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any Lender so purchasing a participation in the Obligations held by the
other Lenders may exercise all rights of set-off, banker's lien, counterclaim,
or similar rights with respect to such participation as fully as if such Lender
were a direct holder of Obligations in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower.
Section 5.8 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Borrower (the
"Payor") prior to the date on which such Lender is to make payment to the
Administrative Agent hereunder or the Borrower is to make a payment to the
Administrative Agent for the account of one or more of the Lenders, as the case
may be (such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, (a)the recipient of such payment
shall, on demand, pay to the Administrative Agent the amount made available to
it together with interest thereon in respect of the period commencing on the
date such amount was so made available by the Administrative Agent until the
date the Administrative Agent recovers such amount at a rate per annum equal to
the Federal Funds Rate for such period and (b)Administrative Agent shall be
entitled to offset against any and all sums to be paid to such recipient, the
amount calculated in accordance with the foregoing clause (a).
Section 5.9 Participation Obligations Absolute; Failure to Fund
Participation. The obligations of a Lender holding a Revolving Commitment to
fund its participation in the Letters of Credit in accordance with the terms
hereof shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever, including without limitation, the following
circumstances: (a)any lack of validity of any Loan Document; (b)the occurrence
of any Default; (c)the existence of any claim, set-off, counterclaim, defenses
or other rights which such Lender, any Obligated Party, or any other Person may
have; (d)the occurrence of any event that has or could reasonably be expected to
have a Material Adverse Effect; (e)the failure of any condition to a Loan under
Article 7 hereof to be satisfied; (f)the fact that after giving effect to the
funding of the participation the Outstanding Revolving Credit may exceed the
aggregate Revolving Commitments; or (g)any other circumstance whatsoever,
whether or not similar to any of the foregoing. If a Lender fails to fund its
participation in a Letter of Credit as required hereby, such Lender shall,
subject to the foregoing proviso, remain obligated to pay to the Administrative
Agent the amount it failed to fund on demand together with interest thereon in
respect of the period commencing on the date such amount should have been funded
until the date the amount was actually funded to the Administrative Agent at a
rate per amount equal to the Federal Funds Rate for such period and the
Administrative Agent shall be entitled to offset against any and all sums to be
paid to such Lender hereunder the amount due the Administrative Agent under this
sentence.
ARTICLE 6
Change in Circumstances
Section 6.1 Increased Cost and Reduced Return.
(a) Increased Cost. If, after the date hereof, any Regulatory Change
or compliance by any Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any
Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Libor Accounts,
its Notes, or its obligation to make Libor Accounts, or change the
basis of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Agreement or its Notes in
respect of any Libor Accounts (other than franchise taxes or taxes
imposed on or measured by the net income of such Lender by the
jurisdiction in which such Lender is organized, has its principal
office or such Applicable Lending Office or is doing business);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Libor Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Commitments
of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) by an amount deemed by such
Lender to be material of making, Converting into, Continuing, or
maintaining any Libor Accounts or to reduce any sum received or receivable
by such Lender (or its Applicable Lending Office) under this Agreement or
its Notes with respect to any Libor Accounts, then the Borrower shall pay
to such Lender on demand such amount or amounts as will compensate such
Lender for such increased cost or reduction. If any Lender requests
compensation by the Borrower under this Section 6.1(a), the Borrower may,
by notice to such Lender (with a copy to the Administrative Agent), suspend
the obligation of such Lender to make or maintain Libor Accounts, or to
Convert Base Rate Accounts into Libor Accounts, until the event or
condition giving rise to such request ceases to be in effect (in which case
the provisions of Section 6.4 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) Capital Adequacy. If, after the date hereof, any Lender shall have
determined that any Regulatory Change has or would have the effect of
reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time
to time upon demand, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
(c) Claims under this Section6.1. Each Lender shall promptly (and in
any event prior to the date which is ninety (90) days after the Lender has
knowledge of any Regulatory Change or other change described in this
Section 6.1 entitling such Lender to compensation hereunder) notify the
Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender
to such compensation pursuant to this Section 6.1 and will designate a
different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section shall furnish to the Borrower and
the Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence
of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
Section 6.2 Limitation on Libor Accounts. If on or prior to the first day
of any Interest Period for any Libor Account:
(a) the Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Libor Rate
for such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the Adjusted Libor
Rate will not adequately and fairly reflect the cost to the Lenders of
funding Libor Accounts for such Interest Period; then the Administrative
Agent shall give the Borrower prompt notice thereof specifying the amounts
or periods, and so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Libor Accounts, Continue
Libor Accounts, or to Convert Base Rate Accounts into Libor Accounts and
the Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Libor Accounts, either prepay such Libor
Accounts or Convert such Libor Accounts into Base Rate Accounts in
accordance with the terms of this Agreement.
Section 6.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Libor Accounts hereunder,
then such Lender shall promptly notify the Borrower thereof and such Lender's
obligation to make or Continue Libor Accounts and to Convert Base Rate Accounts
into Libor Accounts shall be suspended until such time as such Lender may again
make, maintain, and fund Libor Accounts (in which case the provisions of Section
6.4 shall be applicable).
Section 6.4 Treatment of Affected Accounts. If the obligation of any Lender
to make a particular Libor Account or to Continue, or to Convert Base Rate
Accounts into, Libor Accounts shall be suspended pursuant to Sections 6.1 or 6.3
hereof (Accounts of such Type being herein called "Affected Accounts"), such
Lender's Affected Accounts shall be automatically Converted into Base Rate
Accounts on the last day(s) of the then current Interest Period(s) for the
Affected Accounts (or, in the case of a Conversion required by Section 6.3
hereof, on such earlier date as such Lender may specify to the Borrower with a
copy to the Administrative Agent) and, unless and until such Lender gives notice
as provided below that the circumstances specified in Sections 6.1 or 6.3 hereof
that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Accounts have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Accounts shall be applied instead to
its Base Rate Accounts; and
(b) all Accounts that would otherwise be made or Continued by such
Lender as Libor Accounts shall be made or Continued instead as Base Rate
Accounts, and all Accounts of such Lender that would otherwise be Converted
into Libor Accounts shall be Converted instead into (or shall remain as)
Base Rate Accounts.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Sections 6.1 or 6.3 hereof that gave
rise to the Conversion of such Lender's Affected Accounts no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Libor Accounts made by other Lenders are outstanding, such Lender's
Base Rate Accounts shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Libor Accounts, to the
extent necessary so that, after giving effect thereto, all Accounts held by the
Lenders holding Libor Accounts and by such Lender are held pro rata (as to
principal amounts, Types, and Interest Periods) in accordance with their
respective Commitment Percentages.
Section 6.5 Compensation. Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion by the Borrower of a Libor
Account for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 12.1) on a date other than the last day of
the Interest Period for such Libor Account; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article 7
to be satisfied) to borrow, Convert, Continue, or prepay a Libor Account on
the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Agreement.
Section 6.6 Withholding Taxes. (a) Except as otherwise provided in this
Agreement, any and all payments by any Obligated Party to or for the account of
any Lender or the Administrative Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and each Agent, taxes imposed on or measured by its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or such Agent (as the case may be) is
organized, located or doing business or any political subdivision thereof (all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as "Taxes"). If an
Obligated Party shall be required by law to deduct any Taxes from or in respect
of any sum payable under any Loan Document to any Lender or Administrative
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 6.6) such Lender or such Agent receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the applicable Obligated Party shall make such deductions, (iii) the applicable
Obligated Party shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (iv) the
applicable Obligated Party shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof. If the
Borrower is required to pay additional amounts to or for the account of any
Lender pursuant to this Section 6.6, then such Lender will agree to use
reasonable efforts to change the jurisdiction of its Applicable Lending Office
so as to eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the judgment of such Lender, is not materially
disadvantageous in any material respect to such Lender. If the Administrative
Agent or a Lender receives a refund in respect of any Taxes or other amounts
paid by an Obligated Party pursuant to this Section6.6, it shall promptly remit
such refund (including any interest paid by the applicable taxing authority in
respect thereof) to the Obligated Party, net of all out-of-pocket expenses of
such Agent or such Lender; provided, however, that the Obligated Party, upon
request of such Agent or Lender, agrees promptly to return such refund (plus any
interest paid by the applicable taxing authority in respect thereof) to such
party in the event such party is required to repay such refund to the relevant
taxing authority. Such Agent or Lender shall provide the Obligated Party with a
copy of any notice or assessment from the relevant taxing authority requiring
the repayment of such refund. Section 6.7 Withholding Tax Exemption. Each Lender
and Agent organized under the laws of a jurisdiction outside the United States,
on or prior to the date of its execution and delivery of this Agreement in the
case of each Lender listed on the signature pages hereof and on or prior to the
date on which it becomes a Lender in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Administrative Agent (but only so long as such Lender remains lawfully able to
do so), shall provide the Borrower and the Administrative Agent with (a) if such
Lender is a "bank" within the meaning of Section881(c)(3)(A) of the Code, (i)
Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces to zero the rate of withholding tax on payments of interest
or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii)any other
form or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to a complete exemption from tax on payments
pursuant to any of the Loan Documents or (b) if such Lender is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such non-U.S. Lender
delivers a FormW-8, a certificate representing that such non-U.S. Lender is not
a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such non-U.S. Lender claiming complete exemption from United
States Federal withholding tax on payments of interest by the Borrower under
this Agreement and the other Loan Documents. For any period with respect to
which a Lender has failed to provide the Borrower and the Administrative Agent
with the appropriate form pursuant to Section 6.7 and thereby to establish
complete exemption from United States withholding tax (unless such failure to
establish complete exemption from United States withholding tax is due to a
change in treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), (A) the applicable Obligated Party
shall deduct all required Taxes from any amounts payable to such Lender under
any Loan Document, (B) the applicable Obligated Party shall pay the full amount
allocated to the relevant taxing authority or other authority in accordance with
applicable law, (C) the applicable Obligated Party shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof and (D) such Lender shall not be entitled to an indemnification
or increases in the sum payable under Sections 6.6 or 14.2 with respect to Taxes
imposed by the United States; provided, however, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall, at the expense of such Lender, take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
Section 6.8 Replacement of Affected Lender. Within thirty (30) days after
receipt by the Borrower of written notice and demand from any Lender for any
payment under the terms of Section 6.1 or Section 6.6, or within thirty (30)
days of the Borrower becoming aware that a Lender has become insolvent, or its
assets subject to a receiver, liquidator, trustee, custodian or other similar
Person or it or its assets are otherwise subject to insolvency proceedings, or
if a Lender fails to make Loans required to be made hereunder, the Borrower may,
at its option notify the Administrative Agent and such Lender (the "Affected
Lender") of its intention to obtain, at the Borrower's expense, a replacement
Lender ("Replacement Lender") to purchase the Affected Lender's Loans and its
obligations under the Loan Documents. The Borrower shall, within thirty (30)
days following the delivery of such notice from the Borrower cause the
Replacement Lender to purchase the Loans of the Affected Lender and assume the
Affected Lender's obligations hereunder in accordance with the terms of an
Assignment and Acceptance for cash in an aggregate amount equal to the aggregate
unpaid principal of the Loans held by such Lender, all unpaid interest and
commitment fees accrued thereon, and all other Obligations owed to such Lender
including amounts owed under Sections 6.1 or 6.6. Notwithstanding the foregoing,
(i) the Borrower shall continue to be obligated to pay to the Affected Lender in
full all amounts then demanded and due under Sections 6.1 or 6.6 in accordance
with the terms thereof, (ii) neither the Administrative Agent nor any Lender
shall have any obligation to find a Replacement Lender, (iii) the Replacement
Lender must be reasonably acceptable to the Administrative Agent and (iv)
NationsBank, N.A. may not be replaced under this Section 6.8 without its
consent.
ARTICLE 7
Conditions Precedent
Section 7.1 Initial Loan and Letter of Credit. The obligation of each
Lender to make its initial Loan and the obligation of the Administrative Agent
to issue the initial Letter of Credit are subject to the following conditions
precedent:
(a) Deliveries. The Administrative Agent shall have received on or
before the Closing Date and on or before the day of any such Loan or Letter
of Credit all of the following, each dated (unless otherwise indicated) the
Closing Date, in form and substance satisfactory to the Administrative
Agent:
(i) Resolutions; Authority. Resolutions of the Board of Directors
of each Obligated Party certified by its Secretary or an Assistant
Secretary which authorize its execution, delivery, and performance of
the Transaction Documents to which it is or is to be a party.
(ii) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Obligated
Party certifying the names of its officers (A) who are authorized to
sign the Transaction Documents to which it is or is to be a party
(including the certificates contemplated herein) together with
specimen signatures of each such officer and (B) who will, until
replaced by other officers duly authorized for that purpose, act as
its representative for the purposes of signing documentation and
giving notices and other communications in connection with this
Agreement and the transactions contemplated hereby.
(iii) Organizational Documents. The articles of incorporation of
each Obligated Party certified by the Secretary of State of the state
of its incorporation and dated a current date.
(iv) Bylaws. The bylaws of each Obligated Party certified by its
Secretary or an Assistant Secretary.
(v) Governmental Certificates. Certificates of the appropriate
government officials of the state of incorporation of each Obligated
Party as to its existence and, to the extent applicable, good standing
and certificates of the appropriate government officials of each state
in which each Obligated Party's principal business office is located,
as to each Obligated Party's qualification to do business and good
standing in such state, all dated a current date.
(vi) Notes. The Notes executed by the Borrower dated the date
hereof.
(vii) Guaranty. The Guaranty executed by each Subsidiary.
(viii) Lien Search Reports. UCC, tax and judgment Lien search
reports listing all documentation on file against the Borrower and the
Subsidiaries in the central filing locations of each jurisdiction in
which any such party's principal business office is located and in the
local filing offices of each jurisdiction in which such principal
business office is located.
(ix) Termination of Liens. Duly executed UCC-3 termination
statements, mortgage releases and such other documentation as shall be
necessary to terminate or release all Liens other than those permitted
by Section 10.2 hereof.
(x) Insurance Policies. Certificates of insurance summarizing the
insurance policies of the Borrower and the Subsidiaries required by
this Agreement and reflecting the Administrative Agent as additional
insured under such policies.
(xi) Opinion of Counsel. Opinions of legal counsel to the
Borrower and the Subsidiaries from such jurisdictions and, as to such
matters as, the Administrative Agent may reasonably request.
(xii) Fees. The advisory, administrative, underwriting and other
fees set forth in that certain letter dated December20, 1997, from
NationsBank, N.A. and NationsBanc Montgomery Securities, LLC to the
Borrower, as the same may be amended from time to time.
(xiii) Transaction Documents. Copies of the executed Hi-Lo
Acquisition Documents and the Capitalization Documents, including
without limitation, the financial statements of the Borrower and its
Subsidiaries as of and for the period ended September 30, 1997, and of
Hi-Lo and its Subsidiaries as of and for the period ended December 31,
1997, and the approvals, consents and the other documentation required
to be delivered under the terms thereof. All certificates and opinions
(if any) delivered in connection with such Transaction Documents shall
be addressed to Administrative Agent and Lenders or accompanied by a
written authorization from the Person delivering such certificate or
opinion stating that Administrative Agent and the Lenders may rely on
such document as though it were addressed to it.
(xiv) Employment Agreements and Life Insurance. Copies of all
employment contracts or other compensation arrangements between the
Borrower or any of its Subsidiaries and David O'Reilly and of the
keyman life insurance policy covering David O'Reilly.
(xv) Letter of Direction. A letter of direction from the Borrower
addressed to Administrative Agent with respect to the disbursement of
the proceeds of the Loans.
(xvi) Pro Forma. The Pro Forma.
(b) Closing Date Availability. After giving effect to the
consummation of the Related Transactions and all Outstanding
Revolving Credit incurred on the Closing Date, the Revolving
Commitment shall exceed the Outstanding Revolving Credit by not
less than Forty Million Dollars ($40,000,000.00).
(c) Attorneys' Fees and Expenses. The costs and expenses
(including attorneys' fees) referred to in Section 14.1 hereof
for which statements have been presented shall have been paid in
full.
(d) Consummation of Tender Offer. The Tender Offer shall
have been, or shall be, consummated on or before the Closing Date
pursuant to the Merger Agreement and in compliance with all
applicable law and regulatory approvals.
(e) Minimum Shares. After giving effect to the Related
Transactions and as of the Closing Date, Shamrock shall have
acquired, concurrently with the making of the Term Loans, not
fewer than the Minimum Shares, and there shall not have been any
material change in the number of Shares outstanding as of
December 20, 1997.
(f) Payment of Existing Hi-Lo Financing Agreement. The
Existing Hi-Lo Financing Agreement with The CIT Group/Business
Credit, Inc. shall be (i) terminated, (ii) all loans and
obligations of the Borrower and/or the Guarantors thereunder
shall be paid or satisfied in full utilizing the proceeds of the
initial Revolving Loans to be made under this Financing Agreement
and which shall be loaned to or invested in Hi-Lo, and (iii)all
liens upon or security interest in favor of The CIT
Group/Business Credit, Inc. in connection therewith shall be
terminated and/or released upon such payment.
(g) Government Approvals. The Federal Trade Commission or
U.S. Justice Department under the Hart-Scott-Rodino Anti-Trust
Improvements Act shall have approved the Merger and the other
transactions contemplated by the Hi-Lo Acquisition Documents or
the waiting period thereunder shall have expired without adverse
action.
(h) Related Transactions. The Administrative Agent shall
have been provided evidence satisfactory to them that all
conditions to the consummation of the Related Transactions
(excluding the Merger, but including the Hi-Lo Acquisition and
any Permitted Acquisition funded with an advance under the
Revolving Loans) have been satisfied or waived in accordance with
Section8.20 and that such transactions will occur on the Closing
Date.
(i) Absence of Legal Action. No order, judgment or decree of
any court, arbitrator or Governmental Authority shall purport or
threaten to enjoin or restrain any of the Related Transactions.
(j) Additional Documentation. The Administrative Agent shall
have received such additional approvals, opinions, or other
documentation as the Administrative Agent may reasonably request.
Section 7.2 All Loans and Letters of Credit. The obligation of each Lender
to make any Loan (including the initial Loan) and the obligation of the
Administrative Agent to issue any Letter of Credit (including any initial Letter
of Credit) are subject to the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be continuing, or
would result from such Loan or Letter of Credit; and
(b) Representations and Warranties. All of the representations and
warranties contained in Article 8 hereof and in the other Loan Documents
shall be true and correct in all material respects on and as of the date of
such Loan or Letter of Credit with the same force and effect as if such
representations and warranties had been made on and as of such date except
to the extent that such representations and warranties relate specifically
to another date.
Each notice of borrowing by the Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by the Borrower that the conditions precedent set forth in Subsections 7.2(a)
and 7.2(b) hereof have been satisfied (both as of the date of such notice and,
unless the Borrower otherwise notifies the Administrative Agent prior to the
date of such borrowing or Letter of Credit, as of the date of such borrowing or
Letter of Credit).
ARTICLE 8
Representations and Warranties
To induce the Administrative Agent and the Lenders to enter into this
Agreement, the Borrower represents and warrants to the Administrative Agent and
the Lenders that the following statements are, and, after giving effect to the
Related Transactions, will be true, correct and complete: Section 8.1 Corporate
Existence. The Borrower and each Subsidiary is (a) a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation and, in the case of each of Hi-Lo Auto Supply, L.P., and First
Call Auto Supply, L.P., a limited partnership, duly organized, validly existing
and in good standing under the laws of Texas; (b) has all requisite power and
authority to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a Material Adverse Effect.
Each Obligated Party has the power and authority to execute, deliver, and
perform its respective obligations under the Transaction Documents to which it
is or may become a party.
Section 8.2 Financial Condition.
(a) Financial Statements. The Borrower has delivered to Administrative
Agent the audited financial statements for each of the Borrower and Hi-Lo
as of, and for the each of the twelve month periods ending, respectively,
December 31, 1994, December 31, 1995 and December 31, 1996 (the "Audited
Statements") and a statement of income for each of the Borrower and Hi-Lo
for the nine month period ending September 30, 1997. All financial
statements concerning the Borrower and its Subsidiaries and Hi-Lo and its
Subsidiaries have been prepared in accordance with GAAP, and present
fairly, the financial condition of, respectively, the Borrower and its
Subsidiaries and Hi-Lo and its Subsidiaries, as of the respective dates
indicated therein and the results of operations for the respective periods
indicated therein subject, in the case of the September 30, 1997 financial
statements, to year-end audit adjustments. Neither the Borrower, Hi-Lo nor
any of their Subsidiaries has any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments, or
unrealized or anticipated losses from any unfavorable commitments except as
referred to or reflected in such financial statements. There has been no
Material Adverse Effect since the effective date of the Audited Statements.
(b) Projections. The Projections delivered and to be delivered
(including the Projections annexed hereto as Schedule8.2) have been and
will be prepared by the Borrower in light of the past operation of the
business of the Borrower, Hi-Lo and their Subsidiaries. The Projections
represent, as of the date thereof, a good faith estimate by the Borrower
and its senior management of the financial conditions and performance of
the Borrower and its Subsidiaries based on assumptions believed to be
reasonable at the time made.
Section 8.3 Corporate Action; No Breach. The execution, delivery, and
performance by each Obligated Party of the Transaction Documents to which each
is or may become a party and compliance with the terms and provisions hereof and
thereof have been duly authorized by all requisite action on the part of each
Obligated Party and do not and will not (a) violate or conflict with, or result
in a breach of, or require any consent under (i) the articles of incorporation,
partnership agreements or bylaws of any Obligated Party, (ii) any applicable
law, rule, or regulation or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any agreement or instrument to
which any Obligated Party is a party or by which any of them or any of their
property is bound or subject, or (b) constitute a default under any such
agreement or instrument, or result in the creation or imposition of any Lien
upon any of the revenues or assets of any Obligated Party.
Section 8.4 Operation of Business. The Borrower and each of the
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, and the Borrower and each of the Subsidiaries are not in
violation of any valid rights of others with respect to any of the foregoing
where such violation could reasonably be expected to have a Material Adverse
Effect.
Section 8.5 Litigation and Judgments. Except as set forth in Schedule 8.5,
to the Borrower's knowledge there is no action, suit, investigation, or
proceeding before or by any Governmental Authority or arbitrator pending or
threatened against or affecting (a) the Borrower or any Subsidiary or (b) any of
the Related Transactions. As of the Closing Date, except as set forth in
Schedule 8.5, there are no outstanding judgments against the Borrower or any of
its Subsidiaries.
Section 8.6 Rights in Properties; Liens. The Borrower and each Subsidiary
have good title to or valid leasehold interests in their respective properties
and assets, real and personal, including, as of the Closing Date, the
properties, assets, and leasehold interests reflected in the financial
statements described in Section 8.2 hereto, and none of such properties, assets,
or leasehold interests of the Borrower or any Subsidiary is subject to any Lien,
except as permitted by Section 10.2 hereto.
Section 8.7 Enforceability. The Loan Documents and the Transaction
Documents to which any Obligated Party is a party, when delivered, shall
constitute the legal, valid, and binding obligations of the applicable Obligated
Party, enforceable against the applicable Obligated Party in accordance with
their respective terms, except as limited by bankruptcy, insolvency, or other
laws of general application relating to the enforcement of creditors' rights and
general principles of equity.
Section 8.8 Approvals. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by any Obligated
Party of the Transaction Documents to which each is or may become a party or for
the validity or enforceability thereof except for such authorizations,
approvals, consents, filings and registrations which have been obtained and are
described in the Merger Agreement. The waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 applicable to the Hi-Lo
Acquisition has expired without any adverse action.
Section 8.9 Debt. Neither the Borrower nor any Subsidiary has any Debt,
except as permitted by Section 10.1 hereto.
Section 8.10 Taxes. Except as disclosed in the Merger Agreement, the
Borrower, Hi-Lo and each Subsidiary have filed all material tax returns
(federal, state, and local) required to be filed, including all material income,
franchise, employment, property, and sales tax returns, and have paid all of
their respective material liabilities for taxes, assessments, governmental
charges, and other levies that are due and payable other than those being
contested in good faith by appropriate proceedings diligently pursued for which
adequate reserves have been established in accordance with GAAP. Except as
disclosed in the Merger Agreement, the Borrower knows of no pending
investigation of the Borrower or any Subsidiary by any taxing authority with
respect to any liability for tax or of any pending but unassessed tax liability
of the Borrower or any Subsidiary.
Section 8.11 Margin Securities. Neither the Borrower nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations G, T, U, or X of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock other than, in connection with the Hi-Lo
Acquisition, the shares of common stock of Hi-Lo and, in connection with any
Permitted Acquisition, shares of the Target whose shares constitute margin stock
and whose shares are being acquired pursuant to such Permitted Acquisition..
Section 8.12 ERISA. The Borrower and each Subsidiary are in compliance with
all applicable provisions of ERISA. Neither a Reportable Event nor a Prohibited
Transaction has occurred and is continuing with respect to any Plan. No notice
of intent to terminate a Plan has been filed, nor has any Plan been terminated.
No circumstances exist which constitute grounds entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings. Neither the Borrower nor any ERISA
Affiliate has completely or partially withdrawn from a Multiemployer Plan. The
Borrower and each ERISA Affiliate have met their minimum funding requirements
under ERISA with respect to all of their Plans. The present value of all vested
benefits under each Plan do not exceed the fair market value of all Plan assets
allocable to such benefits, as determined on the most recent valuation date of
the Plan and in accordance with ERISA. Neither the Borrower nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA (other than
liability for the payment of PBGC premiums in the ordinary course of business).
Section 8.13 Disclosure. All factual information furnished by or on behalf
of the Borrower or any Subsidiary in writing to Administrative Agent or any
Lender (including, without limitation, all information contained in the
Transaction Documents) for purposes of or in connection with this Agreement, the
other Transaction Documents or any transaction contemplated herein or therein
is, and all other such factual information hereafter furnished by or on behalf
of the Borrower or any Subsidiary to Administrative Agent or any Lender, will be
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information not misleading in any material respect
at such time in light of the circumstances under which such information was
provided.
Section 8.14 Subsidiaries; Capitalization. As of the Closing Date and after
giving effect to the Related Transactions, the Borrower has no Subsidiaries
other than those listed in SectionI of Schedule8.14 hereto. As of the Closing
Date and after giving effect to the Related Transactions, SectionI of
Schedule8.14 sets forth the jurisdiction of incorporation or organization of
each Subsidiary, the percentage of the Borrower's or another Subsidiary's
ownership of the outstanding voting stock (or other ownership interests) of each
Subsidiary and the authorized, issued and outstanding capital stock (or other
ownership interests) of the Borrower and each Subsidiary. As of the Closing Date
and after giving effect to the Related Transactions, members of the Control
Group own the shares of capital stock of the Borrower disclosed in Section II of
Schedule8.14. All of the outstanding capital stock of the Borrower and each
Subsidiary has been validly issued, is fully paid, is nonassessable and has not
been issued in violation of any preemptive or similar rights. Except as
disclosed in SectionIII of Schedule8.14, there are (a) no outstanding
subscriptions, options, warrants, calls, or rights (including preemptive rights)
to acquire, and no outstanding securities or instruments convertible into,
capital stock of the Borrower or any Subsidiary, and (b)no shareholder
agreements, voting trusts or similar agreements in effect and binding on any
shareholder of the Borrower or a Subsidiary or the capital stock of the Borrower
or a Subsidiary. All shares of capital stock of the Borrower and each Subsidiary
were issued in compliance with all applicable state and federal securities laws.
Section 8.15 Agreements. Neither the Borrower nor any Subsidiary is a party
to any indenture, loan, or credit agreement, or to any lease or other agreement
or instrument, or subject to any charter or corporate restriction that could
have a Material Adverse Effect. Neither the Borrower nor any Subsidiary is in
default in any respect in the performance, observance, or fulfillment of any of
the obligations, covenants, or conditions contained in any agreement or
instrument to which it is a party where such default could reasonably be
expected to cause a Material Adverse Effect.
Section 8.16 Compliance with Laws. Neither the Borrower nor any Subsidiary
is in violation of any law, rule, regulation, order, or decree of any
Governmental Authority or arbitrator except for unintentional violations which
could not reasonably be expected to have a Material Adverse Effect.
Section 8.17 Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 8.18 Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility" within
the meaning of the Public Utility Borrower Company Act of 1935, as amended.
Section 8.19 Environmental Matters.
(a) Except as disclosed on Schedule 8.19, the Borrower, each
Subsidiary, and all of their respective properties, assets, and operations
are in material compliance with all Environmental Laws. The Borrower is not
aware of, nor has the Borrower received notice of, any past, present, or
future conditions, events, activities, practices, or incidents which may
interfere with or prevent the compliance or continued compliance of the
Borrower and its Subsidiaries with all Environmental Laws;
(b) The Borrower and each Subsidiary have obtained and maintained, and
are in material compliance with, all material permits, licenses, and
authorizations that are required under applicable Environmental Laws;
(c) Except as disclosed on Schedule 8.19, no Hazardous Materials exist
on, about, or within or have been used, generated, stored, transported,
disposed of on, or Released from any of the properties or assets of the
Borrower or any Subsidiary which could have a Material Adverse Effect. The
use which the Borrower and the Subsidiaries make and intend to make of
their respective properties and assets will not result in the use,
generation, storage, transportation, accumulation, disposal, or Release of
any Hazardous Material on, in, or from any of their properties or assets
which could have a Material Adverse Effect;
(d) Except as disclosed on Schedule 8.19, neither the Borrower nor any
of the Subsidiaries nor any of their respective currently or previously
owned or leased properties or operations is subject to any outstanding or
threatened order from or agreement with any Governmental Authority or other
Person or subject to any judicial or administrative proceeding with respect
to (i)failure to comply with Environmental Laws, (ii)Remedial Action, or
(iii)any Environmental Liabilities arising from a Release or threatened
Release, which in any case could have a Material Adverse Effect;
(e) Except as disclosed on Schedule 8.19, there are no conditions or
circumstances associated with the currently or previously owned or leased
properties or operations of the Borrower or any of the Subsidiaries that
could give rise to any Environmental Liabilities which could have a
Material Adverse Effect;
(f) Neither the Borrower nor any of the Subsidiaries is a treatment,
storage, or disposal facility requiring a permit under the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., regulations
thereunder or any comparable provision of state law. The Borrower and the
Subsidiaries are in compliance with all applicable financial responsibility
requirements of all Environmental Laws.
(g) Neither the Borrower nor any of the Subsidiaries has filed or
failed to file any notice required under applicable Environmental Law
reporting an unauthorized Release; and
(h) No Lien arising under any Environmental Law has attached to any
property or revenues of the Borrower or the Subsidiaries.
Section 8.20 Transaction Documents. As of the Closing Date, the Borrower
has delivered to Administrative Agent a complete and correct copy of the Tender
Offer Documents, the Hi-Lo Acquisition Documents and the Capitalization
Documents, each such Transaction Document is in full force and effect and no
material term or condition thereof has been amended or otherwise waived except
for such amendments and waivers approved by the Administrative Agent (which the
Administrative Agent may give without the consent of the Lenders), none of the
parties thereto has failed to perform any material obligation thereunder, and
each of the representations and warranties given therein is true and correct on
and as of the Closing Date.
Section 8.21 Broker's Fees. Except as disclosed on Schedule 8.21, no
broker's or finder's fee, commission or similar compensation will be payable
with respect to the Related Transactions by the Borrower or any Subsidiary.
Except as disclosed on Schedule 8.21, no other similar fees or commissions will
be payable by the Borrower or any Subsidiary for any other services rendered to
the Borrower or any Subsidiary ancillary to the Related Transaction. Section
8.22 Employee Matters. Except as set forth in the Merger Agreement, as of the
Closing Date (a)neither the Borrower nor any Subsidiary, nor any of their
respective employees is subject to any collective bargaining agreement, (b)no
petition for certification or union election is pending with respect to the
employees of the Borrower or any Subsidiary and no union or collective
bargaining unit has sought such certification or recognition with respect to the
employees of the Borrower or any Subsidiary and (c)there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
the Borrower after due inquiry, threatened between the Borrower or any
Subsidiary and its respective employees.
Section 8.23 Solvency. As of and from and after the date of this Agreement
and after giving effect to the consummation of the Related Transactions, the
Borrower and each of the Subsidiaries individually and on a consolidated basis:
(a)owns and will own assets the fair saleable value of which are (i)greater than
the total amount of liabilities (including contingent liabilities) and
(ii)greater than the amount that will be required to pay the probable
liabilities of its then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to it; (b)has capital that is not unreasonably small in relation to
its business as presently conducted or any contemplated or undertaken
transaction; and (c)does not intend to incur and does not believe that it will
incur debts beyond its ability to pay such debts as they become due.
Section 8.24 Year 2000 Compliance. As of the date hereof, the Borrower is
not aware of any areas within the business and operations of it and its
Subsidiaries that could be adversely affected by the "Year 2000 Problem" (that
is, the risk that computer applications used by the Borrower or its Subsidiaries
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999).
ARTICLE 9
Positive Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder or any
Letter of Credit remains outstanding, it will perform and observe the following
positive covenants:
Section 9.1 Reporting Requirements. The Borrower will furnish to the
Administrative Agent and each Lender:
(a) Annual Financial Statements. As soon as available, and in any
event within one hundred twenty (120) days after the end of each Fiscal
Year of the Borrower, beginning with the Fiscal Year ending December 31,
1997, (i)a copy of the annual audit report of the Borrower and the
Subsidiaries for such Fiscal Year containing, on a consolidated basis,
balance sheets and statements of income, retained earnings, and cash flow
as at the end of such Fiscal Year and for the Fiscal Year then ended, in
each case setting forth in comparative form the figures for the preceding
Fiscal Year, all in reasonable detail and audited and certified on an
unqualified basis by Ernst & Young or other independent certified public
accountants of recognized standing selected by the Borrower and reasonably
acceptable to the Administrative Agent, to the effect that such report has
been prepared in accordance with GAAP; and (ii)a copy of the annual
unaudited report of the Borrower and its significant business divisions (as
identified in a manner reasonably satisfactory to the Administrative
Agent)for such Fiscal Year containing, on a consolidating basis balance
sheets and statements of income, retained earnings, and cash flow as at the
end of such Fiscal Year and for the Fiscal Year then ended, in each case
setting forth in comparative form the figures for the preceding Fiscal
Year, and in reasonable detail certified by the chief executive officer or
chief financial officer of the Borrower to have been prepared in accordance
with GAAP and to fairly present the financial condition and results of
operation of the Borrower and such significant business divisions, on a
consolidating basis at the date and for the Fiscal Year then ended;
(b) Quarterly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each of the first three
Fiscal Quarters beginning with the Fiscal Quarter ending March31, 1998 and
no later than February20, 1998, with respect to the Fiscal Quarter ended
December31, 1997, a copy of an unaudited financial report of the Borrower
and its significant business divisions (as identified in a manner
reasonably satisfactory to the Administrative Agent) as of the end of such
period and for the portion of the Fiscal Year then ended containing, on a
consolidated basis, balance sheets and statements of income, retained
earnings, and cash flow, in each case setting forth in comparative form the
figures for the corresponding period of the preceding Fiscal Year, all in
reasonable detail certified by the chief executive officer or chief
financial officer of the Borrower to have been prepared in accordance with
GAAP and to fairly present the financial condition and results of
operations of the Borrower and its significant business divisions on a
consolidated basis, at the date and for the periods indicated therein,
subject to year-end audit adjustments;
(c) Compliance Certificate. As soon as available, and in any event
within forty- five (45) days after the end of each of the first three
Fiscal Quarters and accompanying the annual financial statements delivered
in accordance with Subsection9.1 (a), a Compliance Certificate, together
with schedules setting forth the calculations supporting the computations
therein;
(d) Notice of Litigation. Promptly after receipt by the Borrower or
any Subsidiary of notice of the commencement thereof, notice of all
actions, suits, and proceedings before any Governmental Authority or
arbitrator affecting the Borrower or any Subsidiary which, if determined
adversely to the Borrower or such Subsidiary, could reasonably be expected
to have a Material Adverse Effect;
(e) Notice of Default. As soon as possible and in any event within
five (5) Business Days after the chief executive officer, president, chief
financial officer, any vice president, secretary, assistant secretary,
treasurer or any assistant treasurer of the Borrower has knowledge of the
occurrence of a Default, a written notice setting forth the details of such
Default and the action that the Borrower has taken and proposes to take
with respect thereto;
(f) ERISA Reports. If requested by the Administrative Agent, promptly
after the filing or receipt thereof, copies of all reports, including
annual reports, and notices which the Borrower or any Subsidiary files with
or receives from the PBGC or the U.S. Department of Labor under ERISA; and
as soon as possible and in any event within five (5) Business Days after
the Borrower or any Subsidiary knows or has reason to know that any
Reportable Event or Prohibited Transaction has occurred with respect to any
Plan or that the PBGC or the Borrower or any Subsidiary has instituted or
will institute proceedings under Title IV of ERISA to terminate any Plan, a
certificate of the chief financial officer of the Borrower setting forth
the details as to such Reportable Event or Prohibited Transaction or Plan
termination and the action that the Borrower proposes to take with respect
thereto;
(g) Notice of Material Adverse Effect. As soon as possible and in any
event within five (5) Business Days of the discovery of any event or
condition that could reasonably be expected to have a Material Adverse
Effect, written notice thereof;
(h) Proxy Statements, Etc. As soon as available, one copy of each
financial statement, report, notice or definitive proxy statement sent by
the Borrower or any Subsidiary to its stockholders generally and one copy
of each regular, periodic or special report, registration statement, or
prospectus filed by the Borrower or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor agency;
(i) Articles and Certificate of Merger. Promptly upon consummation of
the Merger, a true and correct copy of the Articles of Merger filed with,
and a Certificate of Merger issued by, the Secretary of State of Delaware;
and
(j) General Information. Promptly, such other information concerning
the Borrower or any Subsidiary or any Target as Administrative Agent or any
Lender may from time to time reasonably request.
Section 9.2 Maintenance of Existence; Conduct of Business. Except as
permitted by Section10.3, the Borrower will, and will cause each Subsidiary to,
preserve and maintain its corporate existence and all of its leases, privileges,
licenses, permits, franchises, qualifications, and rights that are necessary in
the ordinary conduct of its business. The Borrower will, and will cause each
Subsidiary to, conduct its business in an orderly and efficient manner in
accordance with good business practices.
Section 9.3 Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, maintain, keep, and preserve all of its material properties
necessary in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
Section 9.4 Taxes and Claims. The Borrower will, and will cause each
Subsidiary to, pay or discharge at or before maturity or before becoming
delinquent (a)all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b)all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; provided, however, that neither the Borrower nor any
Subsidiary shall be required to pay or discharge any tax, levy, assessment, or
governmental charge (i)which is being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves in accordance
with GAAP have been established or (ii)if the failure to pay the same would not
result in a Lien on the property of the Borrower or any Subsidiary.
Section 9.5 Insurance. The Borrower will, and will cause each Subsidiary
to, maintain insurance with financially sound and reputable insurance companies
in such amounts and covering such risks as are usually carried by corporations
engaged in similar businesses and owning similar properties in the same general
areas in which the Borrower and the Subsidiaries operate, provided that in any
event the Borrower will maintain and cause each Subsidiary to maintain workers'
compensation insurance, property insurance and comprehensive general liability
insurance reasonably satisfactory to the Administrative Agent. Each general
liability insurance policy shall name the Administrative Agent as additional
insured and shall provide that such policy will not be canceled or materially
changed without thirty (30) days prior written notice to the Administrative
Agent.
Section 9.6 Keeping Books and Records. The Borrower will, and will cause
each Subsidiary to, maintain proper books of record and account in which full,
true, and correct entries in conformity with GAAP shall be made of all dealings
and transactions in relation to its business and activities.
Section 9.7 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply in all material respects with all applicable laws
(including, without limitation, all Environmental Laws), rules, regulations,
orders, and decrees of a material nature of any Governmental Authority or
arbitrator other than any such laws, rules, regulations, orders, and decrees
contested by appropriate actions or proceedings diligently pursued, if adequate
reserves in conformity with GAAP and satisfactory to the Administrative Agent
are established with respect thereto.
Section 9.8 Compliance with Agreements. The Borrower will, and will cause
each Subsidiary to, comply with all agreements, contracts, and instruments
binding on it or affecting its properties or business other than such
noncompliance which could not reasonably be expected to have a Material Adverse
Effect.
Section 9.9 Further Assurances.
(a) Further Assurance. The Borrower will, and will cause each
Subsidiary to, execute and deliver pursuant to this clause(a)such further
documentation and take such further action as may be reasonably requested
by the Administrative Agent to carry out the provisions and purposes of the
Loan Documents.
(b) Subsidiary Joinder. Within ten (10) days after the end of each
Fiscal Quarter or, if applicable, at the time that is sooner required by
Section 10.5 in connection with an acquisition, the Borrower shall cause
each domestic Subsidiary created or acquired during the Fiscal Quarter then
ending or, in the case of acquisition, then being acquired, to execute and
deliver to Administrative Agent a Joinder Agreement and such other
documentation as the Administrative Agent may reasonably request to cause
such Subsidiary to evidence and otherwise implement the guaranty for the
repayment of the Obligations contemplated by the Guaranty and this
Agreement.
Section 9.10 ERISA. The Borrower will, and will cause each Subsidiary to,
comply with all minimum funding requirements and all other material requirements
of ERISA, if applicable, so as not to give rise to any liability which could
have a Material Adverse Effect.
Section 9.11 Inspection. The Borrower shall permit any authorized
representatives of Administrative Agent to visit and inspect any of the
properties of the Borrower or any of the Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and business with its
and their officers and certified public accountants, at such reasonable times on
reasonable notice during normal business hours and as often as may be reasonably
requested. Any Lender may accompany the Administrative Agent on any such visit
or inspection.
Section 9.12 Acquisition Agreements. The Borrower will, and will cause each
Subsidiary to, at its expense: (a)perform and observe all of the terms and
provisions of the Hi-Lo Acquisition Documents and the Acquisition Agreements to
be performed or observed by it, maintain such agreements in full force and
effect, enforce such agreements in accordance with their respective terms, and
take all action to such end as may be from time to time appropriate in the
exercise of prudent business judgment; (b)furnish to the Administrative Agent
promptly on receipt thereof, copies of all notices, requests, and other
documents received by it under or pursuant to the Hi-Lo Acquisition Documents
and the Acquisition Agreements and (c)from time to time (1)furnish to the
Administrative Agent such information and requests regarding such agreements as
the Administrative Agent may reasonably request and (2) make to any other party
to any such agreement such demands and requests for information and reports or
for action as it is entitled to make thereunder appropriate in the exercise of
prudent business judgment.
ARTICLE 10
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder or any
Letter of Credit remains outstanding, they will perform and observe the
following negative covenants:
Section 10.1 Debt. The Borrower will not, and will not permit any
Subsidiary to, incur, create, assume, or permit to exist any Debt (other than
Debt to be paid in full concurrently with the Closing Date), except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Debt described on Schedule 10.1 hereto, and any extensions,
renewals or refinancings of such existing Debt so long as (i)the principal
amount of such Debt after such renewal, extension or refinancing shall not
exceed the principal amount of such Debt which was outstanding immediately
prior to such renewal, extension or refinancing and (ii)such Debt shall not
be secured by any assets other than assets securing such Debt, if any,
prior to such renewal, extension or refinancing;
(c) Debt of a Subsidiary to the Borrower or another Subsidiary;
(d) Guaranties incurred in the ordinary course of business with
respect to surety and appeal bonds, performance and return-of-money bonds
and other similar obligations including those of the type otherwise
described in Section10.2(f);
(e) Debt of the Borrower or any Subsidiary (including Capital Lease
Obligations) incurred (or assumed in connection with an acquisition
permitted hereby) after the Closing Date not to exceed Five Million Dollars
($5,000,000) in the aggregate at any time outstanding secured by purchase
money Liens permitted by Section10.2(g);
(f) Debt constituting obligations to reimburse worker's compensation
insurance companies for claims paid by such companies on the Borrower's or
a Subsidiaries' behalf in accordance with the policies issued to the
Borrower and the Subsidiaries;
(g) Debt arising under the Transaction Documents;
(h) Debt secured by the Liens permitted by clauses (d) and (e) of
Section 10.2;
(i) unsecured Debt arising under, created by and consisting of Hedge
Agreements, provided, (i) such Hedge Agreements shall have been entered
into for the purpose of hedging actual risk and not for speculative
purposes and (ii) that each counterparty to such Hedge Agreement shall be a
Lender or shall be rated in one of the two highest rating categories of
Standard and Poors Corporation or Moody's Investors Service, Inc.;
(j) the Existing Letters of Credit, provided that the Existing Letters
of Credit are replaced by Letters of Credit no later than February25, 1998;
and
(k) Debt in addition to the Debt described in the forgoing clauses (a)
through (i) in an aggregate amount not exceeding Twenty Million Dollars
($20,000,000) in the aggregate principal amount at any one time
outstanding;
Section 10.2 Limitation on Liens and Restrictions on Subsidiaries. The
Borrower will not, and will not permit any Subsidiary to, incur, create, assume,
or permit to exist any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except the following:
(a) Liens described on Schedule 10.2 hereto, and any extensions,
renewals or refinancings of the Debt secured by such Liens as permitted
under Subsection 10.1(b), provided that (i)no such Lien is expanded to
cover any additional property (other than after acquired title in or on
such property and proceeds of the existing collateral) after the Closing
Date and (ii)no such Lien is spread to secure any additional Debt after the
Closing Date other than Debt permitted by Section10.1(b);
(b) Liens in favor of the Administrative Agent for the benefit of the
Administrative Agent and each Lender pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, zoning restrictions, or
other restrictions on the use of real property that do not (individually or
in the aggregate) materially detract from the value of the assets
encumbered thereby or materially impair the ability of the Borrower or the
Subsidiaries to use such assets in their respective businesses;
(d) Liens (other than Liens relating to Environmental Liabilities or
ERISA securing obligations in excess of One Million Dollars ($1,000,000))
for taxes, assessments, or other governmental charges that are not
delinquent or which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP;;
(e) Liens of mechanics, materialmen, warehousemen, carriers, landlords
or other similar statutory Liens securing obligations that are not overdue
for a period of more than thirty (30) days or are being contested in good
faith by appropriate proceedings diligently pursued and for which adequate
reserves have been established in accordance with GAAP and are incurred in
the ordinary course of business;
(f) Liens resulting from deposits to secure payments of worker's
compensation, unemployment insurance or other social security programs or
to secure the performance of tenders, statutory obligations, leases,
insurance contracts, surety and appeal bonds, bids and other contracts
(other than for payment of Debt);
(g) Liens for purchase money obligations and Liens securing Capital
Lease Obligations; provided that: (i)the Debt secured by any such Lien is
permitted under Section10.1(e) hereof; and (ii)any such Lien encumbers only
the asset so purchased;
(h) Any attachment or judgment Lien not constituting an Event of
Default;
(i) Any interest or title of a licensor, lessor or sublessor under any
license or lease incurred in the ordinary course of business;
(j) Liens on the assets of a Subsidiary existing prior to the time
such assets were acquired by the Subsidiary and not incurred as a result
of, in connection with or in anticipation of such acquisition; provided
(i)such Liens do not extend to or cover (A)any assets other than the assets
so acquired or (B)any accounts, (ii)such Liens only secure Debt permitted
by Section10.1(k), and (iii)such Liens do not secure more than Ten Million
Dollars ($10,000,000) in the aggregate principal amount at any one time
outstanding;
(k) Liens against equipment arising from precautionary UCC financing
statement filings regarding operating leases entered into by the Borrower
and the Subsidiaries in the ordinary course of business;
(l) Nonconsensual Liens in favor of banking institutions arising as a
matter of law and encumbering the deposits (including the right of setoff)
held by such banking institutions in the ordinary course of business;
(m) Liens on Hi-Lo shares prior to the Merger; and
(n) Notwithstanding the permission for Liens with respect to purchase
money obligations set forth in clause (g) above, at no time shall
indebtedness secured by Liens in favor of GM exceed Four Million Dollars
($4,000,000) in the aggregate at any time outstanding.
Section 10.3 Mergers, Etc. The Borrower will not, and will not permit any
Subsidiary to, become a party to a merger or consolidation other than the
Merger, or purchase or otherwise acquire all or a substantial part of the
business or assets of any Person or all or a substantial part of the business or
assets of a division or branch of a Person or any shares, equity Securities or
other evidence of beneficial ownership of any Person, or wind-up, dissolve, or
liquidate itself; provided that as long as no Default exists or would result
therefrom and provided the Borrower gives the Administrative Agent and the
Lenders prior written notice:
(i) The Borrower or any Subsidiary may acquire shares, equity
Securities or other evidence of beneficial ownership of a Person or all or
substantially all of a Person's assets or the assets of a division or
branch of such Person in accordance with the restrictions set forth in
Section 10.5;
(ii) The Borrower may consummate the repurchases of stock, options and
warrants in accordance with Subsection 10.4(iii);
(iii) In connection with a Permitted Acquisition, the Borrower or a
Subsidiary may merge or consolidate with or, in the case of a Subsidiary,
into any other Person provided the Borrower or a Wholly-Owned Subsidiary is
the surviving Person;
(iv) A Subsidiary (other than the Borrower) may wind-up, dissolve or
liquidate if (a) its assets are transferred to the Borrower or a
Wholly-Owned Subsidiary and (b)the Obligated Party acquiring the assets
complies with its obligations under Section 9.9 simultaneously with such
acquisitions; and
(v) Any Subsidiary may merge or consolidate with the Borrower
(provided the Borrower is the surviving entity) or with any Wholly-Owned
Subsidiary (provided the Wholly-Owned Subsidiary is the surviving entity)
or, in connection with a Permitted Acquisition any other Person that, in
each case is or becomes an Obligated Party (by execution of a Joinder
Agreement and related documents in accordance with Subsection10.5(a) and
Section9.9) and a Wholly-Owned Subsidiary.
Section 10.4 Restricted Junior Payments. The Borrower will not and will not
permit any Subsidiary to directly or indirectly declare, order, pay, make or set
apart any sum for (a)any dividend or other distribution, direct or indirect, on
account of any shares of any class of stock of the Borrower or any Subsidiary
now or hereafter outstanding; (b)any redemption, conversion, exchange,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of the Borrower
or any Subsidiary now or hereafter outstanding; or (c)any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of the Borrower or any
Subsidiaries now or hereafter outstanding except:
(i) Subsidiaries (other than the Borrower) may make, declare and pay
dividends and make other distributions with respect to their capital stock
to the Borrower or Wholly- Owned Subsidiaries of the Borrower;
(ii) The Borrower may declare and pay dividends on any class of its
capital stock payable solely in shares of capital stock of the Borrower;
and
(iii) as long as no Default exists or would result therefrom, the
Borrower may repurchase its common stock or any options to purchase its
common stock from its and the Subsidiaries' officers and employees and
their heirs, estates and legal representatives provided that the aggregate
amount paid for such repurchases (a)in any Fiscal Year does not exceed 25%
of the Borrower's Net Income for the prior Fiscal Year.
Section 10.5 Investments. The Borrower will not, and will not permit any
Subsidiary to, make or permit to remain outstanding any advance, loan, extension
of credit, or capital contribution to or investment in any Person, or purchase
or own any stocks, bonds, notes, debentures, or other securities of any Person,
or be or become a joint venturer with or partner of any Person (all the
foregoing, herein "Investments"), except:
(a) The Borrower or any Wholly-Owned Subsidiary may acquire shares,
other equity Securities or other evidence of beneficial ownership of a
Person or, for purposes of Section 10.3, all or substantially all of a
Persons's assets or the assets of a division or branch of such Person, if,
with respect to each such acquisition:
(i) Default. No Default exists or would result therefrom;
(ii) Delivery, Notice and Approval Requirements.
(A) If the Purchase Price for the acquisition is more than
Twenty- Five Million Dollars ($25,000,000), simultaneously with
such acquisitions the obligations under Section9.9(b) shall be
fulfilled and Borrower shall provide the Administrative Agent,
fifteen (15) days prior to the consummation of the acquisition,
the following: (A)notice of the acquisition, (B)the most recent
financial statements of the Target that Borrower has available,
(C)such other documentation and information relating to the
Target and the acquisition as the Administrative Agent may
reasonably request, and (D)evidence certified by the chief
executive or chief financial officer of Borrower that, on a pro
forma basis for the period of four consecutive Fiscal Quarters
most recently ended (assuming the consummation of the acquisition
in question, that the incurrence or assumption of any Debt in
connection therewith occurred on the first day of such period, to
the extent such Debt bears interest at a floating rate, the rate
in effect for the entire period of calculation was the rate in
effect at the time of calculation and any sale of Subsidiaries or
lines of business which occurred during such period occurred on
the first day of such period), Borrower shall be in compliance
with the covenants contained in Article11; and
(B) if (1) the Purchase Price for the acquisition is more
than Sixty Million Dollars ($60,000,000) or (2) the Purchase
Price for the acquisition plus the aggregate Purchase Price for
all other acquisitions during the preceding twelve (12) month
period is more than Sixty Million Dollars ($60,000,000) in the
aggregate, such acquisition shall not be consummated without the
prior written consent of the Administrative Agent and the
Required Lenders and, in addition to the items required by
clause(A), Borrower shall provide the Administrative Agent with a
copy of the information provided to the board of directors of
Borrower and/or the Subsidiary making the acquisition to obtain
the board of director approval of such acquisition.
(iii) Diligence. The Borrower has completed due diligence on the
Target and the assets to be acquired;
(iv) U.S. Acquisitions. The Target is organized under the laws of
a state in the United States of America and is involved in the same
general type of business activities as the Borrower and its
Subsidiaries; and
(v) Structure. If the proposed acquisition is an acquisition of
the stock of a Target, the acquisition will be structured so that the
Target will become a Wholly- Owned Subsidiary. If the proposed
acquisition is an acquisition of assets, the acquisition will be
structured so that Borrower or a Wholly-Owned Subsidiary shall acquire
the assets.
(b) The Borrower and the Subsidiaries may make equity investments in
and may make loans to Subsidiaries (in the case of loans, as permitted by
Section 10.1);
(c) readily marketable direct obligations of the United States of
America or any agency thereof with maturities of one year or less from the
date of acquisition;
(d) fully insured certificates of deposit with maturities of one year
or less from the date of acquisition issued by any commercial bank
operating in the United States of America having capital and surplus in
excess of One Hundred Million Dollars ($100,000,000);
(e) commercial paper of a domestic issuer and equity or debt
Securities of a domestic issuer if at the time of purchase such paper or
debt Securities of such issuer is rated in one of the two highest rating
categories of Standard and Poors Corporation or Moody's Investors Service,
Inc. or any successor thereto and shares of any mutual fund company
substantially all the assets of which consist of cash and the Investments
of the type described in clauses(c), (d) and this clause(e);
(f) equity Securities including equity Securities of a mutual fund
owning equity Securities (in each case other than the equity Securities of
the type described in clause(e) immediately above) if, as of any date of
determination, the aggregate market value of all such equity Securities of
the type described in this clause(f) does not exceed an amount equal to ten
percent (10%) of the market value of all Securities of the type described
in clauses (c) through (e) and this clause (f) as of such date;
(g) loans to officers and employees not to exceed One Million Dollars
($1,000,000) in the aggregate at any time outstanding and short-term loans
to employees for the purchase of inventory from Borrower or its
Subsidiaries in the ordinary course of business;
(h) advances to officers, directors and employees for business
expenses incurred in the ordinary course of business;
(i) if no Event of Default exists, the Borrower and the Subsidiaries
may make capital contributions to or investments in, or purchase any stocks
or other equity Securities authorized to be issued under Section 10.6 of,
the Borrower, a Wholly-Owned Subsidiary or a newly created Person organized
by the Borrower or a Subsidiary that, immediately after such investment or
purchase, will be a Wholly-Owned Subsidiary; provided that the obligations
under Section 9.9 shall be fulfilled;
(j) The Subsidiaries may acquire and own any Investments of any Person
received in connection with the bankruptcy or reorganization of suppliers
and customers and in connection with the settlement of delinquent
obligations of, and disputes with, customers and suppliers arising in the
ordinary course of business;
(k) extensions of trade credit in the ordinary course of business;
(l) promissory notes and other noncash consideration received by
Subsidiaries in connection with the dispositions of assets permitted by
Section10.8;
(m) Investments in joint ventures not to exceed Two and One-Half
Million Dollars ($2,500,000) at any time outstanding (determined as
provided in clause (n) below);
(n) Investments other than those described in clauses (a) through (l)
of this Section 10.5 if the aggregate amount thereof never exceeds Two and
One-Half Million Dollars ($2,500,000) at any time (determined based on the
cost or outstanding principal amount thereof, as applicable, without regard
to any write up or write down thereof). Section 10.6 Limitation on Issuance
of Capital Stock. The Borrower will not, and will not permit any Subsidiary
to, at any time issue, sell, assign, or otherwise dispose of (a) any of its
capital stock, (b)any securities exchangeable for or convertible into or
carrying any rights to acquire any of its capital stock, or (c)any option,
warrant, or other right to acquire any of its capital stock; except:
(i) The Borrower may enter into transaction described above,
only if the change of control Events of Default in Sections
12.1(m) and 12.1(n) do not occur; and
(ii) Subsidiaries may enter into such transactions with the
Borrower or another Subsidiary.
Section 10.7 Transactions With Affiliates. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction, including, without
limitation, the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate of the Borrower or such Subsidiary, except in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary. This Section10.7 shall not restrict transactions
among the Borrower and its Subsidiaries in existence on the date hereof.
Section 10.8 Disposition of Assets. The Borrower will not, and will not
permit any Subsidiary to, sell, lease, assign, transfer, or otherwise
voluntarily dispose of any of its assets, except (a)dispositions of inventory in
the ordinary course of business; (b) dispositions of assets reasonably and in
good faith determined by the Borrower or such Subsidiary to be obsolete or no
longer necessary to its business (including, without limitation, sale of Hi-Lo's
office building located at 2575 West Belfort, Houston, Texas 77054 for no less
than One Million Dollars ($1,000,000)); (c)any sale, lease or other disposition
of assets of a Subsidiary (other than the Borrower) as a result of a transaction
permitted by Section 10.3, (d) licenses, sublicenses, leases and subleases of
intellectual property, general intangibles, or other property (other than
accounts), in each case in the ordinary course of business, that do not
materially interfere with the business of the Borrower and the Subsidiaries; (e)
the sale of overdue accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or settlement thereof;
(f)the sale, lease or other disposition of assets of a Subsidiary to the
Borrower or a Wholly-Owned Subsidiary; and (g) the sale of margin stock for fair
market value.
Section 10.9 Sale and Leaseback. The Borrower will not, and will not permit
any Subsidiary to, enter into any arrangement with any Person pursuant to which
it leases from such Person real or personal property that has been or is to be
sold or transferred, directly or indirectly, by it to such Person other than any
such arrangement entered into in the exercise of prudent business judgment with
aggregate sales prices not exceeding $10,000,000 during the period from the date
hereof until the Obligations are paid in full.
Section 10.10 Lines of Business. The Borrower and its Subsidiaries will not
engage in any line or lines of business activity other than the businesses in
which they are engaged on the date hereof or a business reasonably related
thereto. The Borrower will not permit any Subsidiary to engage in any line or
lines of business activity other than the businesses in which the Borrower and
its Subsidiaries are engaged on the date hereof or a business reasonably related
thereto.
Section 10.11 Acquisition Agreement. The Borrower will not, and will not
permit any Subsidiary to: (a) amend or modify the terms and conditions of the
indemnities and licenses furnished pursuant to any of Hi-Lo Acquisition
Documents or the Acquisition Agreements such that after giving effect thereto
such indemnities or licenses shall be materially less favorable to the interests
of the Obligated Parties or the Lenders in any material respect or (b) otherwise
amend or modify the other terms and conditions of any of the Hi-Lo Acquisition
Documents or the Acquisition Agreement except to the extent that any such
amendment or modification could not reasonably be expected to have an adverse
effect on the interests of the Lenders in any material respect.
Section 10.12 Limitations on Restrictions Affecting Subsidiaries. Neither
the Borrower nor any Subsidiary shall enter into or assume any material
agreement (other than the Loan Documents) prohibiting the creation or assumption
of any Lien upon its material properties or assets, whether now owned or
hereafter acquired except: (i) restrictions described on Schedule 10.12 existing
on the date hereof; and (ii) restrictions in agreements governing Debt described
in Section 10.1(e) with respect to assets purchased thereunder (or assets
acquired in an acquisition permitted hereunder). Except as provided herein, the
Borrower will not and will not permit any Subsidiaries directly or indirectly to
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to:
(A)pay dividends or make any other distribution on any of such Subsidiary's
capital stock owned by the Borrower or any other Subsidiary; (B)pay any Debt
owed to the Borrower or any other Subsidiary; (C)make loans or advances to any
Subsidiary; or (D)transfer any of its property or assets to any Subsidiary.
ARTICLE 11
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder or any
Letter of Credit remains outstanding, it will perform and observe the following
financial covenants:
Section 11.1 Funded Debt to Adjusted EBITDA. As of the end of each Fiscal
Quarter ending during the periods set forth below, the Borrower shall not permit
the ratio of (a)Funded Debt which is outstanding as of the date of
determination to (b)Adjusted EBITDA for the twelve (12) month period then
ending, to exceed the ratio set forth below opposite the applicable period
below:
==========================================================
Period Ratio
--------------------------------------------
From and including Through
------------------------- ------------------ -----------
12/31/97 3/31/00 3.25
3/31/00 and thereafter 2.50
============================================ ===========
Section 11.2 Tangible Net Worth. The Borrower shall at all times maintain
Tangible Net Worth in an amount equal to not less than the sum of (a)eighty-five
percent (85%) of the Borrower's Tangible Net Worth on the Closing Date plus
(b)fifty percent (50%) of Net Income, if positive, for each fiscal quarter
ending after the Closing Date (i.e., exclusive of any negative Net Income for
any such fiscal quarter) determined on a cumulative basis subsequent to the
Closing Date, plus (c) seventy-five percent (75%) of the proceeds of any
issuance of equity securities of the Borrower or other contributions to the
capital of the Borrower subsequent to the Closing Date.
Section 11.3 Current Ratio. The Borrower shall at all times maintain a
ratio of (a)Current Assets to (b) Current Liabilities of not less than 1.50 to
1.00.
Section 11.4 Fixed Charge Coverage Ratio. As of the end of each Fiscal
Quarter ending during the periods set forth below, the Borrower shall not permit
the ratio of (a)EBITDAR for the twelve (12) month period then ending to (b) the
sum of (i) cash Interest Expense, plus (ii)scheduled repayments of principal of
Funded Debt, plus (iii)Rental Expense for such period, to be less than 2.00 to
1.00.
Section 11.5 Capital Expenditures. The Borrower shall not permit the
aggregate amount of all Capital Expenditures of the Borrower and the
Subsidiaries made during any Fiscal Year to exceed an amount equal to the sum of
the amount set forth in the table below plus (i)the carry-over amount for such
Fiscal Year and (ii)capital contributions to or private or public equity
investments in the Borrower during such Fiscal Year or the immediately preceding
Fiscal Year specifically made for the purpose of funding Capital Expenditures in
excess of the amount otherwise permitted by this Section 11.5 provided that, in
the case of capital contributions (but not in the case of any private or public
investment in the Borrower), such additional amount of permitted Capital
Expenditures shall not exceed 33% of the amount that would otherwise be
permitted during such Fiscal Year as set forth in the chart below:
- -------------------------- --------------------------
Fiscal Year Amount
- -------------------------- --------------------------
1998 $60,000,000
1999 $50,000,000
2000 $50,000,000
2001 $50,000,000
2002 $50,000,000
For purposes of this Section11.5, the "carry-over amount" for any Fiscal Year
shall be the positive remainder, if any, of (a)the amount set forth in the table
above for the immediately preceding Fiscal Year minus (b)the aggregate amount of
all Capital Expenditures of the Borrower and its Subsidiaries made during such
immediately preceding Fiscal Year (inclusive of any Capital Expenditures made as
a result of any carry-over amount attributable to the Fiscal Year preceding such
immediately preceding Fiscal Year).
ARTICLE 12
Default
Section 12.1 Events of Default. Each of the following shall be deemed an
"Event of Default":
(a) The Borrower shall fail to pay (i) when due any principal of any
Loan or any Reimbursement Obligation payable under any Loan Document or any
part thereof; (ii) within three (3) days of the date due any interest or
fees payable under the Loan Documents or any part thereof; or (iii) within
five (5) days after the date the Borrower receives written notice of the
failure to pay when due any other Obligation or any part thereof, or any
indebtedness, liability or obligation under any Hedge Agreement.
(b) Any representation, warranty or certification made or deemed made
by any Obligated Party (or any of their respective officers) in any Loan
Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with any Loan Document shall be false,
misleading, or erroneous in any material respect when made or deemed to
have been made.
(c) Any Obligated Party shall fail to perform, observe, or comply with
any covenant, agreement, or term contained in Article 10 or Article 11 of
this Agreement.
(d) The Borrower shall fail to perform, observe or comply with any
covenant, agreement or term contained in Section 9.1 (a) through (c) and
Section 9.1(e) of this Agreement and such failure shall continue for ten
(10) Business Days.
(e) Any Obligated Party shall fail to perform, observe, or comply with
any other agreement, or term contained in any Loan Document (other than
covenants described in Subsections 12.1(a) through 12.1(d)) and such
failure shall continue for a period of thirty (30) days after the earlier
of (i) the date the Administrative Agent provides the Borrower with notice
thereof or (ii) the date the Borrower should have notified the
Administrative Agent thereof in accordance with Subsection 9.1(g) hereof.
(f) Any Obligated Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner, liquidator or the like of itself or of all or a
substantial part of its property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the United
States Bankruptcy Code (as now or hereafter in effect, the "Bankruptcy
Code"), (iv) institute any proceeding or file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, (vi) admit in writing its
inability to, or be generally unable to pay its debts as such debts become
due, or (vii) take any corporate action for the purpose of effecting any of
the foregoing.
(g) A proceeding or case shall be commenced, without the application,
approval or consent of the applicable Obligated Party in any court of
competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or readjustment
of its debts, (ii) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of such Obligated Party or of all or any
substantial part of its property, or (iii) similar relief in respect of
such Obligated Party under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of sixty (60) or more days;
or an order for relief against any Obligated Party shall be entered in an
involuntary case under the Bankruptcy Code.
(h) Any Obligated Party shall fail within a period of sixty (60) days
after the commencement thereof to discharge or obtain a stay of any
attachment, sequestration, forfeiture, or similar proceeding or proceedings
involving an aggregate amount in excess of Five Million Dollars
($5,000,000) against any of its assets or properties.
(i) A final judgment or judgments for the payment of money in excess
of Five Million Dollars ($5,000,000) in the aggregate (to the extent not
paid or fully covered by insurance acknowledged by a carrier reasonably
acceptable to Administrative Agent) shall be rendered by a court or courts
against any Obligated Party and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within sixty (60) days from the date of
entry thereof and the relevant Obligated Party shall not, within said
period of sixty (60) days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal.
(j) Any Obligated Party shall fail to pay when due any principal of or
interest on any Debt (beyond the period of grace, if any) if the aggregate
principal amount of the affected Debt equals or exceeds Five Million
Dollars ($5,000,000) (other than the Obligations), or the maturity of any
such Debt shall have been accelerated, or any such Debt shall have been
required to be prepaid prior to the stated maturity thereof or any event
shall have occurred with respect to any Debt in the aggregate principal
amount equal to or in excess of Five Million Dollars ($5,000,000) that
permits any holder or holders of such Debt or any Person acting on behalf
of such holder or holders to accelerate the maturity thereof or require any
prepayment thereof.
(k) This Agreement or any Guaranty shall cease to be in full force and
effect or shall be declared null and void or the validity or enforceability
thereof shall be contested or challenged by any Obligated Party or any
Obligated Party shall deny that it has any further liability or obligation
under any of the Loan Documents.
(l) Any of the following events shall occur or exist with respect to
the Borrower or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that might constitute grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA for the termination of, or for the
appointment of a trustee to administer, any Plan, or the institution by the
PBGC of any such proceedings; or (v)complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan; and
in each case above, such event or condition, together with all other events
or conditions, if any, have subjected or could in the reasonable opinion of
the Administrative Agent subject the Borrower or any of its Subsidiaries to
any tax, penalty, or other liability to a Plan, a Multiemployer Plan, the
PBGC, or otherwise (or any combination thereof) which in the aggregate
could reasonably be expected to exceed Five Million Dollars ($5,000,000).
(m) Any Person or group (as defined in Section 13(d)(3) or 14(d)(2) of
the Exchange Act) other than any member of the Control Group shall become
the direct or indirect beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of more than thirty percent (30%) of the total voting power
of any class of capital stock then outstanding of the Borrower entitled
(without regard to the occurrence of any contingency) to vote in elections
of directors of the Borrower.
(n) The majority of the members of the board of directors of the
Borrower at any time cease to be Continuing Directors.
(o) After the Merger, the Borrower fails to own, directly or
indirectly, one hundred percent (100%) of the issued and outstanding
capital stock of Hi-Lo and Ozark Automotive Distributors, Inc.
(p) The Related Transactions other than the Merger shall fail to be
consummated on the Closing Date or the Merger shall fail to be consummated
within 120 days of the Closing Date.
Section 12.2 Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent may (and if directed by Required Lenders,
shall) do any one or more of the following:
(a) Acceleration. By notice to the Borrower, declare all outstanding
principal of and accrued and unpaid interest on the Notes and all other
amounts payable by the Borrower under the Loan Documents immediately due
and payable, and the same shall thereupon become immediately due and
payable, without further notice, demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, protest, or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower except as where required by the specific terms of this Agreement
or the other Loan Documents;
(b) Termination of Commitments. Terminate the Commitments, including,
without limitation, the obligation of the Administrative Agent to issue
Letters of Credit, without notice to the Borrower or any Subsidiary;
(c) Judgment. Reduce any claim to judgment;
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted to
the Administrative Agent for the benefit of the Administrative Agent and
each Lender to secure payment and performance of the Obligations in
accordance with the terms of the Loan Documents; and
(e) Rights. Exercise any and all rights and remedies afforded by the
laws of the State of New York, Texas or any other jurisdiction governing
any of the Loan Documents, by equity, or otherwise;
provided, however, that, upon the occurrence of an Event of Default under
Subsections 12.1 (f) or 12.1 (g) hereof, the Commitments of all of the Lenders
shall automatically terminate (including, without limitation, the obligation of
the Fronting Bank to issue Letters of Credit), and the outstanding principal of
and accrued and unpaid interest on the Notes and all other amounts payable by
the Borrower under the Loan Documents shall thereupon become immediately due and
payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other formalities of
any kind, all of which are hereby expressly waived by the Borrower.
Section 12.3 Cash Collateral. If an Event of Default shall have occurred
and be continuing, the Borrower shall, if requested by the Administrative Agent
or Required Lenders, pledge to the Administrative Agent as security for the
Obligations, pursuant to agreements in form and substance satisfactory to the
Administrative Agent, an amount in immediately available funds equal to the then
outstanding Letter of Credit Liabilities, such funds to be held in a cash
collateral account at the Administrative Agent without any right of withdrawal
by the Borrower.
Section 12.4 Performance by the Administrative Agent. Upon the occurrence
of a Default, if any Obligated Party shall fail to perform any agreement in
accordance with the terms of the Loan Documents, the Administrative Agent may,
at the direction of Required Lenders, perform or attempt to perform such
agreement on behalf of the Obligated Party. In such event, the Borrower shall,
at the request of the Administrative Agent, promptly pay any amount expended by
the Administrative Agent or the Lenders in connection with such performance or
attempted performance to the Administrative Agent at the Principal Office,
together with interest thereon at the Default Rate applicable to Base Rate
Accounts from and including the date of such expenditure to but excluding the
date such expenditure is paid in full. Notwithstanding the foregoing, it is
expressly agreed that neither the Administrative Agent nor any Lender shall have
any liability or responsibility for the performance of any obligation of any
Obligated Party under any Loan Document.
Section 12.5 Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being hereby expressly waived by
the Borrower), to set off and apply any and all deposits (general, time, demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower against any
and all of the obligations of such party now or hereafter existing under any
Loan Document, irrespective of whether or not the Administrative Agent or such
Lender shall have made any demand under such Loan Documents and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
(with a copy to the Administrative Agent) after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights and remedies of each Lender hereunder
are in addition to other rights and remedies (including, without limitation,
other rights of setoff) which such Lender may have.
Section 12.6 Continuance of Default. For purposes of all Loan Documents, a
Default shall be deemed to have continued and exist until the Administrative
Agent shall have actually received evidence satisfactory to Administrative Agent
that such Default shall have been remedied.
ARTICLE 13
The Administrative Agent
Section 13.1 Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes NationsBank, N.A. to act as its agent under
this Agreement and the other Loan Documents with such powers and discretion as
are specifically delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 13.5 and the first sentence of Section 13.6 hereof
shall include its Affiliates (including NationsBanc Montgomery Securities, Inc).
and its own and its Affiliates' officers, directors, employees, and agents): (a)
shall not have any duties or responsibilities except those expressly set forth
in the Loan Documents and shall not be a trustee or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital, statement,
representation, or warranty (whether written or oral) made in or in connection
with any Loan Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability, or sufficiency of
any Loan Document, or any other document referred to or provided for therein or
for any failure by any Obligated Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Obligated Party or the satisfaction of any
condition or to inspect the property (including the books and records) of any
Obligated Party or any of its Affiliates; (d) shall not be required to initiate
or conduct any litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted to be taken by it
under or in connection with any Loan Document, except for its own gross
negligence or willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Section 13.2 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice, instrument, writing,
or other communication (including, without limitation, any thereof by telephone
or telecopy) believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any Obligated Party),
independent accountants, and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until the Administrative Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 14.8 hereof. As to any matters not expressly provided for by this
Agreement, the Administrative Agent shall not be required to exercise any
discretion or take any action, [but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding on all of the Lenders]; provided, however, that the Administrative Agent
shall not be required to take any action that exposes the Administrative Agent
to personal liability or that is contrary to any Loan Document or applicable
law.
Section 13.3 Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received written notice from a Lender or the Borrower specifying such
Default and stating that such notice is a "Notice of Default". In the event that
the Administrative Agent receives such a notice of the occurrence of a Default,
the Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default as it
shall deem appropriate or as shall reasonably be directed by the Required
Lenders.
Section 13.4 Rights as Lender. With respect to its Commitment and the Loans
made by it, NationsBank, N.A. (and any successor acting as Administrative Agent)
in its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. NationsBank, N.A. (and any successor acting as
Administrative Agent) and its Affiliates may (without having to account therefor
to any Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust, or other
business with any Obligated Party or any of their respective Affiliates as if it
were not acting as Administrative Agent, and NationsBank, N.A. (and any
successor acting as Administrative Agent) and its Affiliates may accept fees and
other consideration from any Obligated Party or any of their respective
Affiliates for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
Section 13.5 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT (TO THE EXTENT NOT REIMBURSED UNDER SECTION 14.1 OR SECTION
14.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER UNDER SUCH SECTIONS)
RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT PERCENTAGES, FOR ANY AND
ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES), OR DISBURSEMENTS
OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST THE ADMINISTRATIVE AGENT (INCLUDING BY ANY LENDER) IN ANY WAY
RELATING TO OR ARISING OUT OF ANY TRANSACTION DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT
UNDER ANY TRANSACTION DOCUMENT; PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY
OF THE FOREGOING TO THE EXTENT THEY ARE FOUND IN A FINAL, NON-APPEALABLE
JUDGMENT RENDERED BY A COURT OF COMPETENT JURISDICTION TO HAVE ARISEN FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF, THE PERSON TO BE INDEMNIFIED. WITHOUT
LIMITING ANY PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR
CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. WITHOUT LIMITATION OF THE FOREGOING,
EACH LENDER AGREES TO REIMBURSE THE ADMINISTRATIVE AGENT PROMPTLY UPON DEMAND
FOR ITS RATABLE SHARE (CALCULATED BASED ON THE COMMITMENT PERCENTAGES) OF ANY
COSTS OR EXPENSES PAYABLE BY THE BORROWER UNDER SECTION 14.1 TO THE EXTENT THAT
THE ADMINISTRATIVE AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS AND EXPENSES
BY THE BORROWER. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING
TO WHICH THE INDEMNITY IN THIS SECTION 13.5 APPLIES, SUCH INDEMNITY SHALL BE
EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT
BY THE BORROWER, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR ANY PARTY ENTITLED
TO INDEMNIFICATION HEREUNDER OR ANY OTHER PERSON AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 13.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent, the Syndication Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of the Obligated Parties and decision to enter into this Agreement and
that it will, independently and without reliance upon the Administrative Agent,
the Syndication Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Obligated Party or any of their
Affiliates that may come into the possession of the Administrative Agent or any
of its Affiliates.
Section 13.7 Resignation of Administrative Agent. The Administrative Agent
may resign at any time by giving notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the right to appoint
a successor Administrative Agent, which successor agent shall be subject to the
approval of the Borrower, which approval shall not be unreasonably withheld,
conditioned or delayed. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent which shall be a
commercial bank organized under the laws of the United States of America having
combined capital and surplus of at least $100,000,000, which successor agent
shall be subject to the approval of the Borrower, which approval shall not be
unreasonably withheld, conditioned or delayed. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor, such successor
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article 13 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
Section 13.8 Administrative Agent Fee. The Borrower agrees to pay to the
Administrative Agent on the date hereof and on each anniversary of the date
hereof the administrative fee described in that certain letter dated December20,
1997 from NationsBank, N.A. and NationsBanc Montgomery Securities, LLC to the
Borrower, as the same may be amended from time to time.
Section 13.9 Several Commitments. The Commitments and other obligations of
the Lenders under any Loan Document are several. The default by any Lender in
making a Loan in accordance with its Commitment shall not relieve the other
Lenders of their obligations under any Loan Document. In the event of any
default by any Lender in making any Loan, each nondefaulting Lender shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. No Lender shall
be responsible for any act or omission of any other Lender.
ARTICLE 14
Miscellaneous
Section 14.1 Expenses. The Borrower hereby agrees to pay promptly after
presentation of supporting documentation without duplication: (a) all reasonable
costs and expenses of the Administrative Agent arising in connection with the
preparation, negotiation, execution, and delivery of the Transaction Documents
and all amendments or other modifications to the Transaction Documents,
including, without limitation, the reasonable fees and expenses of legal counsel
for the Administrative Agent, Jenkens & Gilchrist, a Professional Corporation;
(b) all reasonable costs and expenses of Administrative Agent arising in
connection with assignments permitted by Section 14.8, including, without
limitation, the reasonable fees and expenses of legal counsel for the
Administrative Agent; (c)all reasonable fees, costs and expenses of the
Administrative Agent arising in connection with any Letter of Credit, including
the Administrative Agent's customary fees for amendments, transfers and drawings
on Letters of Credit; (d) all costs and expenses of the Administrative Agent in
connection with any Default and the enforcement of any Loan Document, including,
without limitation, the fees and expenses of legal counsel for the
Administrative Agent; (e) all fees, costs and expenses of any Lender arising in
connection with an Event of Default and the enforcement of any Loan Document
during the continuance of an Event of Default; provided, however, that all
Lenders (other than the Administrative Agent) shall be limited to the legal fees
and expenses of one counsel for all Lenders unless such representation shall
result in a conflict of interest, in which case the Borrower shall pay the fees,
costs and expenses of as many counsel as necessary to avoid conflicts among the
Lenders; (f) all transfer, stamp, documentary, or other similar taxes,
assessments, or charges (including the "Taxes" and any penalties or interest)
levied by any Governmental Authority in respect of any Loan Document or the
transactions contemplated hereby; (g) all reasonable costs, expenses,
assessments, and other charges incurred in connection with any filing,
registration, recording, or perfection of any security interest or other Lien
contemplated by any Loan Document; and (h) all other reasonable costs and
expenses incurred by the Administrative Agent in connection with any Transaction
Document. The fees and expenses of legal counsel for the Administrative Agent
that the Borrower has agreed to pay hereunder include the fees and expenses of
legal counsel for the Administrative Agent arising in connection with advice
given to the Administrative Agent as to its rights and responsibilities
hereunder.
Section 14.2 Indemnification. THE BORROWER SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT, NATIONSBANC MONTGOMERY SECURITIES, LLC, THE FRONTING BANK
AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS
AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) TO
WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR
RELATE TO (A) ANY BREACH BY ANY OBLIGATED PARTY OF ANY REPRESENTATION, WARRANTY,
COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE TRANSACTION DOCUMENTS, (B)
THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY
HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE ASSETS OF
BORROWER OR ANY SUBSIDIARY, (C) THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT
OR ANY PAYMENT OR FAILURE TO PAY WITH RESPECT TO ANY LETTER OF CREDIT, (D) ANY
AND ALL STAMP, FILING OR SIMILAR TAXES (INCLUDING THE "TAXES" AND ANY INTEREST
OR PENALTY) LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON THE ADMINISTRATIVE AGENT
OR ANY LENDER IN RESPECT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, OR (E) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING,
WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER
PROCEEDING RELATING TO ANY OF THE FOREGOING, THE TRANSACTION DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY; PROVIDED THAT THE PERSON ENTITLED TO BE
INDEMNIFIED UNDER THIS SECTION SHALL NOT BE INDEMNIFIED FROM OR HELD HARMLESS
AGAINST ANY LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS OR EXPENSES (INCLUDING ATTORNEYS' FEES) FOUND IN A FINAL,
NON- APPEALABLE JUDGMENT RENDERED BY A COURT OF COMPETENT JURISDICTION TO HAVE
ARISEN OUT OF OR RESULTED FROM ITS GROSS NEGLIGENCE OR ITS WILLFUL MISCONDUCT.
WITHOUT LIMITING ANY PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION
OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION
SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. IN THE CASE OF AN INVESTIGATION,
LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 14.2
APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION,
LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS DIRECTORS, SHAREHOLDERS
OR CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR ANY OTHER
PERSON AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 14.3 Limitation of Liability. None of the Administrative Agent, any
Lender, or any Affiliate, officer, director, employee, attorney, or agent
thereof shall have any liability with respect to the Borrower, and, by the
execution of the Loan Documents to which it is a party, each other Obligated
Party, hereby waives, releases, and agrees not to sue any of them upon, any
claim for any special, indirect, incidental, consequential or punitive damages
suffered or incurred by any Obligated Party in connection with, arising out of,
or in any way related to any of the Transaction Documents, or any of the
transactions contemplated by any of the Transaction Documents.
Section 14.4 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by the Administrative Agent or any
Lender shall have the right to act exclusively in the interest of the
Administrative Agent and the Lenders and shall have no duty of disclosure, duty
of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, any Subsidiary or any of the Borrower's shareholders
or any other Person.
Section 14.5 No Fiduciary Relationship. The relationship between the
Obligated Parties on the one hand and the Administrative Agent and each Lender
on the other is solely that of debtor and creditor, and neither the
Administrative Agent nor any Lender has any fiduciary or other special
relationship with any Obligated Parties, and no term or condition of any of the
Transaction Documents shall be construed so as to deem the relationship between
the Obligated Parties on the one hand and the Administrative Agent and each
Lender on the other to be other than that of debtor and creditor. Section 14.6
Equitable Relief. The Borrower recognizes that in the event any Obligated Party
fails to pay, perform, observe, or discharge any or all of the obligations under
the Transaction Documents, any remedy at law may prove to be inadequate relief
to the Administrative Agent and the Lenders. The Borrower therefore agrees that
the Administrative Agent and the Lenders, if the Administrative Agent or the
Required Lenders so request, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
Section 14.7 No Waiver; Cumulative Remedies. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power, or privilege under any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in the Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 14.8 Successors and Assigns.
(a) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns. The Borrower may not assign or transfer any of its rights or
obligations hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent and all of the Lenders.
(b) Assignment. Each Lender may assign to one or more Persons all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loans, its Note, and its
Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee.
"Eligible Assignee" means (A) a Lender; (B) an Affiliate of a Lender
or, with respect to any Lender that is a fund that invests in bank
loans, any other fund that invests in bank loans and is managed by the
same investment advisor as such Lender (herein a "Related Fund"); and
(C) any other Person approved by the Administrative Agent and, unless
an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with this Section 14.8 the
Borrower, such approval not to be unreasonably withheld, conditioned,
or delayed by the Borrower and such approval to be deemed given by the
Borrower if no objection is received by the assigning Lender and the
Administrative Agent from the Borrower within five (5) Business Days
after notice of such proposed assignment has been provided by the
assigning Lender to the Borrower; provided, however, that neither the
Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement or an assignment by a Lender to one of its Related Funds,
any such partial assignment shall be in an amount at least equal to
Five Million Dollars ($5,000,000) and any partial assignment to a
Related Fund shall be in an amount at least equal to Two Million Five
Hundred Thousand Dollars ($2,500,000);
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Agreement; and
(iv) the parties to such assignment shall execute and deliver to
the Administrative Agent for its acceptance an Assignment and
Acceptance, together with any Note subject to such assignment and
(other than assignments pursuant to Section6.8) a processing fee of
$3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the
Administrative Agent and the Borrower shall upon return of the assignor's notes,
if any, make appropriate arrangements so that, if required, new Notes are issued
to the assignor and the assignee. If the assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall deliver to the
Borrower and the Administrative Agent certification as to exemption from
deduction or withholding of Taxes in accordance with Section6.7.
(c) Register. The Administrative Agent shall maintain at its Principal
Office a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice. Upon its receipt of an Assignment and
Acceptance executed by the parties thereto, together with any Note or Notes
subject to such assignment and payment of the processing fee, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed, (i)accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Participations. Each Lender may sell participations to one or more
Persons in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and its Loans);
provided, however, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)the
participant shall be entitled to the benefit of the yield protection
provisions contained in Article 6 (to the extent that the Lender selling
such participation would have been entitled thereto) and the right of
set-off contained in Section 12.5, and (iv) the Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain
the sole right to enforce the obligations of the Borrower relating to its
Loans and to approve any amendment, modification, waiver or consent of any
provision of any Loan Document (other than amendments, modifications,
waivers or consents of the types relating to the Loan or Commitment
participated in under Section14.11(a)).
(e) Pledge to Federal Reserve. Notwithstanding any other provision set
forth in this Agreement, any Lender may at any time assign and pledge all
or any portion of its Loans to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning Lender
from its obligations hereunder.
(f) Delivery of Information. Any Lender may furnish any information
concerning the Borrower or any Subsidiaries in the possession of such
Lender from time to time to assignees and participants (including
prospective assignees and participants) subject to such Persons agreeing to
being bound by the provisions of Section 14.22.
Section 14.9 Survival. All representations and warranties made in any Loan
Document or in any document, statement, or certificate furnished in connection
with any Loan Document shall survive the execution and delivery of the Loan
Documents and no investigation by the Administrative Agent or any Lender or any
closing shall affect the representations and warranties or the right of the
Administrative Agent or any Lender to rely upon them. Without prejudice to the
survival of any other obligation of the Borrower hereunder, the obligations
under Article 6 hereof and Sections 13.5, 14.1 and 14.2 hereof shall survive
repayment of the Notes and termination of the Commitments and the Letters of
Credit.
Section 14.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
THERETO.
Section 14.11 Amendments and Waivers. Any provision of any Loan Document
may be amended or waived and any consent to any departure by any Obligated Party
therefrom may be granted if, but only if, such amendment, waiver or consent is
in writing and is signed by the Borrower and the Required Lenders (and, if
Article 13 or the rights or duties of the Administrative Agent are affected
thereby, by the Administrative Agent); provided that no such amendment, waiver
or consent applicable to:
(a) a Loan, Letter of Credit or Commitment which has the effect of:
(i) increasing such Commitment,
(ii) reducing the principal of or rate of interest on such Loan
or any Reimbursement Obligation relating to such Letter of Credit or
any fees or other amounts payable hereunder with respect to such Loan,
Letter of Credit or Commitment,
(iii) postponing any date fixed for the payment of any scheduled
installment of principal of or interest on such Loan or any
Reimbursement Obligation relating to such Letter of Credit or any fees
or other amounts payable hereunder with respect to such Loan, Letter
of Credit or Commitment or changing any optional or mandatory
prepayment provision applicable to such Loan or Letter of Credit, or
(iv) postponing any date fixed for termination of such Commitment
shall be effective unless also signed by each Lender holding (with respect to
Letters of Credit either directly or through a participation under
Section2.7(a)) the Loan, Letter of Credit or Commitment of the type being
modified; and
(b) any change (including a waiver) in:
(i) the percentage of the Commitments or of the unpaid principal
amount of the Notes or the Letter of Credit Liabilities, or the number
of Lenders, which shall be required for the Lenders or any of them to
take any action under this Section or any other provision of any Loan
Document, or
(ii) the conditions specified in Article 7 hereof, or
(iii) which has the effect of releasing any Obligated Party in a
transaction which is not otherwise permitted hereby
shall not be effective unless signed by all Lenders.
Section 14.12 Maximum Interest Rate.
(a) No interest rate specified in any Loan Document shall at any time
exceed the Maximum Rate. If at any time the interest rate (the "Contract
Rate") for any Obligation shall exceed the Maximum Rate, thereby causing
the interest accruing on such Obligation to be limited to the Maximum Rate,
then any subsequent reduction in the Contract Rate for such Obligation
shall not reduce the rate of interest on such Obligation below the Maximum
Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been
in effect.
(b) No provision of any Loan Document shall require the payment or the
collection of interest in excess of the maximum amount permitted by
applicable law. If any excess of interest in such respect is hereby
provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the
provisions of this Section shall govern and prevail and neither the
Borrower nor the sureties, guarantors, successors, or assigns of the
Borrower shall be obligated to pay the excess amount of such interest or
any other excess sum paid for the use, forbearance, or detention of sums
loaned pursuant hereto. In the event any Lender ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of
the maximum amount permitted by applicable law shall be applied as a
payment and reduction of the principal of the Obligations; and, if the
principal of the Obligations has been paid in full, any remaining excess
shall forthwith be paid to the Borrower. In determining whether or not the
interest paid or payable exceeds the Maximum Rate, the Borrower and each
Lender shall, to the extent permitted by applicable law, (a) characterize
any non-principal payment as an expense, fee, or premium rather than as
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
Obligations so that interest for the entire term does not exceed the
Maximum Rate.
Section 14.13 Notices. All notices and other communications provided for in
any Loan Document to which any Obligated Party is a party shall be given or made
in writing (except as otherwise permitted by Section 5.3) and telecopied, mailed
by certified mail return receipt requested, or delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof or with respect to any Obligated Party, at the "Address for
Notices" specified below the Borrower's name on the signature pages hereof, or
with respect to a Lender not a party to this Agreement on the Closing Date, in
its Assignment and Acceptance, or, as to any party at such other address as
shall be designated by such party in a notice to each other party given in
accordance with this Section. Except as otherwise provided in any Loan Document,
all such communications shall be deemed to have been duly given when transmitted
by telecopy, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, three (3) Business Days after
being duly deposited in the mails, in each case given or addressed as aforesaid;
provided, however, notices to the Administrative Agent pursuant to Section 2.7
or 5.3 hereof shall not be effective until received by the Administrative Agent.
Section 14.14 Governing Law; Venue; Service of Process. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. ANY ACTION OR
PROCEEDING AGAINST BORROWER UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY NEW TEXAS STATE COURT LOCATED IN
DALLAS OR FEDERAL COURT IN THE NORTHERN DISTRICT OF TEXAS. THE BORROWER
IRREVOCABLY (A)SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B)
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. THE BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED
OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 14.13 OF THIS
AGREEMENT. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR
ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR WITH
RESPECT TO ANY OF ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS.
Section 14.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 14.16 Severability. Any provision of any Loan Document held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of any Loan Document and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 14.17 Headings. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 14.18 Non-Application of Chapter 15 of Texas Credit Code. The
provisions of Chapter 15 of the Texas Credit Code (relating to certain revolving
credit facilities) are specifically declared by the parties hereto not to be
applicable to any Loan Documents or to the transactions contemplated thereby.
Section 14.19 Construction. The Borrower, each Obligated Party (by its
execution of the Loan Documents to which it is a party), the Administrative
Agent and each Lender acknowledges that each of them has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review
the Loan Documents with its legal counsel and that the Loan Documents shall be
construed as if jointly drafted by the parties thereto.
Section 14.20 Independence of Covenants. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
Section 14.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, OR ENFORCEMENT THEREOF.
Section 14.22 Confidentiality. Each Lender agrees to keep confidential any
information obtained by it from any Obligated Party or its agents or
representatives pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery in accordance with such Lender's
customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (a)to such Lender's officers, directors,
employees, representatives, attorneys, agents or affiliates who are advised of
the confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender on a non-confidential
basis from any source or as such information that is in the public domain at the
time of disclosure, (c) to the extent disclosure is required by law, regulation,
subpoena or judicial order or process (provided that notice of such requirement
or order shall be promptly furnished to the Borrower unless such notice is
legally prohibited) or requested or required by bank regulators or auditors or
any administrative body, commission, or other Governmental Authority to whose
jurisdiction such Lender may be subject, (d)to assignees or participants or
potential assignees or participants or to professional advisors or direct or
indirect contractual counterparts in swap agreements provided in each case such
Person agrees to be bound by the provisions of this Subsection 14.22, (e) to the
extent required in connection with any litigation between any Obligated Party
and any Lender with respect to the Loans or this Agreement and the other Loan
Documents, (f) to rating agencies, their employees, representatives, attorneys,
agents or affiliates who are advised of the confidential nature of such
information and (g)with the Borrower's prior written consent.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
O'REILLY AUTOMOTIVE, INC.
By:/s/ James R. Batten
---------------------------
Name: James R. Batten
Title: CFO and Vice-President of Finance
Address for
Notices to the Borrower
or any Obligated Party:
OReilly Automotive, Inc.
233 South Patterson
Springfield, Missouri 65802
Attention:
Mr. James R. Batten
Telephone: (417) 862-2674, ext. 1165
Telecopier: (417) 862-2710
NATIONSBANK, N.A.,
as Administrative Agent and as a Lender
Revolving Commitment:
$125,000,000 By: /s/ Juan Cazorla
-----------------------------
Name: Juan Cazorla
Term Commitment Title: Vice-President
$50,000,000 Address for Notices:
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Ms. Molly Oxford
Telephone: (214) 508-3255
Telecopier: (214) 508-2515
Lending Office
for Base Rate Accounts
and Libor Accounts:
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Ms. Molly Oxford
Telephone: (214) 508-3255
Telecopier: (214) 508-2515
NATIONSBANC MONTGOMERY SECURITIES, LLC,
as Syndication Agent
By: /s/ Joseph Siegel, Jr.
------------------------------
Name: Joseph Siegel, Jr.
Title: Managing Director
Address for Notices:
NationsBank of Texas, Inc.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Ms. Molly Oxford
Telephone: (214) 508-3255
Telecopier: (214) 508-2515