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$650,000,000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
CLUBCORP, INC.
CERTAIN LENDERS NAMED HEREIN
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
WELLS FARGO BANK (TEXAS), N.A., AS SYNDICATION AGENT
BANK ONE, TEXAS, N.A., AS DOCUMENTATION AGENT
FIRST UNION NATIONAL BANK
CREDIT LYONNAIS NEW YORK BRANCH
AS MANAGING AGENTS
GUARANTY FEDERAL BANK, F.S.B.
BRANCH BANKING AND TRUST COMPANY
SOUTHTRUST BANK, N.A.
COMERICA BANK
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AS CO-AGENTS
September 24, 1999
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BANC OF AMERICA SECURITIES LLC
AS SOLE LEAD ARRANGER AND SOLE LEAD BOOK MANAGER
TABLE OF CONTENTS
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ARTICLE 1
Definitions
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Section 1.1 Defined Terms
Section 1.2 Amendments and Renewals
Section 1.3 Construction
ARTICLE 2
Advances
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Section 2.1 The Advances
Section 2.2 Manner of Borrowing and Disbursement
Section 2.3 Interest
Section 2.4 Fees
Section 2.5 Prepayments
Section 2.6 Reduction of Commitment
Section 2.7 Non-Receipt of Funds by the Administrative Agent
Section 2.8 Prepayment Reduction of Commitments
Section 2.9 Reimbursement
Section 2.10 Manner of Payment
Section 2.11 LIBOR Lending Offices
Section 2.12 Sharing of Payments
Section 2.13 Calculation of LIBOR Rate
Section 2.14 Taxes
Section 2.15 Letters of Credit
ARTICLE 3
Conditions Precedent
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Section 3.1 Conditions Precedent to the Initial Advances and the Initial Letters of Credit
Section 3.2 Conditions Precedent to All Advances and Letters of Credit
Section 3.3 Conditions Precedent to Conversions and Continuations
ARTICLE 4
Representations and Warranties
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Section 4.1 Representations and Warranties
Section 4.2 Survival of Representations and Warranties, etc.
ARTICLE 5
General Covenants
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Section 5.1 Preservation of Existence and Similar Matters
Section 5.2 Business; Compliance with Applicable Law
Section 5.3 Maintenance of Properties
Section 5.4 Accounting Methods and Financial Records
Section 5.5 Insurance
Section 5.6 Payment of Taxes and Claims
Section 5.7 Visits and Inspections
Section 5.8 Use of Proceeds
Section 5.9 IDEMINITY
Section 5.10 Environmental Law Compliance
Section 5.11 Further Assurances
Section 5.12 Year 2000 Compliance
Section 5.13 Non-Guarantors as Guarantors
Section 5.14 Subsidiaries
ARTICLE 6
Information Covenants
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Section 6.1 Quarterly Financial Statements and Information
Section 6.2 Annual Financial Statements and Information; Certificate of No Default
Section 6.3 Compliance Certificate
Section 6.4 Copies of Other Reports and Notices
Section 6.5 Notice of Litigation, Default and Other Matters
Section 6.6 ERISA Reporting Requirements
Section 6.7 Year 2000 Compliance
ARTICLE 7
Negative Covenants
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Section 7.1 Unsecured Indebtedness
Section 7.2 Secured Indebtedness
Section 7.3 Liens
Section 7.4 Investments
Section 7.5 Liquidation, Merger
Section 7.6 Guaranties
Section 7.7 Sales of Assets
Section 7.8 Acquisitions
Section 7.9 Restricted Payments
Section 7.10 Affiliate Transactions
Section 7.11 Compliance with ERISA
Section 7.12 Maximum Leverage Ratio
Section 7.13 Minimum Fixed Charge Coverage Ratio
Section 7.14 Minimum Tangible Net Worth
Section 7.15 Sale or Discount of Receivables
Section 7.16 Business
Section 7.17 Fiscal Year
Section 7.18 Amendment of Organizational Documents
Section 7.19 Non-Guarantors
Section 7.20 Restrictions on Subsidiaries
Section 7.21 Capital Expenditures
ARTICLE 8
Default
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Section 8.1 Events of Default
Section 8.2 Remedies
ARTICLE 9
Changes in Circumstances
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Section 9.1 LIBOR Basis Determination Inadequate
Section 9.2 Illegality
Section 9.3 Increased Costs
Section 9.4 Effect on Base Rate Advances
Section 9.5 Capital Adequacy
ARTICLE 10
Agreement Among Lenders
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Section 10.1 Agreement Among Lenders
Section 10.2 Lender Credit Decision
Section 10.3 Benefits of Article
ARTICLE 11
Miscellaneous
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Section 11.1 Notices
Section 11.2 Expenses
Section 11.3 Waivers
Section 11.4 Determination by the Lenders Conclusive and Binding
Section 11.6 Assignment
Section 11.7 Counterparts
Section 11.8 Severability
Section 11.9 Interest and Charges
Section 11.10 Headings
Section 11.11 Amendment and Waiver
Section 11.12 Exception to Covenants
Section 11.13 No Liability of Issuing Bank
Section 11.14 Confidentiality
Section 11.15 No Duties
Section 11.16 GOVERNING LAW
Section 11.17 WAIVER OF JURY TRIAL
Section 11.18 ENTIRE AGREEMENT
Schedules and Exhibits
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Schedule 1.1(a) Commitments and Specified Percentages
Schedule 1.1(b) LIBOR Lending Offices
Schedule 1.1(c) Existing Letters of Credit
Schedule 1.1(d) Investment Policy
Schedule 1.1(e) Non-Guarantors (see Schedule 4.1(a))
Schedule 4.1(a) Subsidiaries
Schedule 4.1(v) Labor Matters
Schedule 7.1 Existing Unsecured Indebtedness
Schedule 7.2 Existing Liens
Schedule 7.4 Existing Investments
Exhibit A Revolving Credit Note
Exhibit B Facility A Term Loan Note
Exhibit C Facility B Term Loan Note
Exhibit D Pledge Agreement
Exhibit E Compliance Certificate
Exhibit F Assignment Agreement
Exhibit G Subsidiary Guaranty
Exhibit H Notice of Borrowing
Exhibit I Notice of Continuation/Conversion
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
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THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of September 24,
1999, among CLUBCORP, INC., a Delaware corporation (the "Borrower"), the Lenders
(as hereinafter defined) from time to time party hereto, WELLS FARGO BANK
(TEXAS), N.A., as syndication agent, BANK ONE, TEXAS, N.A., as documentation
agent, FIRST UNION NATIONAL BANK, as a managing agent, CREDIT LYONNAIS NEW YORK
BRANCH, as a managing agent, GUARANTY FEDERAL BANK, F.S.B., as a co-agent,
BRANCH BANKING AND TRUST COMPANY, as a co-agent, SOUTHTRUST BANK, N.A., as a
co-agent, COMERICA BANK, as a co-agent, and BANK OF AMERICA, N.A., a national
banking association, as administrative agent for the Lenders.
BACKGROUND
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The Lenders have been requested to provide the Borrower funds to (a) refinance a
portion of the existing debt of the Borrower and its Subsidiaries (as
hereinafter defined), including but not limited to debt of the Borrower pursuant
to that certain (i) Credit Agreement, dated as of May 27, 1998, among the
Borrower, the lenders party thereto, certain co-agents, and Bank of America,
N.A. (formerly known as NationsBank, N.A.), as administrative agent, as amended,
modified, supplemented and restated from time to time, and (ii) Credit
Agreement, dated as of March 29, 1999, among the Borrower, the lenders party
thereto, and Bank of America, N.A. (formerly known as NationsBank, N.A.), as
administrative agent, as amended, modified, supplemented and restated from time
to time (collectively, the "Existing Credit Agreements"), (b) finance
acquisitions, and (c) finance the ongoing working capital and general corporate
requirements of the Borrower and its Subsidiaries. The Lenders have agreed to
provide a portion of such financing, subject to the terms and conditions set
forth below.
In consideration of the mutual covenants and agreements contained herein, and
other good and valuable consideration hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
Definitions
Section 1.1 Defined Terms. For purposes of this Agreement:
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"Acquisition" means any transaction pursuant to which the Borrower or any of its
Subsidiaries, (a) whether by means of a capital contribution or purchase or
other acquisition of stock or other securities or other equity participation or
interest, (i) acquires (or after giving effect to such transaction owns) more
than 50% of the equity interest in any Person pursuant to a solicitation by the
Borrower or such Subsidiary of tenders of equity securities of such Person, or
through one or more negotiated block, market, private or other transactions, or
a combination of any of the foregoing, or (ii) except as permitted by Section
7.5(b) hereof with respect to an existing Subsidiary of the Borrower, makes any
existing corporation a Subsidiary of the Borrower or such Subsidiary, or causes
any corporation, other than a Subsidiary of the Borrower or such Subsidiary, to
be merged into the Borrower or such Subsidiary (or agrees to be merged into any
other corporation other than a wholly-owned Subsidiary (excluding directors'
qualifying shares) of the Borrower or such Subsidiary), or (b) purchases in one
transaction or a series of related transactions all or more than 50% of the
business or assets of any Person or of any operating division, facility or group
of facilities of any Person.
"Acquisition Consideration" means the consideration given by the Borrower or any
of its Subsidiaries for an Acquisition, including but not limited to the sum of
(without duplication) (a) the fair market value of any cash, property (including
Redeemable Stock) or services given, plus (b) consideration paid with proceeds
of Indebtedness permitted pursuant to this Agreement, plus (c) the amount of any
Indebtedness, accounts payable and accrued expenses assumed, incurred or
guaranteed in connection with such Acquisition by the Borrower or any of its
Subsidiaries.
"Additional Costs" has the meaning specified in Section 9.5 hereof.
"Adjusted LIBOR Rate" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100th of 1%) determined by the Administrative Agent to be equal to the
quotient obtained by dividing (a) the LIBOR Rate for such LIBOR Advance for such
Interest Period by (b) 1 minus the Reserve Requirement for such LIBOR Advance
for such Interest Period.
"Administrative Agent" means Bank of America, N.A., a national banking
association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to Section 10.1(b) hereof.
"Administrative Agent Fee Letter" has the meaning specified in Section 2.4(c)(i)
hereof.
"Advance" means any amount advanced or deemed advanced by a Lender to the
Borrower pursuant to Article 2 hereof.
"Affiliate" means, as applied to any Person, any other Person that, directly or
indirectly, through one or more Persons, Controls or is Controlled By or Under
Common Control with, such Person, or a Person who Controls or is Controlled By,
such Person.
"Agreement" means this First Amended and Restated Credit Agreement, as amended,
modified, supplemented or restated from time to time to the extent permitted
pursuant hereto.
"Agreement Date" means the date of this Agreement.
"Applicable Environmental Laws" means Applicable Laws pertaining to health or
the environment, including without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended from time to time,
"CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended by the
Used Oil Recycling Act of 1980, the Solid Waste Disposal Act amendments of 1980,
and the Hazardous and Solid Waste Amendments of 1984 (as amended from time to
time, "RCRA"), the Texas Water Code, and the Texas Solid Waste Disposal Act.
"Applicable Law" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, and (b) in respect of contracts relating to interest or finance charges
that are made or performed in the State of Texas, "Applicable Law" shall mean
the laws of the United States of America, including without limitation 12 USC ''
85 and 86, as amended from time to time, and any other statute of the United
States of America now or at any time hereafter prescribing the maximum rates of
interest on loans and extensions of credit, and the laws of the State of Texas,
including, without limitation, Art. 1H, if applicable, and if Art. 1H is not
applicable, Art. 1D, and any other statute of the State of Texas now or at any
time hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided that the parties hereto agree pursuant to Texas Finance Code
Section 346.004 that the provisions of Chapter 346 of the Texas Finance Code
shall not apply to Advances, Reimbursement Obligations, this Agreement, the
Notes or any other Loan Documents.
"Applicable Base Rate Margin" means the following per annum percentages,
applicable in the following situations:
Revolving Facility A Facility B
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Credit Term Loan Term Loan
(b)Applicability (c)Advances (d)Advances (e)Advances
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(a) The Leverage Ratio is less than 2.50 to 1 0.000 0.000 1.750
(b) The Leverage Ratio is greater than or equal to 2.50 to 1 but 0.250 0.250 1.750
less than 3.00 to 1
(c) The Leverage Ratio is greater than or equal to 3.00 to 1 but 0.500 0.500 1.750
less than 3.50 to 1
(d) The Leverage Ratio is greater than or equal to 3.50 to 1 but 0.750 0.750 1.750
less than 4.00 to 1
(e) The Leverage Ratio is greater than or equal to 4.00 to 1 1.000 1.000 1.750
The Applicable Base Rate Margin payable by the Borrower on the Base Rate
Advances outstanding hereunder shall be subject to reduction or increase, as
applicable and as set forth in the table above, on a quarterly basis according
to the performance of the Borrower as tested by using the Leverage Ratio as of
the end of the most recent Fiscal Quarter (calculated for the twelve Fiscal
Months preceding the date of determination); provided, that each adjustment in
the Applicable Base Rate Margin shall be effective on the date which is two
Business Days following receipt by the Administrative Agent of the financial
statements required to be delivered pursuant to Section 6.1 or 6.2, as
applicable, hereof and the Compliance Certificate required pursuant to Section
6.3 hereof. If such financial statements and Compliance Certificate are not
received by the Administrative Agent by the date required, the Applicable Base
Rate Margin shall be determined as if the Leverage Ratio is greater than or
equal to 4.00 to 1 until such time as such financial statements and Compliance
Certificate are received. Notwithstanding the above, until such time as the
Lenders have received the financial statements required for the fourth Fiscal
Quarter of the Borrower's 1999 Fiscal Year and related Compliance Certificate,
the Applicable Margin shall be determined as if the Leverage Ratio is greater
than or equal to 3.50 to 1 but less than 4.00 to 1; provided, further, however,
notwithstanding anything above to the contrary, if the Compliance Certificate
for the fourth Fiscal Quarter of the Borrower's 1999 Fiscal Year provides that
the Leverage Ratio is greater than or equal to 4.00 to 1, the adjustment in the
Applicable Base Rate Margin shall be retroactive to the first day of Fiscal
Year 2000.
"Applicable LIBOR Rate Margin" means the following per annum percentages,
applicable in the following situations:
Revolving Facility A Facility B
Credit Term Loan Term Loan
Applicability Advances Advances Advances
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(a) The Leverage Ratio is less than 2.50 to 1 0.875 1.250 3.000
(b) The Leverage Ratio is greater than or equal to 2.50 to 1 but 1.125 1.500 3.000
less than 3.00 to 1
(c) The Leverage Ratio is greater than or equal to 3.00 to 1 but 1.250 1.750 3.000
less than 3.50 to 1
(d) The Leverage Ratio is greater than or equal to 3.50 to 1 but 1.500 2.000 3.000
less than 4.00 to 1
1.750 2.250 3.000
(e) The Leverage Ratio is greater than or equal to 4.00 to 1
The Applicable LIBOR Rate Margin payable by the Borrower on the LIBOR Advances
outstanding hereunder shall be subject to reduction or increase, as applicable
and as set forth in the table above, on a quarterly basis according to the
performance of the Borrower as tested by using the Leverage Ratio as of the end
of the most recent Fiscal Quarter (calculated for the twelve Fiscal Months
preceding the date of determination); provided, that each adjustment in the
Applicable LIBOR Rate Margin shall be effective on the date which is two
Business Days following receipt by the Administrative Agent of the financial
statements required to be delivered pursuant to Section 6.1 or 6.2, as
applicable, hereof and the Compliance Certificate required pursuant to Section
6.3 hereof. If such financial statements and Compliance Certificate are not
received by the Administrative Agent by the date required, the Applicable LIBOR
Rate Margin shall be determined as if the Leverage Ratio is greater than or
equal to 4.00 to 1 until such time as such financial statements and Compliance
Certificate are received. Notwithstanding the above, until such time as the
Lenders have received the financial statements required for the fourth Fiscal
Quarter of the Borrower's 1999 Fiscal Year and related Compliance Certificate,
the Applicable LIBOR Rate Margin shall be determined as if the Leverage Ratio is
greater than or equal to 3.50 to 1 but less than 4.00 to 1; provided, further,
however, notwithstanding anything above to the contrary, if the Compliance
Certificate for the fourth Fiscal Quarter of the Borrower's 1999 Fiscal Year
provides that the Leverage Ratio is greater than or equal to 4.00 to1, the
adjustment in the Applicable LIBOR Rate Margin shall be retroactive to the first
day of Fiscal Year 2000.
"Applicable Specified Percentages" means the Revolving Credit Specified
Percentage, the Facility A Term Loan Specified Percentage, the Facility B Term
Loan Specified Percentage, or the Total Specified Percentage, as applicable in
the context used.
"Art. 1D" means Article 5069-1D, Title 79, Revised Civil Statutes of Texas,
1925, as amended.
"Art. 1H" means Article 5069-1H, Title 79, Revised Civil Statutes of Texas,
1925, as amended.
"Assignment Agreement" has the meaning specified in Section 11.6(d) hereof.
"Authorized Signatory" means such senior personnel of the Borrower as may be
duly authorized and designated in writing by the Borrower to execute documents,
agreements and instruments on behalf of the Borrower, and to request Advances
and Letters of Credit hereunder.
"Bank of America" means Bank of America, N.A., a national banking association,
in its capacity as a Lender.
"Base Rate Advance" means any Advance bearing interest at the Base Rate Basis.
"Base Rate Basis" means, for any day, a per annum interest rate equal to the
higher of (a) the sum of (i) 0.50%, plus (ii) the Federal Funds Rate on such
day, plus (iii) the Applicable Base Rate Margin or (b) the sum of (i) the Prime
Rate on such day plus (ii) the Applicable Base Rate Margin. The Base Rate Basis
shall be adjusted automatically without notice as of the opening of business on
the effective date of each change in the Prime Rate or Federal Funds Rate, as
applicable, to account for such change.
"Business Day" means a day on which commercial banks are open (a) for the
transaction of commercial banking business in Dallas, Texas, and (b) with
respect to any LIBOR Advance, for the transaction of international commercial
banking business (including dealings in Dollar deposits) in London, England.
"Capital Expenditures" means, for any period, expenditures made by the Borrower
and its Subsidiaries to develop or construct new facilities and real estate
ventures, computed in accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such Person,
including, without limitation, the shares of each class of capital stock in any
Person that is a corporation, and each class of partnership interest (including,
without limitation, general, limited and preference units) in any Person that is
a partnership, and each class of member interest in any Person that is a limited
liability company.
"Capitalized Lease Obligations" means all of the portions of any obligation of
the Borrower or any of its Subsidiaries as lessee under a lease which at the
time would be required to be capitalized on a balance sheet of the Borrower or
such Subsidiary prepared in accordance with GAAP.
"Change of Control" means the occurrence of any of the following events after
the Agreement Date: (a) the sale, lease or transfer of all or substantially all
of the Borrower's assets to any Person or Group, (b) the adoption of a plan
relating to the liquidation or dissolution of the Borrower, (c) any Person or
Group (other than Robert H. Dedman, Sr.) shall beneficially own (as defined in
Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act or
any successor provision thereto) more than 50% of the aggregate Voting Power of
the Borrower, or (d) during any period of twenty-four consecutive months
(excluding, however, any such period during which a public offering of the
Capital Stock of the Borrower occurs), individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Borrower was approved by a vote of a
majority of the directors of the Borrower then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved), cease for any reason to constitute a
majority of the Board of Directors of the Borrower then in office.
"Co-Agent" means any of Guaranty Federal Bank, F.S.B., Branch Banking and Trust
Company, SouthTrust Bank or Comerica Bank.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any collateral granted by any Person to the Administrative
Agent to secure the Obligations.
"Collateral Documents" means the Pledge Agreements and any other document under
which a security interest in Collateral is granted and any document related
thereto.
"Collateral Release Event" means the occurrence of each of the following events:
(a) the Facility B Term Loan Advances, together with all interest owing thereon
and all other amounts due in respect thereof, shall have been indefeasibly
repaid in full; (b) the Leverage Ratio, as set forth on the Compliance
Certificate delivered to the Administrative Agent pursuant to Section 6.3 hereof
for two consecutive Fiscal Quarters, shall be less than or equal to 3.00 to 1;
and (c) the maximum Leverage Ratio permitted pursuant to Section 7.12 shall have
been amended pursuant to the terms of Section 11.11 hereof to be 3.50 to 1.
"Commitments" means, collectively, the Revolving Credit Commitment, the Facility
A Term Loan Commitment and the Facility B Term Loan Commitment.
"Compliance Certificate" means a certificate, signed by an Authorized Signatory,
in substantially the form of Exhibit E, appropriately completed.
"Control" or "Controlled By" or "Under Common Control" means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise, but not solely by being an officer or director of that Person);
provided, however, that in any event any Person which beneficially owns,
directly or indirectly, 10% or more (in number of votes) of the securities
having ordinary Voting Power with respect to a corporation shall be conclusively
presumed to control such corporation.
"Controlled Group" means as of the applicable date, as to any Person not an
individual, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under common control with
such Person and which, together with such Person, are treated as a single
employer under Section 414(b) or (c) of the Code; provided, however, that the
Subsidiaries of the Borrower shall be deemed to be members of the Borrower's
Controlled Group.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to time
in effect.
"Default" means an Event of Default and/or any of the events specified in
Section 8.1, hereto regardless of whether there shall have occurred any passage
of time or giving of notice or both that would be necessary in order to
constitute such event an Event of Default.
"Default Application Notice" has the meaning specified in Section 2.10(d)(ii)(B)
hereof.
"Default Rate" means a simple per annum interest rate equal to (a) with respect
to Base Rate Advances the lesser of (i) the Highest Lawful Rate or (ii) the Base
Rate Basis then in effect plus 2.00% or (b) with respect to LIBOR Advances, the
lesser of (i) the Highest Lawful Rate or (ii) the LIBOR Basis then in effect
plus 2.00%.
"Determining Lenders" means, on any date of determination, any combination of
Lenders whose Total Specified Percentages aggregate more than 50%; provided,
however, in the event that all of the Commitments have been terminated,
"Determining Lenders" means, on any date of determination, any combination of
Lenders having more than 50% of the Advances (calculated with respect to Swing
Line Advances by using each Lender's, including the Swing Line Bank's, Revolving
Credit Specified Percentage of any outstanding Swing Line Advances) and
participations in Letters of Credit then outstanding.
"Dividend" means, as to any Person, (a) any declaration or payment of any
dividend (other than a dividend in stock or in the right to acquire stock of
such Person) on, or the making of any distribution on account of, any Capital
Stock of such Person and (b) any purchase, redemption, or other acquisition or
retirement for value of any Capital Stock of such Person, excluding, however,
purchases of Capital Stock pursuant to the Redemption Obligation.
"Documentation Agent" means Bank One, Texas, N.A.
"Dollar" or "$" means the lawful currency of the United States of America.
"Domestic Subsidiary" means any Subsidiary of the Borrower other than a Foreign
Subsidiary.
"EBITDA" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) Pretax
Net Income (excluding therefrom, to the extent included in determining Pretax
Net Income, (i) any items of extraordinary gain, including net gains on the sale
of assets other than asset sales in the ordinary course of business, and (ii)
equity in joint venture net income, and adding thereto, to the extent included
in determining Pretax Net Income, any items of extraordinary loss, including net
losses on the sale of assets other than asset sales in the ordinary course of
business), plus (b) depreciation and amortization, plus (c) interest expense
(including but not limited to interest expense pursuant to Capitalized Lease
Obligations), plus (d) to the extent included in determining Pretax Net Income,
non-recurring, non-cash charges, minus (e) to the extent included in determining
Pretax Net Income, non-recurring credits, plus (f) cash distributions received
from any Person the financial results of which are not consolidated with the
financial results of the Borrower pursuant to GAAP.
"EBITDAR" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) EBITDA,
plus (b) lease expense pursuant to Operating Leases.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate or Related Fund of a
Lender; 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 with respect to such Person is effected in accordance with Section
11.6 hereof, the Borrower, such approval not to be unreasonably withheld or
delayed by the Borrower or the Administrative Agent; such approval to be deemed
given by the execution of an Assignment Agreement by the Administrative Agent
and 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 two 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 any of its Affiliates shall qualify as an Eligible
Assignee.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any regulation promulgated thereunder.
"ERISA Event" means, with respect to the Borrower and its Subsidiaries, (a) a
Reportable Event (other than a Reportable Event not subject to the provision for
30-day notice to the PBGC pursuant to regulations issued under Section 4043 of
ERISA), (b) the withdrawal of any such Person or any member of its Controlled
Group from a Plan subject to Title IV of ERISA during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate under Section 4041(c) of ERISA, (d)
the institution of proceedings to terminate a Plan by the PBGC, (e) the failure
to make required contributions which could result in the imposition of a lien
under Section 412 of the Code or Section 302 of ERISA, or (f) any other event or
condition which could reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination by the PBGC of, or the appointment by the
appropriate United States District Court of a trustee to administer, any Plan or
the imposition of any liability under Title IV of ERISA other than PBGC premiums
due but not delinquent under Section 4007 of ERISA.
"Event of Default" means any of the events specified in Section 8.1 hereof,
provided that any requirement for notice or lapse of time or both has been
satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Matters" has the meaning specified in Section 5.9(a) hereof.
"Existing Letters of Credit" means those Letters of Credit existing on the
Agreement Date and set forth on Schedule 1.1(c) hereto.
"Facility A Term Loan Advance" means an Advance made pursuant to Section 2.1(b)
hereof.
"Facility A Term Loan Commitment" means the commitments of the Lenders, subject
to the terms and conditions hereof, to make Facility A Term Loan Advances up to
an aggregate principal amount of $100,000,000, as terminated pursuant to Section
2.1(b) hereof.
"Facility A Term Loan Maturity Date" means September 24, 2004, or the earlier
date of acceleration of the Facility A Term Loan Advances pursuant to Section
8.2 hereof.
"Facility A Term Loan Note" means any Promissory Note of the Borrower evidencing
Facility A Term Loan Advances hereunder, substantially in the form of Exhibit B
hereto, together with any extension, renewal or amendment thereof, or
substitution therefor.
"Facility A Term Loan Specified Percentage" means, as to any Lender, the
percentage indicated beside its name on Schedule 1.1(a) hereto as its Facility A
Term Loan Specified Percentage, or as adjusted or specified in any amendment to
this Agreement or in any Assignment Agreement.
"Facility B Term Loan Advance" means an Advance made pursuant to Section 2.1(c)
hereof.
"Facility B Term Loan Commitment" means the commitments of the Lenders, subject
to the terms and conditions hereof, to make Facility B Term Loan Advances up to
an aggregate principal amount of $200,000,000, as terminated pursuant to Section
2.1(c) hereof.
"Facility B Term Loan Maturity Date" means March 24, 2007, or the earlier date
of acceleration of the Facility B Term Loan Advances pursuant to Section 8.2
hereof.
"Facility B Term Loan Note" means any Promissory Note of the Borrower evidencing
Facility B Term Loan Advances hereunder, substantially in the form of Exhibit C
hereto, together with any extension, renewal or amendment thereof, or
substitution therefor.
"Facility B Term Loan Specified Percentage" means, as to any Lender, the
percentage indicated beside its name on Schedule 1.1(a) hereto as its Facility B
Term Loan Specified Percentage, or as adjusted or specified in any amendment to
this Agreement or in any Assignment Agreement.
"Facility Fee" has the meaning specified in Section 2.4(a) hereof.
"Federal Funds Rate" means, for any day, the rate per annum 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 Dallas 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 of the quotations for
the day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Fee Letter" means that certain letter, dated August 5, 1999, from Bank of
America, N.A., and Banc of America Securities LLC, providing for the payment of
certain fees with respect to this Agreement.
"Financial Statements" has the meaning specified in Section 4.1(j) hereof.
"Fiscal Month" means a consecutive 28-day period. The first Fiscal Month of the
Fiscal Year shall commence on the first day of the Fiscal Year.
"Fiscal Quarter" means four periods in each Fiscal Year. The first three shall
consist of three consecutive Fiscal Months and the last shall consist of four
consecutive Fiscal Months. The First Quarter of the Fiscal Year shall commence
on the first day of the Fiscal Year.
"Fiscal Year" means a period commencing on the Wednesday following the last
Tuesday in December and ending on the last Tuesday of the following December.
"Fixed Charges" means, for any date of calculation, calculated for the Borrower
and its Subsidiaries on a consolidated basis in accordance with GAAP, the sum
of, without duplication, (a) interest expense (including but not limited to
interest expense pursuant to Capitalized Lease Obligations, but not including
amortization of discount on Membership Deposits and amortization of discounts on
Indebtedness), plus (b) lease expense under Operating Leases, in each case for
the applicable period immediately preceding the date of calculation, plus (c)
all scheduled principal payments of Total Debt.
"Fixed Charge Coverage Ratio" means, for any date of determination (which shall
be as of the last day of each Fiscal Quarter), the ratio of (a) the sum of (i)
EBITDAR minus (ii) Maintenance Capital Expenditures to (b) Fixed Charges, in
each case for the immediately preceding four Fiscal Quarters.
"Foreign Subsidiary" means any Subsidiary of the Borrower which is not organized
under the Laws of any state of the United States of America or the District of
Columbia.
"Form 1001" has the meaning specified in Section 2.14(e)(i)(B) hereof.
"Form 4224" has the meaning specified in Section 2.14(e)(i)(A) hereof.
"GAAP" means generally accepted accounting principles applied on a consistent
basis, set forth in the Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants, or their successors which
are applicable in the circumstances as of the date in question. The requirement
that such principles be applied on a consistent basis shall mean that the
accounting principles applied in a current period are comparable in all material
respects to those applied in a preceding period.
"Group" means any Persons acting together which would constitute a "group" for
purposes of Section 13(d) of the Exchange Act or any successor provision
thereto.
"Guarantor" means each direct and indirect Subsidiary of the Borrower which
executes a Subsidiary Guaranty.
"Guaranty" or "Guaranteed", means (a) as applied to an obligation of another
Person, (i) a guaranty, direct or indirect, in any manner, of any part or all of
such obligation, or (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of any part
or all of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to amounts which may be drawn by
beneficiaries of outstanding letters of credit or (b) an agreement, direct or
indirect, contingent or otherwise, to maintain the net worth, working capital,
earnings or other financial performance of another Person; provided, however,
Guaranty does not mean the endorsement of instruments for collection or deposit
in the ordinary course of business.
"Hazardous Substance" means any hazardous, dangerous or toxic substance or
material in the meaning of any Law.
"Hedge Agreements" means any and all agreements, devices or arrangements
designed to protect at least one of the parties thereto from the fluctuations of
interest rates, currency exchange rates, forward rates applicable to such
party's assets, commodity prices (including commodity hedging agreements),
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.
"Highest Lawful Rate" means at the particular time in question the maximum rate
of interest which, under Applicable Law, the Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the weekly rate ceiling described in and computed in accordance with the
provisions of Art. 1D.003, or (b) if the parties subsequently contract as
allowed by Applicable Law, the quarterly ceiling or the annualized ceiling
computed pursuant to Art. 1D.008; provided, however, that at any time the weekly
rate ceiling, the quarterly ceiling or the annualized ceiling shall be less than
18% per annum or more than 24% per annum, the provisions of Art. 1D.009(a) and
(b) shall control for purposes of such determination, as applicable.
"Increased Advance Costs" has the meaning specified in Section 9.3 hereof.
"Increased Letter of Credit Costs" has the meaning specified in Section 2.15(d)
hereof.
"Indebtedness" means, with respect to any Person, without duplication, (a) all
obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, (d) all obligations issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable in the
ordinary course of business), (e) all obligations secured by any Lien on any
property or asset owned by such Person, whether or not the obligation secured
thereby shall have been assumed, (f) to the extent not otherwise included, all
Capitalized Lease Obligations of such Person, all obligations in respect of
letters of credit, bankers' acceptances and similar instruments, and all
obligations under Hedge Agreements, (g) any "withdrawal liability" of such
Person as such term is defined under Part I of Subtitle E of Title IV or ERISA,
(h) all Redeemable Stock, (i) the principal portion of all obligations of such
Person under any Synthetic Lease, and (j) any Guaranty of such Person of any
obligation of another Person constituting obligations of a type set forth above.
"Indemnified Matters" has the meaning specified in Section 5.9(a) hereof.
"Indemnitees" has the meaning specified in Section 5.9(a) hereof.
"Interest Period" means the period beginning on the day any LIBOR Advance is
made and ending one, two, three or six months thereafter (as the Borrower shall
select); provided, however, that:
(i) if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless the result of such extension would be to extend such
Interest Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(iii) the Borrower shall select Interest Periods so as not to require
payment or prepayment of any LIBOR Advance during an Interest Period for such
Advance; and
(iv) there shall be outstanding at any one time no more than ten
Interest Periods in the aggregate.
"Investment" means any direct or indirect purchase or other acquisition of,
capital stock or other securities of, or beneficial interest in, any other
Person which is not an Acquisition, or any direct or indirect loan, advance
(other than loans or advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution to, or investment in any other Person, including without
limitation the purchase of accounts receivable of any other Person that are not
current assets or do not arise in the ordinary course of business.
"Investment Policy" means those investments permitted to be made by the Borrower
and its Subsidiaries set forth in the Investment Policy of the Borrower attached
hereto as Schedule 1.1(d), as such Investment Policy may be amended with the
consent of the Board of Directors of the Borrower after the Agreement Date, but
only to the extent that such amendments are approved in writing by the
Determining Lenders.
"Issuing Bank" means any Lender which agrees to issue a Letter of Credit.
"Law" means any statute, law, ordinance, regulation, rule, order, writ,
injunction, or decree of any Tribunal.
"Lender" means each financial institution shown on the signature pages hereof so
long as such financial institution maintains a portion of any of the Commitments
or is owed any part of the Obligations (including the Administrative Agent in
its individual capacity), and each Eligible Assignee that hereafter becomes a
party hereto pursuant to Section 11.6 hereof, subject to the limitations set
forth therein.
"L/C Cash Collateral Account" has the meaning specified in Section 2.15(g)(i)
hereof.
"L/C Related Documents" has the meaning specified in Section 2.15(e)(i) hereof.
"Letter of Credit" means any letter of credit issued by an Issuing Bank pursuant
to Section 2.15(a) hereof (or any Existing Letter of Credit).
"Letter of Credit Agreement" has the meaning specified in Section 2.15(b)
hereof.
"Letter of Credit Facility" has the meaning specified in Section 2.15(a) hereof.
"Leverage Ratio" means, for any date of calculation (which shall be as of the
last day of each Fiscal Quarter), the ratio of Total Debt as of the date of
determination to EBITDA calculated for the four consecutive Fiscal Quarters
ending on the date of calculation. For purpose of calculation of the Leverage
Ratio only, with respect to assets not owned at all times during the four Fiscal
Quarters immediately preceding the date of calculation of EBITDA, there shall be
(i) included in EBITDA the proforma EBITDA (but calculated to exclude any
increase in EBITDA which would be the result of any expenses that the Borrower
projects to be eliminated by such proposed acquisition) of any assets acquired
during any such four Fiscal Quarters and (ii) excluded from EBITDA the EBITDA of
any assets disposed of during any of such four Fiscal Quarters.
"LIBOR Advance" means any Advance bearing interest at the LIBOR Basis.
"LIBOR Basis" means, with respect to any LIBOR Advance, a per annum interest
rate equal to the lesser of (a) the Highest Lawful Rate, or (b) the sum of the
Adjusted LIBOR Rate applicable to such LIBOR Advance plus the Applicable LIBOR
Rate Margin.
"LIBOR Lending Office" means, with respect to a Lender, the office designated as
its LIBOR Lending Office on Schedule 1.1(b) attached hereto, and such other
office of the Lender or any of its Affiliates hereafter designated by written
notice to the Borrower and the Administrative Agent.
"LIBOR Rate" means, for any LIBOR Advance 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 Advance 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.
"Lien" means, with respect to any property, any mortgage, lien, pledge,
collateral assignment, hypothecation, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment or other similar
encumbrance of any kind in respect of such property, whether or not choate,
vested or perfected, excluding (a) Liens securing Indebtedness among the
Obligors, provided that such Indebtedness is subordinated to the Obligations in
a manner satisfactory to the Determining Lenders and (b) Liens to secure
Indebtedness of any Non-Guarantor owed to any Obligor.
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation by or before any Tribunal, including, without limitation,
proceedings, claims, lawsuits, and/or investigations under or pursuant to any
environmental, occupational, safety and health, antitrust, unfair competition,
securities, Tax or other Law, or under or pursuant to any contract, agreement or
other instrument.
"Loan Documents" means this Agreement, the Notes, any Subsidiary Guaranty, any
Pledge Agreement, the L/C Related Documents, the Fee Letter, the Administrative
Agent Fee Letter, any Hedge Agreement with any Lender or an Affiliate of any
Lender entered into in the ordinary course of business for the purpose of
limiting risks entered into in the ordinary course of business, and any other
document or agreement executed or delivered from time to time by the Borrower
and any of its Subsidiaries or any other Person in connection herewith or
therewith or as security for the Obligations, each as amended, modified,
supplemented or restated from time to time.
"Maintenance Capital Expenditures" means, for any date of determination, an
amount equal to the product of (a) 5% multiplied by (b) gross revenue of the
Borrower and its Subsidiaries, on a consolidated basis, determined in accordance
with GAAP, calculated for the four consecutive Fiscal Quarters ending on the
date of determination.
"Managing Agent" means either First Union National Bank or Credit Lyonnais New
York Branch.
"Material Adverse Effect" means any act or circumstance or event that (a) could
reasonably be expected to be material and adverse to the business, assets,
liabilities, financial condition, results of operations or prospects of the
Borrower and its Subsidiaries taken as a whole, or (b) in any manner whatsoever
does or could reasonably be expected to materially and adversely affect (i) the
validity or enforceability of any Loan Document, (ii) the ability of the
Borrower and its Subsidiaries taken as a whole to perform their respective
Obligations under the Loan Documents, or (iii) the Rights of the Lenders or the
Administrative Agent under any of the Loan Documents.
"Membership Deposits" means the advance initiation deposits paid to Subsidiaries
of the Borrower by members of Subsidiaries of the Borrower upon their acceptance
as a member of Subsidiaries of the Borrower, and as reported in accordance with
GAAP.
"Multiemployer Plan" means, as to any Person, at any time, a "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA and to which such Person
or any member of its Controlled Group is making, or is obligated to make
contributions or has made, or been obligated to make, contributions.
"Necessary Authorization" means any right, franchise, license, permit, consent,
approval or authorization from, or any filing or registration with, any Tribunal
or any Person necessary to enable the Borrower or any of its Subsidiaries to
maintain and operate its business and properties.
"Negative Pledge" means any agreement, contract or other arrangement whereby the
Borrower or any of its Subsidiaries is prohibited from, or would otherwise be in
default as a result of, creating, assuming, incurring or suffering to exist,
directly or indirectly, any Lien on any of its assets in favor of the
Administrative Agent for the benefit of the Lenders under this Agreement.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or other
disposition of any asset by or of any Person (including any Capital Stock owned
by such Person), the amount of cash received by such Person in connection with
such transaction after deducting therefrom the aggregate, without duplication,
of the following amounts to the extent properly attributable to such transaction
or to any asset that may be the subject thereof: (i) reasonable brokerage
commissions, legal fees, finder's fees, financial advisory fees, fees for
solvency opinions, accounting fees, underwriting fees, investment banking fees,
survey, title insurance, appraisals, notaries and other similar commissions and
fees, and expenses, in each case, to the extent paid, payable or reimbursed by
such Person; (ii) filing, recording or registration fees or charges or similar
fees or charges paid by such Person; (iii) without duplication, taxes paid or
payable by such Person or any shareholder, partner or member of such Person to
governmental taxing authorities as a result of such sale or other disposition
(after taking into account any available tax credits or deductions or any tax
sharing arrangements); and (iv) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Obligations) that is secured by a Lien on the asset in question, to the extent
required pursuant to the documentation evidencing such Indebtedness.
"Net Income" means net earnings (or deficit) after taxes of the Borrower and its
Subsidiaries, on a consolidated basis, determined in accordance with GAAP.
"Net Tangible Assets" means, for the Borrower and its Subsidiaries, on a
consolidated basis, determined in accordance with GAAP, an amount equal to the
total assets of the Borrower and its Subsidiaries minus goodwill and any other
items that are classified as intangibles in accordance with GAAP.
"Net Worth" means, for the Borrower and its Subsidiaries, on a consolidated
basis, determined in accordance with GAAP, total stockholders' equity.
"Non-Guarantors" means the Subsidiaries of the Borrower which are not
Guarantors. The Borrower may designate a Non-Guarantor as a Guarantor (in which
case such Subsidiary shall execute a Subsidiary Guaranty and deliver such
certificates and documents related thereto as shall be required by the
Administrative Agent) by written notice to the Administrative Agent.
"Notes" means, collectively, the Revolving Credit Notes, the Facility A Term
Loan Notes and the Facility B Term Loan Notes.
"Notice of Borrowing" has the meaning specified in Section 2.2(a) hereof.
"Notice of Continuation/Conversion" has the meaning specified in Section 2.2(d)
hereof.
"Notice of Issuance" has the meaning specified in Section 2.15(b) hereof.
"Obligations" means (a) all obligations of any nature (whether matured or
unmatured, fixed or contingent, including the Reimbursement Obligations, and,
including without limitation, interest accruing after maturity of the Advances
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) of the Borrower or any other Obligor to any
Lender, the Administrative Agent or any Affiliate of any Lender under any of the
Loan Documents, and (b) all obligations of the Borrower or any other Obligor for
losses, damages, expenses or any other liabilities of any kind that any Lender,
the Administrative Agent or any Affiliate of any Lender may suffer by reason of
a breach by the Borrower or any other Obligor of any obligation, covenant or
undertaking with respect to any Loan Document.
"Obligor" means the Borrower and each Guarantor.
"Operating Lease" means any operating lease, as defined in the Financial
Accounting Standard Board Statement of Financial Accounting Standards No. 13,
dated November, 1976 or otherwise in accordance with GAAP.
"Other Taxes" has the meaning specified in Section 2.14(b) hereof.
"Ownership Information" has the meaning specified in Section 11.6(j) hereof.
"Participants" has the meaning specified in Section 11.6(c) hereof.
"Participations" has the meaning specified in Section 11.6(c) hereof.
"Payment Date" means the last day of the Interest Period for any LIBOR Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
"Permitted Liens" means, as applied to any Person:
(a) Any Lien in favor of the Administrative Agent to secure the Obligations
hereunder;
(b) Liens for taxes, assessments, governmental charges, levies or claims
that are not yet delinquent or that are being diligently contested in good faith
by appropriate proceedings in accordance with Section 5.6 hereof and for which
adequate reserves shall have been set aside on such Person's books, but only so
long as no foreclosure, restraint, sale or similar proceedings have been
commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers, landlords and
materialmen and other similar Liens incurred in the ordinary course of business
or by operation of Law for sums not yet due or being contested in good faith, if
such reserve or appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;
(d) Liens incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance, pensions or other
social security programs or similar legislation;
(e) Easements, right-of-way, restrictions and other similar encumbrances on
the use of real property which do not interfere in any material respect with the
ordinary conduct of the business of such Person;
(f) Liens arising from filing Uniform Commercial Code financing statements
for precautionary purposes relating solely to operating leases of personal
property permitted by this Agreement under which the Borrower or any of its
Subsidiaries is a lessee;
(g) Any zoning or similar law or right reserved to or vested in any Tribunal
to control or regulate the use of any real property;
(h) Liens incurred or deposits made to secure the performance of bids,
tenders, leases, trade contracts (other than for Indebtedness), statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;
(i) Any leases or subleases currently in effect, entered into in the
ordinary course of business or entered into in compliance with the Loan
Documents;
(j) Any Liens which are described on Schedule 7.2 hereto (and any
replacement, extension or renewal thereof), and Liens resulting from the
refinancing of the related Indebtedness, provided that the Indebtedness secured
thereby shall not be increased and the Liens shall not cover additional assets
of the Borrower on or after the Agreement Date or the date of such refinancing,
as the case may be; and
(k) Liens created to secure the purchase price of assets acquired (or
existing on property at the time such property is acquired) by such Person,
which are created solely for the purpose of financing the acquisition of such
assets and created at the time of acquisition or which exist against such assets
at the time of acquisition thereof or within 180 days thereafter, provided that
(i) each such Lien shall at all times be confined solely to the asset or assets
so acquired (and proceeds thereof), and refinancings of the Indebtedness secured
thereby so long as any such Lien remains solely on the asset or assets acquired
(and the proceeds thereof), (ii) the aggregate principal amount of Indebtedness
outstanding at any time secured by any Liens (including, without limitation,
clause (j) above) shall not exceed 10% of Net Tangible Assets at such time, and
(iii) the aggregate consideration paid for such assets does not exceed 100% of
the fair market value of such assets.
"Permitted Secured Indebtedness" means (a) Indebtedness of the Borrower and its
Subsidiaries secured by Liens described in clauses (j) and (k) of the definition
of Permitted Liens, and (b) Indebtedness under the Loan Documents.
"Person" means an individual, corporation, partnership, limited liability
company, trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
(including a Multiemployer Plan) pursuant to which any employees of the
Borrower, its Subsidiaries or any member of their Controlled Group participate.
"Pledge Agreement" means any Pledge Agreement executed by the Borrower or any of
its Domestic Subsidiaries, substantially in the form of Exhibit D hereto, as
amended, supplemented, modified, renewed or otherwise restated from time to
time.
"Pretax Net Income" means net profit (or loss) before taxes of the Borrower and
its Subsidiaries, on a consolidated basis, determined in accordance with GAAP.
"Prime Rate" means, at any time, the prime interest rate announced or published
by the Reference Lender from time to time as its reference rate for the
determination of interest rates for loans of varying maturities in United States
dollars to United States residents of varying degrees of creditworthiness and
being quoted at such time by the Reference Lender as its "prime rate;" it being
understood that such rate may not be the lowest rate of interest charged by the
Reference Lender.
"Qualifying Date" means the date of the Collateral Release Event.
"Quarterly Date" means the last day of each March, June, September and December,
beginning September 30, 1999.
"Redeemable Stock" means any Capital Stock of the Borrower or its Subsidiaries
which prior to March 24, 2007 is (a) mandatorily redeemable (by sinking fund or
similar payments or otherwise), (b) redeemable at the option of the holder
thereof or (c) convertible into Indebtedness.
"Redemption Obligation" means that certain obligation of the Borrower to
repurchase Capital Stock of the Borrower pursuant to Section 6.05 of the
Borrower's Employee Stock Ownership Plan, effective as of January 1, 1999.
"Reference Lender" means Bank of America; provided that if Bank of America shall
cease to be the Administrative Agent hereunder, Bank of America shall cease to
be the Reference Lender, and the new Administrative Agent (after consultation
with the Borrower) shall, with notice to the Borrower and the Lenders, designate
itself as the Reference Lender.
"Register" has the meaning specified in Section 11.6(j) hereof.
"Regulatory Modification" has the meaning specified in Section 9.5 hereof.
"Reimbursement Obligations" means, in respect of any Letter of Credit as at any
date of determination, the sum of (a) the maximum aggregate amount which is then
available to be drawn under such Letter of Credit plus (b) the aggregate amount
of all drawings under such Letter of Credit not theretofore reimbursed by the
Borrower.
"Related Fund" means, with respect to any Lender which is a fund that invests in
loans, any other fund that invests in loans and is managed by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.
"Release Date" means the date on which the Notes have been paid in full, all
other Obligations due and owing have been paid and performed in full, and the
Commitments have been terminated.
"Reportable Event" has the meaning set forth in Section 4043(c) of ERISA.
"Required Facility A Term Loan Lenders" means, on any date of determination, any
combination of Lenders having more than 50% of the Facility A Term Loan Advances
then outstanding.
"Required Facility B Term Loan Lenders" means, on any date of determination, and
combination of Lenders having more than 50% of the Facility B Term Loan Advances
then outstanding.
"Required Revolving Credit Lenders" means, on any date of determination, any
combination of Lenders whose Revolving Credit Specified Percentages aggregate
more than 50%, provided, however, in the event that the Revolving Credit
Commitment has terminated, "Required Revolving Credit Lenders" means, on any
date of determination, any combination of Lenders having more than 50% of the
Revolving Credit Advances then outstanding.
"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 "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 (a) any category of
liabilities which includes deposits by reference to which the Adjusted LIBOR
Rate is to be determined, or (b) any category of extensions of credit or other
assets which include LIBOR Advances. The Adjusted LIBOR Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.
"Responsible Officer" means, of any Person, the President, chief operating
officer, chief executive officer, chief financial officer, chief accounting
officer or treasurer of such Person.
"Restricted Payments" means, collectively, (a) Dividends, and (b) any payment or
prepayment of principal, premium or penalty on any Indebtedness of the Borrower
or any of its Subsidiaries or any defeasance, redemption, purchase, repurchase
or other acquisition or retirement for value, in whole or in part, of any
Indebtedness (including, without limitation, the setting aside of assets or the
deposit of funds therefor) other than payment of principal of such Indebtedness
at regularly scheduled maturities.
"Revolving Credit Advance" means an Advance made pursuant to Section 2.1(a)
hereof or Section 2.2(g) hereof in respect of a Swing Line Advance or Section
2.15(c) hereof in respect of drawing under a Letter of Credit.
"Revolving Credit Commitment" means the commitments of the Lenders, subject to
the terms and conditions of this Agreement, to make Revolving Credit Advances up
to an aggregate principal amount of $350,000,000.00, as reduced or terminated
pursuant to Section 2.6 or 8.2 hereof.
"Revolving Credit Commitment Maturity Date" means September 24, 2004, or the
earlier date of termination in whole of the Revolving Credit Commitment pursuant
to Section 2.6 or 8.2 hereof.
"Revolving Credit Note" means any Promissory Note of the Borrower evidencing
Revolving Credit Advances hereunder, substantially in the form of Exhibit A
hereto, together with any extension, renewal, or amendment thereof, or
substitution therefor.
"Revolving Credit Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on Schedule 1.1(a) hereto as its Revolving Credit
Specified Percentage, or as adjusted or specified in any amendment to this
Agreement or in any Assignment Agreement.
"Rights" means rights, remedies, powers and privileges.
"Secured Indebtedness" means all Indebtedness of the Borrower and its
Subsidiaries secured by Liens.
"Solvent" means, with respect to any Person, that as of the date of
determination, (a) the fair saleable value of the assets of such Person is
greater than the total amount of liabilities (including contingent and
unliquidated liabilities) of such Person, (b) such Person is able to pay the
probable liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person, and (c) such Person does not have
unreasonably small capital with which to carry on its business. In computing
the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.
"Special Counsel" means the law firm of Donohoe, Jameson & Carroll, P.C., or
such other legal counsel as the Administrative Agent may select.
"Specified Percentage" means, as applicable or as the context requires, the
Revolving Credit Specified Percentage, the Facility A Term Loan Specified
Percentage or the Facility B Term Loan Specified Percentage.
"Subsidiary" of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate or other Person of which (or in
which) more than 50% of:
(a) the outstanding capital stock having Voting Power to elect a majority of
the Board of Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall or might
have Voting Power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership or joint
venture,
(c) the beneficial interest of such trust or estate, or
(d) the equity interest of such other Person,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries;
provided, however, notwithstanding anything above to the contrary, Subsidiary
shall also mean and include any other Person the financial results of which are
consolidated with the financial results of the Borrower pursuant to GAAP.
"Subsidiary Guaranty" means a guaranty, substantially in the form of Exhibit D
hereto, executed by each Domestic Subsidiary of the Borrower, as amended,
supplemented, modified, renewed or otherwise restated from time to time.
"Swing Line Advance" means an Advance made pursuant to Section 2.1(d) hereof.
"Swing Line Bank" means Bank of America, N.A. and any successor thereto
appointed in accordance with Section 10.1(b) hereof.
"Swing Line Facility" has the meaning specified in Section 2.1(d) hereof.
"Syndication Agent" means Wells Fargo Bank (Texas), N.A.
"Synthetic Lease" means any synthetic lease, tax retention generating lease, or
off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but which is classified as an
Operating Lease pursuant to GAAP.
"Tangible Net Worth" means, as of any date of determination, the sum of the
following for the Borrower and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP, (a) Net Worth, minus (b) the sum of the
following (without duplication in respect of items already deducted in arriving
at Net Worth): the book value of all assets which would be treated as
intangible assets under GAAP, including without limitation, goodwill,
trademarks, copyrights, patents, organizational expense and experimental
expense, deferred assets, unamortized debt discount and expense, any write-up in
the book value of assets resulting from the revaluation thereof subsequent to
December 29, 1998.
"Taxes" has the meaning specified in Section 2.14(a) hereof.
"Term Loan Advance" means a Facility A Term Loan Advance or a Facility B Term
Loan Advance.
"Total Capitalization" means, as of any date of determination, the sum of the
following for the Borrower and its Subsidiaries, on a consolidated basis
determined in accordance with GAAP, (a) Net Worth, plus (b) the redemption value
of common Capital Stock of the Borrower and its Subsidiaries, plus (c) Total
Debt.
"Total Debt" means, as of any date of determination, determined for the Borrower
and its Subsidiaries on a consolidated basis, to the extent that the following
would appear as a liability upon the consolidated balance sheet of the Borrower
and its Subsidiaries in accordance with GAAP: (i) indebtedness for borrowed
money, (ii) obligations evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations to pay the deferred purchase price of property or
services other than trade payables incurred in the ordinary course of business,
(iv) Capitalized Lease Obligations, and (v) obligations in respect of Redeemable
Stock (excluding, however, the Redemption Obligation).
"Total Specified Percentage" means, as to any Lender, the percentage indicated
beside its name on Schedule 1.1(a) hereto as its Total Specified Percentage, or
as adjusted or specified in any amendment to this Agreement or in any Assignment
Agreement, as adjusted to account for any permanent reductions in the Revolving
Credit Commitment and any payments of Facility A Term Loan Advances or Facility
B Term Loan Advances.
"Tribunal" means any (a) state, commonwealth, federal, foreign, territorial, or
other court or government body, subdivision, agency, department, commission,
board, bureau, or instrumentality of a governmental or other regulatory or
public body or authority or (b) private arbitration board or panel.
"UCC" means the Uniform Commercial Code of Texas, as amended from time to time,
and the Uniform Commercial Code applicable in such other states as any
Collateral may be located.
"Unsecured Indebtedness" means Indebtedness of the Borrower and its Subsidiaries
other than Secured Indebtedness.
"Unsecured Subordinated Indebtedness" means Unsecured Indebtedness which is at
all times subordinated to the payment of the Obligations on terms reasonably
satisfactory to the Administrative Agent.
"Voting Power" means, with respect to any Person, the power ordinarily (without
the occurrence of a contingency) to elect the members of the board of directors
(or persons performing similar functions).
"Year 2000 Compliant" has the meaning specified in Section 4.1(x) hereof.
Section 1.2 Amendments and Renewals.
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Each definition of an agreement in this Article 1 shall include such agreement
as amended to date, and as amended or renewed from time to time in accordance
with its terms, but only with the prior written consent of the Determining
Lenders or all the Lenders as required pursuant to Section 11.11 hereof.
Section 1.3 Construction.
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The terms defined in this Article 1 (except as otherwise expressly provided in
this Agreement) for all purposes shall have the meanings set forth in Section
1.1 hereof, and the singular shall include the plural, and vice versa, unless
otherwise specifically required by the context. All accounting terms used in
this Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP on a consolidated basis for the Borrower and its
Subsidiaries, unless otherwise expressly stated herein.
ARTICLE 2
Advances
Section 2.1 The Advances
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(a) Revolving Credit Advances. Each Lender with a Revolving Credit
Specified Percentage severally agrees, upon the terms and subject to the
conditions of this Agreement, to make Revolving Credit Advances to the Borrower
from time to time to but not including the Revolving Credit Commitment Maturity
Date in an aggregate amount not to exceed its Revolving Credit Specified
Percentage of the Revolving Credit Commitment less its Revolving Credit
Specified Percentage of the aggregate amount of all (i) Reimbursement
Obligations then outstanding (assuming compliance with all conditions to
drawing) and (ii) Swing Line Advances then outstanding, for the purposes set
forth in Section 5.8 hereof. Subject to Section 2.9 hereof, Revolving Credit
Advances may be repaid and then reborrowed. Notwithstanding any provision in
any Loan Document to the contrary, in no event shall the principal amount of all
outstanding Revolving Credit Advances, Reimbursement Obligations and Swing Line
Advances exceed the Revolving Credit Commitment.
(b) Facility A Term Loan Advances. Each Lender with a Facility A Term Loan
Specified Percentage severally agrees, upon the terms and subject to the
conditions of this Agreement, to make a Facility A Term Loan Advance to the
Borrower on the Agreement Date in an amount equal to such Lender's Facility A
Term Loan Specified Percentage of the Facility A Term Loan Commitment for the
purposes set forth in Section 5.8 hereof. Notwithstanding any provision in any
Loan Document to the contrary, in no event shall the principal amount of all
outstanding Facility A Term Loan Advances exceed the Facility A Term Loan
Commitment. Immediately upon the making of the Facility A Term Loan Advances,
the Facility A Term Loan Commitment shall be automatically terminated. Facility
A Term Loan Advances may not be repaid and then reborrowed.
(c) Facility B Term Loan Advances. Each Lender with a Facility B Term Loan
Specified Percentage severally agrees, upon the terms and subject to the
conditions of this Agreement, to make a Facility B Term Loan Advance to the
Borrower on the Agreement Date in an amount equal to such Lender's Facility B
Term Loan Specified Percentage of the Facility B Term Loan Commitment for the
purposes set forth in Section 5.8 hereof. Notwithstanding any provision in any
Loan Document to the contrary, in no event shall the principal amount of all
outstanding Facility B Term Loan Advances exceed the Facility B Term Loan
Commitment. Immediately upon the making of the Facility B Term Loan Advances,
the Facility B Term Loan Commitment shall be automatically terminated. Facility
B Term Loan Advances may not be repaid and then reborrowed.
(d) Swing Line Advances. The Borrower may request the Swing Line Bank to
make, and the Swing Line Bank shall make, on the terms and conditions
hereinafter set forth, advances ("Swing Line Advances") to the Borrower from
time to time on any Business Day during the period from the Agreement Date to
the Revolving Credit Commitment Maturity Date in an aggregate principal amount
not to exceed at any time outstanding the lesser of (a) $20,000,000 and (b) an
amount equal to the Revolving Credit Commitment minus (i) the aggregate
principal amount of Revolving Credit Advances then outstanding and (ii) the
aggregate amount of all Reimbursement Obligations then outstanding (the "Swing
Line Facility"). Each Swing Line Advance shall be in an amount not less than
$100,000. Within the limits of the Swing Line Facility and subject to the terms
hereof, Swing Line Advances may be repaid and then reborrowed.
(e) Type and Number of Advances. Any Advance, other than a Swing Line
Advance, shall, at the option of the Borrower as provided in Section 2.2 hereof
(and, in the case of LIBOR Advances, subject to the provisions of Article 9
hereof), be made as a Base Rate Advance or a LIBOR Advance; provided that there
shall not be outstanding, at any one time, more than ten Interest Periods for
LIBOR Advances.
Section 2.2 Manner of Borrowing and Disbursement
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(a) Base Rate Advances. In the case of Base Rate Advances (other than Swing
Line Advances), the Borrower, through an Authorized Signatory, shall give the
Administrative Agent prior to 11:00 a.m., Dallas, Texas time, on the date of any
proposed Base Rate Advance irrevocable written notice, or irrevocable telephonic
notice followed immediately by written notice, in substantially the form of
Exhibit H hereto (a "Notice of Borrowing") (provided, however, that the
Borrower's failure to confirm any telephonic notice in writing shall not
invalidate any notice so given), of its intention to borrow a Base Rate Advance
hereunder. Such Notice of Borrowing shall specify the requested funding date,
which shall be a Business Day, the amount of the proposed aggregate Base Rate
Advances to be made by Lenders, and whether such Advance is a Revolving Credit
Advance, Facility A Term Loan Advance or Facility B Term Loan Advance.
(b) LIBOR Advances. In the case of LIBOR Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Agent at least three
Business Days' irrevocable written notice, or irrevocable telephonic notice
followed immediately by written notice (provided, however, that the Borrower's
failure to confirm any telephonic notice in writing shall not invalidate any
notice so given) pursuant to a Notice of Borrowing, of its intention to borrow
or reborrow a LIBOR Advance hereunder. Notice shall be given to the
Administrative Agent prior to 11:00 a.m., Dallas, Texas time, in order for such
Business Day to count toward the minimum number of Business Days required.
LIBOR Advances shall in all cases be subject to Article 9 hereof. For LIBOR
Advances, the Notice of Borrowing shall specify the requested funding date,
which shall be a Business Day, the amount of the proposed aggregate LIBOR
Advances to be made by Lenders, whether such Advance is a Revolving Credit
Advance, Facility A Term Loan Advance or Facility B Term Loan Advance and the
Interest Period selected by the Borrower, provided that no such Interest Period
shall extend past the Revolving Credit Commitment Maturity Date, the Facility A
Term Loan Maturity Date or the Facility B Term Loan Maturity Date, as
appropriate, or prohibit or impair the Borrower's ability to comply with Section
2.5 or 2.8 hereof.
(c) Swing Line Advances. In the case of Swing Line Advances, the Borrower,
through an Authorized Signatory, shall give the Swing Line Bank and the
Administrative Agent prior to 12:00 noon, Dallas, Texas time, on the date of any
proposed Swing Line Advance irrevocable telephonic notice (provided, however,
(i) the Borrower shall deliver written notice at least once a week confirming
the telephonic notices given by the Borrower with respect to Swing Line Advances
during the immediately preceding week and (ii) that the Borrower's failure to
confirm any telephonic notice in writing shall not invalidate any notice so
given), of its intention to borrow or reborrow a Swing Line Advance. Such
notice of borrowing shall specify (i) the requested funding date, which shall be
a Business Day, and (ii) the amount of the proposed Swing Line Advance.
(d) Continuation/Conversion. Subject to Sections 2.1 and 2.9 hereof, the
Borrower shall have the option (i) to convert at any time all or any part of the
outstanding Base Rate Advances to LIBOR Advances and all or any part of the
outstanding LIBOR Advances to Base Rate Advances or (ii) upon expiration of any
Interest Period applicable to a LIBOR Advance, to continue all or any portion of
such LIBOR Advance equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount as a LIBOR Advance and the succeeding Interest Period(s)
of such continued LIBOR Advance shall commence on the last day of the Interest
Period of the LIBOR Advance to be continued; provided, however, (A) LIBOR
Advances may only be converted into Base Rate Advances on the expiration date of
the Interest Period applicable thereto and (B) notwithstanding anything in this
Agreement to the contrary, no outstanding Advance or portion thereof may be
continued as, or converted into, a LIBOR Advance when any Default or Event of
Default has occurred and is continuing. Not later than 11:00 a.m., Dallas,
Texas time on the date of any proposed continuation of or a conversion to a Base
Rate Advance and not later than 11:00 a.m., Dallas, Texas time at least three
Business Days prior to any proposed continuation of or conversion to a LIBOR
Advance, the Borrower, through an Authorized Signatory, shall give the
Administrative Agent irrevocable written notice, or irrevocable telephonic
notice followed immediately by written notice, in substantially the form of
Exhibit I hereto (a "Notice of Continuation/Conversion") (provided, however,
that the Borrower's failure to confirm any telephonic notice in writing shall
not invalidate any notice so given), stating (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount of
the Advance to be converted/continued, (iii) in the case of a conversion to, or
a continuation of, a LIBOR Advance, the requested Interest Period, and (iv) in
the case of a conversion of a Base Rate Advance to a LIBOR Advance or
continuation of a LIBOR Advance, stating that no Default or Event of Default has
occurred and is continuing. If the Borrower shall fail to give any notice in
accordance with this Section 2.2(d) prior to the expiration of any then-relevant
Interest Period with respect to any LIBOR Advance, the Borrower shall be deemed
irrevocably to have requested that such LIBOR Advance be converted to a Base
Rate Advance in the same principal amount.
(e) Minimum Amount. The aggregate amount of Base Rate Advances (other than
Swing Line Advances) to be made by the Lenders on any day shall be in a
principal amount which is at least $1,000,000 and which is an integral multiple
of $500,000; provided, however, that such amount may equal the unused amount of
the applicable Commitment. The aggregate amount of LIBOR Advances having the
same Interest Period and to be made by the Lenders on any day shall be in a
principal amount which is at least $5,000,000 and which is an integral multiple
of $1,000,000.
(f) Notice and Disbursement. The Administrative Agent shall promptly notify
the Lenders of each notice (other than with respect to a Swing Line Advance)
received from the Borrower pursuant to this Section. Each Lender shall, not
later than 2:00 p.m., Dallas, Texas time, on the date of any Advance, deliver to
the Administrative Agent, at its address set forth herein, such Lender's
Revolving Credit Specified Percentage, Facility A Term Loan Specified Percentage
or Facility B Term Loan Specified Percentage, as the case may be, of such
Advance in immediately available funds in accordance with the Administrative
Agent's instructions. Prior to 2:30 p.m., Dallas, Texas time, on the date of
any Advance hereunder, the Administrative Agent shall, subject to satisfaction
of the conditions set forth in Article 3, disburse the amounts made available to
the Administrative Agent by the Lenders by (i) transferring such amounts by wire
transfer pursuant to the Borrower's instructions, or (ii) in the absence of such
instructions, crediting such amounts to the account of the Borrower maintained
with the Administrative Agent. All Revolving Credit Advances shall be made by
each Lender according to its Revolving Credit Specified Percentage. All
Facility A Term Loan Advances shall be made by each Lender according to its
Facility A Term Loan Specified Percentage. All Facility B Term Loan Advances
shall be made by each Lender in accordance with its Facility B Term Loan
Specified Percentage. Upon the request of any Lender, the Administrative Agent
shall notify such Lender of the aggregate principal amount of Swing Line
Advances outstanding at such time.
(g) Swing Line Advances. The Swing Line Bank shall, not later than 2:00
p.m., Dallas, Texas time, on the date of any Swing Line Advance, deliver to the
Administrative Agent at its address set forth herein, the amount of such Swing
Line Advance in immediately available funds in accordance with the
Administrative Agent's instructions. Prior to 2:30 p.m., Dallas, Texas time, on
the date of any Swing Line Advance, the Administrative Agent shall, subject to
the conditions set forth in Article 3, disburse the amount made available to the
Administrative Agent by the Swing Line Bank by (i) transferring such amounts by
wire transfer pursuant to the Borrower's instruction or (ii) in the absence of
such instructions, crediting such amounts to the account of the Borrower
maintained with the Administrative Agent. Swing Line Advances shall be due
three Business Days after demand. Forthwith upon demand by the Swing Line Bank
at any time, including after a Default or Event of Default, and in any event
upon the making of the direction specified by Section 8.2 to authorize the
Administrative Agent to declare the Advances due and payable pursuant to the
provisions of Section 8.2, each Lender with a Revolving Credit Specified
Percentage, including the Swing Line Bank, notwithstanding the failure of the
Borrower at such time to satisfy each condition specified in Article 3, shall
make by 12:00 noon (Dallas, Texas time) on the first Business Day following
receipt by such Lender of notice from the Swing Line Bank, a Revolving Credit
Advance in an amount equal to the product of (i) the Revolving Credit Specified
Percentage of such Lender times (ii) the aggregate outstanding principal amount
of the Swing Line Advances. The proceeds of such Revolving Credit Advances
shall be applied by the Administrative Agent to repay the outstanding Swing Line
Advances. If as a result of termination of the Revolving Credit Commitment
pursuant to any Debtor Relief Law, the Lenders are prohibited from making a
Revolving Credit Advance pursuant to the immediately preceding sentence, each
Lender with a Revolving Credit Specified Percentage, on the date that such
Revolving Credit Advance was to have been made pursuant to this Section 2.2(g),
will purchase an undivided participation interest in the Swing Line Advances
equal to the product of (i) the Revolving Credit Specified Percentage of such
Lender times (ii) the aggregate principal amount of the Swing Line Advances.
Each Lender with a Revolving Credit Specified Percentage will immediately
transfer to the Swing Line Bank, in immediately available funds, the amount of
its participation.
Section 2.3 Interest
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(a) On Base Rate Advances.
(i) The Borrower shall pay interest on the outstanding unpaid principal
amount of each Base Rate Advance from the date such Base Rate Advance is made
until such Base Rate Advance is due (whether at maturity, by reason of
acceleration, by scheduled reduction, or otherwise) and repaid at a simple
interest rate per annum equal to the Base Rate Basis for the Base Rate Advances
as in effect from time to time. If at any time the Base Rate Basis would exceed
the Highest Lawful Rate, interest payable on the Base Rate Advances shall be
limited to the Highest Lawful Rate, but the Base Rate Basis shall not thereafter
be reduced below the Highest Lawful Rate until the total amount of interest
accrued on the Base Rate Advances equals the amount of interest that would have
accrued if the Base Rate Basis had been in effect at all times.
(ii) Subject to Section 11.9 hereof, interest on the Base Rate Advances
shall be computed on the basis of a year of 365 or 366 days, as appropriate, for
the actual number of days elapsed, and shall be payable in arrears on each
Quarterly Date and on the Revolving Credit Commitment Maturity Date, Facility A
Term Loan Maturity Date or Facility B Term Loan Maturity Date, as appropriate.
(b) On LIBOR Advances.
(i) The Borrower shall pay interest on the outstanding unpaid principal
amount of each LIBOR Advance, from the date such Advance is made until it is due
(whether at maturity, by reason of acceleration, by scheduled reduction, or
otherwise) and repaid, at a rate per annum equal to the LIBOR Basis for such
LIBOR Advance. The Administrative Agent, whose determination shall be
controlling in the absence of demonstrable error, shall determine the LIBOR
Basis on the second Business Day prior to the applicable funding, conversion or
continuation date and shall notify the Borrower and the Lenders of such LIBOR
Basis. The Administrative Agent shall, at the request of the Borrower, furnish
such information concerning the calculation of the LIBOR Basis as the Borrower
may reasonably request.
(ii) Subject to Section 11.9 hereof, interest on each LIBOR Advance shall
be computed on the basis of a 360-day year for the actual number of days
elapsed, and shall be payable in arrears on the applicable Payment Date and on
the Revolving Credit Commitment Maturity Date, Facility A Term Loan Maturity
Date or Facility B Term Loan Maturity Date; provided, however, that if the
Interest Period for such LIBOR Advance exceeds three months, interest shall also
be due and payable in arrears on each three-month anniversary of the
commencement of such Interest Period during such Interest Period.
(c) On Swing Line Advances.
(i) (The Borrower shall pay interest on the outstanding principal amount
of such Swing Line Advance, from the date of such Swing Line Advance is made
until it is due (whether by demand or otherwise) and repaid, at an interest rate
per annum equal to a fixed interest rate agreed to by the Borrower and the Swing
Line Bank for such Swing Line Advance, but in no event higher than the Highest
Lawful Rate; provided, however, that at any time any Lender makes a Revolving
Credit Advance or is deemed to have purchased, pursuant to Section 2.2(g)
hereof, a participation in a Swing Line Advance, such Revolving Credit Advance
or Swing Line Advance, as applicable, shall bear interest at the Default Rate.
(ii) Subject to Section 11.9 hereof, interest on each Swing Line Advance
shall be computed on the basis of a 360-day year for the actual number of days
elapsed, and shall be payable in arrears on each Quarterly Date and on the
Revolving Credit Commitment Maturity Date.
(d) Interest After an Event of Default. Subject to Section 11.9 hereof,
(i) after an Event of Default (other than an Event of Default specified
in Section 8.1(e) or (f) hereof) and during any continuance thereof, at the
option of the Determining Lenders and after written notice to the Borrower by
the Administrative Agent, and (ii) after an Event of Default specified in
Section 8.1(e) or (f) hereof and during any continuance thereof, automatically
and without any action by the Administrative Agent or any Lender, the
Obligations shall bear interest at a rate per annum equal to the Default Rate.
Such interest shall be payable on the earlier of demand or the Maturity Date,
and shall accrue until the earlier of (i) waiver or cure of the applicable Event
of Default, (ii) agreement by the Determining Lenders to rescind the charging of
interest at the Default Rate, or (iii) payment in full of the Obligations. The
Lenders shall not be required to accelerate the maturity of the Advances or to
exercise any other rights or remedies under the Loan Documents to charge
interest at the Default Rate. The Lenders shall not be required to give notice
to the Borrower of the decision to charge interest at the Default Rate.
Section 2.4 Fees.
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(a) Facility Fee. Subject to Section 11.9 hereof, the Borrower agrees to pay
to the Administrative Agent, for the account of each Lender, a facility fee
("Facility Fee") in an amount equal to the product of (i) such Lender's
Revolving Credit Specified Percentage multiplied by the Revolving Credit
Commitment multiplied (ii) by the following per annum percentages, applicable in
the following situations:
Applicability Percentage
- ------------- ----------
(a) The Leverage Ratio is less than 3.00 to 1 0.375
(b) The Leverage Ratio is greater than or equal to 3.00 to 1 0.500
Such Facility Fee shall accrue beginning on the Agreement Date and shall be (i)
payable in arrears on each Quarterly Date and on the Revolving Credit Commitment
Maturity Date, fully earned when due and, subject to Section 11.9 hereof,
nonrefundable when paid and (ii) subject to Section 11.9 hereof, computed on the
basis of a 360-day year, for the actual number of days elapsed. The Facility
Fee shall be subject to reduction or increase, as applicable and as set forth in
the table above, on a quarterly basis according to the performance of the
Borrower as tested by using the Leverage Ratio as of the end of the most recent
Fiscal Quarter (calculated for the twelve Fiscal Months preceding the date of
determination). Any such increase or reduction in such fee shall be effective
on the date which is two Business Days after receipt by the Lenders of the
financial statements required pursuant to Section 6.1 or 6.2, as applicable,
hereof and the Compliance Certificate required pursuant to Section 6.3 hereof.
If such financial statements and Compliance Certificate are not received by the
Lenders on the date required, the fee payable in respect of the Revolving Credit
Commitment shall be determined as if the Leverage Ratio is greater than or equal
to 3.00 to 1 until such time as such financial statements and Compliance
Certificate are received. Notwithstanding the above, until such time as the
Lenders shall have received the financial statements required for the fourth
Fiscal Quarter of the Borrower's 1999 Fiscal Year and related Compliance
Certificate, the facility fee shall be determined as if the Leverage Ratio is
greater than or equal to 3.00 to 1.
(b) Closing Fee. Subject to Section 11.9 hereof, the Borrower agrees to pay to
the Administrative Agent, for the account of each Lender, a closing fee in the
amounts specified in a letter agreement, dated as of the Agreement Date, between
the Borrower and each Lender (the "Closing Fee Letter"). Such fee shall be
payable on the Agreement Date, and, subject to Section 11.9 hereof, fully-earned
when due and nonrefundable when paid.
(c) Other Fees. Subject to Section 11.9 hereof, the Borrower agrees to pay to
the Administrative Agent, for the account of (i) the Administrative Agent, the
fees on the dates and in the amounts specified in the letter agreement (the
"Administrative Agent Fee Letter"), dated as of the Agreement Date, between the
Borrower and the Administrative Agent, and (ii) Bank of America, N.A. and Banc
of America Securities LLC the fees specified in the Fee Letter on the Agreement
Date.
Section 2.5 Prepayments.
- --------------------------
(a) Voluntary Prepayments. Upon one Business Day's prior telephonic notice (to
be promptly followed by written notice) by an Authorized Signatory to the
Administrative Agent, Base Rate Advances may be voluntarily prepaid without
premium or penalty. Upon two Business Days' prior telephonic notice (to be
promptly followed by written notice) by an Authorized Signatory to the
Administrative Agent, LIBOR Advances may be voluntarily prepaid, without premium
or penalty, but only so long as the Borrower concurrently reimburses the Lenders
in accordance with Section 2.9 hereof. Any notice of prepayment shall be
irrevocable.
(b) Mandatory Prepayment.
(i) Commitment Reductions. On or before the date of any reduction of the
Revolving Credit Commitment, the Borrower shall first, prepay applicable
outstanding Revolving Credit Advances and second, prepay Swing Line Advances in
an amount necessary to reduce the sum of outstanding Revolving Credit Advances,
Swing Line Advances and Reimbursement Obligations to an amount less than or
equal to the Revolving Credit Commitment as so reduced. To the extent required
by the immediately preceding sentence, the Borrower shall first prepay all Base
Rate Advances and shall thereafter prepay LIBOR Advances. To the extent that
any prepayment requires that a LIBOR Advance be repaid on a date other than the
last day of its Interest Period, the Borrower shall reimburse each Lender in
accordance with Section 2.9 hereof. To the extent that outstanding Revolving
Credit Advances, Reimbursement Obligations and Swing Line Advances exceed the
Revolving Credit Commitment after any reduction thereof, the Borrower shall
repay any such excess amount and all accrued interest attributable to such
excess Revolving Credit Advances, Reimbursement Obligations and Swing Line
Advances on the date of such reduction.
(ii) Prepayments from Sales of Assets. Within two Business Days of the
receipt of Net Cash Proceeds from the sale or disposition by the Borrower or any
of its Subsidiaries of any assets (including the Capital Stock of any
Subsidiary) (other than any such sales or dispositions permitted under Section
7.7 hereof other than Section 7.7(a)(vii) thereof), the Borrower shall prepay
Facility A Term Loan Advances and Facility B Term Loan Advances in an aggregate
principal amount equal to 100% of such Net Cash Proceeds received. At such
time, if any, as the Facility A Term Loan Advances and the Facility B Term Loan
Advances have been paid in full, the Borrower shall prepay the outstanding
Revolving Credit Advances in an aggregate principal amount equal to 100% of such
Net Cash Proceeds received. Each such prepayment shall be applied as provided
in Section 2.5(c) hereof.
(c) Prepayments and Payments, Generally. Any partial payment of a (i) Base
Rate Advance shall be in a principal amount which is at least $1,000,000 and
which is an integral multiple of $500,000 and (ii) a LIBOR Rate Advance shall be
in a principal amount which is at least $5,000,000 and which is an integral
multiple of $1,000,000, and to the extent that any payment of a LIBOR Advance is
made on a date other than the last day of its Interest Period, the Borrower
shall reimburse each Lender (to the extent required) in accordance with Section
2.9 hereof. Any prepayment of any Term Loan Advance shall (i) include and be
applied to accrued interest to the date of such prepayment on the principal
amount prepaid and (ii) be applied pro rata to all of the unpaid scheduled
installment payments of the Facility A Term Loan Advances and the Facility B
Term Loan Advances, in each case pro rata based on the outstanding principal
amount of the Facility A Term Loan Advances and the Facility B Term Loan
Advances then unpaid. Any prepayments required to be made pursuant to Section
2.5(b)(ii) hereof shall (i) not be subject to the notice and minimum payment
provisions of this Section 2.5; provided, however, the Borrower shall be
required to reimburse each Lender for any loss, cost or expense incurred by each
Lender in connection with any such prepayment as set forth in Section 2.9 hereof
if any prepayment results in a LIBOR Advance being paid on a day other than the
last day of an Interest Period for such LIBOR Advance, (ii) be applied first to
Base Rate Advances, if any, and then to LIBOR Advances, and (iii) be applied to
the outstanding Revolving Credit Advances, to the extent that the Facility A
Term Loan Advances and the Facility B Term Loan Advances shall have been paid in
full.
(d) Prepayment Waiver. Any Lender holding Facility B Term Loan Advances may
elect on not less than one Business Day's prior written notice to the
Administrative Agent with respect to any mandatory prepayment required to be
made pursuant to Section 2.5(b)(ii) hereof not to have such prepayment applied
to such Lender's Facility B Term Loan Advances until all Facility A Term Loan
Advances have been paid in full, in which case the amount not so applied shall
be applied to the Facility A Term Loan Advances and shall reduce the then
remaining installments of Facility A Term Loan Advances pro rata based on the
outstanding principal amount of the Facility A Term Loan Advances then unpaid.
Section 2.6 Reduction of Commitment
- ---------------------------------------
(a) Voluntary Reduction. The Borrower shall have the right, upon not less than
5 Business Days' notice by an Authorized Signatory to the Administrative Agent
(if telephonic, to be confirmed by telex or in writing on or before the date of
reduction or termination), which shall promptly notify the Lenders, to terminate
or reduce the Revolving Credit Commitment. Each partial termination shall be in
an aggregate amount which is at least $5,000,000 and which is an integral
multiple of $1,000,000, and no voluntary reduction in the Revolving Credit
Commitment shall cause any LIBOR Advance to be repaid prior to the last day of
its Interest Period unless the Borrower shall reimburse each Lender in
accordance with Section 2.9 hereof. Any such reduction of the Revolving Credit
Commitment shall be applied pro rata among the Lenders based on the respective
Revolving Credit Specified Percentages.
(b) Mandatory Reduction. The Revolving Credit Commitment shall be permanently
reduced by the amount of Revolving Credit Advances required to be prepaid
pursuant to Section 2.5(b)(ii) hereof. On the Revolving Credit Commitment
Maturity Date, the Revolving Credit Commitment shall be automatically reduced to
zero.
(c) General Requirements. Upon any reduction of the Revolving Credit
Commitment pursuant to this Section, the Borrower shall immediately make a
repayment of Revolving Credit Advances and/or Swing Line Advances in accordance
with Section 2.5(b) hereof. The Borrower shall reimburse each Lender in
connection with any such payment in accordance with Section 2.9 hereof to the
extent applicable. The Borrower shall not have any right to rescind any
termination or reduction. Once reduced, the Revolving Credit Commitment may not
be increased or reinstated.
Section 2.7 Non-Receipt of Funds by the Administrative Agent
- --------------------------------------------------------------------
Unless the Administrative Agent shall have been notified by a Lender prior to
the date of any proposed Advance (which notice shall be effective upon receipt)
that such Lender does not intend to make the proceeds of such Advance available
to the Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on such
date, and the Administrative Agent may in reliance upon such assumption (but
shall not be required to) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover such
amount on demand from such Lender (or, if such Lender fails to pay such amount
forthwith upon such demand, from the Borrower) together with interest thereon in
respect of each day during the period commencing on the date such amount was
available to the Borrower and ending on (but excluding) the date the
Administrative Agent receives such amount from (a) the Lender, at a per annum
rate equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal
Funds Rate, or (b) the Borrower, at the per annum rate applicable at the time to
such Advance. No Lender shall be liable for any other Lender's failure to fund
an Advance hereunder. The failure or refusal by any Lender to make available to
the Administrative Agent the proceeds of any Advance shall not relieve any
Lender from its several obligation hereunder to make its Applicable Specified
Percentage of any requested Advance available to the Administrative Agent.
Section 2.8 Payment of Principal of Advances
- --------------------------------------------------
(a) Revolving Credit Advances. To the extent not otherwise required to be paid
earlier as provided herein, the principal amount of the Revolving Credit
Advances shall be due and payable on the Revolving Credit Commitment Maturity
Date.
(b) Facility A Term Loan Advances. To the extent not otherwise required to be
paid earlier as provided herein, the principal amount of the Facility A Term
Loan Advances shall be repaid on each Quarterly Date and on the Facility A Term
Loan Maturity Date in such amounts as set forth next to each such date below:
Amount of
Reduction of
Facility A
Term Loan
Advances as
Quarterly Date of each Date
- -------------- ------------
March 31, 2000 $1,875,000
June 30, 2000 $1,875,000
September 30, 2000 $1,875,000
December 31, 2000 $1,875,000
March 31, 2001 $3,750,000
June 30, 2001 $3,750,000
September 30, 2001 $3,750,000
December 31, 2001 $3,750,000
March 31, 2002 $5,000,000
June 30, 2002 $5,000,000
September 30, 2002 $5,000,000
December 31, 2002 $5,000,000
March 31, 2003 $6,250,000
June 30, 2003 $6,250,000
September 30, 2003 $6,250,000
December 31, 2003 $6,250,000
March 31, 2004 $8,125,000
June 30, 2004 $8,125,000
September 24, 2004 $16,250,000
or such
other amounts
of Facility
A Term Loan
Advances then
outstanding
(c) Facility B Term Loan Advances. To the extent not otherwise required to be
paid earlier as provided herein, the principal amount of the Facility B Term
Loan Advances shall be repaid on each Quarterly Date and on the Facility B Term
Loan Maturity Date in such amounts as set forth next to each such date below:
Amount of
Reduction of
Facility B
Term Loan
Advances as
Quarterly Date of each Date
- -------------- ------------
March 31, 2000 $500,000
June 30, 2000 $500,000
September 30, 2000 $500,000
December 31, 2000 $500,000
March 31, 2001 $500,000
June 30, 2001 $500,000
September 30, 2001 $500,000
December 31, 2001 $500,000
March 31, 2002 $500,000
June 30, 2002 $500,000
September 30, 2002 $500,000
December 31, 2002 $500,000
March 31, 2003 $500,000
June 30, 2003 $500,000
September 30, 2003 $500,000
December 31, 2003 $500,000
March 31, 2004 $500,000
June 30, 2004 $500,000
September 30, 2004 $500,000
December 31, 2004 $500,000
March 31, 2005 $21,000,000
June 30, 2005 $21,000,000
September 30, 2005 $21,000,000
March 31, 2006 $21,000,000
June 30, 2006 $21,000,000
September 30, 2006 $21,000,000
December 31, 2006 $21,000,000
March 24, 2007 $22,000,000
or such other
amount of
Facility B
Term Loan
Advances then
outstanding
(d) Swing Line Advances. To the extent not otherwise required to be paid
earlier as provided herein, the outstanding principal amount of each Swing Line
Advance shall be due and payable on its maturity date pursuant to Section
2.2(c)(iii) hereof.
Section 2.9 Reimbursement.
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Whenever any Lender shall sustain or incur any losses or reasonable
out-of-pocket expenses in connection with (a) failure by the Borrower to borrow
any LIBOR Advance after having given notice of its intention to borrow in
accordance with Section 2.2 hereof (whether by reason of the Borrower's election
not to proceed or the non-fulfillment of any of the conditions set forth in
Article 3 hereof), (b) any prepayment for any reason of any LIBOR Advance in
whole or in part (including, but not limited to, a prepayment pursuant to
Section 9.3(b) hereof) on other than the last day of an Interest Period
applicable to such LIBOR Advance or (c) any prepayment of any of its LIBOR
Advances that is not made on any date specified in a notice of prepayment given
by the Borrower, the Borrower agrees to pay to any such Lender, within 30 days
after demand by such Lender, an amount sufficient to compensate such Lender for
all such losses (including loss of anticipated profits) and reasonable
out-of-pocket expenses, subject to Section 11.9 hereof. A certificate as to any
amounts payable to any Lender under this Section 2.9 submitted to the Borrower
by such Lender shall certify that such amounts were actually incurred by such
Lender and shall show in reasonable detail an accounting of the amount payable
and the calculations used to determine in good faith such amount and shall be
conclusive absent demonstrable error.
Section 2.10. Manner of Payment
- -----------------------------------
(a) Payment Timing and Type. Each payment (including prepayments) by the
Borrower of the principal of or interest on the Advances, fees, and any other
amount owed under this Agreement or any other Loan Document shall be made not
later than 12:00 noon (Dallas, Texas time) on the date specified for payment
under this Agreement or such other Loan Document to the Administrative Agent at
the Administrative Agent's office, in lawful money of the United States of
America constituting immediately available funds.
(b) Non-Business Day Payment. If any payment under this Agreement or any other
Loan Document shall be specified to be made upon a day which is not a Business
Day, it shall be made on the next succeeding day which is a Business Day,
unless, with respect to a payment due in respect of a LIBOR Advance, such
Business Day falls in another calendar month, in which case payment shall be
made on the preceding Business Day. Any extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
(c) Payments Without Deduction. The Borrower agrees to pay principal,
interest, fees and all other amounts due under the Loan Documents without
deduction for set-off or counterclaim or any deduction whatsoever.
(d) Apportionment of Payments.
(i) Prior to (A) the occurrence of an Event of Default and (B) delivery by
the Determining Lenders of a Default Application Notice to the Administrative
Agent, all payments in respect of the Obligations under this Agreement and the
Notes shall be applied in the following order:
(1) first, to pay the Administrative Agent's fees and expenses incurred on
behalf of the Lenders then due and payable;
(2)second, to pay all other fees then due and payable in respect of the
Advances and the Reimbursement Obligations under the Loan Documents;
(3) third, to pay all other amounts other than principal and interest
(including, without limitation, expense reimbursements and indemnities) not
otherwise referred in clauses (1) and (2) immediately preceding then due and
payable in respect of the Advances and the Reimbursement Obligations under the
Loan Documents;
(4) fourth, to pay interest then due and payable on the Advances and the
Reimbursement Obligations, to be applied in accordance with the Applicable
Specified Percentages (except that (A) prior to the Lenders making Revolving
Credit Advances pursuant to Section 2.2(g) hereof, all interest due and payable
on the Swing Line Advances shall be payable to the Swing Line Bank and (B) at
such time, if any, that the Lenders make a Revolving Credit Advance pursuant to
Section 2.2(g) hereof, the Administrative Agent shall distribute all interest
payments in respect of Swing Line Advances to the Lenders in accordance with
their respective Revolving Credit Specified Percentages).
(5) fifth, to pay principal then due and payable on the Advances and
Reimbursement Obligations, to be applied in accordance with Applicable Specified
Percentages (except that (A) prior to the Lenders making a Revolving Credit
Advance pursuant to Section 2.2(g) hereof, all principal due and payable on the
Swing Line Advances shall be payable to the Swing Line Bank and (B) at such
time, if any, that the Lenders make a Revolving Credit Advance pursuant to
Section 2.2(g) hereof, the Administrative Agent shall distribute all principal
payments in respect of Swing Line Advances to the Lenders in accordance with
their respective Revolving Credit Specified Percentages).
(ii) After (A) the occurrence of an Event of Default and during the
continuance thereof and (B) the Determining Lenders shall have delivered the
notice to the Administrative Agent to apply payments in respect of the
Obligations as provided in this Section 2.10(d)(ii) (a "Default Application
Notice"), all payments in respect of the Obligations and (proceeds of Collateral
and payments under any Subsidiary Guaranty) shall be applied in the following
order:
(1) first, to pay the Administrative Agent's fees and expenses incurred on
behalf of the Lenders then due and payable;
(2) second, to pay all other fees then due and payable in respect of the
Advances and the Reimbursement Obligations under the Loan Documents;
(3) third, to pay all other amounts other than principal and interest
(including; without limitation, expense reimbursements and indemnities) not
otherwise referred to in clauses (1) and (2) immediately preceding then due and
payable in respect of the Advances and the Reimbursement Obligations under the
Loan Documents;
(4) fourth, to pay interest then due and payable on the Advances and the
Reimbursement Obligations, ratably in accordance with the aggregate amount of
interest owed to each Lender; and
(5) fifth, to pay principal then due and payable on the Advances and
Reimbursement Obligations, and in the case of proceeds of Collateral and
payments under any Subsidiary Guaranty, to pay any other obligations to any
Secured Party (as defined in the Pledge Agreement) not covered in first through
fourth above, ratably among the Secured Parties in accordance with the aggregate
principal amount of Advances and the Reimbursement Obligations and, in the case
of proceeds of Collateral or payments under any Subsidiary Guaranty, the
obligations secured or guaranteed thereby, owed to each Secured Party.
Section 2.11 LIBOR Lending Offices.
- ---------------------------------------
Each Lender's initial LIBOR Lending Office is set forth opposite its name in
Schedule 1.1(b) attached hereto. Each Lender shall have the right at any time
and from time to time to designate a different office of itself or of any
Affiliate of such Lender as such Lender's LIBOR Lending Office, and to transfer
any outstanding LIBOR Advance to such LIBOR Lending Office.
Section 2.12 Sharing of Payments.
- -------------------------------------
If any Lender shall obtain a payment (whether voluntary or involuntary, due to
the exercise of any right of set-off, or otherwise) on account of its Advances
(other than pursuant to Sections 2.4(c), 2.14, 2.15(d), 9.3 or 9.5 hereof) in
excess of its share of payments made according to (a) before the Determining
Lenders have delivered a Default Application Notice to the Administrative Agent,
its Applicable Specified Percentage, and (b) after the Determining Lenders have
delivered a Default Application Notice to the Administrative Agent, the
percentage that the Advances owed to such Lender bears to the aggregate amount
of Advances owed to all Lenders, then, in each case, such Lender shall purchase
from each other Lender such participation in the Advances made by such other
Lender as shall be necessary to cause such purchasing Lender to share a ratable
portion of the excess payment with each other Lender (based on its Applicable
Specified Percentage, if the Determining Lenders have not delivered a Default
Application Notice to the Administrative Agent, and based on the percentage that
the Advances owed to such Lender bears to the aggregate amount of Advances owed
to all Lenders, if the Determining Lenders have delivered a Default Application
Notice to the Administrative Agent); provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section, to the fullest extent permitted by law, may exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.
Section 2.13 Calculation of LIBOR Rate.
- --------------------------------------------
The provisions of this Agreement relating to calculation of the LIBOR Rate are
included only for the purpose of determining the rate of interest or other
amounts to be paid hereunder that are based upon such rate, it being understood
that each Lender shall be entitled to fund and maintain its funding of all or
any part of a LIBOR Advance as it sees fit.
Section 2.14 Taxes
- --------------------
(a) Any and all payments by the Borrower hereunder shall be made, in accordance
with Section 2.10 hereof, free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, (i) taxes imposed on, based upon or
measured by its overall net income, net worth or capital, and franchise taxes,
doing business taxes or minimum taxes imposed on it, by the jurisdiction under
the laws of which such Lender or the Administrative Agent (as the case may be)
is organized or in which it has its applicable lending office or any political
subdivision thereof; (ii) taxes imposed by reason of failure by such Lender or
the Administrative Agent (as the case may be) to comply with the requirements of
paragraph (e) of this Section 2.14; (iii) in the case of any Lender, any taxes
in the nature of transfer, stamp, recording or documentary taxes resulting from
a transfer (other than as a result of foreclosure) by such Lender of all or any
portion of its interest in this Agreement, the Notes or any other Loan
Documents; and (iv) taxes, levies, imposts, deductions, charges, withholdings
and liabilities which are finally judicially determined by a court of competent
jurisdiction to have arisen as a result of gross negligence or willful
misconduct of the Administrative Agent or any Lender (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by Law
to deduct or withhold any Taxes from or in respect of any sum payable hereunder
to any Lender or the Administrative Agent, to the extent not prohibited by
Applicable Law, (x) the sum payable shall be increased as may be necessary so
that after making all required deductions for Taxes (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (y) the Borrower
shall make such deductions and (z) the Borrower shall pay the full amount of
Taxes deducted to the relevant taxation authority or other authority in
accordance with Applicable Law.
(b) In addition, the Borrower agrees to pay any and all stamp and documentary
taxes and any and all other excise and property taxes, charges and similar
levies (other than those described in clauses (iii) and (iv) of the first
sentence of Section 2.14(a)) that arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative Agent for
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.14) paid by such Lender or the Administrative Agent (as the case may
be) and all liabilities (including penalties, additions to tax, interest and
reasonable expenses) arising therefrom or with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted, other than
penalties, additions to tax, interest and expenses which are finally judicially
determined by a court of competent jurisdiction to have arisen as a result of
gross negligence or willful misconduct on the part of such Lender or the
Administrative Agent. This indemnification shall be made within 30 days from
the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower will
furnish to the Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof. For purposes of this Section 2.14 the terms
"United States" and "United States Person" shall have the meanings set forth in
Section 7701 of the Code.
(e)Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Agreement Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 11.6 after the Agreement
Date, the date upon which such Lender becomes a party hereto) and at such times
as necessary in the reasonable determination of the Borrower, deliver to the
Borrower through the Administrative Agent, with a copy to the Administrative
Agent:
(A) if any lending office is located in the United States, two (2)
accurate and complete signed originals of Internal Revenue Service Form 4224 or
any successor form thereto ("Form 4224"),
(B) if any lending office is located outside the United States, two (2)
accurate and complete signed originals of Internal Revenue Service Form 1001 or
any successor form thereto ("Form 1001"),
in each case establishing that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest, fees, or other amounts
payable at such lending office or lending offices under this Agreement or any
other Loan Document free from deduction or withholding of United States federal
income tax;
(ii) if at any time such Lender changes its lending office or lending
offices or selects an additional lending office it shall, at the same time or
reasonably promptly thereafter, but only to the extent the forms previously
delivered by it hereunder are not effective with respect to such changed or
additional lending office or lending offices, deliver to the Borrower through
the Administrative Agent, with a copy to the Administrative Agent, in
replacement for the forms previously delivered by it hereunder:
(A) if such changed or additional lending office is located in the United
States, two (2) accurate and complete signed originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of Form
1001,
in each case establishing that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest, fees, or other
amounts payable at such changed or additional lending office under this
Agreement or any other Loan Document free from deduction of withholding of
United States federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in clause (ii)
above) requiring a change in the most recent Form 4224 or Form 1001 previously
delivered by such Lender and if the delivery of the same be lawful, deliver to
the Borrower through the Administrative Agent, with a copy to the Administrative
Agent, two (2) accurate and complete original signed copies of Form 4224 or Form
1001, in each case establishing that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest, fees, or other
amounts payable under this Agreement or any other Loan Document free from
deduction or withholding of United States federal income tax, in replacement for
the forms previously delivered by such Lender;
(iv) it shall, promptly upon the request of the Borrower to that effect,
deliver to the Borrower such other forms or similar documentation as may be
required from time to time by any applicable law, treaty, rule or regulation in
order to establish such Lender's tax status for withholding purposes;
(v) it shall notify the Borrower promptly after any event (including an
amendment to or a change in any applicable law or regulation or in the written
interpretation thereof by any regulatory authority or any judicial authority or
by ruling applicable to such Lender of any governmental authority charged with
the interpretation or administration of any law) shall occur that results in
such Lender no longer being capable of receiving payments under this Agreement
without any deduction or withholding of United States federal income tax; and
(vi) if such Lender is not a "bank" or other person described in Section
881(c)(3) of the Code and cannot deliver either Form 4224 or Form 1001, a
statement that such Lender is not a "bank" under Section 881(c)(3)(A) of the
Code and two original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such Lender.
(f) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.14 shall survive the payment in full of the Obligations.
(g) Each Lender (and the Administrative Agent with respect to payments to the
Administrative Agent for its own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver or by virtue of the location of any
Lender's lending office), and (ii) it will use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office, if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the sole judgment of such Lender, be
disadvantageous to such Lender; provided, however, no Lender nor the
Administrative Agent shall be obligated by reason of this Section 2.14(g) to (a)
disclose any information regarding its tax affairs or tax computations or
reorder its tax or other affairs or tax or other planning or (b) contest the
payment of any Taxes or Other Taxes. Subject to the foregoing, to the extent
the Borrower pays sums pursuant to this Section 2.14 and the Lender or the
Administrative Agent receives a refund of any or all of such sums, the party
receiving such refund shall promptly pay over all such refunded sums to the
Borrower, provided that no Default or Event of Default is in existence at such
time. At such time, if any, that such Default or Event of Default is cured or
waived, the party receiving such refund shall promptly pay over all such
refunded sums to the Borrower.
Section 2.15 Letters of Credit
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(a) The Letter of Credit Facility. The Borrower may request the Issuing Bank,
on the terms and conditions hereinafter set forth, to issue, and the Issuing
Bank shall, if so requested, issue, one or more Letters of Credit for the
account of the Borrower and/or any of its Subsidiaries (provided that, if any
Letter of Credit is issued for the account of any Subsidiary, the Borrower shall
be jointly and severally liable with respect to such Letter of Credit pursuant
to the terms of the Letter of Credit Agreement (as defined below) governing such
Letter of Credit) from time to time on any Business Day from the date of the
initial Advance until the Revolving Credit Commitment Maturity Date in an
aggregate maximum amount (assuming compliance with all conditions to drawing)
not to exceed, at any time outstanding, the lesser of (i) $50,000,000 (the
"Letter of Credit Facility") and (ii) an amount equal to the Revolving Credit
Commitment minus the aggregate principal amount of Revolving Credit Advances and
Swing Line Advances then outstanding. No Letter of Credit shall have an
expiration date (including all rights of renewal) later than the earlier of (i)
ten days prior to the Revolving Credit Commitment Maturity Date or (ii) one year
after the date of issuance thereof (provided that any Letter of Credit may
provide for the renewal thereof for additional periods of up to one year, which
in no event extend beyond the date referred to in clause (i) of this sentence).
Immediately upon the issuance of each Letter of Credit (or upon satisfaction of
the conditions precedent set forth in Sections 3.1 and 3.2 hereof with respect
to the Existing Letters of Credit), the Issuing Bank shall be deemed to have
sold and transferred to each Lender with a Revolving Credit Specified
Percentage, and each Lender with a Revolving Credit Specified Percentage shall
be deemed to have purchased and received from the Issuing Bank, in each case
irrevocably and without any further action by any party, an undivided interest
and participation in such Letter of Credit, each drawing thereunder and the
obligations of the Issuing Bank under this Agreement in respect thereof in an
amount equal to the product of (x) such Lender's Revolving Credit Specified
Percentage times (y) the maximum amount available to be drawn under such Letter
of Credit (assuming compliance with all conditions to drawing). Within the
limits of the Letter of Credit Facility, and subject to the limits referred to
above, the Borrower may request the issuance of Letters of Credit under this
Section 2.15(a), repay any Revolving Credit Advances resulting from drawings
thereunder pursuant to Section 2.15(c) hereof and request the issuance of
additional Letters of Credit under this Section 2.15(a).
(b) Request for Issuance. Each Letter of Credit shall be issued upon notice,
given not later than 11:00 a.m. (Dallas, Texas time) on the third Business Day
prior to the date of the proposed issuance of such Letter of Credit, by the
Borrower to the Issuing Bank and the Administrative Agent. Each Letter of
Credit shall be issued upon notice given in accordance with the terms of any
separate agreement between the Borrower and the Issuing Bank in form and
substance reasonably satisfactory to the Borrower and the Issuing Bank providing
for the issuance of Letters of Credit pursuant to this Agreement (a "Letter of
Credit Agreement"), provided that if any terms and conditions of such Letter of
Credit Agreement are inconsistent with or more restrictive than this Agreement,
this Agreement shall control. Each such notice of issuance of a Letter of
Credit by the Borrower (a "Notice of Issuance") shall be by telephone or
telecopier, specifying therein, in the case of a Letter of Credit, the requested
(i) date of such issuance (which shall be a Business Day), (ii) maximum amount
of such Letter of Credit, (iii) expiration date of such Letter of Credit, (iv)
name and address of the beneficiary of such Letter of Credit, and (v) form of
such Letter of Credit and specifying such other information as shall be required
pursuant to the relevant Letter of Credit Agreement. Upon sending each Notice
of Issuance to the Issuing Bank, the Borrower shall promptly send a copy thereof
to the Administrative Agent. If the requested terms of such Letter of Credit
are acceptable to the Issuing Bank in its reasonable discretion, the Issuing
Bank will, upon fulfillment of the applicable conditions set forth in Article 3
hereof, make such Letter of Credit available to the Borrower at its office
referred to in Section 11.1 hereof or as otherwise agreed with the Borrower in
connection with such issuance. No less than once each calendar month, the
Issuing Bank shall give a summary report of the issued and outstanding Letters
of Credit to the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a draft
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Revolving Credit Advance, which
shall bear interest at the Base Rate Basis, in the amount of such draft (but
without any requirement for compliance with the conditions set forth in Article
3 hereof); provided, however, if as a result of termination of the Revolving
Credit Commitment pursuant to any Debtor Relief Law the Issuing Bank is
prohibited from making a Revolving Credit Advance, the obligation of the
Borrower to repay the Issuing Bank the amount of such draft shall bear interest
at the Base Rate Basis. In the event that a drawing under any Letter of Credit
is not reimbursed by the Borrower by 12:00 noon (Dallas, Texas time) on the
first Business Day after such drawing, the Issuing Bank shall promptly notify
Administrative Agent, which shall notify each other Lender. Each such Lender
shall, on the first Business Day following such notification, make a Revolving
Credit Advance (or, if as a result of any Debtor Relief Law, the Lenders are
prohibited from making a Revolving Credit Advance, each Lender shall fund its
participation purchased pursuant to Section 2.15(a) hereof by making such amount
available to the Administrative Agent), which shall bear interest at the Base
Rate Basis, and shall be used to repay the applicable portion of the Issuing
Bank's Advance with respect to such Letter of Credit, in an amount equal to the
amount of its participation in such drawing for application to reimburse the
Issuing Bank (but without any requirement for compliance with the applicable
conditions set forth in Article 3 hereof) and shall make available to the
Administrative Agent for the account of the Issuing Bank, by deposit at the
Administrative Agent's office, in same day funds, the amount of such Advance.
In the event that any Lender fails to make available to the Administrative Agent
for the account of the Issuing Bank the amount of such Advance, the Issuing Bank
shall be entitled to recover such amount on demand from such Lender together
with interest thereon at a rate per annum equal to the lesser of (i) the Highest
Lawful Rate or (ii) the Federal Funds Rate.
(d) Increased Costs. If, (i) any change or phase-in after the Agreement Date
in any Law or in the interpretation thereof by any Tribunal charged with the
administration thereof or (ii) compliance by a Lender with any Law or any
guideline or requirement from any central bank or Tribunal (whether or not
having the force of law) adopted or promulgated after the Agreement Date
(including any implementation of the Basle Accord or similar guideline or
requirement adopted, promulgated or becoming effective after the Agreement Date)
shall either (A) impose, modify or deem applicable any reserve, special deposit
or similar requirement against letters of credit or guarantees issued by, or
assets held by, or deposits in or for the account of, the Issuing Bank or any
Lender or any corporation controlling the Issuing Bank or any Lender or (B)
impose on the Issuing Bank or any Lender or any corporation controlling the
Issuing Bank or any Lender any other condition regarding this Agreement or any
Letter of Credit, and the result of any event referred to in the preceding
clause (A) or (B) shall be to increase the cost to the Issuing Bank or any
corporation controlling the Issuing Bank of issuing or maintaining any Letter of
Credit or to any Lender or any corporation controlling such Lender of purchasing
any participation therein or making any Advance pursuant to Section 2.15(c)
hereof ("Increased Letter of Credit Costs"), then, within 30 days after demand
by the Issuing Bank or such Lender, the Borrower shall, subject to Section 11.9
hereof, pay to the Issuing Bank or such Lender, from time to time as specified
by the Issuing Bank or such Lender, additional amounts that shall be sufficient
to compensate the Issuing Bank or such Lender or any corporation controlling
such Lender for such Increased Letter of Credit Costs. A certificate as to the
amount of such Increased Letter of Credit Costs, submitted to the Borrower by
the Issuing Bank or such Lender, shall certify that such Increased Letter of
Credit Costs were actually incurred by the Issuing Bank or such Lender and shall
show in reasonable detail an accounting of the amount payable and the
calculation used to determine in good faith such amount and shall be conclusive
absent demonstrable error. In determining such amount, the Issuing Bank or such
Lender may use any reasonable averaging or attribution method.
(e) Obligations Absolute. The obligations of the Borrower under this Agreement
with respect to any Letter of Credit, any Letter of Credit Agreement and any
other agreement or instrument relating to any Letter of Credit or any Revolving
Credit Advance pursuant to Section 2.15(c) hereof shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of this Agreement, any other
Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "L/C Related
Documents");
(ii) (A) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of the
Letters of Credit or any Revolving Credit Advance pursuant to Section 2.15(c)
hereof or (B) any other amendment or waiver of or any consent to departure from
all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank, any Lender or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or by the L/C Related Documents or any unrelated transaction;
(iv) any statement or any other document presented under a 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, except to
the extent that any such forged, fraudulent, invalid, insufficient, untrue or
inaccurate statement was relied upon as a result of the Issuing Bank's gross
negligence or willful misconduct;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not comply with the terms of
the Letter of Credit, except for any payment made upon the Issuing Bank's gross
negligence or willful misconduct;
(vi) any exchange, release or non-perfection of any Collateral, or any
release or amendment or waiver of or consent to departure from any guarantee,
for all or any of the Obligations of the Borrower in respect of the Letters of
Credit or any Revolving Credit Advance pursuant to Section 2.15(c) hereof; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor, other than the Issuing's Bank gross
negligence or willful misconduct.
(f) Compensation for Letters of Credit.
(i) Letter of Credit Fee. Subject to Section 11.9 hereof, the Borrower
shall pay to the Administrative Agent for the account of the Lenders according
to their Revolving Credit Specified Percentages, a per annum fee (which shall be
payable quarterly in arrears on each Quarterly Date and on the Revolving Credit
Commitment Maturity Date) equal to the product of (A)(i) the Applicable LIBOR
Rate Margin in effect from time to time for Revolving Credit Advances plus (ii)
the per annum percentage component of the Facility Fee as provided in Section
2.4(a) hereof multiplied by (B) the average daily amount available for drawing
under all outstanding Letters of Credit. Subject to Section 11.9 hereof, such
fee shall be computed on the basis of a 360-day year for the actual number of
days elapsed.
(ii) Fronting Fee. Subject to Section 11.9 hereof, the Borrower shall pay
to the Administrative Agent for the account of the Issuing Bank a per annum
fronting fee (which shall be payable quarterly in arrears on each Quarterly Date
and on the Revolving Credit Commitment Maturity Date) in an amount equal to the
product of 0.125% multiplied by the average daily amount available for drawing
under all outstanding Letters of Credit. Subject to Section 11.9 hereof, such
fee shall be computed on the basis of a 360-day year for the actual number of
days elapsed.
(iii) Administrative Fee. Subject to Section 11.9 hereof, the Borrower
shall pay, with respect to each amendment, renewal or transfer of each Letter of
Credit and each drawing made thereunder, reasonable documentary and processing
charges in accordance with the Issuing Bank's standard schedule for such charges
in effect at the time of such amendment, renewal, transfer or drawing, as the
case may be.
(g) L/C Cash Collateral Account.
(i) Upon the occurrence of an Event of Default and demand by the
Administrative Agent pursuant to Section 8.2(c) hereof (except in the case of an
Event of Default specified in Section 8.1(e) or (f) hereof, without any demand
or taking of any other action by the Administrative Agent or any Lender), the
Borrower will promptly pay to the Administrative Agent in immediately available
funds an amount equal to the maximum amount then available to be drawn under the
Letters of Credit then outstanding. Any amounts so received by the
Administrative Agent shall be deposited by the Administrative Agent in a deposit
account maintained by the Administrative Agent (the "L/C Cash Collateral
Account").
(ii) As security for the payment of all Reimbursement Obligations and for
any other Obligations, the Borrower hereby grants, conveys, assigns, pledges,
sets over and transfers to the Administrative Agent (for the benefit of the
Issuing Bank and Lenders), and creates in the Administrative Agent's favor (for
the benefit of the Issuing Bank and Lenders) a Lien in, all money, instruments
and securities at any time held in or acquired in connection with the L/C Cash
Collateral Account, together with all proceeds thereof. The L/C Cash Collateral
Account shall be under the sole dominion and control of the Administrative Agent
and the Borrower shall have no right to withdraw or to cause the Administrative
Agent to withdraw any funds deposited in the L/C Cash Collateral Account during
the continuance of any Event of Default. At any time and from time to time,
upon the Administrative Agent's reasonable request, the Borrower promptly shall
execute and deliver any and all such further instruments and documents,
including UCC financing statements, as may be necessary, appropriate or
desirable in the Administrative Agent's reasonable judgment to obtain the full
benefits (including perfection and priority) of the security interest created or
intended to be created by this paragraph (ii) and of the rights and powers
herein granted. The Borrower shall not create or suffer to exist any Lien on
any amounts or investments held in the L/C Cash Collateral Account other than
the Lien granted under this paragraph (ii).
(iii) The Administrative Agent shall (A) apply any funds in the L/C Cash
Collateral Account on account of Reimbursement Obligations when the same become
due and payable, (B) after the Revolving Credit Commitment Maturity Date, apply
any proceeds remaining in the L/C Cash Collateral Account first to pay any
unpaid Obligations then outstanding hereunder and then to refund any remaining
amount to the Borrower.
(iv) The Borrower, no more than once in any calendar month, may direct the
Administrative Agent to invest the funds held in the L/C Cash Collateral Account
(so long as the aggregate amount of such funds exceeds any relevant minimum
investment requirement) in (A) Cash and Cash Equivalents or direct obligations
of the United States or any agency thereof, or obligations guaranteed by the
United States or any agency thereof and (B) one or more other types of
investments permitted by the Determining Lenders, in each case with such
maturities as the Borrower, with the consent of the Determining Lenders, may
specify, pending application of such funds on account of Reimbursement
Obligations or on account of other Obligations, as the case may be. In the
absence of any such direction from the Borrower, the Administrative Agent shall
invest the funds held in the L/C Cash Collateral Account (so long as the
aggregate amount of such funds exceeds any relevant minimum investment
requirement) in one or more types of investments with the consent of the
Determining Lenders with such maturities as the Administrative Agent, with the
consent of the Determining Lenders, may determine, pending application of such
funds on account of Reimbursement Obligations or on account of other
Obligations, as the case may be. All such investments shall be made in the
Administrative Agent's name for the account of the Lenders, subject to the
ownership interest therein of the Borrower. The Borrower recognizes that any
losses or taxes with respect to such investments shall be borne solely by the
Borrower, and the Borrower agrees to hold the Administrative Agent and the
Lenders harmless from any and all such losses and taxes, the Administrative
Agent may liquidate any investment held in the L/C Cash Collateral Account in
order to apply the proceeds of such investment on account of the Reimbursement
Obligations as provided in Section 2.15(g)(iii) hereof (or on account of any
other Obligation then due and payable, as the case may be) without regard to
whether such investment has matured and without liability for any penalty or
other fee incurred (with respect to which the Borrower hereby agrees to
reimburse the Administrative Agent) as a result of such application.
(v) After the establishment of the L/C Cash Collateral Account pursuant to
Section 2.15(g)(i) hereof, the Borrower shall pay to the Administrative Agent
the fees customarily charged by the Administrative Agent with respect to the
maintenance of accounts similar to the L/C Cash Collateral Account.
(vi) At such time as no Event of Default is in existence, the
Administrative Agent shall return any amount remaining in the L/C Cash
Collateral Account to the Borrower.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to the Initial Advances and the Initial
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Letters of Credit.
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The obligation of each Lender to make its initial Advance(s) (and, if
applicable, participate in the Existing Letters of Credit) and the obligation of
the Issuing Bank to issue the initial Letter of Credit is subject to (i) receipt
by the Administrative Agent of the following items which are to be delivered, in
form and substance reasonably satisfactory to each Lender, with a copy (except
for the Notes and this Agreement) for each Lender, and (ii) satisfaction of the
following conditions which are to be satisfied:
(a) A loan certificate of each Obligor required by the Administrative Agent to
be delivered certifying as to the accuracy of its representations and warranties
in the Loan Documents, certifying, in the case of any such Obligor, that no
Default or Event of Default has occurred, including a certificate of incumbency
with respect to each Authorized Signatory, and including (i) a copy of the
articles or certificate of incorporation or other organizational documents of
such Obligor, certified to be true, complete and correct by the secretary of
state of its state of organization, (ii) a copy of a certificate of good
standing and a certificate of existence for its state of organization and in the
case of any such Obligor, each state in which the nature of its business
requires it to be qualified to do business, (iii) a copy of such Obligor's
bylaws, partnership agreement or similar document, certified to be true,
complete and correct by its secretary or general partner, as the case may be,
and (iv) a copy of corporate or similar resolutions authorizing the execution,
delivery and performance of the Loan Documents to be executed by such Obligor;
(b) a certificate of incumbency with respect to each Authorized Signatory of
each Obligor not required to be delivered pursuant to clause (a) immediately
above, together with a copy of corporate or similar resolutions authorizing the
execution, delivery and performance of the Loan Documents to be executed by such
Obligor;
(c) a duly executed Revolving Credit Note, Facility A Term Loan Note and
Facility B Term Loan Note, payable to the order of each Lender with a related
Commitment and in an amount for each Lender equal to its Specified Percentage of
each such Commitment, respectively, and has specifically requested such Note;
(d) opinions of counsel to each Obligor addressed to the Lenders and in form
and substance reasonably satisfactory to the Administrative Agent and Special
Counsel, dated the Agreement Date, and covering certain of the matters set forth
in Sections 4.1(a), (b), (c), (h), (m), (n) and (p) and such other matters
incident to the transactions contemplated hereby as the Administrative Agent or
Special Counsel may reasonably request;
(e) reimbursement for the Administrative Agent for Special Counsel's reasonable
and customary fees (on an hourly basis) and expenses rendered through the
Agreement Date;
(f) evidence that all proceedings of each Obligor taken in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent and
Special Counsel; and the Administrative Agent shall have received copies of all
documents or other evidence which the Administrative Agent or Special Counsel
may reasonably request in connection with such transactions;
(g) any fees or any expenses required to be paid pursuant to Section 2.4(b)
hereof, the Administrative Agent Fee Letter and the Arrangement Fee Letter;
(h) simultaneously with the making of the initial Advances, executed UCC-3
Termination Statements to be filed in appropriate jurisdictions to terminate all
Liens against assets of the Borrower and its Subsidiaries other than Permitted
Liens (or written agreements from each holder of such Liens to promptly execute
such Termination Statements);
(i) all Indebtedness of the Borrower and its Subsidiaries not otherwise
permitted pursuant to Sections 7.1 and 7.2 hereof shall have been (or shall be
simultaneously with the initial Advances hereunder) refinanced or repaid in full
and all obligations of the Borrower and its Subsidiaries under such Indebtedness
shall terminate;
(j) the duly executed Subsidiary Guaranty executed by all Guarantors (which
shall be all Subsidiaries of the Borrower which are not Non-Guarantors);
(k) the Schedule of Non-Guarantors in the form of Schedule 1.1(e) hereto;
(l) duly executed Pledge Agreements, granting a first priority perfected Lien
in all Collateral covered thereby, together with related financing statements,
stock powers and stock certificates evidencing ownership of (i) 100% of the
issued and outstanding Capital Stock of each such Domestic Subsidiary and (ii)
65% of the issued and outstanding Capital Stock of each such Foreign Subsidiary
which has the Borrower or a Domestic Subsidiary as its direct parent;
(m) this Agreement duly executed by the Borrower and each Lender as of the
Agreement Date; and
(n) in form and substance reasonably satisfactory to the Administrative Agent
and Special Counsel, such other documents, instruments and certificates as the
Administrative Agent or any Lender may reasonably require in connection with the
transactions contemplated hereby.
Section 3.2 Conditions Precedent to All Advances and Letters of Credit.
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The obligation of each Lender to make each Advance hereunder (including the
initial Advances) and the obligation of the Issuing Bank to issue or extend each
Letter of Credit (including the initial Letter of Credit) is subject to
fulfillment of the following conditions immediately prior to or
contemporaneously with each such Advance or issuance or extension:
(a) With respect to each Advance and each issuance or extension of a Letter
of Credit, all of the representations and warranties of the Borrower under this
Agreement, which, pursuant to Section 4.2 hereof, are made at and as of the time
of each such Advance or issuance or extension, shall be true and correct, both
before and after giving effect to the application of the proceeds of the Advance
or Letter of Credit;
(b) The incumbency of the Authorized Signatories shall be as stated in the
certificate of incumbency delivered in the Borrower's loan certificate pursuant
to Section 3.1(a) or 3.1(b) or as subsequently modified and reflected in a
certificate of incumbency delivered to the Administrative Agent. The Lenders
may, without waiving this condition, consider it fulfilled and a representation
by the Borrower made to such effect if no written notice to the contrary, dated
on or before the date of such Advance or Letter of Credit, is received by the
Administrative Agent from the Borrower prior to the making of such Advance or
issuance or extension of such Letter of Credit;
(c) There shall not exist a Default or Event of Default hereunder;
(d) The aggregate Advances and Letters of Credit, after giving effect to
such proposed Advance or Letter of Credit, shall not exceed the maximum
principal amount then permitted to be outstanding hereunder;
(e) No order, judgment, injunction or decree of any Tribunal shall purport
to enjoin or restrain any Lender or the Issuing Bank from making any Advance or
issuing or extending any Letter of Credit;
(f) There shall be no Litigation pending against, or, to the Borrower's
knowledge, threatened against the Borrower or any of its Subsidiaries, or in any
other manner relating directly and adversely to the Borrower or any of its
Subsidiaries, or any of their respective properties, in any court or before any
arbitrator of any kind or before or by any governmental body which could
reasonably be expected to have a Material Adverse Effect; and
(g) There shall have occurred no material adverse change in the business,
assets, operations, prospects or conditions (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole, since December 29, 1998.
Notwithstanding the above, the obligation of each Lender with a Revolving Credit
Specified Percentage to make a Revolving Credit Advance pursuant to Section
2.2(g) (or fund its participation in respect of Swing Line Advances pursuant to
Section 2.2(g)) and Section 2.15(c) (or fund its participation in respect of
Letters of Credit pursuant to Section 2.15(c)) shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, (i) the occurrence of any Default or Event of Default, (ii) the
failure of the Borrower to satisfy any condition set forth in this Section 3.2,
or (iii) any other circumstance, happening or event whatsoever, except that,
notwithstanding clauses (i), (ii) and (iii) immediately above, the conditions
precedent set forth in Sections 3.1 and 3.2 with respect to the Swing Line
Advance or the Letter of Credit for which such Revolving Credit Advance is made
pursuant to Section 2.2(g) or 2.15(c) (or, in either case, participation funded)
shall have been satisfied in full at the time of the making of such Swing Line
Advance or the issuance or extension of such Letter of Credit.
Section 3.3 Conditions Precedent to Conversions and Continuations.
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The obligation of the Lenders to convert any existing Base Rate Advance or any
portion thereof into a LIBOR Advance or to continue any existing LIBOR Advance
is subject to the condition precedent that on the date of such conversion or
continuation no Default or Event of Default shall have occurred and be
continuing or would result from the making of such conversion or continuation.
The acceptance of the benefits of each such conversion and continuation shall
constitute a representation and warranty by the Borrower to each of the Lenders
that no Default or Event of Default shall have occurred and be continuing or
would result from the making of such conversion or continuation.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties.
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The Borrower hereby represents and warrants to each Lender as follows:
(a) Organization; Power; Qualification. As of the Agreement Date, the
respective jurisdiction of organization or incorporation of the Borrower and its
Subsidiaries and the percentage ownership by the Borrower and its Subsidiaries
of any Subsidiary listed on Schedule 4.1(a) are true and correct. All of the
outstanding Capital Stock of the Borrower and its Subsidiaries is validly
issued, fully paid and non-assessable. The Capital Stock of each Guarantor has
been pledged pursuant to the Pledge Agreements. Each of the Borrower and its
Subsidiaries is a corporation or other legal Person duly organized, validly
existing and in good standing under the laws of its state of incorporation or
organization. Each of the Borrower and its Subsidiaries has the legal power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted, except where the failure to have such power
and authority could not reasonably be expected to have a Material Adverse
Effect. Each of the Borrower and its Subsidiaries is authorized to do business
and is duly qualified and in good standing in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization, except where the failure to be so qualified or
authorized could not reasonably be expected to have a Material Adverse Effect.
(b) Authorization. The Borrower has the legal power and has taken all
necessary legal action to authorize it to borrow and request Letters of Credit
hereunder. Each of the Borrower and its Subsidiaries has the legal power and
has taken all necessary legal action to execute, deliver and perform the Loan
Documents to which it is party in accordance with the terms thereof and to
consummate the transactions contemplated thereby. Each Loan Document has been
duly executed and delivered by the Borrower or its Subsidiary executing it.
Each of the Loan Documents to which the Borrower or any of its Subsidiaries is a
party is a legal, valid and binding obligation of the Borrower or such
Subsidiary, as applicable, enforceable in accordance with its terms, subject, to
enforcement of remedies, to the following qualifications: (i) equitable
principles generally, and (ii) Debtor Relief Laws (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower or any
such Subsidiary).
(c) Compliance with Other Loan Documents and Contemplated Transactions. The
execution, delivery and performance by the Borrower and its Subsidiaries of the
Loan Documents to which they are respectively a party, and the consummation of
the transactions contemplated thereby, do not and will not (i) require any
consent or approval necessary on or prior to the Agreement Date not already
obtained, (ii) violate any Applicable Law, (iii) conflict with, result in a
breach of, or constitute a default under the certificate of incorporation or
by-laws or other applicable organizational documents of the Borrower or any of
its Subsidiaries, (iv) conflict with, result in a breach of, or constitute a
default under any Necessary Authorization, indenture, agreement or other
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which they or their respective properties may be bound, or (v) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any of its
Subsidiaries.
(d) Business. The Borrower is a holding company, and its Subsidiaries are
engaged primarily in the operation of private clubs (including city,
city/athletic, athletic and country clubs), resorts, golf clubs and public golf
facilities through sole ownership, partial ownership (including joint venture
interests) and management agreements and other activities related thereto,
including, but not limited to, the hospitality business.
(e) Licenses, etc. All Necessary Authorizations have been duly obtained,
and are in full force and effect without any known conflict with the rights of
others and free from any unduly burdensome restrictions. The Borrower and its
Subsidiaries are and will continue to be in compliance with all provisions
thereof, except to the extent that any such failure to comply could not
reasonably be expected to have a Material Adverse Effect. No circumstance
exists which could reasonably be expected to impair the utility of the Necessary
Authorizations or the right to renew such Necessary Authorizations the effect of
which could reasonably be expected to have a Material Adverse Effect. No
Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened challenge, suspension, cancellation or
revocation, the effect of which could reasonably be expected to have a Material
Adverse Effect.
(f) Compliance with Law. The Borrower and its Subsidiaries are in
compliance in all respects with all Applicable Laws (including, without
limitation, all Applicable Environmental Laws), except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect.
(g) Title to Properties. The Borrower and its Subsidiaries have good title
to, or a valid leasehold or subleasehold interest in, all of their material
assets. None of their assets are subject to any Liens, except Permitted Liens.
No financing statement or other Lien filing (except relating to Permitted Liens
and other Liens for which releases and UCC-3 Termination Statements have been
obtained pursuant to Section 3.1(h) hereof) is on file in any state or
jurisdiction that names the Borrower or any of its Subsidiaries as debtor or
covers (or purports to cover) any assets of the Borrower or any of its
Subsidiaries, except for financing statements or other Lien filings securing
Indebtedness with respect to which the requirements of Section 3.1(h) hereof
have been satisfied. The Borrower and its Subsidiaries have not signed any such
financing statement or filing, nor any security agreement authorizing any Person
to file any such financing statement or filing (except relating to Permitted
Liens).
(h) Litigation. Except as disclosed in writing to the Lenders prior to the
Agreement Date, as of the Agreement Date there is no Litigation pending against,
or, to the Borrower's current actual knowledge, threatened against the Borrower
or any of its Subsidiaries, or in any other manner relating directly and
adversely to the Borrower or any of its Subsidiaries, or any of their respective
properties, in any court or before any arbitrator of any kind or before or by
any governmental body in which the amount claimed in an aggregate amount
(excluding liabilities for which credit worthy insurance companies have
acknowledged coverage) exceeds $1,000,000.
(i) Taxes. All federal, state and other tax returns of the Borrower and its
Subsidiaries required by law to be filed have been duly filed, or extensions
have been timely filed, and all Taxes shown to be due and payable on such
returns, have been paid, unless the same are being diligently contested in
accordance with Section 5.6 hereof. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of their Taxes are, in the
reasonable judgment of the Borrower, adequate.
(j) Financial Statements; Material Liabilities.
(i) The Borrower has heretofore delivered to Lenders the (A) audited
consolidated balance sheets of the Borrower and its Subsidiaries as at December
29, 1998, and the related statements of earnings and changes in shareholders'
equity and statement of cash flows for the Fiscal Year then ended and (B)
unaudited consolidated balance sheets of the Borrower and its Subsidiaries as at
June 15, 1999 and the related statements of earnings and changes in
shareholders' equity and statement of cash flows for the six-month period then
ended (the "Financial Statements"). The Financial Statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position of the Borrower and its Subsidiaries as at the date thereof and the
combined results of operations and cash flows for the period covered thereby.
(ii) The projected financial statements of the Borrower and its
Subsidiaries, delivered to the Lenders prior to or on the Agreement Date are
based on good faith estimates and assumptions made by the management of the
Borrower and believed to be reasonable at the time made, it being recognized by
the Lenders that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections may differ from the projected results.
(iii) The financial statements of the Borrower and its Subsidiaries
delivered to the Lenders pursuant to Section 6.1 and 6.2 hereof fairly present
in all material respects their respective financial condition and their
respective results of operations as of the dates and for the periods shown, all
in accordance with GAAP, subject to normal year-end adjustments. The latest of
such financial statements reflects all material liabilities, direct and
contingent, of the Borrower and each Subsidiary of the Borrower that are
required to be disclosed in accordance with GAAP.
(k) No Adverse Change. Since December 29, 1998, no event or circumstance
has occurred or arisen which is reasonably likely to have a Material Adverse
Effect.
(l) ERISA. Each Plan of the Borrower and its Controlled Group (other than
any Multiemployer Plan) is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and any other applicable Law, except
to the extent that failure to so comply would not reasonably be expected to have
a Material Adverse Effect. With respect to each Plan (other than any
Multiemployer Plan) of the Borrower and each member of its Controlled Group, all
reports required under ERISA or any other Applicable Law to be filed with any
Tribunal, the failure of which to file could reasonably be expected to result in
liability of the Borrower or any member of its Controlled Group in excess of
$500,000, have been duly filed. All such reports are true and correct in all
material respects as of the date given. No Plan of the Borrower or any member
of its Controlled Group has been terminated under Section 4041(c) of ERISA nor
has any accumulated funding deficiency (as defined in Section 412(a) of the
Code) been incurred (without regard to any waiver granted under Section 412 of
the Code), nor has any funding waiver from the Internal Revenue Service been
received or requested the result of which could reasonably be expected to have a
Material Adverse Effect. None of the Borrower or any member of its Controlled
Group has failed to make any contribution or pay any amount due or owing as
required under the terms of any such Plan, or by Section 412 of the Code or
Section 302 of ERISA by the due date under Section 412 of the Code and Section
302 of ERISA, the result of which could reasonably be expected to have a
Material Adverse Effect. There has been no ERISA Event or any event requiring
disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any
Plan or its related trust of the Borrower or any member of its Controlled Group
since the effective date of ERISA, the result of which could reasonably be
expected to have a Material Adverse Effect. The present value of the benefit
liabilities, as defined in Title IV of ERISA, of each Plan subject to Title IV
of ERISA (other than a Multiemployer Plan) of the Borrower and each member of
its Controlled Group does not exceed the present value of the assets of each
such Plan as of the most recent valuation date using each such Plan's actuarial
assumptions at such date by an amount which could reasonably be expected to have
a Material Adverse Effect. There are no pending, or to the Borrower's knowledge
threatened, claims, lawsuits or actions (other than routine claims for benefits
in the ordinary course) asserted or instituted against, and neither the Borrower
nor any member of its Controlled Group has knowledge of any threatened
litigation or claims against, the assets of any Plan or its related trust or
against any fiduciary of a Plan with respect to the operation of such Plan, the
result of which could reasonably be expected to have a Material Adverse Effect.
None of the Borrower or, to the Borrower's knowledge, any member of its
Controlled Group has engaged in any prohibited transactions, within the meaning
of Section 406 of ERISA or Section 4975 of the Code, in connection with any Plan
the result of which could reasonably be expected to have a Material Adverse
Effect. None of the Borrower or any member of its Controlled Group has
withdrawn from any Multiemployer Plan, nor has incurred or reasonably expects to
incur (A) any liability under Title IV of ERISA (other than premiums due under
Section 4007 of ERISA to the PBGC), (B) any withdrawal liability (and no event
has occurred which with the giving of notice under Section 4219 of ERISA would
result in such liability) under Section 4201 of ERISA as a result of a complete
or partial withdrawal (within the meaning of Section 4203 or 4205 of ERISA) from
a Multiemployer Plan, or (C) any liability under Section 4062 of ERISA to the
PBGC or to a trustee appointed under Section 4042 of ERISA, the result of which
could reasonably be expected to have a Material Adverse Effect. None of the
Borrower, any member of its Controlled Group, or any organization to which the
Borrower or any member of its Controlled Group is a successor or parent
corporation within the meaning of ERISA Section 4069(b), has engaged in a
transaction within the meaning of ERISA Section 4069, the result of which could
reasonably be expected to have a Material Adverse Effect. Any Plan that is a
welfare benefit plan within the meaning of Section 3(1) of ERISA maintained or
contributed to by the Borrower or any member of its Controlled Group and which
provides for continuing benefits or coverage for any participant or any
beneficiary of any participant after such participant's termination of
employment may be terminated by the Borrower or any member of its Controlled
Group at any time without liability other than liability that could not
reasonably be expected to have a Material Adverse Effect. Each of Borrower and
any member of its Controlled Group which maintains a Plan which is a welfare
benefit plan within the meaning of Section 3(1) of ERISA has complied in all
material respects with the provisions of Parts 6 and 7 of subtitle B of Title I
of ERISA, as amended, and the regulations thereunder, except to the extent that
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect. None of the Borrower or any member of its Controlled Group
maintains or has established a multiemployer welfare benefit arrangement within
the meaning of Section 3(40)(A) of ERISA.
(m) Compliance with Regulations T, U and X. The Borrower is not engaged
principally or as one of its important activities in the business of extending
credit for the purpose of purchasing or carrying any margin stock within the
meaning of Regulations T, U and X of the Board of Governors of the Federal
Reserve System. No more than 25% of the assets of the Borrower and its
Subsidiaries are margin stock. None of the Borrower and its Subsidiaries nor
any agent acting on their behalf, have taken or will take any action which might
cause the Borrower, the Lenders, this Agreement or any other Loan Document to
violate any regulation of the Board of Governors of the Federal Reserve System
or to violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect. Neither the making of any Advances, the issuance or
extension of any Letters of Credit nor the application of any proceeds thereof
will violate, or be inconsistent with, the provisions Regulations T, U and X of
the Board of Governors of the Federal Reserve System.
(n) Required Consents. The Borrower and its Subsidiaries are not required
to obtain any material Necessary Authorization on or prior to the Agreement Date
that has not already been obtained from, or effect any material filing or
registration that has not already been effected with, any Tribunal in connection
with the execution and delivery of this Agreement or any other Loan Document, or
the performance thereof, in accordance with their respective terms, including
any borrowings hereunder.
(o) Absence of Default. The Borrower and its Subsidiaries are in compliance
in all material respects with all of the provisions of their respective
certificate of incorporation, by-laws and other organizational documents, and no
event has occurred or failed to occur, which has not been remedied or waived,
the occurrence or non-occurrence of which constitutes, or which with the passage
of time or giving of notice or both would constitute, (i) an Event of Default or
(ii) a default by the Borrower or any of its Subsidiaries under any indenture,
agreement or other instrument, or any judgment, decree or order to which the
Borrower or any of its Subsidiaries or by which they or any of their respective
properties is bound, the result of which with respect to any default set forth
in clause (ii) could reasonably be expected to have a Material Adverse Effect.
(p) Governmental Regulation. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended. Neither the entering into or
performance by the Borrower of this Agreement nor the issuance of the Notes
violates any provision of such acts or requires any consent, approval, or
authorization of, or registration with, the Securities and Exchange Commission
or any other Tribunal pursuant to any provisions of such act.
(q) Environmental Matters. The Borrower does not have any knowledge or
reason to believe that any Hazardous Substance has been placed (i) on any real
property fee title to which is now owned by the Borrower or any of its
Subsidiaries or (ii) by Borrower or any of its Subsidiaries on any real property
leased by the Borrower or any of its Subsidiaries, in either case in a manner
which does not comply with Applicable Environmental Laws, except to the extent
that the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. The Borrower and its Subsidiaries are not in violation
of or subject to any existing, pending or, to the best of the Borrower's
knowledge, threatened investigation or inquiry by any Tribunal or to any
remedial obligations under any Applicable Environmental Laws, the effect of
which could reasonably be expected to have a Material Adverse Effect. The
Borrower and its Subsidiaries have not failed to obtain and comply with any
permits, licenses or similar authorizations required to be obtained by reason of
any Applicable Environmental Laws with respect to any real property owned or
leased by the Borrower or any of its Subsidiaries, except to the extent that the
failure to so obtain could not reasonably be expected to have a Material Adverse
Effect. The Borrower has no current actual knowledge that any Hazardous
Substances have been disposed of or otherwise released (i) on or to the real
property fee title to which is owned by the Borrower or any of its Subsidiaries
or (ii) by Borrower or any of its Subsidiaries on or to any real property leased
by Borrower or any of its Subsidiaries, all within the meaning of the Applicable
Environmental Laws, the effect of which could reasonably be expected to have a
Material Adverse Effect.
(r) Certain Fees. No broker's, finder's or other fee or commission will be
payable by the Borrower (other than under the Arrangement Fee Letter and as set
forth in Section 2.4 hereof) with respect to the making of the Commitments or
the Advances hereunder. The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender from and against any claims, demand,
liability, proceedings, costs or expenses asserted with respect to or arising in
connection with any such fees or commissions.
(s) Intellectual Property. The Borrower and its Subsidiaries have
collectively obtained or applied for or licensed or otherwise obtained the right
to use all patents, trademarks, service marks, trade names, copyrights, and
other rights, free from Liens (except Permitted Liens), that are necessary for
the operation of their business as presently conducted and as proposed to be
conducted. Nothing has come to the current actual knowledge of the Borrower or
any of its Subsidiaries to the effect that (i) any process, method, part or
other material presently contemplated to be employed by the Borrower or any of
its Subsidiaries infringes any valid and enforceable patent, trademark, service
mark, trade name, copyright, license or other right owned by any other Person,
or (ii) there is pending or overtly threatened any claim or litigation against
or affecting the Borrower or any of its Subsidiaries contesting its right to
sell or use any such process, method, part or other material, which could
reasonably be expected to have a Material Adverse Effect.
(t) Disclosure. All information, reports, financial statements, exhibits
and schedules furnished in writing by the Borrower or any of its Subsidiaries to
the Administrative Agent or any Lender in connection with this Agreement or the
other Loan Documents is, and all other such written information hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender will be, true and accurate in all material
respects (or, in the case of projections based on reasonable estimates and
assumptions) on the date as of which such information is dated or certified and
not incomplete by omitting to state any material fact necessary to make such
information not misleading at such time in light of the circumstances under
which such information was provided. There is no fact known to the Borrower and
not known to the public generally that could reasonably be expected to have a
Material Adverse Effect, which has not been set forth in this Agreement or in
the documents, certificates and statements furnished to the Lenders by or on
behalf of the Borrower in connection with the transactions contemplated hereby
or thereby.
(u) Solvency. The Borrower is, and Borrower and its Subsidiaries on a
consolidated basis are, Solvent.
(v) Labor Relations. Except as set forth on Schedule 4.1(v) hereto, neither
the Borrower nor any of its Subsidiaries is a party to a collective bargaining
agreement or similar agreement, and the Borrower and each Subsidiary is in
compliance in all material respects with all Laws respecting employment and
employment practices, terms and conditions of employment, wages and hours and
other laws related to the employment of its employees. There are no arrears in
the payment of wages, withholding or social securities taxes, unemployment
insurance premiums or other similar obligations of the Borrower or any of its
Subsidiaries or for which the Borrower or any such Subsidiary may be responsible
other than in the ordinary course of business. There is no strike, work
stoppage or labor dispute with any union or group of employees pending or
overtly threatened involving Borrower or any of its Subsidiaries.
(w) Common Enterprise. The Borrower and its Subsidiaries are engaged in the
businesses set forth in Section 4.1(d) hereof. These operations require
financing on a basis such that the credit supplied can be made available from
time to time to the Borrower and various of its Subsidiaries, as required for
the continued successful operation of the Borrower and its Subsidiaries as a
whole. The Borrower and its Subsidiaries expect to derive benefit (and the
boards of directors of the Borrower and its Subsidiaries have determined that
the Borrower and its Subsidiaries may reasonably be expected to derive benefit),
directly or indirectly, from the credit extended by the Lenders hereunder, both
in their separate capacities and as members of the group of companies, since the
successful operation and condition of the Borrower and its Subsidiaries is
dependent on the continued successful performance of the functions of the group
as a whole.
(x) Year 2000 Compliance. The Borrower is (i) developing a review and
assessment of all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower or any of its Subsidiaries (or its suppliers
and vendors) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), and (ii) developing a plan and timeline for addressing the Year 2000
Problem on a timely basis. The Borrower reasonably believes that all computer
applications (including those of its suppliers and vendors) that are material to
its or any of its Subsidiaries' business and operations will on a timely basis
be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent
that a failure to do so could not reasonably be expected to have a Material
Adverse Effect.
Section 4.2 Survival of Representations and Warranties, etc.
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All representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at and
as of the date of each Advance (and any continuation or conversion of an
Advance) and the date of issuance or extension of each Letter of Credit, and
each shall be true and correct when made, except to the extent (a) previously
fulfilled in accordance with the terms hereof, (b) previously waived in writing
by the Determining Lenders with respect to any particular factual circumstance
or permitted by the terms of this Agreement or (c) such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct on and as of
such date. All such representations and warranties shall survive, and not be
waived by, the execution hereof by any Lender, any investigation or inquiry by
any Lender, or by the making of any Advance or the issuance or extension of any
Letter of Credit under this Agreement.
ARTICLE 5
General Covenants
Prior to the Release Date:
Section 5.1 Preservation of Existence and Similar Matters.
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The Borrower shall, and shall cause each of its Subsidiaries to:
(a) except as otherwise permitted pursuant to Section 7.4 hereof, preserve and
maintain, or timely obtain and thereafter preserve and maintain, its existence,
rights, franchises, licenses, authorizations, consents, privileges and all other
Necessary Authorizations from any Tribunal, the loss of which could reasonably
be expected to have a Material Adverse Effect; and
(b) except as otherwise permitted pursuant to Section 7.4 hereof, qualify and
remain qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization, unless the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law.
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The Borrower and its Subsidiaries shall (a) engage primarily in the businesses
set forth in Section 4.1(d) hereof, and (b) comply in all material respects with
the requirements of all Applicable Laws, including, without limitation, all
Applicable Environmental Laws.
Section 5.3 Maintenance of Properties.
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The Borrower shall, and shall cause each of its Subsidiaries to, maintain or
cause to be maintained all its properties (whether owned or held under lease) in
adequate operating condition and repair for purposes of their current use with
due regard to the age thereof, taken as a whole, subject to ordinary wear and
tear, and from time to time make or cause to be made all appropriate repairs,
renewals, replacements, additions, betterments and improvements thereto.
Section 5.4 Accounting Methods and Financial Records.
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The Borrower shall, and shall cause each of its Subsidiaries to, maintain a
system of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made and
all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets.
Section 5.5 Insurance.
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The Borrower shall, and shall cause each of its Subsidiaries to, maintain
insurance from responsible companies in such amounts and against such risks as
shall be customary and usual in the industry for companies of similar size and
capability. Each insurance policy shall provide for at least 30 days' prior
notice to the Administrative Agent of any proposed termination or cancellation
of such policy, whether on account of default or otherwise.
Section 5.6 Payment of Taxes and Claims.
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The Borrower shall, and shall cause each of its Subsidiaries to, pay and
discharge all material taxes to which each is subject prior to the date on which
penalties attach thereto, and all lawful claims for labor, materials and
supplies which, if unpaid, might by Law become a Lien upon any of its
properties; except that no such tax or claim need be paid which is being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on the appropriate books, but only
so long as any Lien related thereto is a Permitted Lien and no foreclosure,
distraint, sale or similar proceedings shall have been commenced. The Borrower
shall, and shall cause each of its Subsidiaries to, timely file all information
returns (or extensions of such filing deadlines) required by federal, state or
local tax authorities.
Section 5.7 Visits and Inspections
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The Borrower shall, and shall cause each of its Subsidiaries to, promptly permit
representatives of the Administrative Agent or any Lender from time to time
after reasonable notice by the Administrative Agent or any Lender to (a) visit
and inspect the properties of the Borrower and its Subsidiaries as often as the
Administrative Agent or any Lender shall reasonably deem advisable, (b) review,
inspect and make extracts from and copies of the Borrower's and each such
Subsidiary's books and records, and (c) discuss with the Borrower's and each
such Subsidiary's directors, officers, employees and auditors its business,
assets, liabilities, financial positions, results of operations and business
prospects, provided that such representatives of the Administrative Agent or any
Lender shall keep confidential all information obtained pursuant to this Section
5.7 to the extent required by Section 11.14. The Borrower shall pay the
reasonable out-of-pocket expenses related to inspections and reviews performed
(a) at any time by the Administrative Agent, and (b) after the occurrence and
during the continuance of an Event of Default, by each Lender. Except after the
occurrence and during the continuance of an Event of Default, all such visits
and inspections shall be conducted during normal business hours. Following the
occurrence and during the continuance of an Event of Default, such visits and
inspections shall be conducted at any time requested by the Administrative Agent
or any Lender without any requirement for reasonable notice.
Section 5.8 Use of Proceeds
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The proceeds of the Advances and the Letters of Credit shall be used by the
Borrower to (a) pay certain outstanding Indebtedness of the Borrower and its
Subsidiaries, including all Indebtedness in respect of the Existing Credit
Agreements, (b) finance acquisitions, and (c) finance the ongoing working
capital and general corporate requirements of the Borrower and its Subsidiaries.
SECTION 5.9 INDEMNITY
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(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE
ADMINISTRATIVE AGENT, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES, AND EACH
OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS, DIRECTORS, EMPLOYEES,
TRUSTEES, AGENTS, ATTORNEYS AND CONSULTANTS (INCLUDING, WITHOUT LIMITATION,
THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED SATISFACTION OF
ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE FOREGOING (COLLECTIVELY,
"INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, REASONABLE COSTS,
REASONABLE OUT-OF-POCKET EXPENSES AND REASONABLE DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES IN CONNECTION WITH ANY
INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING, WHETHER OR NOT SUCH
INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL,
WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND REGULATIONS, UNDER COMMON
LAW OR AT EQUITY, OR ON CONTRACT, TORT OR OTHERWISE, AND WHETHER ARISING FROM OR
CONNECTED WITH THE PAST, PRESENT OR FUTURE OPERATIONS OF THE BORROWER OR ANY
SUBSIDIARY OF THE BORROWER OR THEIR RESPECTIVE PREDECESSORS IN INTEREST, OR THE
PAST, PRESENT OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE BORROWER OR
ANY SUBSIDIARY OF THE BORROWER), RELATING TO OR ARISING OUT OF THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT
OR TRANSACTION RELATING THERETO, INCLUDING IN CONNECTION WITH, OR AS A RESULT,
IN WHOLE OR IN PART, OF ANY ORDINARY OR MERE NEGLIGENCE OF ADMINISTRATIVE AGENT
OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY BY A PARTICIPANT
AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER AND NOT THE BORROWER), OR THE USE
OR INTENDED USE OF THE PROCEEDS OF THE ADVANCES OR LETTERS OF CREDIT HEREUNDER,
OR IN CONNECTION WITH ANY INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY,
BUT EXCLUDING (I) ANY CLAIM OR LIABILITY THAT IS THE RESULT OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNITEE, AS ADMITTED IN WRITING BY
SUCH INDEMNITEE OR FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION, AND (II) MATTERS RAISED BY ONE LENDER AGAINST ANOTHER LENDER OR
INDEMNITEE OR BY ANY SHAREHOLDERS OF A LENDER AGAINST A LENDER OR INDEMNITEE OR
ITS MANAGEMENT (COLLECTIVELY, EXCEPT FOR THE MATTERS REFERRED TO CLAUSES (I) OR
(II) ABOVE, "INDEMNIFIED MATTERS", AND THE MATTERS REFERRED TO IN CLAUSES (I) OR
(II) ABOVE, COLLECTIVELY, "EXCLUDED MATTERS").
(b) WITHOUT DUPLICATION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE OUT-OF-POCKET LEGAL AND OTHER
ACTUAL REASONABLE EXPENSES (INCLUDING THE REASONABLE COST OF ANY INVESTIGATION
AND PREPARATION) INCURRED IN CONNECTION WITH ANY INDEMNIFIED MATTER; PROVIDED
THAT SUCH INDEMNITEE SHALL PROVIDE ADEQUATE DOCUMENTATION OF SUCH EXPENSES;
PROVIDED, FURTHER, THAT IF AN INDEMNITEE IS REIMBURSED HEREUNDER FOR SUCH
AMOUNT, THE AMOUNT SO PAID SHALL BE REFUNDED TO THE BORROWER IF AND TO THE
EXTENT IT IS FINALLY JUDICIALLY DETERMINED THAT THE INDEMNIFIED MATTER IN
QUESTION WAS AN EXCLUDED MATTER. THE REIMBURSEMENT AND INDEMNITY OBLIGATIONS
UNDER THIS SECTION 5.9 SHALL BE IN ADDITION TO ANY LIABILITY WHICH THE BORROWER
MAY OTHERWISE HAVE, SHALL EXTEND UPON THE SAME TERMS AND CONDITIONS TO EACH
INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF ANY
SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE LENDERS AND ALL OTHER INDEMNITEES. THIS SECTION SHALL
SURVIVE ANY TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE OBLIGATIONS AND
SHALL CONTINUE WITH RESPECT TO ANY LENDER THAT MAY ASSIGN ALL OF ITS RIGHTS AND
OBLIGATIONS UNDER THE LOAN DOCUMENTS.
Section 5.10 Environmental Law Compliance.
- ----------------------------------------------
In addition to and without limiting the generality of Section 5.2 hereof, the
use which the Borrower or any of its Subsidiaries make of any real property
which is owned or leased by it will not result in the disposal or other release
of any Hazardous Substance or solid waste on or to such real property, the
effect of which could reasonably be expected to have a Material Adverse Effect.
As used herein, the term "release" as used in this Section shall have the
meaning specified in CERCLA (as defined in the definition of Applicable
Environmental Laws), and the terms "solid waste" and "disposal" shall have the
meanings specified in RCRA (as defined in the definition of Applicable
Environmental Laws); provided, however, that if CERCLA or RCRA is amended so as
to broaden or lessen the meaning of any term defined thereby, such broader or
lesser meaning shall apply subsequent to the effective date of such amendment;
and provided further, to the extent that any other law applicable to the
Borrower, any Subsidiary or any of their properties establishes a meaning for
"release," "solid waste," or "disposal" which is broader or lesser than that
specified in either CERCLA or RCRA, such broader or lesser meaning shall apply.
Section 5.11 Further Assurances
- ----------------------------------
At any time or from time to time upon reasonable request by the Administrative
Agent, the Borrower or any of its Subsidiaries shall execute and deliver such
further documents and do such other acts and things as the Administrative Agent
may reasonably request in order to effect fully the purposes of this Agreement
and the other Loan Documents and to provide for payment of the Obligations in
accordance with the terms of this Agreement and the other Loan Documents.
Without limiting the generality of the foregoing, the Borrower agrees to update
and deliver to the Administrative Agent Schedule 4.1(a) hereto at the time of
delivery of the financial statements set forth in Sections 6.1 (with respect to
the identities, jurisdiction of organization and ownership of the Guarantors)
and 6.2 (with respect to the identities, jurisdictions of organization and
ownership of the Borrower's Subsidiaries) hereof if the information provided
therein is not complete and correct.
Section 5.12 Year 2000 Compliance
- -------------------------------------
The Borrower shall, and shall cause each of its Subsidiaries to, maintain its
computer applications to be Year 2000 Compliant, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
Section 5.13 Non-Guarantors as Guarantors
- ---------------------------------------------
At any time that an Event of Default occurs as a result of a breach of Section
7.19 hereof, the Borrower agrees to immediately cause such of its Subsidiaries
to execute a Subsidiary Guaranty (and to deliver such certificates and documents
related thereto as shall be required by the Administrative Agent) and thereby
become Guarantors as are necessary to cure such breach of Section 7.19 hereof;
provided, however, nothing provided in this Section 5.13 shall be deemed to
provide any grace period for any Event of Default that occurs as a result of a
breach of Section 7.19 hereof.
Section 5.14 Subsidiaries
- ---------------------------
Unless otherwise waived by the Administrative Agent at any time that any Person
becomes a Domestic Subsidiary, (a) 100% of such Subsidiary's Capital Stock shall
be pledged to secure the Obligations and (b) the Lenders shall receive such
stock certificates, stock powers, board resolutions, officer's certificates,
corporate and other documents and opinions of counsel as the Administrative
Agent shall reasonably request in connection with such pledge. Unless otherwise
waived by the Administrative Agent, at any time that any Person becomes a
Foreign Subsidiary which has the Borrower or a Domestic Subsidiary as its direct
parent, (a) 65% of such Subsidiary's Capital Stock shall be pledged to secure
the Obligations and (b) the Lenders shall receive such stock certificates, stock
powers, board resolutions, officers' certificates, corporate and other documents
and opinions of counsel as the Administrative Agent shall reasonably request in
connection with such pledge.
ARTICLE 6
Information Covenants
Prior to the Release Date, the Borrower shall furnish or cause to be furnished
to each Lender:
Section 6.1 Quarterly Financial Statements and Information
- ----------------------------------------------------------------
Within 60 days after the end of each Fiscal Quarter of each Fiscal Year (other
than the end of a Fiscal Quarter which coincides with the end of a Fiscal Year),
the consolidated balance sheets of the Borrower and its Subsidiaries as at the
end of such Fiscal Quarter and the related consolidated statements of earnings
for such Fiscal Quarter and for the elapsed portion of the year ended with the
last day of such Fiscal Quarter, and consolidated statements of cash flow for
the elapsed portion of the year ended with the last day of such Fiscal Quarter,
all of which shall be certified by a Responsible Officer, to, in his or her
opinion acting solely in his or her capacity as an officer of the Borrower,
present fairly in all material respects, in accordance with GAAP (except for the
absence of footnotes), the financial position and results of operations of the
Borrower and its Subsidiaries as at the end of and for such Fiscal Quarter, and
for the elapsed portion of the year ended with the last day of such Fiscal
Quarter, subject only to normal year-end adjustments.
Section 6.2 Annual Financial Statements and Information; Certificate of No
- --------------------------------------------------------------------------------
Default.
- --------
(a) Within 120 days after the end of each Fiscal Year, a copy of (i) the
consolidated balance sheets of the Borrower and its Subsidiaries, as of the end
of the current and prior Fiscal Years and (ii) the consolidated statements of
earnings and consolidated statements of changes in shareholders' equity and
consolidated statements of cash flow as of and through the end of such Fiscal
Year (together with certain consolidating statements in form reasonably
satisfactory to the Administrative Agent), all of which are prepared in
accordance with GAAP, and said consolidated statements certified by independent
certified public accountants reasonably acceptable to the Administrative Agent,
whose opinion shall be in scope and substance in accordance with generally
accepted auditing standards and shall be unqualified in all respects.
(b) Simultaneously with the delivery of the statements required by this Section
6.2, a letter from the Borrower's certified public accountants stating to the
effect that during their audit of such financial statements nothing has come to
their attention that would result in a Default or Event of Default under this
Agreement, recognizing, however, that the scope and purpose of their audit was
not to determine compliance with the terms of this Agreement or whether a
Default or Event of Default has otherwise occurred.
Section 6.3 Compliance Certificate
- -------------------------------------
At the time financial statements are furnished pursuant to Sections 6.1 and 6.2
hereof, the Compliance Certificate, completed as provided therein.
Section 6.4 Copies of Other Reports and Notices
- ------------------------------------------------------
(a) Promptly upon their becoming available, copies of (i) all material reports
or letters submitted to the Borrower or any of its Subsidiaries by accountants
in connection with any annual, interim or special audit, including without
limitation any report prepared in connection with the annual audit referred to
in Section 6.2 hereof, and any other comment letter submitted to management in
connection with any such audit, (ii) each regular, periodic or other report and
any registration statement (other than statements on Form S-8) or prospectus (or
material written communication in respect of any thereof) filed by the Borrower
or any of its Subsidiaries with any securities exchange, with the Securities
and Exchange Commission or any successor agency, and (iii) all press releases
concerning material financial aspects of the Borrower or any of its
Subsidiaries;
(b) Promptly upon the Borrower becoming aware that (i) the holder(s) of any
note(s) or other evidence of Indebtedness or other security of the Borrower or
any of its Subsidiaries in excess of $250,000 in the aggregate has given notice
or taken any action with respect to a breach, failure to perform, claimed
default or event of default thereunder or (ii) any event, circumstance or
condition which could reasonably be expected to be classified as a Material
Adverse Effect, a written notice specifying the details thereof (or the nature
of any claimed default or event of default) and what action is being taken or is
proposed to be taken with respect thereto;
(c) Promptly upon the Borrower becoming aware that any party to any Capitalized
Lease Obligations in excess of $250,000 or Operating Lease in which the annual
rentals thereunder exceed $100,000 has given notice or taken any action with
respect to a breach, failure to perform, claimed default or event of default
thereunder, a written notice specifying the details thereof (or the nature of
any claimed default or event of default) and what action is being taken or is
proposed to be taken with respect thereto;
(d) Promptly upon receipt by the Borrower thereof, information with respect to
and copies of any notices received from any Tribunal relating to any order,
ruling, law, information or policy that relates to a breach of or noncompliance
with any Law, and could reasonably be expected to result in the payment of money
by the Borrower or any of its Subsidiaries in an amount of $250,000 or more in
the aggregate or otherwise have a Material Adverse Effect, or result in the loss
or suspension of any Necessary Authorization where such loss could reasonably be
expected to have a Material Adverse Effect; and
(e) From time to time and promptly upon each request, such material data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of the Borrower and its Subsidiaries, as the
Administrative Agent or any Lender may reasonably request.
Section 6.5 Notice of Litigation, Default and Other Matters
- -------------------------------------------------------------------
Prompt notice of the following events after the Borrower has knowledge or notice
thereof:
(a) The commencement of all Litigation and investigations by or before any
Tribunal, and all actions and proceedings in any court or before any arbitrator
involving claims for damages (including punitive damages) in excess of
$1,000,000 (after deducting the amount with respect to which creditworthy
insurance companies have acknowledged coverage), against or in any other way
relating directly to the Borrower, any of its Subsidiaries or any of their
respective properties or businesses; and
(b) Promptly upon the happening of any condition or event of which the Borrower
has current actual knowledge which constitutes a Default, a written notice
specifying the nature and period of existence thereof and what action is being
taken or is proposed to be taken with respect thereto.
Section 6.6 ERISA Reporting Requirements
- --------------------------------------------
(a) Promptly and in any event (i) within 30 days after the Borrower has current
actual knowledge that any ERISA Event described in clause (a) of the definition
of ERISA Event or any event described in Section 4063(a) of ERISA with respect
to any Plan of the Borrower or any member of its Controlled Group has occurred,
and (ii) within 10 Business Days after the Borrower or any member of its
Controlled Group has current actual knowledge that any other ERISA Event with
respect to any Plan of the Borrower or any member of its Controlled Group has
occurred or a request for a minimum funding waiver under Section 412 of the Code
has been made with respect to any Plan of the Borrower or any member of its
Controlled Group, a written notice describing such event and describing what
action is being taken or is proposed to be taken with respect thereto, together
with a copy of any notice of such event that is given to the PBGC;
(b) Promptly and in any event within ten Business Days after receipt thereof by
the Borrower, copies of each notice received by the Borrower or any member of
its Controlled Group from the PBGC of the PBGC's intention to terminate any Plan
or to have a trustee appointed to administer any Plan;
(c) Promptly upon the request of the Administrative Agent, copies of each
annual report (including Schedule B thereto, if applicable) with respect to each
Plan subject to Title IV of ERISA of which Borrower or any member of its
Controlled Group is the "plan sponsor";
(d) Promptly, and in any event within 10 Business Days after receipt thereof by
the Borrower, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Borrower or such member of its Controlled Group setting
forth details as to the events giving rise to such potential withdrawal
liability and the action which the Borrower or such member of its Controlled
Group is taking or proposes to take with respect thereto;
(e) Notification within 30 days of any material increases in the benefits
provided under any existing Plan which is not a Multiemployer Plan, or the
establishment of any new Plans, or the commencement of contributions to any Plan
to which the Borrower or any member of its Controlled Group was not previously
contributing, which could reasonably be expected in any such case to result in
an additional material liability to the Borrower;
(f) Notification within five Business Days after the Borrower knows that the
Borrower or any such member of its Controlled Group has filed or intends to file
a notice of intent to terminate any Plan under a distress termination within the
meaning of Section 4041(c) of ERISA and a copy of such notice; and
(g) Within five Business Days after receipt by the Borrower of written notice
of commencement thereof, notice of all actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any member of
its Controlled Group with respect to any Plan, except those which, in the
aggregate, if adversely determined could not reasonably be expected to have a
Material Adverse Effect.
Section 6.7 Year 2000 Compliance
- ------------------------------------
The Borrower will promptly notify the Administrative Agent in the event the
Borrower discovers or determines that any computer application (including those
of its suppliers and vendors) that is material to its or any of its
Subsidiaries' business and operations will not be Year 2000 Compliant on a
timely basis, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
ARTICLE 7
Negative Covenants
Prior to the Release Date:
Section 7.1 Unsecured Indebtedness
- -------------------------------------
(a) The Borrower shall not, and shall not permit any Subsidiary of the
Borrower to, create, assume, incur or otherwise become or remain obligated in
respect of, or permit to be outstanding, or suffer to exist any Unsecured
Indebtedness, except:
(b) After the Collateral Release Event, Indebtedness under the Loan
Documents;
(c) Unsecured Indebtedness existing on the Agreement Date which is described
on Schedule 7.1 hereto, including renewals, replacements and refinancings (but
no increases) thereof;
(d) Unsecured Indebtedness in respect of endorsement of negotiable
instruments in the ordinary course of business;
(e) Unsecured Indebtedness owing to any Obligor by the Borrower or any of
its Subsidiaries, which Indebtedness (i) is evidenced by an entry on the
financial records of the Borrower or any such Subsidiary and (ii) if owed by an
Obligor, is subordinated to the Obligations in a manner satisfactory to the
Determining Lenders, and which will permit payments to be made on such
Indebtedness provided that no Default or Event of Default shall exist before
such payment or after giving effect thereto;
(f) Guaranties by Subsidiaries of the Borrower of Unsecured Indebtedness of
the Borrower or other Subsidiaries of the Borrower and Guaranties by the
Borrower of Unsecured Indebtedness of Subsidiaries of the Borrower, in each case
to the extent such underlying Unsecured Indebtedness is permitted hereunder;
(g) Unsecured Indebtedness consisting of performance bonds or surety or
appeal bonds provided by the Borrower or any of its Subsidiaries in the ordinary
course of business and which do not secure other Indebtedness;
(h) Guaranties permitted pursuant to Section 7.6 hereof;
(i) Prior to the Qualifying Date, other Unsecured Subordinated Indebtedness
of the Borrower and its Subsidiaries, provided that (i) prior to and after
giving effect to such other Unsecured Subordinated Indebtedness, no Default or
Event of Default shall have occurred and be continuing, and (ii) such other
Unsecured Subordinated Indebtedness shall not mature prior to 180 days after the
Facility B Term Loan Maturity Date and shall amortize in such amounts and on
such dates as are reasonably acceptable to the Administrative Agent, and (B) on
and after the Qualifying Date, other Unsecured Indebtedness of the Borrower and
its Subsidiaries, provided that (i) prior to and after giving effect to such
other Unsecured Indebtedness, no Default or Event of Default shall have occurred
and be continuing, (ii) the terms, covenants and provisions of such other
Unsecured Indebtedness shall not be more restrictive than any terms, covenants
or provisions of this Agreement, and (iii) such other Unsecured Indebtedness
shall not mature prior to 180 days after the Facility A Term Loan Maturity Date
and shall amortize in such amounts and on such dates as are reasonably
acceptable to the Administrative Agent; and
(j) Prior to the Qualifying Date, other Unsecured Indebtedness not otherwise
permitted under this Section 7.1 not to exceed $30,000,000 in aggregate
principal amount outstanding at any time, and (B) on and after the Qualifying
Date, other Unsecured Indebtedness not otherwise permitted under this Section
7.1 not to exceed $50,000,000 in aggregate principal amount outstanding at any
time.
Section 7.2 Secured Indebtedness
- -----------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to, create,
assume, incur or otherwise become or remain obligated in respect of, or permit
to be outstanding, or suffer to exist any Secured Indebtedness, except for
Permitted Secured Indebtedness.
Section 7.3 Liens
- -------------------
The Borrower shall not, and shall not permit any Subsidiary of Borrower to,
create, assume, incur, permit or suffer to exist, directly or indirectly, any
Lien on any of its assets, whether now owned or hereafter acquired, except
Permitted Liens. The Borrower shall not, and shall not permit any Subsidiary
to, become subject to a Negative Pledge other than in respect of Permitted
Secured Indebtedness, provided that such Negative Pledge relates only to the
assets purchased or acquired.
Section 7.4 Investments
- -------------------------
The Borrower shall not, and shall not permit any Subsidiary of Borrower to, make
any Investment, except that the Borrower and any Subsidiary of the Borrower may
purchase or otherwise acquire and own:
(a) Accounts receivable that arise in the ordinary course of business and
are payable in a manner consistent with past practices;
(b) Investments in existence on the Agreement Date which are described on
Schedule 7.4 hereto;
(c) Investments in the form of Hedge Agreements permitted by Section 7.1(b)
hereof;
(d) Investments pursuant to the Investment Policy;
(e) Investments in Obligors;
(f) Investments after the Agreement Date in Non-Guarantors, but excluding
from the limitation provided in this clause (f) Investments in Non-Guarantors
which are not obligated to third Persons in respect of any Indebtedness,
(calculated on the initial investment amount but adjusted to take into account
any proceeds received by the Borrower or any other Obligor on a liquidation or
repayment of any such Investments) not to exceed, together with other
Investments pursuant to Section 7.4(g) hereof (calculated as provided in Section
7.4(g) hereof) and Acquisitions of Non-Guarantors pursuant to Section 7.8 hereof
(calculated using the aggregate Acquisition Consideration therefor), an amount
equal to 10% of Total Capitalization at any time; and
(g) Investments after the Agreement Date not otherwise permitted pursuant to
clauses (a) through (e) above, but excluding from the limitation provided in
this clause (g) Investments in joint ventures which are not obligated to third
Persons in respect of any Indebtedness and which are obligated to distribute all
cash available to be distributed to their equity owners, (calculated on the
initial investment amount but adjusted to take into account any proceeds
received by the Borrower or any other Obligor on a liquidation or repayment of
any such Investments) not to exceed, together with Investments in (calculated as
provided in Section 7.4(f) hereof) and Acquisitions of Non-Guarantors pursuant
to Section 7.8 hereof (calculated using the aggregate Acquisition Consideration
therefor), an amount equal to 10% of Total Capitalization at any time; provided,
however, that no Investment otherwise permitted by clauses (f) and (g) above
shall be permitted to be made if, immediately before or after giving effect
thereto, any Event of Default shall have occurred and be continuing.
Section 7.5 Liquidation, Merger
- ----------------------------------
The Borrower shall not, and shall not permit any Subsidiary of Borrower to, at
any time:
(a) liquidate or dissolve itself (or suffer any liquidation or dissolution) or
otherwise wind up, except that (i) a Subsidiary of the Borrower may liquidate or
dissolve into the Borrower or a Subsidiary of the Borrower which is an Obligor,
and (ii) a Subsidiary of the Borrower which is not an Obligor may liquidate or
dissolve into the Borrower or a Subsidiary of the Borrower; or
(b) enter into any merger or consolidation unless (i) with respect to a merger
or consolidation, the Borrower shall be the surviving corporation, unless the
merger or consolidation involves a Guarantor and the Borrower is not merging
with another Person, and either (A) such Guarantor shall be the surviving
corporation, (B) the survivor of the merger becomes a Guarantor, (C) the entity
formed in the consolidation becomes a Guarantor, or (D) the survivor is, or is
properly designated as, a Non-Guarantor, (ii) such transaction shall not be
utilized to circumvent compliance with any term or provision herein, and (iii)
no Default or Event of Default shall then be in existence or occur as a result
of such transaction.
Section 7.6 Guaranties
- ------------------------
The Borrower shall not, and shall not permit any Subsidiary to, at any time make
or issue any Guaranty, or assume, be obligated with respect to, or permit to be
outstanding any Guaranty, of any obligation of any other Person except (a) the
Subsidiary Guaranty, (b) the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection, (c) the Guaranty of
Indebtedness permitted by Sections 7.1 and 7.2 hereof, and (d) the Guaranty of
Indebtedness of Persons other than the Borrower and its Subsidiaries, provided
that the aggregate principal amount of such Indebtedness which is guaranteed by
the Borrower and its Subsidiaries shall not at any time exceed 15% of Net Worth.
Section 7.7 Sales of Assets
- -------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to, sell,
transfer or otherwise dispose of, any of its assets except:
(a) prior to Qualifying Date,
(i) inventory in the ordinary course of business,
(ii) obsolete or worn-out assets,
(iii) sales and dispositions from the Borrower or any of its Subsidiaries
to any Obligor,
(iv) sales of assets in which the Net Cash Proceeds do not exceed
$500,000;
(v) sales of assets in which the Net Cash Proceeds do not exceed
$10,000,000 in aggregate amount during any Fiscal Year (excluding the amount of
any assets permitted to be sold pursuant to clause (iv) immediately preceding),
(vi) sales of assets in which the Net Cash Proceeds thereof are used within
one year of such sale to purchase assets useful in the business of the Borrower
and its Subsidiaries, provided that,
(A) after giving effect to such sale, no Default or Event of Default
exists or would be continuing,
(B) such sales are for full and fair consideration,
(C) at least 75% of such consideration received by the Borrower or its
Subsidiaries in respect thereof is in the form of Cash and Cash Equivalents, and
(vii) other assets not otherwise permitted to be sold in this clause (a)
above, provided that,
(A) after giving effect to such sale, no Default or Event of Default
exists or would be continuing,
(B) such sales are for full and fair consideration, and
(C) the Net Cash Proceeds thereof are applied in accordance with Section
2.5(b)(ii) hereof, and
(b) on and after the Qualifying Date,
(i) inventory in the ordinary course of business,
(ii) obsolete or worn-out assets,
(iii) sales and dispositions from the Borrower or any of its Subsidiaries
to any Obligor, and
(iv) other assets not otherwise permitted to be sold in this clause (b)
above,
provided that,
(A) after giving effect to such sale, no Default or Event of Default
exists or would be continuing,
(B) such sales are for full and fair consideration, and
(C) the aggregate amount of such assets sold during any Fiscal Year
shall not exceed in aggregate amount 10% of Net Tangible Assets as of the end of
the immediately preceding Fiscal Year.
Section 7.8 Acquisitions
- --------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to, make
any Acquisitions unless (a) immediately prior to and after giving effect to the
proposed Acquisition there shall not exist a Default or Event of Default, (b)
such Acquisition shall not be opposed by the board of the directors of the
Person being acquired, (c) if the Acquisition Consideration for such Acquisition
is greater than or equal to (i) prior to the Qualifying Date, $25,000,000 and
(ii) on and after the Qualifying Date, $50,000,000, the Lenders shall have
received written notice thereof at least 5 Business Days prior to the date of
such Acquisition, together with a Compliance Certificate setting forth the
covenant calculations both immediately prior to and after giving effect to the
proposed Acquisition, but calculated to exclude any increases in EBITDA which
would be the result of any expenses that the Borrower projects to be eliminated
by such proposed Acquisition, (d) the assets, property or business acquired
shall be primarily in the business described in Section 4.1(d) hereof, (e) if
such Acquisition results in a Subsidiary which is to be a Guarantor, (i) such
Subsidiary shall execute a Subsidiary Guaranty and (ii) the Administrative Agent
on behalf of the Lenders shall receive such board resolutions, officer's
certificates and opinions of counsel as the Administrative Agent shall
reasonably request in connection with such Acquisition; (f) if such Subsidiary
is a Domestic Subsidiary and unless otherwise waived by the Administrative
Agent, 100% of such Subsidiary's Capital Stock shall be pledged and the
Administrative Agent on behalf of the Lenders shall receive such stock
certificates, stock powers, board resolutions, officer's certificates and
opinions of counsel as the Administrative Agent shall reasonably request in
connection with such pledge, (g) if such Subsidiary is a Foreign Subsidiary and
unless otherwise waived by the Administrative Agent, 65% of such Subsidiary's
Capital Stock shall be pledged and the Administrative Agent on behalf of the
Lenders shall receive such stock certificates, stock powers, board resolutions,
officer's certificates and opinion of counsel as the Administrative Agent shall
reasonably request in connection with such pledge, (h) the aggregate Acquisition
Consideration for all Non-Guarantors (excluding Acquisition Consideration in
respect of Subsidiaries which are not obligated to third Persons in respect of
any Indebtedness), together with Investments in Non-Guarantors (calculated as
provided in Section 7.4(f) hereof) and other Investments (calculated as provided
in Section 7.4(g) hereof) pursuant to Section 7.4(g) hereof, shall not exceed an
amount equal to 10% of Total Capitalization at any time, and (i) prior to the
Qualifying Date, the Acquisition Consideration for such Acquisition is less than
or equal to the sum of (i) $75,000,000 plus (ii) the aggregate net cash proceeds
received by the Borrower from the issuance of any Capital Stock during the
365-day period beginning on and after the Agreement Date and ending on the date
of such Acquisition, and the aggregate Acquisition Consideration for all
Acquisitions during any period of four consecutive Fiscal Quarters is less than
or equal to the sum of (i) $125,000,000 plus (ii) the aggregate net cash
proceeds received by the Borrower from the issuance of any Capital Stock during
the 365-day period ending on the date of any Acquisition.
Section 7.9 Restricted Payments
- ----------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly declare, pay or make any Restricted Payments except (a)
Dividends payable by a Subsidiary to the Borrower or another Subsidiary that is
an Obligor, (b) payments and prepayments of principal of Indebtedness other than
Indebtedness permitted to be incurred pursuant to Section 7.1(h) hereof, and (c)
Dividends payable by the Borrower in an aggregate amount not to exceed (i)
$15,000,000 during any Fiscal Year in which no Capital Stock issued in
connection with an Acquisition is redeemed and (ii) $20,000,000 during any
Fiscal Year in which Capital Stock issued in connection with an Acquisition is
redeemed; provided, however, the Borrower shall not pay or make any Restricted
Payments permitted by this Section 7.9 unless there shall exist no Default or
Event of Default prior to or after giving effect to any such proposed Restricted
Payment.
Section 7.10 Affiliate Transactions
- --------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to, at any
time engage in any transaction with an Affiliate (other than the Borrower or any
Obligor) on terms materially less advantageous to the Borrower or such
Subsidiary than would be the case if such transaction had been effected with a
non-Affiliate. The Borrower shall not, and shall not permit any of its
Subsidiaries to, in any event incur or suffer to exist any Indebtedness or
Guaranty in favor of any Affiliate, unless such Affiliate shall subordinate the
payment and performance thereof to the Obligations on terms, conditions and
documentation reasonably satisfactory to the Determining Lenders, and which will
permit payments to be made on any Indebtedness or Guaranty in favor of any
Affiliate provided that no Default or Event of Default shall exist before such
payment or after giving effect thereto.
Section 7.11 Compliance with ERISA
- --------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, or permit any member of its Controlled Group to directly
or indirectly, (a) terminate any Plan so as likely to result in liability to the
Borrower or any member of its Controlled Group taken as a whole which could
reasonably be expected to have a Material Adverse Effect, (b) permit to exist
any ERISA Event, or any other event or condition with respect to a Plan which
could reasonably be expected to have a Material Adverse Effect, (c) make a
complete or partial withdrawal (within the meaning of Section 4201 of ERISA)
from any Multiemployer Plan which could reasonably be expected to have a
Material Adverse Effect on the Borrower or any member of its Controlled Group
taken as a whole, or (d) enter into any new Plan or modify any existing Plan so
as to increase its obligations thereunder which could reasonably be expected to
have a Material Adverse Effect.
Section 7.12 Maximum Leverage Ratio
- ---------------------------------------
The Borrower shall not permit the Leverage Ratio to be greater than (a) 4.50 to
1 at the end of any Fiscal Quarter through and including the third Fiscal
Quarter of Fiscal Year 2000, (b) 4.25 to 1 from and including the fourth Fiscal
Quarter of Fiscal Year 2000 through and including the third Fiscal Quarter of
Fiscal Year 2001 and (c) 4.00 to 1 at the end of any Fiscal Quarter thereafter.
Section 7.13 Minimum Fixed Charge Coverage Ratio
- ------------------------------------------------------
The Borrower shall not permit the Fixed Charge Coverage Ratio to be less than
(a) 1.25 to 1 at the end of any Fiscal Quarter through and including the first
Fiscal Quarter of Fiscal Year 2005 and (b) 1.05 to 1 at the end of any Fiscal
Quarter thereafter.
Section 7.14 Minimum Tangible Net Worth
- --------------------------------------------
The Borrower shall not permit the Tangible Net Worth at any time to be less than
the sum of (a) $333,800,000, plus (b) 50% of cumulative Net Income for the
period from, but not including, June 15, 1999 through the date of calculation
(but excluding from the calculation of such cumulative Net Income the effect, if
any, of any Fiscal Quarter (or portion of a Fiscal Quarter not then ended) of
the Borrower for which Net Income was a negative number), plus (c) an amount
equal to 100% of the tangible net worth of any Person that becomes a Subsidiary
of the Borrower or is merged into or consolidated with the Borrower or any
Subsidiary of the Borrower or substantially all of the assets of which are
acquired by the Borrower or any Subsidiary of the Borrower to the extent the
purchase price paid therefor is paid in equity securities of the Borrower or any
Subsidiary of the Borrower or pursuant to the conversion or exchange of any
convertible subordinated debt or redeemable preferred stock into Capital Stock
of the Borrower or any of its Subsidiaries, plus (d) 75% of the Net Cash
Proceeds (but without duplication) of any offerings of Capital Stock of the
Borrower or any of its Subsidiaries, plus (e) 100% of any reclassification of
redemption value of common Capital Stock to Net Worth.
Section 7.15 Sale or Discount of Receivables
- --------------------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell, with or without recourse, for discount or
otherwise, any notes or accounts receivable.
Section 7.16 Business
- -----------------------
Neither the Borrower nor any of its Subsidiaries shall conduct any business
other than the business described in Section 4.1(d) hereof.
Section 7.17 Fiscal Year
- ---------------------------
Neither the Borrower nor any of its Subsidiaries shall change its Fiscal Year.
Section 7.18 Amendment of Organizational Documents
- -------------------------------------------------------
The Borrower shall not, and shall not permit any Subsidiary of the Borrower to,
amend its articles of incorporation, bylaws or other applicable organizational
documents in any manner that could reasonably be expected to result in a
Material Adverse Effect.
Section 7.19 Non-Guarantors
- -----------------------------
The Borrower shall not permit either the aggregate amount of (a) EBITDA
calculated with respect to all Non-Guarantors (excluding, however, Foreign
Subsidiaries which are not obligated to third Persons in respect of any
Indebtedness) only during any period of four consecutive Fiscal Quarters to
exceed 15% of EBITDA of the Borrower and all of its Subsidiaries during any such
period of four consecutive Fiscal Quarters or (b) assets of all Non-Guarantors
(excluding, however, Foreign Subsidiaries which are not obligated to third
Persons in respect of any Indebtedness) as of the end of any Fiscal Quarter to
exceed 15% of the assets of the Borrower and all of its Subsidiaries as of the
end of any such Fiscal Quarter.
Section 7.20 Restrictions on Subsidiaries
- ---------------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to pay
dividends or make any other distributions to the Borrower or any of its
Subsidiaries, except to the extent that such encumbrances and restrictions would
not, in the aggregate, affect the ability of the Subsidiaries to make such
dividends and distributions in amounts sufficient such that the Borrower can
timely pay and perform all Obligations in full.
Section 7.21 Capital Expenditures
- ------------------------------------
Prior to the Qualifying Date, the Borrower shall not, and shall not permit any
of its Subsidiaries to, make or commit to make Capital Expenditures during any
Fiscal Year in an aggregate amount in excess of $75,000,000.
ARTICLE 8
Default
Section 8.1 Events of Default
- ---------------------------------
Each of the following shall constitute an Event of Default, whatever the reason
for such event, and whether voluntary, involuntary, or effected by operation of
law or pursuant to any judgment or order of any court or any order, rule or
regulation of any governmental or non-governmental body:
(a) Any representation or warranty made under any Loan Document shall prove
to have been incorrect or misleading in any material respect when made;
(b) The Borrower shall fail to pay any (i) principal under any Note when
due; or (ii) interest under any Note or any fees payable hereunder or any other
costs, fees, expenses or other amounts payable hereunder or under any other Loan
Document within the earlier of (A) three days after the date due or (B) one
Business Day after written notice thereof from the Administrative Agent;
(c) The Borrower or any of its Subsidiaries shall default in the performance
or observance of any agreement or covenant contained in Article 7 hereof;
(d) The Borrower or any of its Subsidiaries shall default in the performance
or observance of any other agreement or covenant contained in this Agreement or
any other Loan Document not specifically referred to elsewhere in this Section
8.1, and such default shall not be cured within a period of thirty days after
the earlier of notice from the Administrative Agent thereof or actual notice
thereof by the Borrower or such Subsidiary;
(e) There shall be commenced an involuntary proceeding or an involuntary
petition shall be filed in a court having competent jurisdiction seeking (i)
relief in respect of the Borrower or any other Obligor, or a substantial part of
the property or the assets of the Borrower or such Obligor, under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
applicable Federal, state or foreign bankruptcy law or other similar law, (ii)
the appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official of the Borrower or any other Obligor, or of any
substantial part of their respective properties, or (iii) the winding-up or
liquidation of the affairs of the Borrower or any other Obligor and any such
proceeding or petition shall continue unstayed and in effect for a period of 60
consecutive days; or any order for relief shall be entered in any such
proceeding;
(f) The Borrower or any other Obligor shall (i) file a petition, answer or
consent seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable Federal, state or
foreign bankruptcy law or other similar law, (ii) consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Borrower or
any other Obligor or of substantially all of its properties, (iii) file an
answer admitting the material allegations filed against it in any such
proceeding, (iv) make a general assignment for the benefit of creditors, (v)
become unable, admit in writing its inability, or fail generally, to pay its
debts as they become due, or (vi) the Borrower or any other Obligor shall take
any corporate or other action in furtherance of any such action;
(g) A final judgment or judgments shall be entered by any court against the
Borrower or any other Obligor for the payment of money which exceeds $250,000 in
the aggregate, or a warrant of attachment or execution or similar process shall
be issued or levied against property of the Borrower or any other Obligor which,
together with all other such property of the Borrower and the Obligors subject
to other such process, exceeds in value $250,000 in the aggregate, and if such
judgment or award is not insured or, within 45 days after the entry, issue or
levy thereof, such judgment, warrant or process shall not have been paid or
discharged or stayed pending appeal, or if, after the expiration of any such
stay, such judgment, warrant or process shall not have been paid or discharged;
(h) With respect to any Plan of the Borrower or any member of its Controlled
Group: (i) the Borrower, any such member, or any other party-in-interest or
disqualified person shall engage in transactions which in the aggregate would
reasonably be expected to result in a direct or indirect liability to the
Borrower or any member of its Controlled Group under Section 409 or 502 of ERISA
or Section 4975 of the Code; (ii) the Borrower or any member of its Controlled
Group shall incur any accumulated funding deficiency, as defined in Section 412
of the Code, or request a funding waiver from the Internal Revenue Service for
contributions; (iii) the Borrower or any member of its Controlled Group shall
incur any withdrawal liability as a result of a complete or partial withdrawal
within the meaning of Section 4203 or 4205 of ERISA, or any other liability with
respect to a Plan, unless the amount of such liability has been funded within
the Plan or pursuant to one or more insurance contracts; (iv) the Borrower or
any member of its Controlled Group shall fail to make a required contribution by
the due date under Section 412 of the Code or Section 302 of ERISA which would
result in the imposition of a lien under Section 412 of the Code or Section 302
of ERISA; (v) the Borrower, any member of its Controlled Group or any Plan
sponsor shall notify the PBGC of an intent to terminate, or the PBGC shall
institute proceedings to terminate, or the PBGC shall institute proceedings to
terminate, any Plan subject to Title IV of ERISA; (vi) a Reportable Event shall
occur with respect to a Plan subject to Title IV of ERISA, and within 15 days
after the reporting of such Reportable Event to the Administrative Agent, the
Administrative Agent shall have notified the Borrower in writing that the
Determining Lenders have made a determination that, on the basis of such
Reportable Event, there are reasonable grounds for the termination of such Plan
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such Plan and as a result thereof an Event of
Default shall have occurred hereunder; (vii) a trustee shall be appointed by a
court of competent jurisdiction to administer any Plan or the assets thereof; or
(viii) any ERISA Event with respect to a Plan subject to Title IV of ERISA shall
have occurred, and 30 days thereafter (A) such ERISA Event, other than such
event described in clause (f) of the definition of ERISA Event herein, (if
correctable) shall not have been corrected and (B) the then present value of
such Plan's benefit liabilities, as defined in Title IV of ERISA, shall exceed
the then current value of assets accumulated in such Plan; provided, however,
that the events listed in subsections (i) - (viii) above shall constitute Events
of Default only if the maximum aggregate liability which the Borrower or any
member of its Controlled Group has a reasonable likelihood of incurring under
the applicable provisions of ERISA resulting from such event or events could
reasonably be expected to exceed $500,000.
(i) The Borrower or any other Obligor shall fail to make any payment when
due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) with respect to any Indebtedness in excess of $1,000,000 beyond any
grace period provided with respect thereto, or any other event or condition
shall exist under any agreement or instrument under which such Indebtedness is
created or evidenced beyond any applicable grace period, if the effect of such
event or condition is to permit or cause the holder of such Indebtedness (or a
trustee on behalf of any such holder) to (i) cause such Indebtedness to become
due or prepaid prior to its date of maturity or (ii) require the Borrower or any
other Obligor to purchase, prepay or redeem such Indebtedness;
(j) Any real property lease where the Borrower or any Subsidiary of the
Borrower is the lessee shall terminate or cease to be effective, and termination
or cessation thereof, together with all other real property leases, if any,
which have been terminated or ceased to be effective, could reasonably be
expected to have a Material Adverse Effect; provided, however, that termination
or cessation of a real property lease shall not constitute an Event of Default
if another real property lease reasonably satisfactory to the Administrative
Agent is contemporaneously substituted therefor;
(k) Any provision of any Loan Document shall for any reason cease to be
valid and binding on or enforceable against any party to it (other than the
Administrative Agent or any Lender) in any material respect, or any such party
(other than the Administrative Agent or any Lender) shall so assert in writing;
(l) A Change of Control shall occur; or
(m) Any Collateral Document shall for any reason (other than as expressly
provided or permitted pursuant to the terms of such Collateral Document or this
Agreement) cease to create a valid and perfected first priority Lien in any
material Collateral subject thereto.
Section 8.2 Remedies
- ----------------------
If an Event of Default shall have occurred and shall be continuing:
(a) With the exception of an Event of Default specified in Section 8.1(e) or
(f) hereof, the Administrative Agent shall (i) upon direction of the Required
Revolving Credit Lenders, terminate the Revolving Credit Commitment, and/or (ii)
upon the direction of the Determining Lenders, terminate the Commitments and/or
by written notice to the Borrower declare the principal of and interest on the
Advances and all Obligations and other amounts owed under the Loan Documents to
be forthwith due and payable without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived, except for notices expressly
set forth in the Loan Documents.
(b) Upon the occurrence of an Event of Default specified in Section 8.1(e)
or (f) hereof, such principal, interest and other amounts shall thereupon and
concurrently therewith become due and payable and the Commitments shall
forthwith terminate, all without any action by the Administrative Agent, any
Lender or any holders of the Notes and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in the
Loan Documents to the contrary notwithstanding.
(c) If any Letter of Credit shall be then outstanding, the Administrative
Agent may at its election, and shall upon the direction of the Determining
Lenders, make demand upon the Borrower to, and forthwith upon such demand (but
in the case of an Event of Default specified in Section 8.1(e) or (f) hereof,
without any demand or taking of any other action by the Administrative Agent or
any Lender), the Borrower shall, pay to the Administrative Agent in same day
funds at the office of the Administrative Agent for deposit in the L/C Cash
Collateral Account, an amount equal to the maximum amount available to be drawn
under the Letters of Credit then outstanding.
(d) The Administrative Agent and the Lenders may exercise all of the Rights
granted to them under the Loan Documents or under Applicable Law.
(e) The Rights of the Administrative Agent and the Lenders hereunder shall
be cumulative, and not exclusive.
ARTICLE 9
Changes in Circumstances
Section 9.1 LIBOR Basis Determination Inadequate
- -----------------------------------------------------
If with respect to any proposed LIBOR Advance for any Interest Period, (i) any
Lender determines that deposits in dollars (in the applicable amount) are not
being offered to that Lender in the relevant market for such Interest Period or
(ii) the Determining Lenders determine that the LIBOR Rate for such proposed
LIBOR Advance does not adequately and fairly reflect the cost to such Lender of
making and maintaining such proposed LIBOR Advance for such Interest Period,
such Lender or Determining Lenders, as the case may be, shall forthwith give
prompt notice thereof to the Borrower, whereupon until such Lender or
Determining Lenders, as the case may be, notify the Borrower that the
circumstances giving rise to such situation no longer exist, the obligation of
such Lender to make LIBOR Advances shall be suspended; provided, however, such
Lender or the Determining Lenders, as the case may be, shall promptly notify the
Borrower if the circumstances giving rise to such situation no longer exist.
Section 9.2 Illegality
- ------------------------
If any change or phase-in of applicable law, rule or regulation, or adoption
thereof, or any change in any interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
LIBOR Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency, shall
make it unlawful or impossible for such Lender (or its LIBOR Lending Office) to
make, maintain or fund its LIBOR Advances, such Lender shall promptly so notify
the Borrower and the Administrative Agent. Before giving any notice to the
Borrower pursuant to this Section, the notifying Lender shall designate a
different LIBOR Lending Office or other lending office if such designation will
avoid the need for giving such notice and will not, in the sole judgment of the
Lender, be disadvantageous to the Lender. Upon receipt of such notice,
notwithstanding anything contained in Article 2 hereof, the Borrower shall repay
in full the then outstanding principal amount of each LIBOR Advance owing to the
notifying Lender, together with accrued interest thereon and any reimbursement
required under Section 2.9 hereof, on either (a) the last day of the Interest
Period applicable to such Advance, if the Lender may lawfully continue to
maintain and fund such Advance to such day, or (b) immediately, if the Lender
may not lawfully continue to fund and maintain such Advance to such day or if
the Borrower so elects. Concurrently with repaying each affected LIBOR Advance
owing to such Lender, notwithstanding anything contained in Article 2 hereof,
the Borrower may, without any requirement to satisfy the conditions precedent
set forth in Section 3.1, 3.2 or 3.3, borrow a Base Rate Advance from such
Lender, and such Lender shall make such Base Rate Advance, in an amount such
that the outstanding principal amount of the Advances owing to such Lender shall
equal the outstanding principal amount of the Advances owing immediately prior
to such repayment.
Section 9.3 Increased Costs
- ------------------------------
(a) If any change, phase-in or adoption of any law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Lender (or its LIBOR Lending Office)
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any Tax (net
of any tax benefit engendered thereby) with respect to its LIBOR Advances or its
obligation to make such Advances, or shall change the basis of taxation of
payments to a Lender (or to its LIBOR Lending Office) of the principal of or
interest on its LIBOR Advances or in respect of any other amounts due under this
Agreement, as the case may be, or its obligation to make such Advances (except
for changes in (A) the rate of tax on the overall net income, net worth or
capital of the Lender and franchise taxes, doing business taxes or minimum taxes
imposed upon such Lender and (B) withholding taxes of any Tribunal other than
the United States of America or any state thereof); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, a Lender's LIBOR Lending Office or
shall impose on the Lender (or its LIBOR Lending Office) or on the London
interbank market any other condition affecting its LIBOR Advances or its
obligation to make such Advances (but excluding any reserves or deposits that
are included in the calculation of LIBOR Basis);
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, by an amount deemed by a Lender to be
material ("Increased Advance Costs"), then, within 30 days after demand by a
Lender, the Borrower agrees to pay to such Lender such additional amount as will
compensate such Lender for such Increased Advance Costs, subject to Section 11.9
hereof. The affected Lender will as soon as practicable notify the Borrower of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different LIBOR Lending Office or other lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the sole judgment of the affected Lender made in good faith, be
disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under this Section and
setting forth the additional amounts to be paid to it hereunder shall certify
that such amounts or costs were actually incurred by such Lender and shall show
in reasonable detail an accounting of the amount payable and the calculations
used to determine in good faith such amount and shall be controlling absent
demonstrable error. In determining such amount, a Lender may use any reasonable
averaging and attribution methods. Nothing in this Section 9.3 shall provide
the Borrower or any of its Subsidiaries the right to inspect the records, files
or books of any Lender. If a Lender demands compensation under this Section,
the Borrower may at any time, upon at least five Business Days' prior notice to
the Lender, after reimbursement to the Lender by the Borrower in accordance with
this Section of all costs incurred, prepay in full the then outstanding LIBOR
Advances of the Lender, together with accrued interest thereon to the date of
prepayment, along with any reimbursement required under Section 2.9 hereof.
Concurrently with prepaying such LIBOR Advances, the Borrower may, without any
requirement to satisfy the conditions precedent set forth in Section 3.1, 3.2 or
3.3, borrow a Base Rate Advance from the Lender, and the Lender shall make such
Base Rate Advance, in an amount such that the outstanding principal amount of
the Advances owing to such Lender shall equal the outstanding principal amount
of the Advances owing immediately prior to such prepayment.
Section 9.4 Effect On Base Rate Advances
- ----------------------------------------------
If notice has been given pursuant to Section 9.1, 9.2 or 9.3 hereof suspending
the obligation of a Lender to make LIBOR Advances, or requiring LIBOR Advances
of a Lender to be repaid or prepaid, then, unless and until the Lender notifies
the Borrower that the circumstances giving rise to such suspension, repayment or
prepayment no longer apply, all Advances which would otherwise be made by such
Lender as LIBOR Advances shall be made instead as Base Rate Advances.
Section 9.5 Capital Adequacy
- -------------------------------
If (a) the phase-in or the introduction of or any change in or in the
interpretation of any law, rule or regulation or (b) compliance by a Lender with
any Law or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) (any of such events in
clauses (a) and (b) herein being referred to as a "Regulatory Modification")
affects or would affect the amount of capital required or expected to be
maintained by a Lender or any corporation controlling such Lender, and such
Lender determines that the amount of such capital is increased by or based upon
the existence of such Lender's commitment or Advances hereunder and other
commitments or advances of such Lender of this type, then, within 20 days after
demand by such Lender, subject to Section 11.9, the Borrower shall immediately
pay to such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender with respect to such circumstances
(collectively, "Additional Costs"), to the extent that such Lender reasonably
determines in good faith such increase in capital to be allocable to the
existence of such Lender's commitments hereunder to the extent not compensated
for in the Base Rate Basis or in the LIBOR Rate Basis or in amounts paid by the
Borrower pursuant to Section 9.3 hereof. A certificate as to such amounts
submitted to the Borrower by a Lender hereunder shall, in the absence of
demonstrable error, be controlling and binding for all purposes. In determining
such amount, such Lender or a corporation controlling such Lender may use any
reasonable averaging and attribution methods. Notwithstanding the foregoing,
nothing in this Section 9.5 shall provide the Borrower or any Subsidiary of the
Borrower the right to inspect the records, files or books of any Lender or any
corporation controlling such Lender.
ARTICLE 10
Agreement Among Lenders
Section 10.1 Agreement Among Lenders
- ----------------------------------------
The Lenders agree among themselves that:
(a) Administrative Agent. Each Lender hereby appoints the Administrative Agent
as its nominee in its name and on its behalf, to receive all documents and items
to be furnished hereunder; to act as nominee for and on behalf of all Lenders
under the Loan Documents; to, except as otherwise expressly set forth herein,
take such action as may be requested by the Determining Lenders, provided that,
(i) unless and until the Administrative Agent shall have received such requests,
the Administrative Agent may take such administrative action, or refrain from
taking such administrative action, as it may deem advisable and in the best
interests of the Lenders, and (ii) 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; to arrange
the means whereby the proceeds of the Advances of the Lenders are to be made
available to the Borrower; to distribute promptly to each Lender information,
requests and documents received from the Borrower, and each payment (in like
funds received) with respect to any of such Lender's Advances, or the ratable
amount of fees or other amounts; and to deliver to the Borrower requests,
demands, approvals and consents received from the Lenders. The Administrative
Agent agrees to promptly distribute to each Lender, at such Lender's address set
forth below information, requests, documents and payments received from the
Borrower. The Administrative Agent shall have no trustee or other fiduciary
relationship in respect of any Lender by reason of this Agreement or any other
Loan Document. The Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. The duties
of the Administrative Agent are mechanical and administrative in nature.
(b) Replacement of Administrative Agent. Should the Administrative Agent or
any successor Administrative Agent ever cease to be a Lender hereunder, or
should the Administrative Agent or any successor Administrative Agent ever
resign as Administrative Agent, or should the Administrative Agent or any
successor Administrative Agent ever be removed with cause or without cause by
the action of the Determining Lenders (other than the Administrative Agent),
then the Lender appointed by the Determining Lenders (other than the
Administrative Agent) with the approval of the Borrower (provided that if an
Event of Default shall have occurred and be continuing, the approval of the
Borrower shall not be required) shall forthwith become the Administrative Agent,
and the Borrower and the Lenders shall execute such documents as any Lender may
reasonably request to reflect such change at no cost to the Borrower. If the
Administrative Agent also then serves in the capacity of the Swing Line Bank or
the Issuing Bank, such resignation or removal shall constitute resignation or
removal of the Swing Line Bank and the Issuing Bank and the successor
Administrative Agent shall serve in the capacity of the Swing Line Bank and the
Issuing Bank. Any resignation or removal of the Administrative Agent or any
successor Administrative Agent shall become effective upon the appointment by
the Lenders of a successor Administrative Agent from among the other Lenders and
written notice thereof to the Borrower; provided, however, if no successor
Administrative Agent shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Lenders and,
provided that no Event of Default shall have occurred and be continuing, with
the consent of the Borrower, which consent shall not be unreasonably withheld,
appoint a successor Administrative Agent, which shall be a commercial bank
organized under the Laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents, provided
that if the retiring or removed Administrative Agent is unable to appoint a
successor Administrative Agent, the Administrative Agent shall, after the
expiration of a 60 day period from the date of notice, be relieved of all
obligations as Administrative Agent hereunder. Notwithstanding any
Administrative Agent's resignation or removal hereunder, the provisions of this
Article shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement.
(c) Expenses. Each Lender shall pay its pro rata share, based on its Total
Specified Percentage, of any reasonable expenses paid by the Administrative
Agent directly and solely in connection with any of the Loan Documents (other
than expenses for which the Administrative Agent has received compensation in
the form of the fees set forth in the Administrative Agent Fee Letter) if the
Administrative Agent does not receive reimbursement therefor from other sources
within 60 days after the date incurred. Any amount so paid by the Lenders to
the Administrative Agent shall be returned by the Administrative Agent pro rata
to each paying Lender to the extent later paid by the Borrower or any other
Person on the Borrower's behalf to the Administrative Agent.
(d) Delegation of Duties. The Administrative Agent may execute any of its
duties hereunder by or through officers, directors, employees, attorneys or
agents, and shall be entitled to (and shall be protected in relying upon) advice
of counsel concerning all matters pertaining to its duties hereunder.
(e) Reliance by Administrative Agent. The Administrative Agent and its
officers, directors, employees, attorneys and agents shall be entitled to rely
and shall be fully protected in relying on any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telex or teletype
message, statement, order, or other document or conversation reasonably believed
by it or them in good faith to be genuine and correct and to have been signed or
made by the proper Person and, with respect to legal matters, upon opinions of
counsel selected by the Administrative Agent. The Administrative Agent may, in
its reasonable judgment, deem and treat the payee of any Note as the owner
thereof for all purposes hereof.
(f) Limitation of Administrative Agent's Liability. Neither the Administrative
Agent nor any of its officers, directors, employees, attorneys or agents shall
be liable for any action taken or omitted to be taken by it or them hereunder in
good faith and believed by it or them to be within the discretion or power
conferred to it or them by the Loan Documents or be responsible for the
consequences of any error of judgment, except for its or their own gross
negligence or willful misconduct. Except as aforesaid, the Administrative Agent
shall be under no duty to enforce any rights with respect to any of the
Advances, or any security therefor. The Administrative Agent shall not be
compelled to do any act hereunder or to take any action towards the execution or
enforcement of the powers hereby created or to prosecute or defend any suit in
respect hereof, unless indemnified to its reasonable satisfaction against loss,
cost, liability and expense. The Administrative Agent shall not be responsible
in any manner to any Lender for the effectiveness, enforceability, genuineness,
validity or due execution of any of the Loan Documents, or for any
representation, warranty, document, certificate, report or statement made herein
or furnished in connection with any Loan Documents, or be under any obligation
to any Lender to ascertain or to inquire as to the performance or observation of
any of the terms, covenants or conditions of any Loan Documents on the part of
the Borrower or any other Obligor. TO THE EXTENT NOT REIMBURSED BY THE
BORROWER, EACH LENDER HEREBY SEVERALLY INDEMNIFIES AND HOLDS HARMLESS THE
ADMINISTRATIVE AGENT, PRO RATA ACCORDING TO ITS TOTAL SPECIFIED PERCENTAGE, FROM
AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, REASONABLE EXPENSES AND/OR DISBURSEMENTS OF
ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, ASSERTED AGAINST, OR
INCURRED BY THE ADMINISTRATIVE AGENT (IN SUCH CAPACITY) IN ANY WAY WITH RESPECT
TO ANY LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT
UNDER THE LOAN DOCUMENTS (INCLUDING ANY NEGLIGENT ACTION OF THE ADMINISTRATIVE
AGENT), EXCEPT TO THE EXTENT THE SAME ARE FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION TO RESULT FROM GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY
THE ADMINISTRATIVE AGENT. THE INDEMNITY PROVIDED IN THIS SECTION 10.1(f) SHALL
SURVIVE TERMINATION OF THIS AGREEMENT.
(g) Liability Among Lenders. No Lender shall incur any liability (other than
the sharing of expenses and other matters specifically set forth herein and in
the other Loan Documents) to any other Lender, except for acts or omissions in
bad faith.
(h) Rights as Lender. With respect to its commitment hereunder, the Advances
made by it and the Notes issued to it, the Administrative Agent shall have the
same rights as a Lender and may exercise the same as though it were not the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent or any Lender may accept deposits from, act
as trustee under indentures of, and generally engage in any kind of business
with, the Borrower and any of its Affiliates, and any Person who may do business
with or own securities of the Borrower or any of its Affiliates, all as if the
Administrative Agent were not the Administrative Agent hereunder and without any
duty to account therefor to the Lenders.
(i) Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default (other
than an Event of Default under Section 8.1(b) hereof) unless the Administrative
Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Administrative Agent
receives any such notice, the Administrative Agent shall promptly give notice
thereof to the Lenders.
Section 10.2 Lender Credit Decision
- ---------------------------------------
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based upon the financial
statements referred to in Sections 4.1(j), 6.1, and 6.2 hereof, and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based upon such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents. Each Lender also acknowledges that its decision to fund
the initial Advances shall constitute evidence to the Administrative Agent that
such Lender has deemed all of the conditions set forth in Section 3.1 to have
been satisfied.
Section 10.3 Benefits of Article
- ------------------------------------
None of the provisions of this Article shall inure to the benefit of any Person
other than Lenders; consequently, no such other Person shall be entitled to rely
upon, or to raise as a defense, in any manner whatsoever, the failure of the
Administrative Agent or any Lender to comply with such provisions.
ARTICLE 11
Miscellaneous
Section 11.1 Notices
- ----------------------
(a) All notices and other communications under this Agreement shall be in
writing (except in those cases where giving notice by telephone is expressly
permitted) and shall be deemed to have been given on the date personally
delivered or sent by telecopy (answerback received), or three days after deposit
in the mail, designated as certified mail, return receipt requested,
postage-prepaid, or one day after being entrusted to a reputable commercial
overnight delivery service, addressed to the party to which such notice is
directed at its address determined as provided in this Section. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:
(i) If to the Borrower, at:
ClubCorp, Inc.
3030 LBJ Freeway, Suite 700
Dallas, Texas 75234
Attention: Treasurer
Telephone: (972) 888-7332
Telecopier: (972) 888-6239
(ii) If to the Administrative Agent, at:
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202-3714
Attn: Molly Oxford
Telephone: (214) 09-3255
Telecopier: (214) 90-9437
(iii) If to a Lender, at its address shown below its name on the signature
pages hereof, or if applicable, set forth in its Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be directed
by giving 10 days' written notice of such change to the other parties.
Section 11.2 Expenses
- -----------------------
The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents, the transactions contemplated hereunder
and thereunder, and the making of Advances hereunder, including without
limitation the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses, including reasonable attorneys'
fees, of the Administrative Agent in connection with the transactions
contemplated in this Agreement and the other Loan Documents and the preparation,
negotiation, execution and delivery of any waiver, amendment or consent by the
Administrative Agent relating to this Agreement or the other Loan Documents; and
(c) all reasonable out-of-pocket costs, expenses and attorneys' fees of the
Administrative Agent and each Lender incurred for enforcement, collection,
restructuring, refinancing and "work-out", or otherwise incurred in obtaining
performance under the Loan Documents, which in each case shall include without
limitation reasonable fees and expenses of consultants, legal counsel for the
Administrative Agent and any Lender and administrative fees for the
Administrative Agent.
Section 11.3 Waivers
- ----------------------
The rights and remedies of the Lenders under this Agreement and the other Loan
Documents shall be cumulative and not exclusive of any rights or remedies which
they would otherwise have. No failure or delay by the Administrative Agent or
any Lender in exercising any right shall operate as a waiver of such right. The
Lenders expressly reserve the right to require strict compliance with the terms
of this Agreement in connection with any funding of a request for an Advance.
In the event that any Lender decides to fund an Advance at a time when the
Borrower is not in strict compliance with the terms of this Agreement, such
decision by such Lender shall not be deemed to constitute an undertaking by the
Lender to fund any further requests for Advances or preclude the Lenders from
exercising any rights available under the Loan Documents or at law or equity.
Any waiver or indulgence granted by the Lenders shall not constitute a
modification of this Agreement, except to the extent expressly provided in such
waiver or indulgence, or constitute a course of dealing by the Lenders at
variance with the terms of this Agreement such as to require further notice by
the Lenders of the Lenders' intent to require strict adherence to the terms of
this Agreement in the future. Any such actions shall not in any way affect the
ability of the Administrative Agent or the Lenders, in their discretion, to
exercise any rights available to them under this Agreement or under any other
agreement, whether or not the Administrative Agent or any of the Lenders are a
party thereto, relating to the Borrower or any of its Subsidiaries.
Section 11.4 Determination by the Lenders Conclusive and Binding
- ------------------------------------------------------------------------
Any determination or mathematical calculation required or expressly permitted to
be made by the Administrative Agent or any Lender under this Agreement shall be
controlling, absent demonstrable error.
Section 11. 5 Set-Off
- ----------------------
In addition to any rights now or hereafter granted under Applicable
Law and not by way of limitation of any such rights, upon the occurrence and
during the continuation of an Event of Default, each Lender and any subsequent
holder of any Note, and any assignee of any Note, is hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or any
other Person, any such notice being hereby expressly waived, to set-off,
appropriate and apply any deposits (general or special (except trust and escrow
accounts), time or demand, including without limitation Indebtedness evidenced
by certificates of deposit, in each case whether matured or unmatured) and any
other Indebtedness at any time held or owing by such Lender or holder to or for
the credit or the account of the Borrower, against and on account of the
Obligations and other liabilities of the Borrower to such Lender or holder,
irrespective of whether or not (a) the Lender or holder shall have made any
demand hereunder, or (b) the Lender or holder shall have declared the principal
of and interest on the Advances and other amounts due hereunder to be due and
payable as permitted by Section 8.2 hereof (but after each set-off such Lender
shall promptly notify the Administrative Agent and the Borrower). Any sums
obtained by any Lender or by any assignee or subsequent holder of any Note shall
be subject to pro rata treatment and shared as provided in Section 2.12 hereof.
Section 11.6 Assignment
- -------------------------
(a) The Borrower may not assign or transfer any of its rights or obligations
hereunder or under the other Loan Documents without the prior written consent of
the Lenders.
(b) No Lender shall be entitled to assign or grant a participation in its
interest in this Agreement, its Notes or its Advances, except as hereinafter set
forth.
(c) Each Lender may sell participations to one or more banks or other entities
(the "Participants") in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of the
Advances or Reimbursement Obligations owing to it and the Note or Notes held by
it) (the "Participations"); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its applicable
Specified Percentage of the Commitments) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
any such Note for all purposes of this Agreement, (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (v) no Participant under any such
Participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or consent would (A)
waive or reduce the amount of or waive or postpone any date fixed for payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder (B) increase the commitment of any Participant or (C) waive, extend or
postpone the date of any maturity of any Advance, in each case to the extent
subject to such Participation, and (vi) no Participation shall be in an amount
less than $5,000,000. The Lenders may, subject to Section 11.14 hereof, provide
copies of all financial information received from the Borrower to such
Participants.
(d) Each Lender may assign to one or more Eligible Assignees all or any part of
its rights and obligations under this Agreement and the other Loan Documents;
provided, however, that (i) each such assignment shall be subject to the prior
written consent of the Administrative Agent and Borrower, which consents shall
not be unreasonably withheld (provided, however, notwithstanding anything herein
to the contrary, no consent of the (A) Borrower is required for any assignment
(w) during any time that a Default or an Event of Default has occurred and is
continuing, (x) to an Affiliate of a Lender, (y) to another Lender hereunder or
(z) to a Related Fund and (B) Administrative Agent is required for any
assignment (x) to an Affiliate of a Lender, (y) to another Lender hereunder or
(z) to a Related Fund), (ii) no such assignment, other than to an Affiliate of a
Lender, to an existing Lender hereunder or to a Related Fund, shall be in an
amount less than $5,000,000, unless the portion of the Commitments or Advances
of a Lender is less than $5,000,000, in which case such assignment may be in the
aggregate amount of such Lender's portion of the Commitments or Advances
(provided, however, notwithstanding anything herein to the contrary, in no event
shall the portion of any Commitments or Advances retained by any Lender be less
than $1,000,000), (iii) the applicable Lender and the Eligible Assignee and the
Borrower and the Administrative Agent, where applicable, shall execute and
deliver to the Administrative Agent an Assignment and Acceptance Agreement (an
"Assignment Agreement") in substantially the form of Exhibit C hereto, together
with the Notes subject to such assignment and (iv) the Eligible Assignee or the
assigning Lender, as the case may be, executing the Assignment, shall deliver to
the Administrative Agent a processing fee of $3,500. Upon such execution,
delivery and acceptance from and after the effective date specified in each
Assignment, and the recordation of the information therein in the Register
pursuant to Section 11.6(j) hereof, (A) the Eligible Assignee thereunder shall
be party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment, have the rights and obligations
of a Lender hereunder and (B) the applicable Lender shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
assignment, relinquish such rights and be released from such obligations under
this Agreement; provided, however, the indemnities and rights provided such
Lender in Section 5.9, Article 9 and Section 11.2 hereof shall survive such
assignment.
(e) Notwithstanding anything in clause (d) above to the contrary, (i) any
Lender may assign and pledge all or any portion of its Advances and Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of F.R.S.
Board and any Operating Circular issued by such Federal Reserve Bank and (ii)
any Lender that is a fund may at any time assign or pledge all or any portion of
its rights under this Agreement to secure such Lender's indebtedness; provided,
however, that no such assignment under this clause (e) shall release the
assignor Lender from its obligations hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a Lender and an
Eligible Assignee, and any Note or Notes subject to such assignment, the
Borrower shall, subject to the Borrower's rights under Section 11.6(d), within
five Business Days after its receipt of such Assignment Agreement execute and
deliver to the Administrative Agent in exchange for any such surrendered Notes
new Notes to the order of such Eligible Assignee in an amount equal to the
portion of the Advances and the Specified Percentage of the Commitment assigned
to it pursuant to such Assignment Agreement and new Notes to the order of the
assignor Lender in an amount equal to the portion of the Advances and the
Specified Percentage of the Commitment retained by it hereunder. Such new Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the effective date of such
Assignment Agreement and shall otherwise be in substantially the form of Exhibit
A, B or C hereto, as applicable.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.6, disclose to
the Eligible Assignee or Participant or proposed Eligible Assignee or
Participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower, provided such Person agrees in writing to
handle such information in accordance with the standards set forth in Section
11.14 hereof.
(h) Except as specifically set forth in this Section 11.6, nothing in this
Agreement or any other Loan Documents, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Documents.
(i) Notwithstanding anything in this Section 11.6 to the contrary, no Eligible
Assignee or Participant (nor the assigning or participating Lender) shall be
entitled to receive (whether individually or collectively) any greater payment
under Section 2.14 or Section 9.3 or Section 9.5 than such assigning or
participating Lender or any other Lender would have been entitled to receive
with respect to the interest assigned or participated to such Eligible Assignee
or Participant.
(j) The Administrative Agent shall maintain at its address referred to in
Section 11.1 a copy of each Assignment Agreement delivered to and accepted by it
and a register (the "Register") for the recordation of the names and addresses
of the Lenders, any U.S. taxpayer identification number, the Specified
Percentages of the Lenders (the "Ownership Information"), whether such Lender is
an original Lender or the assignee of another Lender pursuant to an Assignment
Agreement and the effective date and the amount of each Assignment Agreement
delivered to and accepted by it and the parties thereto. Any transfer of an
ownership interest in any Advance, including any right to principal or interest
payable with respect to such Advance, shall be subject to and conditioned upon
the due recordation of such transfer and the Ownership Information with respect
to the transferee in the Register and such transfer shall be effective only upon
such recordation (and not prior thereto), which recordation the Administrative
Agent agrees to make. The entries in the Register shall be controlling and
binding for all purposes, absent demonstrable 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 hereof. 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.
Section 11.7 Counterparts
- ---------------------------
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such separate counterparts shall
together constitute but one and the same instrument.
Section 11.8 Severability
- ---------------------------
Any provision of this Agreement or any other Loan Document which is for any
reason prohibited or found or held invalid or unenforceable by any court or
governmental agency shall be ineffective to the extent of such prohibition or
invalidity or unenforceability without invalidating the remaining provisions
hereof or thereof in such jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.9 Interest and Charges
- -------------------------------------
It is not the intention of any parties to this Agreement to make an agreement in
violation of the laws of any applicable jurisdiction relating to usury.
Regardless of any provision in any Loan Documents, no Lender shall ever be
entitled to charge, receive, collect or apply, as interest on the Obligations,
any amount in excess of the Highest Lawful Rate. If any Lender or Participant
ever receives, collects or applies, as interest, any such excess, such amount
which would be excessive interest shall be deemed a partial repayment of
principal and treated hereunder as such; and if principal is paid in full, any
remaining excess shall be paid to the Borrower. In determining whether or not
the interest paid or payable, under any specific contingency, exceeds the
Highest Lawful Rate, the Borrower and the Lenders shall, to the maximum extent
permitted under Applicable Law, (a) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest, (b) exclude voluntary
prepayments and the effect thereof, and (c) amortize, prorate, allocate and
spread in equal parts, the total amount of interest throughout the entire
contemplated term of the Obligations so that the interest rate is uniform
throughout the entire term of the Obligations; provided, however, that if the
Obligations are paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period of
existence thereof exceeds the Highest Lawful Rate, the Lenders shall refund to
the Borrower the amount of such excess or credit the amount of such excess
against the total principal amount of the Obligations owing, and, in such event,
the Lenders shall not be subject to any penalties provided by any laws for
contracting for, charging or receiving interest in excess of the Highest Lawful
Rate. This Section shall control every other provision of all agreements
pertaining to the transactions contemplated by or contained in the Loan
Documents.
Section 11.10 Headings
- ------------------------
Headings used in this Agreement are for convenience only and shall not be used
in connection with the interpretation of any provision hereof.
Section 11.11 Amendment and Waiver
- --------------------------------------
The provisions of this Agreement may not be amended, modified or waived except
by the written agreement of the Borrower and the Determining Lenders; provided,
however, that no such amendment, modification or waiver shall be made (a)
without the consent of each Lender affected thereby, if it would (i) increase
the aggregate amount of the commitment of a Lender, or (ii) waive, extend or
postpone the date of maturity of, waive, extend or postpone the due date for any
scheduled payment of principal or interest on, reduce the amount of any
installment of principal or interest on, or reduce the rate of interest on, any
Advance, the Reimbursement Obligations or other amount owing under any Loan
Documents (other than any Hedge Agreement) to a Lender, or (iii) reduce the fees
payable hereunder to which such Lender is entitled, (b) without the consent of
all Lenders, if it would (i) release all or substantially all of the Guarantors
or all or substantially all of the Collateral, (ii) revise Section 11.6(a)
hereof, (iii) revise this Section 11.11, or (iv) revise the definition of
"Collateral Release Event" or "Qualifying Date", (c) without the consent of
each Lender encompassed within such definition, reduce the percentages specified
in the definition of "Determining Lenders", "Required Revolving Credit Lenders",
"Required Facility A Term Loan Lenders" or "Required Facility B Term Loan
Lenders"; (d) without the consent of the Required Revolving Credit Lenders,
amend, modify or waive any condition precedent to an extension of a Revolving
Credit Advance under Section 3.2 hereof; (e) without the consent of the
Administrative Agent, if it would alter the rights, duties or obligations of the
Administrative Agent; (f) without the consent of the Issuing Bank, if it would
alter the rights, duties or obligations of the Issuing Bank; or (g) without the
consent of the Swing Line Bank, if it would alter rights, duties or obligations
of the Swing Line Bank. Notwithstanding anything in this Agreement to the
contrary, (i) no amendment, waiver or consent that changes the application of
payments or prepayments to, or allocations of payments or prepayments between,
the Facility A Term Loan Advances and the Facility B Term Loan Advances and no
waiver of any mandatory prepayment pursuant to Section 2.5(b)(ii) hereof may be
made without the express written consent of the Determining Lenders and the
Required Facility A Term Loan Lenders and Required Facility B Term Loan Lenders,
(ii) any amendment of Section 7.12 hereof which reduces the maximum Leverage
Ratio to 3.50 to 1 shall require only the consent of the Administrative Agent,
and (iii) any redesignation of a Guarantor as a Non-Guarantor shall only require
the consent of the Administrative Agent. Neither this Agreement nor any term
hereof may be amended orally, nor may any provision hereof be waived orally but
only by an instrument in writing signed by the Administrative Agent and the
Lenders as required by this Section 11.11 and, in the case of an amendment, by
the Borrower.
Section 11.12 Exception to Covenants
- ----------------------------------------
Neither the Borrower nor any of its Subsidiaries shall be deemed to be permitted
to take any action or fail to take any action which is permitted as an exception
to any of the covenants contained herein or which is within the permissible
limits of any of the covenants contained herein if such action or omission would
result in the breach of any other covenant contained herein.
Section 11.13 No Liability of Issuing Bank
- ------------------------------------------------
The Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither the Issuing Bank nor any Lender nor any of their respective
officers or directors shall be liable or responsible for: (a) the use that may
be made of any Letter of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (b) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by the Issuing Bank against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower shall have a claim against the Issuing Bank,
and the Issuing Bank shall be liable to the Borrower, to the extent of any
direct, but not consequential, damages suffered by the Borrower that a court of
competent jurisdiction finally judicially determines were caused by (i) the
Issuing Bank's willful misconduct or gross negligence or (ii) the Issuing Bank's
willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing 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.
Section 11.4 Confidentiality
- ------------------------------
Each Lender and the Administrative Agent agrees (on behalf of itself and each of
its Affiliates, directors, officers, employees and representatives) to use
reasonable efforts to keep confidential, in accordance with customary procedures
for handling confidential information of this nature and in accordance with safe
and sound banking or investment practices, any non-public information supplied
to it by the Borrower or any of its Affiliates pursuant to this Agreement,
provided that nothing herein shall limit the disclosure of any such information
(a) to the extent required by statute, rule, regulation or judicial process, (b)
to counsel for any Lender or the Administrative Agent, (c) to bank or other
examiners, regulatory bodies, auditors or accountants of any Lender, (d) to the
Administrative Agent or any other Lender or any Affiliate thereof, (e) in
connection with any Litigation relating to the transactions contemplated by the
Loan Documents to which any one or more of Lenders is a party, (f) to the extent
necessary in connection with the exercise of any Right under this Agreement or
any other Loan Document, or (g) to any Eligible Assignee or Participant (or
prospective Eligible Assignee or Participant) or to any direct or indirect
contractual counterparties in swap agreements or to the professional advisors of
such swap counterparties so long as such Eligible Assignee or Participant (or
prospective Eligible Assignee or Participant) or direct or indirect contractual
counterparties in swap agreements or such swap counterparties' professional
advisors agrees to handle such information in accordance with the provisions of
this Section 11.14. Non-public information does not include information that
(a) was publicly known prior to the time of disclosure by the Borrower or any of
its Subsidiaries, (b) after disclosure by the Borrower to any Lender or the
Administrative Agent becomes publicly known through no act or omission by any
Lender or the Administrative Agent or by any Person acting on behalf of any
Lender or the Administrative Agent or (c) otherwise becomes known to any Lender
or the Administrative Agent other than through disclosure by the Borrower or any
of its Subsidiaries or Affiliates or any of their respective representatives or
consultants.
Section 11.15 No Duties
- --------------------------
The Borrower and the Lenders acknowledge that neither the Syndication Agent, the
Documentation Agent, the Managing Agents nor the Co-Agents shall have any
duties, responsibilities or liabilities in their respective capacities.
SECTION 11.16 GOVERNING LAW
- ------------------------------
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS) AND THE UNITED STATES OF AMERICA. THE LOAN
DOCUMENTS ARE PERFORMABLE IN DALLAS COUNTY, TEXAS, AND THE BORROWER AND EACH
SURETY, GUARANTOR, ENDORSER AND ANY OTHER PARTY EVER LIABLE FOR PAYMENT OF ANY
MONEY PAYABLE WITH RESPECT TO THE LOAN DOCUMENTS, JOINTLY AND SEVERALLY WAIVE
THE RIGHT TO BE SUED ELSEWHERE. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE
BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS,
TEXAS, SHALL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND HEREBY SUBMITS WITH RESPECT TO ITSELF
AND ITS PROPERTY TO THE JURISDICTION OF ANY SUCH COURT FOR THE PURPOSE OF ANY
SUIT, ACTION, PROCEEDING OR JUDGMENT RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.17 WAIVER OF JURY TRIAL
- ---------------------------------------
EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY KNOWINGLY
VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM
ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER
ENTERING INTO THIS AGREEMENT AND MAKING ANY ADVANCES HEREUNDER.
SECTION 11.18 ENTIRE AGREEMENT
- ---------------------------------
THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREIN AND
THEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date first set
forth above.
BORROWER: CLUBCORP, INC.
By: /s/John M. Massey III
- -----------------------------
John M. Massey II
Treasurer
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., as Administrative Agent
By: /s/Daniel M. Killian
- ---------------------------
Daniel M. Killian
Principal
SYNDICATION AGENT: WELLS FARGO BANK TEXAS), N.A., as Syndication Agent
By:
Name:
Title:
DOCUMENTATION AGENT: BANK ONE, TEXAS, N.A., as documentation Agent
By:
Name:
Title:
MANAGING AGENTS: FIRST UNION NATIONAL BANK, as Managing Agent
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH, as Managing Agent
By:
Name:
Title:
CO-AGENTS: GUARANTY FEDERAL BANK, F.S.B., as o-Agent
By:
Name:
Title:
BRANCH BANKING AND TRUST COMPANY, as Co-Agent
By:
Name:
Title:
SOUTHTRUST BANK, N.A., as Co-Agent
By:
Name:
Title:
COMERICA BANK, as a Co-Agent
By:
Name:
Title:
LENDERS: BANK OF AMERICA, N.A., as a Lender, Swing Line Bank and Issuing Bank
By: /s/Daniel M. Killian
- -------------------------
Daniel M. Killian
Principal
901 Mail Street, 67th Floor
Dallas, Texas 75202
Attn: Dan M. Killian
WELLS FARGO BANK (TEXAS), N.A., as a Lender
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
BANK ONE, TEXAS, N.A., as a Lender
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
FIRST UNION NATIONAL BANK, as a Lender
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
CREDIT LYONNAIS NEW YORK BRANCH, as a Lender
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
GUARANTY FEDERAL BANK, F.S.B., as a Lender
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
BRANCH BANKING AND TRUST COMPANY, as a Lender
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
SOUTHTRUST BANK, N.A., as a Lender
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
COMERICA BANK
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
COMPASS BANK
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
MELLON BANK, N.A.
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
BANK OF HAWAII
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
BANK OF TEXAS, N.A.
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
HIBERNIA NATIONAL BANK
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
TEXTRON FINANCIAL CORPORATION
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
DEBIS FINANCIAL SERVICES, INC.
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
MERCANTILE BANK NATIONAL ASSOCIATION
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
DEPOSIT GUARANTY NATIONAL BANK
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
By:
Name:
Title:
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
FLOATING RATE PORTFOLIO
By: INVESCO Senior Secured Management, Inc. as attorney in fact
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
METROPOLITAN LIFE INSURANCE COMPANY
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
PPM SPYGLASS FUNDING TRUST
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
BANKBOSTON, N.A.
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
HELLER FINANCIAL, INC.
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
OCTAGON LOAN TRUST
By: Octagon Credit Investors, LLC, as Manager
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
BALANCED HIGH-YIELD FUND II LTD.
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
CYPRESSTREE SENIOR FLOATING RATE FUND
By: CypressTree Investment Management Company, Inc., as Portfolio Manager
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________
NORTH AMERICAN SENIOR FLOATING RATE FUND
By: CypressTree Investment Management Company, Inc., as Portfolio Manager
By:
Name:
Title:
__________________________
__________________________
Attn: ____________________