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Exhibit 10(ii)
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS AGREEMENT is made and entered into this April 30, 1997,
by and between ASTROTECH INTERNATIONAL CORPORATION, a Delaware corporation
("Borrower"), the lenders set forth on Schedule 1 attached hereto (collectively,
"Lenders") and BANK ONE, TEXAS, N.A., a national banking association as agent
("Agent") for itself and the other Lenders, with its offices in Houston, Harris
County, Texas.
W I T N E S S E T H:
WHEREAS, Borrower and Bank One, Texas, N.A. ("Bank One") have
previously entered into a Revolving Credit and Term Loan Agreement dated
February 28, 1995, as amended by First Amendment to Revolving Credit and Term
Loan Agreement and Second Amendment to Revolving Credit and Term Loan Agreement
(as amended, the "Original Credit Agreement"), wherein Bank One made loans
available to Borrower in the aggregate principal amount of $33,000,000, as
evidenced by those certain promissory notes defined therein as the Revolving
Note, the Term Note, the Equipment Note, the Graver Note and Equipment Note
Two; and
WHEREAS, Bank One and Bank of America, Texas, N.A. have
agreed to share and participate as Lenders in the subject credit facility; and
WHEREAS, Borrower has requested that Lenders renew and extend
the maturity date of the Revolving Note and enlarge the principal amount of the
Revolving Note to $20,000,000, to support Borrower's and its Subsidiaries'
working capital requirements and to provide funds for the acquisition of Trusco
Tank Inc., on the terms and subject to the conditions stated herein; and
WHEREAS, Borrower has requested that Lenders consolidate the
Term Note, the Equipment Note, the Graver Note and Equipment Note Two into a
new term note and enlarge the principal amount thereof to $25,000,000 to
provide funds for the acquisition of Trusco Tank Inc., on the terms and subject
to the conditions stated herein; and
WHEREAS, Borrower has requested that Lenders make available
to Borrower, an advancing term facility in the amount of $5,000,000, to permit
Borrower or a Subsidiary to finance capital expenditures and refinance certain
existing indebtedness, on the terms and subject to the conditions stated
herein;
WHEREAS, Lenders are willing, upon and subject to the terms
and conditions hereof, to amend and restate the Original Credit Agreement to
effectuate the same; and
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties hereto hereby
agree as follows:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS.
1.01. Definitions. In addition to the defined terms set forth
elsewhere herein, the following terms shall mean:
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"Advances" shall mean Cash Advances or Letter of Credit
Advances loaned or credited to Borrower or a Subsidiary or their accounts by
Agent, on behalf of Lenders, pursuant to the terms of this Agreement and
includes any Base Rate Advance or LIBOR Advance made pursuant to Section 2.01,
2.02, 2.03 and 2.04.
"Advancing Commitment" shall mean an amount not to exceed
$5,000,000 to be advanced under the Equipment Notes.
"Advancing Loan(s)" shall mean the loan or loans made
pursuant to Section 2.03 hereof.
"Advancing Note(s)" shall mean the Equipment Note(s).
"Advancing Termination Date" shall mean February 28, 1998.
"Agent" shall have the meaning specified in the first
paragraph hereof or a successor agent appointed pursuant to this Agreement.
"Agreement" means this Amended and Restated Revolving Credit
and Term Loan Agreement, as the same may from time-to-time be amended,
modified, or supplemented.
"Aggregate Amount of Letters of Credit Outstanding" means (a)
the aggregate undrawn face amount of all outstanding Letters of Credit and (b)
the aggregate principal amount of all drawings in connection with any Letter of
Credit for which Agent, on behalf of Lenders, has not been reimbursed or paid.
"Applicable Law" means all applicable provisions of all
constitutions, statutes, rules, regulations, and orders of all applicable
Governmental Authorities, and all orders, judgments, and decrees of all courts,
administrative law judges, and arbitrators.
"Authorized Person" shall mean the Chief Executive Officer,
President, Chief Financial Officer, Vice President, Secretary, Assistant
Treasurer or Treasurer of Borrower or a Subsidiary, as the case may be, all of
which individuals are authorized to act on behalf of Borrower or a Subsidiary.
"Base Rate" means at any time the rate of interest per annum
established from time to time by Agent as its Base Rate. Without notice to
Borrower or any other person, the Base Rate shall change automatically from
time to time as and in the amount by which such Base Rate shall fluctuate, with
each such change to be effective as of the date of each change in such Base
Rate. The Base Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. Lenders may make
commercial loans or other loans at rates of interest at, above or below the
Base Rate.
"Base Rate Advance" means any Advance which, pursuant to
Section 2.10(a), is accruing interest at a fluctuating rate per annum equal to
the Effective Base Rate.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
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"Borrower" shall have the meaning specified in the first
paragraph hereof.
"Borrowing" shall mean any credit made available to or for
the account of Borrower under the terms of this Agreement by Lenders in the
form of Cash Advance or a Letter of Credit Advance.
"Borrowing Limit" shall mean an amount equal to (i) eighty
percent (80%) of the Eligible Accounts plus (ii) the lesser of (A) fifty
percent (50%) of the Net Security Value of Inventory or (B) $5,000,000.00.
"Borrowing Report" shall mean the report regarding Borrower's
and the Consolidated Subsidiaries Eligible Accounts and Net Security Value of
Inventory which report is to be in the form of Exhibit "H" attached hereto.
"Business Day" shall mean a day on which banks are open for
business in Houston, Texas.
"Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures and costs of a Person during such period that, in
conformity with Good Accounting Practice, are required to be included in or
reflected by the property, plant or equipment or similar fixed asset accounts
shown in the balance sheet of such Person.
"Cash Advance" shall mean sums of cash advanced to Borrower
under the Revolving Notes and the Advancing Notes.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Consolidated Current Assets" shall mean, as of any date, the
current assets which would be reflected on a consolidated balance sheet of
Borrower and its Consolidated Subsidiaries prepared as of such date in
accordance with Good Accounting Practice.
"Consolidated Current Liabilities" shall mean, as of any
date, all current liabilities which would be reflected on a consolidated
balance sheet of Borrower and its Consolidated Subsidiaries prepared as of such
date in accordance with Good Accounting Practice.
"Consolidated Funded Debt" shall mean, as of any date, all
interest-bearing Indebtedness of Borrower and its Consolidated Subsidiaries
prepared as of such date in accordance with Good Accounting Practice.
"Consolidated Net Income" shall mean, with respect to any
period, consolidated net earnings (after income taxes) of Borrower and the
Consolidated Subsidiaries for such period, determined in accordance with Good
Accounting Practice.
"Consolidated Net Worth" shall mean, as of any date, the
total shareholder's equity (including capital stock, additional paid-in capital
and retained earnings after deducting treasury stock) which would appear on a
consolidated balance sheet of Borrower and its Consolidated Subsidiaries
prepared as of such date in accordance with Good Accounting Practice.
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"Consolidated Subsidiaries" shall mean, as of any date, HMT
Inc. and its subsidiary, HMT Tank Service, Inc., Texoma Tank Company, Inc., HMT
Construction Services, Inc., HMT Sentry Systems, Inc., Astrotech Investments,
Inc., AIX Intellectual Properties, Inc., Brown-Minneapolis Tank & Fabricating
Co., HMT Rubbaglass Limited, Graver Holding Company and its subsidiary, Graver
Tank & Mfg. Co., Inc. and Trusco Tank Inc., and any other Subsidiary included
as of such date in the consolidated financial statements of Borrower, and
"Consolidated Subsidiary" shall mean any one of the Consolidated Subsidiaries.
"Consolidated Tangible Net Worth" shall mean, as of any date,
the sum of (i) the total shareholder's equity (including capital stock,
additional paid-in capital and retained earnings after deducting treasury
stock) which would appear on a consolidated balance sheet of Borrower and its
Consolidated Subsidiaries prepared as of such date in accordance with Good
Accounting Practice, and (ii) the Subordinated Indebtedness less the aggregate
book value of Intangible Assets shown on such balance sheet.
"Consolidated Total Liabilities" shall mean, as of any date,
the liabilities of Borrower that would be reflected on a consolidated balance
sheet of Borrower as "liabilities" in accordance with Good Accounting Practice,
less the Subordinated Indebtedness.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with Borrower, are treated
as a single employer under Section 414(b) or 414(c) of the Code.
"Debt Service Coverage Ratio" shall mean (A) EBITDA less
income tax expense payable in cash, maintenance capital expenditures assumed to
be $1,500,000.00 annually, cash earn-out payments (excluding these payments to
Irwin Jacobs not to exceed $2,600,000.00), and cash dividends for the
immediately preceding twelve month period, divided by (B) interest expense plus
scheduled payments of principal on long term indebtedness (excluding the
Revolving Notes) for such period. EBITDA from Trusco Tank Inc. shall be
included in this calculation without duplication.
"Default" shall mean the occurrence of any event, which with
the giving of notice or the passage of time, or both, could become an Event of
Default.
"Dividends", in respect of any corporation, shall mean (i)
cash distributions or any other distributions on, or in respect of, any class
of capital stock of such corporation, except for distributions made solely in
shares of stock of the same class, and (ii) any and all funds, cash or other
payments made in respect of the redemption, repurchase or acquisition of such
stock, unless such stock shall be redeemed or acquired through the exchange of
such stock of the same class.
"Dollars" or "$" means dollars in lawful currency of the
United States of America.
"EBITDA" shall mean, with respect to any period, consolidated
earnings before interest expense, income taxes, depreciation and amortization
of Borrower and its Consolidated Subsidiaries for such period, determined in
accordance with Good Accounting Practice, but excluding (i) any extraordinary
gains or losses, (ii) any non-recurring items, as determined in accordance with
Good Accounting Practice. EBITDA from Trusco Tank Inc. shall be included in
this calculation without duplication.
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"Effective Base Rate" means the rate of interest for all Base
Rate Advances, such rate to be based upon the ratio of Consolidated Funded Debt
to EBITDA for Borrower's immediately preceding four (4) fiscal quarters
determined as of the date of Agent's receipt of the financial reports required
in Section 6.01, but in no event later than fifteen days after the date such
reports were due. The Effective Base Rate shall be calculated as follows:
If Ratio for Four Then Effective Base Rate
Preceding Quarters Is For Advance Is
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1.00 or less to 1.00 Base Rate minus .50%
1.01 to 1.00 through Base Rate
3.00 to 1.00
3.01 or greater to 1.00 Base Rate plus .25%
"Effective LIBOR Rate" means the rate of interest for all
LIBOR Advances, such rate to be based upon the ratio of Consolidated Funded
Debt to EBITDA for Borrower's immediately preceding four (4) fiscal quarters
determined as of the date of Agent's receipt of the financial reports required
in Section 6.01, but in no event later than fifteen days after the date such
reports were due. The Effective LIBOR Rate shall be calculated as follows:
If Ratio for Four Then Effective LIBOR Rate
Preceding Quarters Is For Advance Is
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1.00 or less to 1.00 LIBOR plus 1.25%
1.01 to 1.00 through LIBOR plus 1.50%
1.50 to 1.00
1.51 to 1.00 through LIBOR plus 1.75%
2.00 to 1.00
2.01 to 1.00 through LIBOR plus 2.00%
2.50 to 1.00
2.51 to 1.00 through LIBOR plus 2.25%
3.00 to 1.00
3.01 to 1.00 or greater LIBOR plus 2.75%
"Eurodollar Business Day" means a Business Day on which
Dollars are traded in the London interbank Eurodollar market.
"Eligible Accounts" shall mean an account which meets each of
the following requirements:
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(a) it is lawfully owned by Borrower or a Subsidiary and
Borrower or a Subsidiary has the right to transfer any interest
therein;
(b) if it arises from the sale or lease of goods,
specifically excluding goods shipped on consignment, the goods have
been shipped or delivered to the person who is obligated on the
account (the "account debtor");
(c) if it arises from the performance of services, such
services have been fully rendered (however, this does not exclude
progress billings to the extent such progress has been fully
rendered);
(d) it is a valid obligation of the account debtor,
enforceable in accordance with its terms and is free and clear of all
liens, security interests, restrictions, setoffs, adverse claims,
prepayments and the like other than the security interest of Lenders;
(e) it is evidenced by an invoice rendered to the account
debtor and is not evidenced by any instrument or chattel paper;
(f) it is not aged more than ninety (90) days from the
date of invoicing;
(g) it is not an account owing from an account debtor who
has twenty percent (20%) or more of all its accounts outstanding to
Borrower for more than ninety (90) days;
(h) it is not owed by an account debtor closely
affiliated with, related to, or employed by Borrower or a Subsidiary,
or domiciled outside of the United States of America (unless secured
with an adequate letter of credit or insured by a third party
acceptable to Agent), or any Governmental Authority (unless a security
interest has been properly perfected pursuant to the Federal
Assignment of Claims Act of 1940);
(i) it is not all or a portion of any retainage;
(j) it is not due from an account debtor known to
Borrower to be the subject of a bankruptcy or other insolvency
proceeding or known to Borrower to have ceased doing business; and
(k) it is not an obligation arising from Borrower's
providing goods or performance of services for a bonded job.
"Encumbrance" shall mean any claim, encumbrance, mortgage,
lien, charge, pledge, security interest, priority payment, conditional sales
agreement right, or other title retention agreement right of any kind
whatsoever, but not including operating leases, in, upon or against any asset
of Borrower.
"Equipment Note(s)" shall collectively mean (i) the
$3,750,000 promissory note in substantially the form attached as Exhibit "E"
hereto, and (ii) the $1,250,000 promissory note
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in substantially the form attached as Exhibit "F" hereto, delivered pursuant to
Section 2.03 hereof, and all renewal, extensions and rearrangements thereof.
"ERISA" shall mean the Employment Retirement Income Security
Act of 1974, as amended.
"Event of Default" shall mean any of the events specified in
Section 8, provided that there shall have been satisfied any requirement in
connection with such event for the giving of notice or lapse of time or both,
or the happening of any further condition, event or act.
"Good Accounting Practice" shall mean such accounting
practice as conforms at the time to generally accepted accounting principles
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state,
county, municipal or other governmental entity, department, commission, board,
bureau, agency, court or instrumentality, domestic or foreign.
"Guarantors" shall mean HMT, Inc., Texoma Tank Company, Inc.
HMT Construction Services, Inc., HMT Tank Service, Inc., HMT Sentry Systems,
Inc., Astrotech Investments, Inc., AIX Intellectual Properties, Inc., HMT
Rubbaglass Limited, Brown-Minneapolis Tank & Fabricating Co., Graver Holding
Company, Graver Tank & Mfg. Co., Inc. and Trusco Tank Inc., and any other
Subsidiaries as determined by Agent.
"Guaranty" of any Person shall mean any contract, agreement
or understanding of such Person pursuant to which such Person guarantees, or in
effect guarantees, any Indebtedness of any other Person (the "Primary Obligor")
in any manner, whether directly or indirectly, including, without limitation,
agreements: (i) to purchase such Indebtedness or any property constituting
security therefor; (ii) to advance or supply funds (a) for the purchase or
payment of such Indebtedness, or (b) to maintain working capital or other
balance sheet conditions, or otherwise to advance or make available funds for
the purchase or payment of such Indebtedness; (iii) to purchase property,
securities or services primarily for the purpose of assuring the holder of such
Indebtedness of the ability of the Primary Obligor to make payment of the
Indebtedness; or (iv) otherwise to assure the holder of the Indebtedness if the
Primary Obligor against loss in respect thereof; except that "Guaranty" shall
not include the endorsement by Borrower or a Subsidiary in the ordinary course
of business of negotiable instruments or documents for deposit or collection.
"Highest Lawful Rate" means the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Notes or the Indebtedness under the
laws applicable to Agent which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws now
allow. Whenever such rate is to be applicable pursuant to any Loan Document,
it shall be applied, and interest at such rate shall be calculated, for the
actual number of days elapsed in the applicable period based on a year of 365
to 366 days, as the case may be.
"Indebtedness" shall mean, with respect to any Person, all
indebtedness, obligations and liabilities of such Person, including, without
limitation, (i) all "liabilities" which would be
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reflected on a balance sheet of such person, prepared in accordance with Good
Accounting Practice; (ii) all obligations of such Person in respect of any
Guaranty; and (iii) all obligations, indebtedness and liabilities secured by
any lien or any security interest on any property or assets of any Person.
"Intangible Assets" of any Person shall mean those assets of
such Person which are (i) deferred assets, other than prepaid insurance and
prepaid taxes; (ii) patents, copyrights, trademarks, tradenames, franchises,
goodwill, experimental expenses and other similar assets which would be
classified as intangible assets on a balance sheet of such Person prepared in
accordance with Good Accounting Practice; and (iii) unamortized debt discount
and expense.
"Interest Payment Date" means (a) with respect to any Base
Rate Advance, the last day of each February, May, August and November while
such Advance is outstanding and the date such Advance is repaid in full or
converted to another type of Advance pursuant to the terms of this Agreement
and (b) (i) with respect to any LIBOR Advance with an Interest Period of less
than six months, the last day of each Interest Period for such Advance and the
date such Advance is repaid in full or converted to another type of Advance
pursuant to the terms of this Agreement, and (ii) for any LIBOR Advance with a
six-month Interest Period, the day which is three months following the first
day of such Interest Period.
"Interest Period" means, with respect to any LIBOR Advance,
the period used for the computation of interest commencing on the date such
Advance is made or deemed made, continued or effected by conversion, and
concluding on the date one, two, three or six months thereafter, in each case
at the Borrower's option, with any subsequent Interest Period commencing on the
last day of the immediately preceding Interest Period and concluding on the
last day of such subsequent Interest Period; provided. however, that:
(a) no Interest Period may extend beyond (i) the
Revolving Termination Date for the Revolving Notes, or (ii) the
Maturity Date for the Advancing Notes and the Term Notes;
(b) any Interest Period for a LIBOR Advance which would
otherwise end on a day which is not a Eurodollar Business Day shall be
extended to the next succeeding Eurodollar Business Day unless such
Eurodollar Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Eurodollar
Business Day; and
(c) any Interest Period for a LIBOR Advance which begins
on the last Eurodollar Business Day of the calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Eurodollar Business Day of the calendar month in which it would have
ended if there were a numerically corresponding day in such calendar
month.
"Legal Requirement" shall mean any law, statute, ordinance,
decree, requirement, order, judgment, rule, regulation (or interpretation of
any of the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
"Lenders" shall have the meaning specified in the first
paragraph hereof.
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"Letter of Credit Advance" shall mean any funds made
available by the issuance of one or more Letters of Credit.
"Letter(s) of Credit" shall mean one or more documentary or
standby letters of credit issued by Agent at the request of Borrower. Any such
Letters of Credit shall be issued for a term of not more than 90 days after the
Letter of Credit Termination Date, and shall be secured by the Loan Documents.
"Letter of Credit Termination Date" shall mean the earliest
date on which any of the following events occurs: (a) February 28, 2000, which
date may be extended one or more times by mutual agreement of Agent and
Borrower; (b) the date that Agent terminates the Letter of Credit as provided
herein; or (c) such earlier date as may be agreed upon in writing by Borrower
and Agent.
"LIBOR" means, at all times during the respective Interest
Period for each LIBOR Advance, a rate per annum as determined by Agent, as
applicable, (rounded upwards, if necessary to the nearest whole multiple of
1/16 of 1%) at which deposits in Dollars in immediately available and freely
transferable funds would be offered by the respective lending office of Agent
to leading banks in the London interbank Eurodollar market at approximately
11:00 a.m. London time two Eurodollar Business Days before the first day of the
respective Interest Period for a period equal to such Interest Period and in
amounts substantially equal to the amount of the LIBOR Advance. Each
determination of LIBOR made by Agent in accordance with this paragraph shall be
presumed correct.
"LIBOR Advance" means any Advance which, pursuant to Section
2.10(b), is accruing interest at a rate per annum based upon LIBOR.
"Loan Documents" shall mean (a) this Agreement, (b) the Notes
and (c) any and all other agreements, documents or instruments now or hereafter
executed in connection with any of the foregoing or the transactions evidenced
thereby, including the Subsidiary Loan Documents, as the same may be modified
or amended from time to time.
"Loans" shall mean any loans by Lenders to Borrower pursuant
to Sections 2.01, 2.02, 2.03 and 2.04.
"Material Adverse Effect" means a material adverse change in
the assets, liabilities, properties, business or condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as a whole, including,
but not limited to, any event or circumstance which would have a material
adverse effect on the Borrower's ability to perform its obligations under this
Agreement or the Notes.
"Maturity Date" means February 28, 2004 for the Term Notes
and the Equipment Notes.
"Net Security Value of Inventory" shall mean the net value of
all inventory (including raw materials and finished goods) less all account
charges, liens and security interests
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(other than the interest of Lenders) of all kinds against inventory, the value
of work in process, any obsolete inventory, and any inventory held on
consignment, all as determined by Agent in its reasonable discretion.
"Notes" shall mean the Revolving Notes, the Term Notes, and
the Equipment Notes.
"Notice of Borrowing" shall have the meaning specified in
Section 2.05.
"Obligations" shall mean all present and future indebtedness,
obligations and liabilities of Borrower to Lenders and all renewals and
extensions thereof, or any part thereof, arising pursuant to this Agreement or
represented by the Notes, and all interest accruing thereon, and attorneys'
fees incurred in the enforcement or collection thereof, regardless of whether
such indebtedness, obligations and liabilities are direct, indirect, fixed,
contingent, joint, several or joint and several; together with all
indebtedness, obligations and liabilities of Borrower evidenced or arising
pursuant to any of the other Loan Documents, and all renewals and extensions
thereof, or part thereof.
"Officer's Certificate" shall mean a certificate of an
Authorized Person of Borrower stating that no Default or Event of Default has
occurred and is continuing or will result from the making of an Advance.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean, an individual, partnership, joint
venture, corporation, bank, trust, unincorporated organization and/or a
government or any department or agency thereof.
"Plan" shall mean an employee pension benefit plan which is
covered by Title IV of ERISA, or subject to the minimum funding standards of
the Code and is either (a) maintained by Borrower or any member of the
Controlled Group for employees of Borrower or any member of the Controlled
Group or (b) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which Borrower or any member of the Controlled Group is then making or accruing
an obligation to make contributions or has within the preceding five Plan years
made contributions.
"Regulation D" shall mean Regulation D of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation G" shall mean Regulation G of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation T" shall mean Regulation T of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
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"Regulation U" shall mean Regulation U of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Revolving Credit Commitment" shall mean the lesser of (i)
$20,000,000 or (ii) the Borrowing Limit.
"Revolving Credit Loans" shall mean the loans made pursuant
to Section 2.01.
"Revolving Note(s)" shall collectively mean (i) the
promissory note in the principal amount of $15,000,000 to be substantially in
the form attached as Exhibit "A" hereto, and (ii) the promissory note in the
principal amount of $5,000,000 to be substantially in the form attached as
Exhibit "B" hereto, delivered pursuant to Section 2.01 hereof and all renewals,
extensions and rearrangements thereof.
"Revolving Termination Date" shall mean February 28, 2000.
"Subordinated Indebtedness" shall mean any secured or
unsecured Indebtedness of Borrower which expressly contains in the instruments
evidencing such Indebtedness or in the indenture or other similar instrument
under which it is issued (which indenture or other similar instrument shall be
binding on all holders of such Indebtedness) subordination provisions (in form
and substance satisfactory to Agent) substantially to the effect that the
holder agrees that the Indebtedness evidenced by such instrument, and any
renewals or extensions thereof, shall at all times and in all respects be
subordinate and junior in right of payment to the Obligations.
"Subsidiary" shall mean any Person of which securities or
other ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of directors or other Persons
performing similar functions (or, if there are no such directors or Persons,
having general voting power) are at the time directly or indirectly owned or
controlled by Borrower (or, where a Subsidiary of another Person is referred
to, such other Person), or by any one or more Subsidiaries, or by Borrower (or,
where a Subsidiary of another Person is referred to, such other Person) and any
one more Subsidiaries.
"Subsidiary Loan Documents" shall mean all promissory notes,
security agreements, related instruments, and any other agreements, documents
or instruments now or hereafter executed in connection with Borrower's loans to
Subsidiaries as described in Section 2.14, as the same may be modified or
amended from time to time.
"Term Note(s)" shall collectively mean (i) the promissory
note in the principal amount of $18,750,000 to be substantially in the form
attached as Exhibit "C" hereto, and (ii) the promissory note in the principal
amount of $6,250,000 to be substantially in the form attached as Exhibit "D"
hereto, delivered pursuant to Section 2.04 hereof and all renewals, extensions
and rearrangements thereof.
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"Term Loan(s)" shall mean the loan or loans made pursuant to
Section 2.04.
"Unfunded Vested Liabilities" shall mean, with respect to any
Plan at any time, the amount (if any) by which (a) the present value of all
vested non-forfeitable benefits under such Plan exceeds (b) the fair market
value of all Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plan using the interest rates and
other factors for Plan termination as announced by the PBGC and in effect at
such time, but only to the extent that such excess represents a potential
liability to Borrower or any member of the Controlled Group to the PBGC under
Title IV of ERISA.
1.02 Accounting Terms. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made and all financial statements required to
be delivered hereunder shall be prepared in accordance with Good Accounting
Practice as in effect from time to time, applied on a basis consistent with
those followed in the preparation of the most recent financial statements
delivered pursuant to Section 6.01 hereof.
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITY.
2.01 Revolving Credit Loans. Borrower has requested and
Lenders have approved the Revolving Credit Commitment which Borrower will
utilize by making requests for Advances in accordance with Section 2.05 hereof.
In that connection and upon the terms and subject to the conditions of this
Agreement, Lenders agree to lend to Borrower at any time and from time to time
up to and including the Revolving Termination Date, but not thereafter, an
amount requested by Borrower. Within the limits of this Section 2.01, Borrower
may borrow, repay and reborrow hereunder, according to the terms hereof, each
Advance being evidenced by the Revolving Notes under which such Advance is
requested; provided, however, that (i) each Base Rate Advance shall be in a
minimum amount of $50,000 or an integral multiple thereof and each LIBOR
Advance shall be in a minimum amount of $250,000; (ii) the aggregate
outstanding principal amount of Advances plus the Aggregate Amount of Letters
of Credit Outstanding shall not at any time exceed Revolving Credit Commitment;
(iii) no more than three LIBOR Advances may be outstanding at any time; (iv) no
Borrowing in the form of a Letter of Credit may be requested if such Letter of
Credit would have a maturity date or an expiration date after 90 days after the
Revolving Termination Date; and (v) no Borrowing in the form of a Letter of
Credit may be requested if the amount of such Letter of Credit, when aggregated
with the Aggregate Amount of Letters of Credit Outstanding, would exceed
$10,000,000.
2.02. Letters of Credit.
(a) Issuance of Letters of Credit. The issuance of any
and all Letters of Credit under Section 2.01 of this Agreement shall
be at Agent's reasonable discretion and each Letter of Credit issued
by Agent shall be used by Borrower or a Consolidated Subsidiary in the
ordinary course of its business.
(b) Letters of Credit and Applications. Each Letter of
Credit shall (a) be issued pursuant to either a letter of credit
application or a standby letter of credit
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application executed by Borrower on the standard form of Agent (a
"Letter of Credit Application"), (b) be reasonably satisfactory in
form and substance to Agent, (c) expire on a date not later than
ninety (90) days following the Letter of Credit Termination Date, and
(d) be denominated in a currency acceptable to Agent. In the event
that any provision of a Letter of Credit Application shall be
inconsistent with any provisions of this Agreement, the provisions of
this Agreement shall govern. Each Letter of Credit Application and
each Letter of Credit shall be subject to the Uniform Customs and
Practices for Documentary Credits (1994 Revision) and, to the extent
not inconsistent therewith, the laws of the State of Texas.
(c) Procedure for Issuing Credits. Borrower will give
Agent written notice at least three (3) Business Days prior to any
date in respect of which a Letter of Credit is requested to be issued
accompanied by a duly completed and executed Letter of Credit
Application therefor. Agent will process such notice from Borrower and
such Letter of Credit Application in accordance with its customary
procedures and, subject to the provisions hereof, shall issue such
Credit to the beneficiary thereof unless otherwise directed in writing
by Borrower.
(d) Reimbursement; Payments. In the event Agent makes any
payment under a Letter of Credit, such action shall be deemed for all
purposes of this Agreement and the other Loan Documents to constitute
the making of a Revolving Credit Loan under the Revolving Notes to
Borrower and, in connection therewith, Borrower hereby unconditionally
and irrevocably authorizes, empowers and directs Agent to record and
otherwise treat payments under Letters of Credit as Revolving Credit
Loans made to Borrower. Any determination by Agent of the outstanding
amount of Revolving Credit Loans made under this Section 2.02 shall be
conclusive in the absence of manifest error.
2.03 Advancing Loans. Borrower has requested and Lenders have
approved the Advancing Commitment which Borrower will utilize by making
requests for Advances in accordance with Section 2.05 hereof. In that
connection and upon the terms and subject to the conditions of this Agreement,
Lenders agrees to lend to Borrower an amount requested by Borrower; provided,
however, that (i) each Base Rate Advance shall be in a minimum amount of
$100,000 or an integral multiple thereof and (ii) each LIBOR Advance shall be
in a minimum amount of $250,000; and provided, further, with respect to the
Equipment Notes, Lenders will lend to Borrower, and Borrower will borrow from
Lenders, an aggregate amount not to exceed $5,000,000, which Advances shall be
used for Borrower's or a Subsidiary's Capital Expenditures. Borrower shall only
be entitled to an Advance under the Advancing Notes in an amount approved by
Lender, and in no event shall any such Advance exceed eighty percent (80%) of
Borrower's or a Subsidiary's cost of any such asset. Borrower shall provide
Lender with certified copies of the invoices setting forth the actual costs of
such assets, and such certificates of title or other instruments as may be
necessary for Lenders to perfect their security interests therein. Although
Advances under the Advancing Notes be made in increments, Lenders shall not be
obligated to make any Advances thereunder after the Advancing Termination Date.
Borrower shall not be entitled to repay and reborrow any sums under the
Advancing Notes.
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2.04 Term Loan. Borrower has requested and Lender has
approved Advances under the Term Notes. Interest rate provisions of this
Agreement relating to Base Rate and LIBOR options shall be applicable to the
Term Notes.
2.05 Making of Advances. Each request by Borrower for a Cash
Advance under this Section 2.05 may be made by Borrower's delivery (which may
be by telephone and immediately confirmed by telecopy facsimile transmission)
to Agent of a notice of borrowing (the "Notice of Borrowing") signed by an
Authorized Person in the form of Exhibit "G" attached hereto. The Notice of
Borrowing for Base Rate Advances shall be submitted to Agent at least 12:00
noon, C.S.T., on the desired advance date, and for LIBOR Advances shall be
submitted to Agent at least 12:00 noon, C.S.T., three Business Days prior to
the desired advance date. Such Notice of Borrowing shall include a brief
description of the uses of such Cash Advance and such other information as
Agent may request. Letter of Credit Advances shall be made in accordance with
the provisions of Section 2.02 hereof.
2.06 Advances Over Borrowing Limit. Lenders shall have no
obligation to advance, and Borrower shall not be entitled to any Advance, that
would cause all of the Advances under the Revolving Notes to exceed the lesser
of $20,000,000 or the Borrowing Limit. If, at any time prior to the Revolving
Termination Date, the outstanding Advances under the Revolving Notes exceed the
Borrowing Limit as shown on the Borrowing Report delivered to Agent under
Section 6.01(f), Borrower, on the date of the delivery of the Borrowing Limit
Report to Agent or as soon as Borrower becomes aware that the outstanding
Advances under the Revolving Notes exceed the Borrowing Limit, shall
immediately prepay on the Revolving Notes such amount as may be necessary to
eliminate such excess.
2.07 Payments.
(a) Revolving Notes. The outstanding principal
amount of the Revolving Notes shall be due and payable on the
Revolving Termination Date. The principal amount of each payment made
by Agent in connection with a drawing under a Letter of Credit shall
be paid by Borrower to the Agent prior to 1:00 p.m. Houston time on
the same Business Day of such drawing. Unless other arrangements
satisfactory to Agent are made with respect to any amount due from
Borrower in connection with a payment under a Letter of Credit,
Borrower agrees that Agent may debit Borrower's principal operating
account with Agent for such amount. Interest upon the Revolving Notes
shall be payable on each Interest Payment Date and on the Revolving
Termination Date.
(b) Equipment Notes. The outstanding principal
amount of the Equipment Notes as of February 28, 1998 shall be due and
payable in quarter-annual installments commencing May 28, 1998, such
principal installments to be calculated based upon a six (6) year
amortization period beginning on February 28, 1998 and continuing on
the last day of each May, August, November and February thereafter
until the Maturity Date, when the outstanding principal balance of the
Equipment Notes shall be fully and finally paid. Interest upon the
Equipment Notes shall be payable on each Interest Payment Date and on
the Maturity Date.
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(c) Term Notes. Principal on the Term Notes shall be
due and payable in quarter-annual installments of Eight Hundred
Ninety-Two Thousand Eight Hundred Fifty-Seven and 14/100 Dollars
($892,857.14) each, beginning on May 28, 1997, and continuing on the
28th day of each May, August, November and February until the Maturity
Date, when the outstanding principal balance of the Term Notes shall
be finally due and payable. Interest on the Term Notes shall be
payable on each Interest Payment Date and on the Maturity Date.
2.08. Conversions Subject to the terms and conditions of this
Agreement including Sections 2.01, 2.02, 2.03 and 2.04, Borrower may select a
subsequent Interest Period to begin on the last day of the immediately
preceding Interest Period for any LIBOR Advance and may convert such LIBOR
Advance to a Base Rate Advance. Subject to the terms and conditions of this
Agreement including Sections 2.01, 2.02, 2.03 and 2.04, Borrower may also
convert a Base Rate Advance to a LIBOR Advance.
2.09. Notice of Draws. Agent shall give prompt notice to
Borrower of any draw request under a Letter of Credit and the date Agent
intends to effect payment thereof.
2.10. Interest Rates.
(a) Base Rate Advance. Each Base Rate Advance shall
bear interest on the unpaid principal amount thereof until payment in
full at the Effective Base Rate, but in no event to exceed the Highest
Lawful Rate. Any change in the interest rate accruing on an Advance
resulting from a change in the Base Rate shall become effective as of
the opening of business on the day on which such change in the Base
Rate shall occur.
(b) LIBOR Advances. Each LIBOR Advance shall bear
interest on the unpaid principal amount thereof until payment in full
at the Effective LIBOR Rate, but in no event to exceed the Highest
Lawful Rate.
(c) Default Rate. If all or any portion of the
principal amount of any payments due under Section 2.07 and/or
interest thereon shall not be paid when due, such past due principal
amount shall bear interest due and payable on demand from and
including the date due to but excluding the date of payment in full at
the Base Rate plus 4% per annum, but in no event to exceed the Highest
Lawful Rate.
(d) Payment Calculations and Dates. Interest shall
be calculated (i) (A) for Base Rate Advances, on the basis of a
365/366-day year and (B) for LIBOR Advances, on the basis of a year of
360 days and (ii) for the actual number of days elapsed, including the
first day, but excluding the last day. Interest shall be due and
payable on each Interest Payment Date and on (i) the Revolving
Termination Date on the Revolving Notes and (ii) the Maturity Date on
the Advancing Notes and the Term Note.
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2.11. Fees.
(a) Commitment Fees. Borrower agrees to pay to Agent, for
the benefit of Lenders, an annual commitment fee of 1/4% after the
date hereof on the average daily unborrowed portion of the Revolving
Credit Commitment, payable in arrears quarterly, commencing on May 31,
1997 (for the period and from the date of this Agreement until such
date) and continuing on the last Business Day of each August,
November, February and May thereafter before the Revolving Termination
Date, with a final payment on the earlier of (i) the Revolving
Termination Date or (ii) the date the Revolving Credit Commitment is
terminated pursuant to the terms of Section 8. In calculating the
average unused portion of the Revolving Credit Commitment, the
aggregate amount of Letters of Credit outstanding shall be treated as
a used portion of the Revolving Credit Commitment.
(b) Letter of Credit Fees. In connection with each Letter
of Credit requested by the Borrower pursuant to the terms of this
Agreement, Borrower shall pay to Agent, for the benefit of Lenders
(provided, however, $200.00 of the fee shall be for Agent only), a
letter of credit fee equal to the greater of (x) $250.00 or (y) one
percent (1%) per annum of the original face amount of such Letter of
Credit for the term of such Letter of Credit. The Letter of Credit fee
shall be payable within 15 days of the issuance of each Letter of
Credit, and upon any renewal or extension thereof. Additionally,
Borrower agrees to reimburse Agent for all actual out-of-pocket
expenses incurred by Agent, such as advising or confirming bank fees,
telex charges and the like and to pay those fees customarily charged
by Agent for any amendments to a Letter of Credit. Upon prior notice
to Borrower, Agent at any time may increase any letter of credit
commissions or other fees or expenses charged by Agent hereunder if
such fees, expenses and commissions are in accordance with Agent's
standard fees and expenses and letter of credit commissions.
(c) Agent Fee: Borrower shall pay to Agent upon the
execution hereof, and, on or before March 31 of each subsequent year,
an agent fee in the amount of $10,000.
(d) Origination Fee. Upon the execution of this
Agreement, Borrower shall pay to Agent, for the benefit of Lenders, an
origination fee of $100,000.
(e) Overdue Fees. The amount of any fee not paid when due
hereunder shall bear interest from the date due until the date paid in
full at the Base Rate plus 4% per annum calculated on the basis of
360-day year for the actual number of days elapsed, but in no event to
exceed the Highest Lawful Rate.
(f) Fee Calculations. Fees shall be calculated on the
basis of a 360 day year for the actual number of days elapsed,
including the first day, but excluding the last day. Borrower
acknowledges and agrees that such fees are in consideration of Lenders
holding monies in readiness for Borrower prior to the funding of
Borrower's requests for Advances and is not intended as additional
compensation for Lenders.
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2.12. Optional Prepayments. Borrower may, at its option, at
any time and from time-to-time, prepay any or all of the Notes, in whole or in
part, without premium or penalty, upon giving telephonic notice to Agent by 1
p.m. on the date of such prepayment; provided that a LIBOR Advance may only be
paid on the last day of the Interest Period therefor. Each Telephonic Notice
shall specify the date and amount of prepayment.
2.13. Indemnification for Telephone/Telecopy Request. In
consideration of Agent permitting Borrower to make requests for Advances by
telephone and/or telecopy under the Revolving Notes and the Advancing Notes,
and except for Agent's gross negligence or willful misconduct in connection
therewith, Borrower covenants and agrees to assume liability for and to
protect, indemnify and save Agent harmless from any and all liabilities,
obligations, damages, penalties, claims, causes of action, costs, charges and
expenses, including attorneys' fees and expenses of employees, which may be
imposed, incurred by or asserted against Agent by reason of any loss, damage or
claim howsoever arising or incurred because of, out of or in connection with
(i) any action of Agent pursuant to telephone or telecopier requests for
advances under the Revolving Notes and the Advancing Notes, (ii) the transfer
of funds pursuant to such telephone or telecopier requests, or (iii) Agent's
honoring or failing to honor any telephone or telecopier request for any
reason. Agent is entitled to rely upon and act upon telephone or telecopier
requests made or purportedly made by any Authorized Person and Borrower shall
be unconditionally and absolutely estopped from denying (x) the authenticity
and validity of any such transaction so acted upon by Lenders once Lenders have
advanced funds under the Revolving Notes and the Advancing Notes and have
deposited or transferred such funds as requested in any such telecopier request
and (y) Borrower's liability and responsibility therefor.
2.14. Loans to Subsidiaries. Until the earlier to occur of a
Default or the Revolving Termination Date, Borrower, with Agent's prior written
approval, may provide each of the following Subsidiaries with a revolving line
of credit (the "Subsidiary Debt"): (a) HMT Inc. in the amount of $15,000,000,
(b) Brown-Minneapolis Tank & Fabricating Co. in the amount of $15,000,000, (c)
Texoma Tank Company, Inc. in the amount of $7,000,000, (d) Graver Tank & Mfg.
Co., Inc. in the amount of $10,000,000, and (e) Trusco Tank Inc. in the amount
of $10,000,000. The Subsidiary Debt shall be evidenced by promissory notes in
form approved by Lenders, and secured by (a) a second priority perfected
security interest (second only to Lenders) in all of such Subsidiary's general
intangibles, equipment, inventory, accounts receivable, instruments, chattel
paper and documents as provided in a security agreement, the form of which
shall be approved by Lenders, (b) a second lien (second only to Lenders) in the
real property and related improvements that are being pledged to Lenders by
Brown-Minneapolis Tank & Fabricating Co., and (c) a second lien (second only to
Lenders) in the real property and related improvements that are being pledged
to Lender by Graver Tank & Mfg. Co., Inc. The Subsidiary Loan Documents shall
be collaterally assigned and endorsed, where appropriate, to Lenders to further
secure Borrower's Obligations.
SECTION 3. SPECIAL PROVISIONS REGARDING LIBOR ADVANCES.
3.01. Illegality. Notwithstanding any other provisions of
this Agreement or the Notes, if at any time Agent shall determine in good faith
that any change in Applicable Law or in the interpretation thereof makes it
unlawful for Lenders to make or continue to maintain any
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LIBOR Advance, Agent shall promptly give notice thereof to Borrower and the
obligation to make, continue or effect by conversion any LIBOR Advance under
this Agreement shall be suspended until Agent shall notify Borrower that the
circumstances causing such suspension no longer exist. Borrower may request
that the principal amount of any affected LIBOR Advance begin to accrue
interest as a Base Rate Advance, subject to all of the terms and conditions of
this Agreement.
3.02. Unavailability of Deposits or Inability to Ascertain
LIBOR. Notwithstanding any other provision of this Agreement or the Notes to
the contrary, if prior to the commencement of any Interest Period Agent shall
determine (i) that deposits in the amount of any LIBOR Advance are not
available to Lenders or (ii) by reason of circumstances affecting the London
interbank Eurodollar market, adequate and reasonable means do not exist for
ascertaining the LIBOR, then Agent shall promptly give notice thereof to
Borrower and the obligation of Lenders to make, continue or effect by
conversion any such LIBOR Advance in such amount and for such Interest Period
shall terminate until deposits in such amount and for the Interest Period
selected by Borrower shall again be readily available to Lenders and adequate
and reasonable means exist for ascertaining the LIBOR. Upon the giving of such
notice, Borrower may elect to either (i) pay or prepay, as the case may be,
such affected LIBOR Advance or (ii) convert such affected LIBOR Advance to
another type of Advance available hereunder, subject to all of the terms and
conditions of this Agreement.
3.03. Funding Indemnity. In the event Lenders shall incur any
actual loss, cost, expense or premium (including, without limitation, any loss
of profit and any loss, cost, expense or premium incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by Lenders to
fund or maintain any LIBOR Advance or the relending or reinvesting of such
deposits or amounts paid or prepaid to Lenders) as a result of: (i) any payment
of a LIBOR Advance on a date other than the last day of the then applicable
Interest Period; (ii) any failure by Borrower to borrow, continue, or effect by
conversion any LIBOR Advance on the date specified in a notice given pursuant
to Section 2.05; or (iii) the occurrence of any Event of Default; then, upon
the demand of Agent, Borrower shall pay to Agent, for the benefit of Lenders,
such amount as will reimburse Lenders for such loss, cost or expense. If Agent
makes a claim for reimbursement on behalf of Lenders, it shall provide to
Borrower a certificate setting forth the amount of such loss, cost or expense
in reasonable detail and such certificate shall be presumed correct as to the
amount thereof.
3.04. Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, Lenders shall
be entitled to fund and maintain its funding of all or any part of the LIBOR
Advances in any manner they sees fit, it being understood however, that for the
purposes of this Agreement all determinations hereunder shall be made as if
Lenders had actually funded and maintained each LIBOR Advance during each
Interest Period for such Advance through the purchase of deposits having
maturity corresponding to such Interest Period and bearing an interest rate
equal to the LIBOR for such Interest Period.
3.05. LIBOR Reserve Costs. Borrower agrees to pay Agent, for
the benefit of Lenders, additional interest on the outstanding principal amount
of each LIBOR Advance from the date such LIBOR Advance is made until such LIBOR
Advance is paid in full or converted
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to another type of Advance at an interest rate per annum equal, at all times
during such Interest Period, to (i) the rate obtained by dividing (A) Lenders'
LIBOR for such Interest Period by (B) a percentage (expressed as a decimal)
equal to 100% minus the Reserve Percentage of Lenders for such Interest Period
minus (ii) Lenders' LIBOR for such Interest Period, but in no event to exceed
the Highest Lawful Rate. Agent shall notify Borrower of the interest due
pursuant to this Section 3.05, which notice shall be presumed correct.
3.06. Taxes and Increased Costs. With respect to any Letter
of Credit, any amount owing by Borrower in connection therewith, or any LIBOR
Advance, if Agent shall determine in good faith that any change in Applicable
Law (including, without limitation, Regulation D) or any new Applicable Law, or
any interpretation of any of the foregoing by any Governmental Authority
charged with the administration thereof or any central bank or other fiscal,
monetary or other authority having jurisdiction over Agent or their lending
branches (whether or not having the force of law) shall:
(a) impose, modify or deem applicable any assessment
rate, reserve, special deposit or similar requirements against letters
of credit issued by, or assets held by, or deposits in or for the
account of, or loans by, or any other acquisition of funds or
disbursements by, Agent;
(b) subject Lenders, any LIBOR Advance or their
respective Notes to any tax (including, without limitation, any United
States interest equalization tax or similar tax however named
applicable to the acquisition or holding of debt obligations any
interest or penalties with respect thereto), duty, charge, stamp tax,
fee, deduction or withholding in respect of this Agreement, any LIBOR
Advance or their respective Notes, except such taxes as may be
measured by the overall net income of Lenders or their lending
branches and imposed by the jurisdiction, or any political subdivision
or taxing authority thereof, in which any Lender's principal executive
office or its lending branch is located;
(c) change the basis of taxation of payments of
principal and interest due from Borrower to Lenders hereunder or under
their respective Notes (other than by a change in basis of taxation of
the net income of Lenders); or
(d) impose on Lenders any penalty with respect to
the foregoing or any other condition regarding this Agreement, its
disbursement, any fixed rate Advance or their respective Notes;
and Lenders shall determine that the result of any of the foregoing is to
increase the cost (whether by incurring a cost or adding to a cost) to Lenders
of issuing or maintaining any Letter of Credit or a risk participation in
Letter of Credit or making or maintaining any LIBOR Advance or to reduce the
amount of principal or interest received by Lenders, then Borrower shall pay to
Agent, for the benefit of Lenders, from time to time as specified by Agent such
additional amounts as Agent shall determine are sufficient to compensate and
indemnify Lenders for such increased cost or reduced amount. Agent shall
promptly give Borrower notice of any condition described in this section that
gives Lenders a right to compensation under this Section. If
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Lenders makes such a claim for compensation, it shall provide to Borrower a
certificate setting forth such increased cost or reduced amount as a result of
any event mentioned herein and such certificate shall be presumed correct.
3.07. Capital Adequacy. If either (a) the enactment,
issuance, implementation or phase-in of or any change in or in the
interpretation of any law, rule or regulation, or (b) compliance with or
implementation of any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force of law) affects
the amount of capital required to be maintained by Lenders or any corporation
controlling Lenders and Lenders determine that the amount of such capital is
increased (or that the rate of return on Lenders' capital is reduced) by or
based on the existence of its obligations under the Letter of Credit or its
risk participation in the Letter of Credit, then, upon demand by Agent Borrower
shall pay to Agent, for the benefit of Lenders, from time-to-time as specified
by Agent, such additional amount or amounts as Lenders shall determine are
necessary to compensate Lenders or any corporation controlling Lenders in light
of such circumstances, to the extent that Lenders reasonably determine such
increase in capital to be allocable to the existence of the Letter of Credit.
3.08. Payments, Prepayments, and Computations. All payments
by Borrower to Agent shall be made in Dollars before 1 p.m. Houston time on the
date due. All payments by Borrower shall be made free and clear of and without
deduction for any and all present and future taxes, levies, imposts,
deductions, charges and withholdings, and all liabilities with respect thereto,
excluding (a) judicial or administrative liens in respect of obligations of
Lenders unrelated to the transactions contemplated by this Agreement and (b)
taxes imposed on income of Lenders by, and franchise taxes imposed on Lenders
by, any country or state or any political subdivision thereof (all such taxes,
levies, imposts, deductions, charges, withholdings and liabilities other than
those described in clauses (a) and (b) above being herein referred to as
"Taxes"). If Borrower shall be required by Applicable Law to withhold or deduct
any Taxes from or in respect of any sum payable hereunder or under the Notes to
Lenders (a) the sum payable shall be increased as may be necessary so that
after making all required withholdings and deductions (including, without
limitation, withholdings and deductions applicable to additional sums payable
under this Section) Lenders receive an amount equal to the sum it would have
received had no withholdings or deductions been made, (b) Lenders shall make
such withholdings and deductions, and (c) Borrower shall pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with Applicable Law and in such a manner that Lenders shall not be
required to make any deduction or payment of any Taxes.
3.09. Indemnification of Lenders. Borrower hereby agrees to
indemnify Lenders against all claims, liabilities, damages and expenses in
connection with or arising out of any litigation or proceeding relating to or
arising in connection with this Agreement, the Notes, any Letter of Credit, any
other Loan Document, the making of any Borrowing, except to the extent any such
claim, liability, damage or expense arose as a result of Lenders' negligence,
gross negligence or willful misconduct. Without limiting the generality of the
foregoing, Borrower agrees that Lenders shall be entitled to rely upon and act
upon instructions from Borrower in accordance with Section 2.02 to issue each
Letter of Credit. Borrower agrees to indemnify and hold Lenders harmless from
any and all claims (including reasonable attorneys' fees) which may
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arise out of or in connection with Lenders' good faith reliance upon
instructions from Borrower, as provided herein, except for such claims,
damages, losses, costs and expenses resulting from acts or omissions
constituting negligence, gross negligence or willful misconduct on the part of
Lenders. The amount of any such indemnification not paid within 30 days after
written demand therefor shall accrue interest from and including such 30th day
to but excluding the date paid at the Base Rate plus 4% per annum calculated on
the basis of a 360-day year for the actual number of days elapsed, but in no
event to exceed the Highest Lawful Rate.
3.10. Booking of Advances. Lenders may, in their sole
discretion, book the Advances made pursuant to this Agreement at any branch or
office of its choice; provided that in no event shall Borrower be required to
pay any amount to Lenders more than Borrower would have been required to pay
pursuant to the terms of this Agreement if all Advances had been booked by
Lenders at their respective offices.
SECTION 4. CONDITIONS TO BORROWING.
4.01 Conditions Precedent to Initial Loans. The obligation of
Lenders to make the Loans on the date hereof is subject to Agent's receipt of
the following items as conditions precedent:
(a) the Notes and Loan Documents duly executed and
delivered by Borrower;
(b) all counterpart originals of this Agreement executed
by Lenders and Borrower;
(c) resolutions of Borrower's board of directors
authorizing the Borrowings and the execution, delivery and performance
of this Agreement, the Notes and any other Loan Documents;
(d) a certificate of incumbency which (i) certifies the
names of the officers of Borrower authorized to sign this Agreement,
the Notes and any other Loan Documents and (ii) contains the true
signature of each such officer;
(e) consent and confirmation of Guarantors (attached
hereto) as to the continued effectiveness of the Guaranties previously
executed;
(f) resolutions of each Guarantor's board of directors
authorizing the Guaranties and the execution, delivery and performance
of any other document relating to such Guaranties;
(g) a certificate of incumbency which (i) certifies the
names of the officers of each Guarantor authorized to sign the
Guaranties and (ii) contains the true signature of each such officer;
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(h) consent of subordinated creditor (attached hereto)
from Irwin Jacobs as to the Subordinated Indebtedness;
(i) a certificate signed by an Authorized Person that (i)
no Default or Event of Default has occurred and is continuing or will
result from the making of the Loans, and (ii) the representations and
warranties of Borrower contained in Section 5 hereof and in the other
Loan Documents are true and correct as of the date hereof, with the
same effect as though made on the date hereof;
(j) all fees and expenses (including, without limitation,
reasonable fees and expenses of its counsel) in respect of this
Agreement;
(k) all required Guaranties and security instruments
therefor; and
(l) title insurance policies for all real property
pledged to secure the Loans, in such amounts and form as required by
Lenders;
(m) receipt by Agent of any and all other documents,
instruments or agreements in respect of the transactions evidenced
and/or contemplated by the Loan Documents and deemed reasonable by
Borrower and Lenders; and
(n) a favorable written opinion of counsel for Borrower,
in form and substance acceptable to Lenders, in respect of the
transactions contemplated by this Agreement.
4.02 Conditions Precedent to the Revolving Credit Loans. The
obligation of Lenders to make any Revolving Credit Loan hereunder (including
the initial Revolving Credit Loan) are subject to the following conditions
precedent:
(a) in the case of a Revolving Credit Loan representing a
Cash Advance, receipt by Agent of the Notice of Borrowing required by
Section 2.05 hereof;
(b) in the case of a Letter of Credit Advance, receipt by
Agent of: (i) the notice as required by Section 2.05, (ii) the Letter
of Credit Application and (iii) the Letter of Credit commission;
(c) as of the date of making such Advance, no material
adverse change has occurred in the business or financial condition of
Borrower or any of its Subsidiaries;
(d) that (i) no Default or Event of Default has occurred
and is continuing or will result from the making of such Advance, and
(ii) the representations and warranties of Borrower contained in
Section 5 hereof are true and correct as of the date of such Advance
(other than those of such representations and warranties which speak
to a date on or before the date hereof), with the same effect as
though made on such date; and
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(e) that, immediately after giving effect to such
Advance, the aggregate principal amount of all outstanding Revolving
Credit Loans shall not exceed the Revolving Credit Commitment.
Each Borrowing shall be deemed to be a representation and warranty by Borrower
on the date of such Borrowing or submission as to the facts specified in
clauses (c), (d) and (e) of this Section 4.02.
4.03 Conditions Precedent to All Advancing Loans and Term
Loans. The obligation of Lenders to make any Advancing Loan, or the Term Loans
hereunder is subject to the following conditions precedent:
(a) in the case of an Advancing Loan, compliance with
Section 2.03 hereof, and the Notice of Borrowing required by Section
2.05 hereof;
(b) as of the date of making such Advancing Loan, no
material adverse change has occurred in the business or financial
condition of Borrower or any of its Subsidiaries;
(c) that (i) no Default or Event of Default has occurred
and is continuing or will result from the making of such Advancing
Loan or Term Loan, and (ii) the representations and warranties of
Borrower contained in Section 5 hereof are true and correct as of the
date hereof and of any such Advancing Loan (other than those of such
representations and warranties which speak to a date on or before the
date hereof), with the same effect as though made on such date; and
(d) that, immediately after giving effect to such
Advancing Loan, the aggregate principal amount of all outstanding
Advancing Loans shall not exceed the Advancing Commitment.
Each Borrowing shall be deemed to be a representation and warranty by Borrower
on the date of such Borrowing or submission as to the facts specified in
clauses (b), (c) and (d) of this Section 4.03.
SECTION 5. REPRESENTATIONS AND WARRANTIES. In order to induce Lenders
to enter into this Agreement and to make the Loans hereunder, Borrower hereby
represents and warrants that:
5.01 Organization and Good Standing. Borrower and each of its
Subsidiaries is a corporation duly organized and existing in good standing
under the laws of the state of its incorporation, is duly qualified as a
foreign corporation and in good standing in all states in which it is doing
business and has the corporate power and authority to own its properties and
assets and to transact the business in which it is engaged and is or will be
qualified in those states wherein it proposes to transact business in the
future, except those jurisdictions, if any, in which the failure to so qualify
would not have a material adverse affect on its business operations or
financial condition.
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5.02 Authority and Power. Borrower is duly authorized and
empowered to create, issue and perform the Notes and to execute, deliver and
perform this Agreement, the Loan Documents and all other instruments referred
to or mentioned herein to which it is a party, and all action on its part
requisite for the due creation, issuance, delivery and performance of the Notes
and the due execution, delivery and performance of this Agreement has been duly
and effectively taken. This Agreement, the Notes and the Loan Documents do not
violate any provisions of Borrower's corporate charter or bylaws.
5.03 Loan Documents. The Loan Documents to which Borrower is
or will be a party have been, or will be, duly executed and delivered on behalf
of Borrower and constitute, or will constitute, the legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
respective terms, except to the extent enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.04 No Material Litigation. No litigation, investigation or
administrative proceeding of or before any court, arbitrator or Governmental
Authority is presently pending or, to the knowledge of Borrower, threatened
against Borrower or any of its Subsidiaries or any of its properties or assets
(a) with respect to any Loan Document or any of the transactions contemplated
hereby or thereby or (b) which, if adversely determined, could reasonably be
expected to materially adversely affect the business, operations, properties,
assets or financial or other condition of Borrower or any Subsidiary. Annexed
hereto as Schedule 5.04 is an accurate and complete schedule of all litigation
affecting Borrower or its Subsidiaries.
5.05 No Default. Borrower or any of its Subsidiaries is not
in default, and the execution, delivery and performance of the Loan Documents
will not result in a default, in the payment or performance of any of
Borrower's or its Subsidiaries' obligations or in the performance of any
mortgage, indenture, lease, contract or other agreement or undertaking to which
it is a party or by which it or any of its properties or assets may be bound,
and no Default nor Event of Default hereunder has occurred and is continuing.
Borrower or any of its Subsidiaries is not in default under any order, award or
decree of any court, arbitrator or Governmental Authority binding upon or
affecting it or by which any of its properties or assets is bound or affected,
and no such order, award or decree has or will affect the ability of Borrower
or any of its Subsidiaries to perform its obligations under the Loan Documents
or the ability of Borrower or any of its Subsidiaries to carry on its business.
5.06 Taxes. Borrower and its Subsidiaries have filed or
caused to be filed all tax returns which are required to be filed, and have
paid all taxes shown to be due and payable on said returns or on any
assessments made against them or any of their properties and all other taxes,
fees or other charges imposed on Borrower or its Subsidiaries or any of its
properties by any Governmental Authority (other than those the amount or
validity of which is currently being contested diligently in good faith and
with respect to which reserves in conformity with Good Accounting Practice have
been provided on the books of Borrower or any of its Subsidiaries) and no tax
liens have been filed and, to the knowledge of Borrower, no claims are being
asserted with respect to any such taxes, fees or other charges.
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5.07 ERISA. Borrower and each of its Subsidiaries is in
compliance in all material respects with ERISA and the rules and regulations
thereunder. There exists no Unfunded Vested Liabilities under any Plan to which
Borrower or any Subsidiary is a party. No "reportable event", as such term is
defined Section 4043(b) of Title IV of ERISA, has occurred and is continuing
with respect to any Plan.
5.08 Regulations G, T, U and X. Borrower or any of its
Subsidiaries is not engaged nor will it engage, 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 respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System. No part of the proceeds of the Loans hereunder will be
used for any purpose which violates the provisions of Regulation G, T, U or X
of the Board of Governors.
5.09 Accuracy and Completeness of Information. All
information, exhibits and other reports and other papers and data with respect
to Borrower and its Subsidiaries, prepared and furnished to Agent by or on
behalf of Borrower in connection with the Loan Documents were at the time the
same were so furnished, complete and correct in all material respects. No
document furnished or statement made to Agent by Borrower or any of its
Subsidiaries in connection with the negotiation, preparation or execution of
this Agreement contains any untrue statement of a fact material to the
creditworthiness of Borrower and its Subsidiaries or omits to state any such
material fact necessary in order to make the statements contained therein not
misleading, in either case which has not been corrected, supplemented or
remedied by subsequent documents furnished or statements made in writing to
Agent.
5.10 Environmental Compliance. Borrower and each of its
Subsidiaries has taken all reasonable steps necessary to determine and has
determined that no hazardous substances, or other substances known or suspected
to pose a threat to health or the environment in violation of Applicable
Environmental Laws ("Hazard[s]") exist on or within any of the operations of
Borrower or any of its Subsidiaries, except as described in Schedule 5.10
annexed hereto. Borrower and each of its Subsidiaries is in compliance with all
laws pertaining to health or the environment ("Applicable Environmental Laws"),
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), the Texas Water
Code and the Texas Solid Waste Disposal Act. Borrower's and its Subsidiaries'
operations do not and will not result in the disposal or release of any
hazardous substance or Hazard on, in or to the environment. The terms
"hazardous substance" and "release" shall each have the meanings specified in
CERCLA, and the terms "solid waste" and "disposal" (or "disposed") shall each
have the meanings specified in RCRA; provided, however, that in the event
either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment; and provided further that, to the extent that the laws
of the State of Texas or any other State in which business is being conducted
establish a meaning for "hazardous substance", "release", "solid waste", or
"disposal" which is broader than specified in either CERCLA or RCRA, such
broader definition shall apply.
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5.11 Investment Company Act. Borrower is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 6. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that,
so long as this Agreement is in effect and until payment in full of the Notes
and all other amounts owing hereunder:
6.01 Financial Statements and Information. Borrower shall
deliver (or cause to be delivered) to Agent each of the following:
(a) As soon as available and in any event within one
hundred twenty (120) days after the close of each fiscal year of
Borrower, copies of the consolidated balance sheet of Borrower and its
Consolidated Subsidiaries, along with consolidating schedules, as of
the close of such fiscal year and statements of income and retained
earnings and a statement of cash flows of Borrower and its
Consolidated Subsidiaries for such fiscal year, in each case setting
forth in comparative form the figures for the preceding fiscal year,
all in reasonable detail and accompanied by an opinion thereon (which
shall not be qualified by reason of any limitation imposed by
Borrower) of independent accountants of recognized national standing
selected by Borrower and satisfactory to Agent, to the effect that
such consolidated and consolidating financial statements have been
prepared in accordance with Good Accounting Practice consistently
maintained and applied (except for changes in which such accountants
concur) and that the examination of such accounts in connection with
such financial statements has been made in accordance with generally
accepted auditing standards and, accordingly, includes such tests of
the accounting records and such other auditing procedures as were
considered necessary in the circumstances, and copies of the unaudited
consolidated balance sheet and income statement of Borrower and its
Consolidated Subsidiaries as of the close of such fiscal year;
(b) As soon as available and in any event within
thirty (30) days after the end of each month, copies of the
consolidated and consolidating balance sheet of Borrower and its
Consolidated Subsidiaries as of the end of such month, and statements
of income and retained earnings and a statement of cash flows of
Borrower and its Consolidated Subsidiaries for that month and for the
portion of the fiscal year ending with such month, in each case
setting forth in comparative form (on a consolidated and consolidating
basis) the figures for the preceding fiscal year, all in reasonable
detail and certified by an Authorized Person as being true and correct
and as having been prepared in accordance with Good Accounting
Practice (without the required footnotes), subject to year-end audit
and adjustments;
(c) Promptly upon receipt thereof, one copy of each
written report submitted to Borrower (with respect to Borrower or its
Subsidiaries) by independent accountants in any annual, quarterly or
special audit made, it being understood and agreed that all audit
reports which are furnished to Agent pursuant to this Section shall be
treated as confidential, but nothing herein contained shall limit or
impair Agent's right to disclose
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such reports to any appropriate Governmental Authority or to use such
information to the extent pertinent to an evaluation of the
Obligations or to enforce compliance with the terms and conditions of
this Agreement, or to take any lawful action which Agent deems
necessary to protect its interests under this Agreement;
(d) Contemporaneously with the furnishing of the
financial statements referred to in subparagraph (b) above, a
certificate of an Authorized Person of Borrower stating that the
signer has reviewed the terms of this Agreement and of the Notes, has
set forth in or attached to such certificate such reasonable detail of
such computations as is necessary to establish compliance with the
covenants contained in this Agreement, and has made, or caused to be
made under his supervision, a review of the transactions and condition
of Borrower during the accounting period covered by such financial
statements and that such review has not disclosed the existence during
such accounting period, and that the signer does not have knowledge of
the existence, as at the date of such certificate, of any condition or
event which constitutes a Default or an Event of Default, or if any
such Default or Event of Default existed or exists, specifying the
nature and period of existence thereof and what action Borrower (or
its Subsidiaries, as the case may be) has taken or is taking or
proposes to take with respect thereto;
(e) Promptly upon their becoming available, one copy
of each financial statement, report, notice or proxy statement sent by
Borrower to stockholders generally and of each regular or periodic
report, registration statement or prospectus filed by Borrower with
any securities exchange or the Securities and Exchange Commission or
any successor agency;
(f) As soon as available and in any event within
thirty (30) days after each calendar month, furnish to Agent (i) a
Borrowing Report, (ii) an aging and listing of accounts receivable, in
form satisfactory to Agent, and (iii) a jobs in progress report, in
form satisfactory to Agent, for such month, with respect to each of
Borrower's Subsidiaries; and
(g) From time to time, such other information
concerning Borrower or any of its Subsidiaries, its business, assets,
properties, condition and operations as Agent may reasonably request.
6.02 Existence; Compliance with Laws. Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
(a) to preserve, renew and keep in full force and effect its corporate
existence and all material rights, licenses, permits and franchises, and (b) to
comply with all laws, statutes and regulations applicable to it and relating to
the conduct of its business.
6.03 Insurance. Borrower will, and will cause each of its
Subsidiaries to, maintain with responsible and reputable insurance companies or
associations insurance with respect to its properties and business in such
amounts and governing such risks as determined by Borrower.
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6.04 Payment of Taxes. Borrower will pay or cause to be paid,
all taxes, assessments and other governmental charges levied upon any of its or
any of its Subsidiaries' properties or assets or in respect of its franchises,
business, income or profits before the same become delinquent, except that
(unless any material item of property would be lost, forfeited or materially
damaged as a result thereof) no such charge needs to be paid if being promptly
and diligently contested in good faith and if such reserve or other appropriate
provision, if any, as shall be required by Good Accounting Practice shall have
been made therefor.
6.05 Records. Borrower will, and will cause each of its
Subsidiaries to, maintain proper books of record and account in accordance with
sound accounting practice in which full, true and correct entries shall be made
of all its properties and assets and its dealings and business affairs, and
shall permit access thereto by Agent for purposes of inspection, copying and
audit, and Borrower shall permit Agent to inspect Borrower's and its
Subsidiaries' properties and operations at all reasonable times.
6.06 Other Notices. Borrower will, and will cause each of its
Subsidiaries to:
(a) Promptly give written notice to Agent of any
occurrence or event which has occurred which would have a material and
adverse effect on (i) Borrower's or any of its Subsidiaries' normal
business or (ii) any of Borrower's or any of its Subsidiaries'
properties or assets, taken as a whole; and
(b) Furnish to Agent immediately upon becoming aware
of the existence of any condition or event which constitutes a Default
or an Event of Default or which, with the lapse of time or giving of
notice, or both, would become a Default or an Event of Default, a
written notice specifying the nature and period of existence thereof
and the action which Borrower and/or such Subsidiary is taking or
proposes to take with respect thereto.
6.07 ERISA Compliance. Borrower shall, and shall cause each
of its Subsidiaries to (a) at all times, make prompt payment of all
contributions required under all Plans and required to meet the minimum funding
standard set forth in ERISA with respect to its Plans; (b) forthwith upon
becoming aware of the occurrence thereof, written notice of, and the steps
being taken by Borrower with respect to, (i) an Event of Default or Default, or
a Reportable Event (as defined in Section 4043(b) of Title IV ERISA) which
might result in a liability of Borrower to the PBGC or any other Person, or any
notice Borrower or other fiduciary or administrator of any Plan may receive
from the PBGC relating to the intention of the PBGC to terminate any Plan or to
appoint a trustee to administer any such Plan, or (ii) a material adverse
change in the business, operations, property or financial or other condition of
Borrower or any of its Subsidiaries; (c) furnish to Agent, upon its request,
such additional information concerning any of its Plans as may be reasonably
requested.
6.08 Debt Service Coverage Ratio. At all times Borrower will
have and maintain a Debt Service Coverage Ratio of not less than 1.25 to 1.00.
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6.09. Ratio of Consolidated Total Liabilities to Consolidated
Net Worth. At all times, Borrower will have and maintain a ratio of
Consolidated Total Liabilities to Consolidated Net Worth of not more than 2.25
to 1.00.
6.10. Minimum Consolidated Tangible Net Worth. From the date
hereof through January 31, 1998, Borrower will have and maintain Consolidated
Tangible Net Worth of not less $13,000,000. Commencing upon receipt of the
financial statements described in Section 6.01(a), and in no event later than
one hundred twenty (120) days after the end of each fiscal year of Borrower,
Borrower will have and maintain during each such year Consolidated Tangible Net
Worth equal to no less than the sum of (i) the previous year's required
Consolidated Tangible Net Worth plus (ii) eighty percent (80%) of Borrower's
Consolidated Net Income, after dividends, for such immediately preceding year
(provided such required Consolidated Tangible Net Worth shall never be reduced
if Borrower does not have a positive Consolidated Net Income). Any Intangible
Assets capitalized subsequent to this closing relating to earn-out payments to
Irwin Jacobs not to exceed $2,600,000.00 in aggregate will be added back for
purposes of this calculation.
6.11 Current Ratio. [Intentionally Deleted.]
6.12 Consolidated Funded Debt to EBITDA. From the date hereof
through March 31, 1998, Borrower will maintain a ratio of Consolidated Funded
Debt to EBITDA of not more than 3.25 to 1.00; from April 1, 1998 through
September 30, 1998, Borrower will maintain a ratio of Consolidated Funded Debt
to EBITDA of not more than 2.75 to 1.00; and from October 1, 1998 and
thereafter, Borrower will maintain a ratio of Consolidated Funded Debt to
EBITDA of not more than 2.50 to 1.00.
6.13 Further Assurances. Borrower and each of its
Subsidiaries shall make, execute or endorse, and acknowledge and deliver or
file or cause the same to be done, all such certifications, additional
agreements, undertakings, conveyances, deeds of trust, mortgages, transfers,
assignments, financing statements or other assurance, and take any and all such
other action, as Agent may, from time to time, deem reasonably necessary or
proper in connection with any of the Loan Documents, the Subsidiary Loan
Documents, the obligations of Borrower or Guarantors, or for better assuring
and confirming unto Agent all or any part of the security for any of such
obligations.
SECTION 7. NEGATIVE COVENANTS. So long as this Agreement is in effect
and until payment in full of the Notes and all other amounts owing hereunder:
7.01 Use of Proceeds. Borrower will not, and will not permit
any of its Subsidiaries to use, directly or indirectly, the proceeds of any
Borrowing hereunder for any purpose other than those specified herein.
Specifically, such proceeds will not be used for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any "margin
stock", within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System. Borrower will not, and will not permit any of its
Subsidiaries to, engage principally, or as one or its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock within the meaning of such Regulation U nor will Borrower or any
of its Subsidiaries otherwise act so as to cause Lenders to be in contravention
of Regulations T and U.
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7.02 Disposal of Assets. Borrower will not, and will not
permit any of its Subsidiaries to, abandon, sell, transfer, lease or otherwise
dispose of any part of its assets or directly or indirectly enter into any
agreement or arrangement whereby Borrower or any of its Subsidiaries shall sell
or transfer any part of its assets or property and thereafter rent or lease
such assets or property, provided, however, that the foregoing shall not
operate to prevent sales by Borrower or any of its Subsidiaries of assets not
in the ordinary course of business, which sales or transfers, after subtracting
therefrom the cost of any additions to fixed assets, do not exceed $50,000 and,
after giving effect to any such sales or transfers, Borrower shall be in full
compliance with the terms of this Agreement.
7.03 Consolidation. Borrower will not, and will not permit
any of its Subsidiaries to, dissolve or liquidate, or become a party to any
merger, acquisition or consolidation in excess of $1,000,000, in the aggregate,
without the prior consent of Agent.
7.04 Creation of Encumbrances. Except as provided otherwise
herein, Borrower will not, and will not permit any of its Subsidiaries to
create, assume, incur or suffer to exist or allow to be created, assumed or
incurred or suffered to exist any Encumbrance provided, however, that the
foregoing restrictions shall not prevent Borrower or a Subsidiary from:
(a) Permitting or incurring Encumbrances for taxes
or assessments or governmental charges or levies on any of the
properties of Borrower or a Subsidiary if such taxes, assessments,
governmental charges or levies shall not at the time be due and
payable or can thereafter be paid without penalty or are being
contested in good faith by appropriate proceedings and with respect to
which Borrower or a Subsidiary has created reserves which are
determined by Borrower or a Subsidiary to be adequate by the
application of Good Accounting Practice;
(b) Incurring mechanics', carriers', workmen's,
repairmen's or other like Encumbrances in the ordinary course of
business in respect of obligations which are not overdue, or making
deposits to obtain the release of such Encumbrances;
(c) Rights of subrogation, if any, under applicable
law in favor of bonding companies and payments made under performance
and/or completion bonds;
(d) Incurring liens in favor of Continental Casualty
Company, National Fire Ins. Co. of Hartford and American Casualty
Company of Reading, Pennsylvania (collectively, the "Insurance
Companies") against the contracts of Borrower which are bonded (the
"Bonded Contracts") by the Insurance Companies, including the right,
title and interest of Borrower in and to all subcontracts let in
connection with such Bonded Contracts, against all machinery, plant,
equipment, tools and materials which are upon the worksite of the
Bonded Contracts, including all materials ordered for the Bonded
Contracts and all sums due under the Bonded Contracts at the time of
default and thereafter, and all proceeds thereof, provided that such
liens are either unperfected or junior in priority to the liens and
security interests in such property held by the Bank; and
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(e) Purchase money liens to the extent such debt is
permitted in Section 7.06 hereof.
7.05 ERISA. Borrower will not, and will not permit any of its
Subsidiaries to (i) voluntarily terminate any Plan if such termination is
likely to result in any material liability of Borrower to the PBGC or any other
Person, (ii) enter into any "prohibited transaction" (as defined in Section
4975 of the Code and in ERISA) involving any Plan which might result in any
material liability of Borrower to the PBGC or any other Person or (iii) permit
the occurrence of any "reportable event" (as defined in Section 4043(b) of
Title IV of ERISA) which might result in any material liability of Borrower to
the PBGC or any other Person or (iv) allow or suffer to exist any other event
or condition which might result in any material liability of Borrower to the
PBGC or any other Person.
7.06 Limitations on Borrowings. Borrower will not, and will
not permit any of its Subsidiaries to, incur, create, assume or permit to exist
any Indebtedness, except (i) the Notes, (ii) Indebtedness incurred in the
ordinary course of Borrower's or Subsidiary's business in connection with
normal trade obligations, including the financing of Borrower's annual
insurance premiums; (iii) any Indebtedness previously made or contemplated to
be made in the future by Lenders to Borrower or a Subsidiary; and (iv) purchase
money indebtedness not to exceed $2,000,000 in the aggregate.
7.07 Disposal of Stock or Indebtedness of a Subsidiary.
Borrower will not sell, assign, transfer or otherwise dispose of (except to a
wholly-owned Subsidiary) any shares of stock of any class of any Subsidiary, or
any other security of, or any Indebtedness owing to it by any such Subsidiary.
7.08 Capital Expenditures; Capital Leases; Purchase of
Assets. Except for the purchase by Borrower or a Subsidiary of new assets as
contemplated in Section 2.03 hereof, Borrower will not and will not permit any
of its Subsidiaries to, incur expenditures in the ordinary course of business
which, in the aggregate (for Borrower and its Subsidiaries) are in excess of
$6,500,000 during Borrower's 1997 fiscal year, $7,000,000 during Borrower's
1998 fiscal year, and $6,000,000 thereafter.
7.09 Prepayment or Change of Subordinated Indebtedness.
Borrower will not, and will not permit any of its Subsidiaries to, (i) after
the occurrence and during the continuance of any Default or Event of Default,
pay any installments of principal of or interest on any Subordinated
Indebtedness, (ii) directly or indirectly make any payments upon the
Subordinated Indebtedness other than regular installments of principal and
interest, or (iii) alter, amend, modify or otherwise change the terms,
conditions and provisions of the Subordinated Indebtedness, except that
Borrower may enter into any amendment or modification of the Subordinated
Indebtedness which only (x) decreases the interest rate due and payable on such
debt or (y) extends any maturity date of any installment of principal of or
interest on such debt, and may obtain any consent pursuant to or waivers of any
representations, warranties or covenants contained in any documents relating to
the Subordinated Indebtedness.
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7.10. Limitation on Investments and Loans. Borrower shall
not, and shall not permit any of its Subsidiaries to, make or have outstanding
any advances, loans or extensions of credit to, or purchase or own any stock,
bonds, notes, debentures or other securities of, any Person, except accounts,
instruments, documents, chattel paper and general intangibles (as defined in
the Uniform Commercial Code of Texas), arising or acquired in the ordinary
course of business, or such investments as may be approved by Agent, which
approval will not be unreasonably withheld. Borrower shall not, and shall not
permit any of its Subsidiaries to make any loans or advances outside of the
ordinary course of business or in excess of $200,000 in the aggregate to any of
the officers or employees of Borrower or its Subsidiaries.
7.11 No Change in Basic Business. Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, engage in
any business other than those in which it is presently engaged, or discontinue
any of its existing lines of business or substantially alter its method of
doing business.
7.12 Transactions with Affiliates. Borrower shall not enter
into or be a party to any transaction or arrangement, including, without
limitation, the purchase, sale, exchange or use of any property or asset, or
any interest therein, whether real, personal or mixed, or tangible or
intangible, or the rendering of any service, with any "Affiliate" (as hereafter
defined), except transactions in the ordinary course of and pursuant to the
reasonable requirements of Borrower's business and upon fair and reasonable
terms no less favorable to Borrower than Borrower would obtain in an arm's
length transaction with a non-Affiliate. For purposes of this subsection the
term "Affiliate" means any person, firm, corporation or other entity which
directly or indirectly controls, is controlled by or is under common control
with Borrower. A person, firm, corporation or other entity shall be deemed to
control another if it owns ten percent (10%) or more of the equity interest of
such other person, firm, corporation or other entity or if it possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of such other person, firm, corporation or other entity,
whether through ownership or stock, by contract or otherwise.
SECTION 8. EVENTS OF DEFAULT. In addition to and without derogation of
the rights of Lenders to demand payment with respect to the Notes as provided
herein, if any Event of Default described in subparagraphs (g), (h), (i) or (j)
below, shall occur and be continuing, the Notes and interest accrued thereon
and all liabilities of Borrower hereunder shall thereupon automatically become
and be immediately due and payable without presentment, demand, protest, notice
of intent to accelerate, notice of acceleration or other notice of any kind to
Borrower, all of which are hereby expressly waived, and the Revolving Credit
Commitment and/or Advancing Commitment (if still in existence) shall thereupon
terminate. If any other Event of Default shall occur and be continuing, Lenders
may (i) terminate the Revolving Credit Commitment and/or Advancing Commitment
(if still in existence) and it shall thereupon terminate, and/or (ii) declare
either or both of the Notes and interest accrued thereon and all liabilities of
Borrower hereunder to be immediately due and payable, and the same shall
thereupon become and be immediately due and payable without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or
other notice of any kind to Borrower, all of which are hereby expressly waived.
Notwithstanding anything herein or in the other Loan Documents to the contrary,
Lenders may elect to pursue any remedy they may have hereunder, at law, in
equity, or otherwise (including,
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but not limited to, reducing any claim to judgment) if a Loan is not paid at
maturity (on demand, by acceleration or otherwise). The following shall be
Events of Default hereunder and under the Notes except as Lenders may otherwise
expressly consent in writing in its sole and absolute discretion except that no
such consent shall ever be given with respect to the Events of Default set
forth in subparagraphs (g), (h), (i) and (j) below:
(a) Borrower fails to pay or prepay within five (5) days
when due any principal of or interest on any of the Notes; or
(b) Borrower fails to pay within five (5) days when due
any and all fees hereunder or any other sums payable to Lenders under
the terms or in respect of, this Agreement; or
(c) Borrower terminates its existence; or
(d) Any material representation or warranty made or
incorporated by Borrower herein or in any writing furnished by
Borrower in connection with this Agreement or the Loan Documents shall
have been untrue, misleading or incomplete in any material respect
when made; or
(e) Borrower violates or fails to observe any covenant,
agreement or condition contained in Sections 6 or 7 of this Agreement
except for any failure to comply with Section 6.01 which continues for
fifteen (15) days from the date required for such performance; or
(f) Borrower violates or fails to observe any covenant,
agreement or condition set forth in this Agreement and not
constituting an Event of Default enumerated elsewhere in this Section
8 and continuance thereof for fifteen (15) days; or
(g) Borrower or any Subsidiary makes an assignment for
the benefit of creditors or admits in writing its inability to pay its
debts as such debts become due; or
(h) Borrower or any Subsidiary petitions or applies to
any tribunal for or consents to the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official, of it or any substantial part of its assets, or commences
any proceedings relating to it under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or other
liquidation law of any jurisdiction or takes corporate action in
furtherance of any of the foregoing; or
(i) Any petition or application of the type referred to
in subparagraph (h) above is filed or any such proceedings are
commenced, against Borrower or any Subsidiary and Borrower or any
Subsidiary by any act indicates its approval thereof, consent thereto
or acquiescence therein, or an order for relief is entered in an
involuntary case under the bankruptcy law of the United States, or an
order, judgment or decree is entered appointing a trustee, receiver,
custodian, liquidator or similar official or
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adjudicating Borrower or any Subsidiary insolvent, or approving the
petition in any such proceedings; or
(j) Any order is entered in any proceeding against
Borrower or a Subsidiary decreeing the dissolution or split-up of
Borrower or a Subsidiary; or
(k) Any court shall render a final judgment or judgments
against Borrower or a Subsidiary in an aggregate amount of $500,000 or
more in excess of any insurance protecting against such liability and
such judgment or judgments shall not be stayed, discharged, vacated or
set aside within thirty (30) days after entry; or any property of
Borrower or a Subsidiary shall be attached under a claim or claims in
an aggregate amount of $500,000 or more in excess of any insurance
protecting against the liabilities on which such attachments are based
and such attachments shall not be released or provided for to the
satisfaction of Lenders within thirty (30) days; or
(l) Any Plan of Borrower (i) which has Unfunded Vested
Liabilities shall be terminated or (ii) a trustee shall be appointed
by the appropriate United States Court to administer any such Plan, or
(iii) the PBGC shall institute proceedings to terminate any such Plan
or to appoint a trustee to administer any such Plan, or (iv) any
notice from the PBGC or event contemplated by Section 5.07 hereof
shall have been received or shall have occurred; or
(m) Default shall occur in the payment of any material
Indebtedness of Borrower or any Subsidiary or default shall occur in
respect of any note, loan agreement or credit agreement relating to
any such Indebtedness and such default shall occur for more than the
period of grace, if any, specified therein; or any such Indebtedness
shall become due before its stated maturity by acceleration of the
maturity thereof or shall become due by its terms and shall not be
promptly paid or extended; or
(n) Any financial statements or audits delivered to Agent
reflect a material deterioration in the financial condition of
Borrower and its Subsidiaries on a consolidated basis from the
financial condition reflected in Borrower's 1996 audited financial
statements submitted to Agent; or
(o) Borrower or any of its Subsidiaries fail to maintain
current contractual relations with the labor union of which its
employees are members and the majority of such employees fail to
report to work for a period in excess of thirty (30) Business Days; or
(p) [Intentionally Blank]
(q) Any stock transfer, pledge or other change in the
controlling ownership of the stock of Borrower, except for such
pledges to Lenders. As used herein, "controlling" shall mean 50% of
the outstanding and issued stock of Borrower; or
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(r) Any modification, extension, renewal or termination
of the Subsidiary Loan Documents, without the prior written consent of
Lenders.
SECTION 9. THE AGENT.
9.01 Creation of Agency. Each Lender hereby authorizes Agent
to take such action on such Lender's behalf and exercise such powers as are
delegated to Agent by the terms hereof, together with all such powers as are
reasonably incidental thereto. The relationship between Agent and each Lender
is that of agent and principal only, and nothing herein shall (nor shall it be
construed so as to) constitute Agent a trustee or fiduciary for or of any
Lender, or impose on Agent any duties or obligations other than those for which
express provision is made herein. In performing its express duties and
obligations hereunder, Agent shall have no liability to any Lender in the
absence of gross negligence or willful misconduct by Agent. Lenders expressly
acknowledge and agree that Agent shall have no implied duties hereunder
including, without limitation, any implied duty of good faith and fair dealing.
Agent agrees that, upon the request of any Lender, it will use its best efforts
to obtain any information from or with respect to Borrower that is available to
Agent pursuant to the terms of this Agreement.
9.02 Payments and Distributions. Each Lender hereby
authorizes Agent to receive any and all payments which are or which may become
due under this Agreement, the Notes or any of the other Loan Documents. Each
Lender and Agent hereby authorize and instruct Borrower to make all payments
which are or which may become due under any of such Loan Documents directly to
Agent. Each Lender hereby agrees that, in the event it receives any payment
which should have been made to Agent pursuant to the terms of this Agreement,
or in the event it offsets any amounts placed on deposit with it by Borrower,
it shall immediately remit such payment or offset amount to Agent for
distribution in accordance with the terms of this Agreement. Except as
otherwise expressly provided herein, Agent shall distribute promptly to Lenders
all sums received by Agent as a payment on or related to any of the Loan
Documents ratably in proportion to the amount of each Lender's interest in the
Loans listed on Schedule 1 hereto. In the event interest on any of the Notes
accrues at more than one rate, or Agent receives any prepayment with respect to
any Note, all interest payments and all prepayments received by Agent hereunder
shall be distributed ratably among Lenders in proportion to the amount of each
Lender's interest in the Loans, regardless of whether the interest or
prepayment was purported to have been made with respect to less than all of the
Notes.
9.03 Notices. Agent will promptly advise each Lender of any
actual notice of a default of Borrower hereunder received by Agent. Agent shall
not be under any obligation to any Lender to ascertain or inquire as to the
performance or observance of any of the terms or conditions of this Agreement
or any other Loan Document to be performed or observed by Borrower. Each Lender
hereby agrees that it will, promptly upon receipt of actual notice thereof,
notify Agent of the existence of any default of Borrower hereunder.
9.04 Indemnity. Each Lender hereby agrees to, and shall,
ratably in proportion to the amount of each Lender's interest in the Loans,
indemnify, to the extent not reimbursed by Borrower, Agent against any loss,
expense (including legal fees) or liability (except such as results from
Agent's own gross negligence or willful misconduct) which Agent may suffer or
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incur in connection with the implementation, administration or enforcement of
the Loans or any of the Loan Documents.
9.05 Reliance. In performing its duties and exercising its
powers hereunder, Agent will be entitled to rely on (a) any communication
believed by it to be genuine and to have been sent or signed by the person by
whom it purports to have been sent or signed and (b) the opinions and
statements of any professional advisor selected by it in connection herewith,
and Agent shall not be liable to any other party hereto for any consequence of
any such reliance.
9.06 Truth of Representations. Agent takes no responsibility
for the truth of any representations made herein, nor for the adequacy or
enforceability of this Agreement, and neither Agent (except in the case of its
gross negligence or willful misconduct) nor any of its officers, directors,
employees, agents or representatives shall be liable for any action taken or
omitted to be taken by it or any of them under or pursuant to this Agreement,
or for any oversight or error of judgment.
9.07 Business with Borrower. Notwithstanding the agency
herein constituted, Bank One, in its individual capacity, may, without
liability to account, make loans to, accept deposits from and generally engage
in any kind of banking or trust business with Borrower. Lenders expressly
acknowledge and agree that such activities shall not constitute (and shall not
be construed to constitute) a conflict of interest with Agent's performance of
its duties hereunder.
9.08 Independent Investigations. Each Lender acknowledges
that it has taken and will take such independent action and make such
investigations as it deems necessary to inform itself as to the financial
condition and affairs of Borrower and, based upon such independent action and
investigation, it has determined to enter into this Agreement.
9.09 Prior Adjudication of Certain Actions. If, in the
opinion of Agent, the distribution of any sum received by Agent in such
capacity hereunder, under the Notes or under any other Loan Document, or the
taking or omitting to take of any action hereunder or thereunder, might involve
Agent in liability, it may refrain from taking such action (or omitting to take
such action) until its right to take such action (or omit to take such action)
shall have been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and distributed
by Agent is to be paid to a person other than the recipient thereof, each
Lender or other person to whom any such distribution shall have been made shall
either repay to Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such a manner and to such persons as shall
be determined by such court.
9.10 Remedies upon Default. Upon the occurrence of an event
of default hereunder by Borrower, the Lenders shall mutually agree upon which
remedies will be pursued with respect to the Loans and the collateral securing
the same (including, without limitation, deeds or assignments in lieu of any
such proceedings). The Lenders shall mutually agree upon which method of
disposition of any collateral securing the Loans, or may elect to not pursue
any or all remedies with respect to such collateral. Should such proceedings
result in the foreclosure of any security interest held by Agent or Lenders,
Agent shall have the right to acquire such
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collateral at foreclosure, and to bid therefor all or any portion of the
indebtedness of Borrower to Lenders under the Loans and, if the successful
bidder thereon, Agent shall acquire such collateral as nominee for Lenders and
operate and/or dispose of such collateral in the manner in which the Lenders
mutually agree, all expenses of operation and disposal of such collateral to be
borne by Lenders ratably according to their respective interests in the Loans.
In addition to the foregoing, upon the occurrence of an event of default
hereunder by Borrower (or, if in the opinion of Lenders, such a default seems
imminent), Lenders, subject to the provisions of Section 9.13 hereof shall be
entitled, should they so elect, to pursue any restructuring or modification of
the terms and provisions (including, without limitation, repayment provisions)
of the Loans, the Notes, this Agreement and the other Loan Documents. Each
Lender hereby agrees to, and shall, ratably in proportion to the amount of each
Lender's interest in the Loans, indemnify and hold Agent harmless from and
against any and all loss, liability or expense (except such as results from
Agent's own gross negligence or willful misconduct) incurred by Agent in
connection with its actions taken hereunder, or in connection with any related
document, after the occurrence of an event of default hereunder by Borrower
(including, without limitation, actions taken to foreclose on, operate or
dispose of any collateral and/or to restructure the terms and provisions of the
Loans, subject in all respects to Agent's compliance with this Section 9.10).
9.11 Fundings by Lenders. Agent shall notify Lenders by
telephone or telecopy as promptly as practicable of a request for advance by
Borrower and the date on which such advance is requested to be made. Each
Lender hereby agrees to deposit with Agent, prior to 2:00 p.m. Houston time on
the date such advance is requested to be made, such Lender's portion of such
advance, which shall be determined by the percentage interest of such Lender in
the Loans.
9.12 Default by a Lender. In the event any Lender fails to
timely make available to Agent such Lender's pro rata portion of any loan made
or to be made pursuant to this Agreement or any other amount due from such
Lender to Agent hereunder or under any of the other Loan Documents, or upon the
breach by any Lender of any of its other obligations hereunder, such defaulting
Lender shall be referred to as a "Defaulting Lender" and Agent and other
Lenders shall have the rights described in this Section with respect to such
Defaulting Lender. Any amounts received by Agent or any Lender (including the
Defaulting Lender) after the default causing such Lender to become a Defaulting
Lender shall be paid to Agent or Lenders other than the Defaulting Lender (the
"Non-defaulting Lenders," whether one or more) in such proportion as the
interest of each Non-defaulting Lender bears to the interest in the Loans of
all Non-defaulting Lenders. Further, Agent and the Non-defaulting Lenders shall
have the right but not the obligation, to advance monies on behalf of, or
otherwise cure defaults of, the Defaulting Lender, and the Defaulting Lender
shall be liable to each such party for all amounts so expended, such amounts to
be repaid either through funds received or to be received by Agent or the other
Lenders as a payment on the Notes or other indebtedness hereunder, or otherwise
through the general funds of such Defaulting Lender. For so long as any Lender
is a Defaulting Lender, such Lender shall be deemed to have transferred and
assigned to the Non-defaulting Lenders all right, title and interest of such
Defaulting Lender in and to the Loans, this Agreement, the Notes, and the other
Loan Documents, as security for the payment of all amounts owing from such
Defaulting Lender to the Non-defaulting Lenders or that may be advanced by the
Non-defaulting Lenders to or for the benefit of Borrower on behalf of such
Defaulting Lender. Once all obligations of the Defaulting Lender to Agent and
the other Lenders have been satisfied, so that
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no default by such Lender exists hereunder, (1) the Non-defaulting Lenders
shall be deemed to have transferred and reassigned to such Lender the right,
title and interest of such Lender in and to the Loans previously transferred
and assigned as security to the Non-defaulting Lenders, (2) such Lender shall
be entitled to be reinstated as a Lender hereunder and (3) subject to the
continued compliance with the terms hereof, such Lender shall thereafter be
entitled to receive all amounts payable with respect to its interest in the
Loans.
9.13 Actions Requiring Consent of Lenders.
(a) Except as set forth in Section 9.10 and this Section
9.13, Agent shall be entitled to take all action and exercise all
powers relating to the Loans, the Loan Documents, and Lenders' rights
and obligations thereunder.
(b) Agent is not authorized to, and shall not, undertake
any of the following actions without the written consent of all
Lenders:
(1) change the maximum availability hereunder;
(2) change the fees or rate of interest payable with
respect to the Loans;
(3) change the date on which any payment on the Loans
is due or extend the final maturity date of any Note;
(4) waive any payment default under any Note;
(5) release any collateral securing the Loans;
(6) release Borrower or any Guarantor from liability
on the Loans;
(7) accelerate the maturity of the Notes;
(8) waive compliance by Borrower with, amend or
modify the terms of Section 8, or any covenant set forth in Section
6 or any covenant set forth in Section 7 hereof; or
(9) amend or modify Section 9.10, or 9.12 or this
Section 9.13(b).
(c) No Lender shall be entitled to take any action with
respect to the obligations owed to it under any Note, any Guaranty or
any other Loan Document including, without limitation, acceleration of
the maturity of such Lender's Note, it being agreed that all of such
actions shall be taken by Agent in the manner prescribed in this
Agreement.
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9.14 Resignation; Successor Agent. Agent may resign at any
time from the agency created hereby by giving written notice of such
resignation to Borrower and Lenders, and Agent shall be relieved of all duties
and obligations arising hereunder after the time of such resignation. Upon
receipt of notice of such resignation, Lenders shall mutually agree upon the
appointment of a successor agent hereunder or, if Lenders fail to so appoint a
successor agent within thirty (30) days after receipt of notice of the
resignation of Agent, any Lender may petition a court of competent jurisdiction
to appoint a successor agent hereunder. Upon appointment and acceptance of the
agency created hereby by the successor agent, such successor agent shall
succeed to all the rights, duties and obligations of Agent hereunder. In the
event Agent is placed under receivership or is subject to any supervisory order
or proceeding initiated by applicable regulatory authority, such event shall be
deemed a resignation by Agent pursuant to the terms of this Agreement.
9.15 No Third Party Beneficiary. Nothing in this Section 9,
express or implied, is intended or shall be construed to give to any person
other than Lenders and Agent (including, without limitation, Borrower) any
right or remedy, and all terms and provisions of this Section 9 shall be for
the sole benefit of Lenders and Agent.
SECTION 10. MISCELLANEOUS.
10.01 No Waiver. No waiver of any Default or Event of Default
shall be a waiver of any other Default or Event of Default. No failure to
exercise and no delay on the part of Lenders in exercising any power or right
in connection herewith or under any of the other Loan Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any
other right or power. No course of dealing between Borrower or any other Person
and Lenders shall operate as a waiver of any rights of Lenders. No amendment,
modification or waiver of any portion of this Agreement or any other Loan
Document nor consent to any departure therefrom shall in any event be effective
unless the same shall be in writing and signed by the Person against whom
enforcement thereof is to be sought, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Borrower or any other Person in any case shall entitle
Borrower or any other Person to any other or further notice or demand in
similar or other circumstances.
10.02 Notices. Notices under the Loan Documents shall be in
writing and shall be (i) delivered; (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid, or (iii) sent by telex,
telecopy, telegram, or other form of electronic transmission, in each case to
the address or telecopy number asset forth on the signature page hereof, or to
such other address or telecopy number as party may by written notice designate.
Notices shall be deemed to have been given to Borrower when received by
Borrower and shall be deemed to have been given to Lenders when received by
Agent.
10.03 Set-Off. If one or more Events of Default shall occur
and be continuing, the holder of the Notes shall have the right without notice
to Borrower and to the fullest extent permitted by applicable law, in addition
to all other rights and remedies available to it, to set-off
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against the unpaid balance of the indebtedness owing to it, on account of the
Loans or otherwise, in such order as such holder may in its sole discretion
decide, any obligations owing to Borrower by such holder, irrespective of
whether Lenders shall have made any demand for satisfaction of such obligations
and although such obligations may be unmatured, including, without limitation,
any funds in any deposit account maintained by Borrower with such holder, and
nothing in this Agreement shall be deemed a waiver or prohibition of Lenders'
rights of banker's lien or set-off.
10.04 GOVERNING LAW. THE LOAN DOCUMENTS ARE BEING DELIVERED
AND ARE INTENDED TO BE PERFORMED IN THE STATE OF TEXAS. UNLESS OTHERWISE
SPECIFIED THEREIN, EACH LOAN SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF
THE STATE OF TEXAS AND FOR ALL PURPOSES SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS, AND WHENEVER REQUIRED,
THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA.
10.05 Survival of Warranties; Successors and Assigns. All
representations, warranties and covenants made by Borrower in connection
herewith shall survive the execution and delivery of the Loan Documents, shall
not be affected by any investigation made by any Person and shall bind Borrower
and its respective successors, trustees, receivers and assigns and inure to the
benefit of the successors and assigns of Lenders, provided that the undertaking
of Lenders hereunder to make the Loans to Borrower shall not inure to the
benefit of any successor or assign of Borrower. The term of this Agreement
shall be until the payment in full of the Notes and the Obligations.
10.06 Counterparts. This Agreement may be executed in several
identical counterparts, and by the parties hereto on separate counterparts, and
each counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
10.07 Maximum Interest Rate. It is the intention of the
parties hereto to comply with the usury laws of the state of Texas and the
United States; accordingly, it is agreed that notwithstanding any provision to
the contrary in the Notes, or in any of the Loan Documents or otherwise
relating to this Agreement, no such provision shall require the payment or
permit the collection of interest in excess of the maximum permitted by
applicable state or Federal law. If any excess of interest in such respect is
provided for, or shall be adjudicated to be so provided for, in the Notes or in
any of the Loan Documents or otherwise relating to this Agreement, or in the
event the maturity of the indebtedness evidenced by the Notes is accelerated in
whole or in part, or in the event that all or part of the principal or interest
of the Notes shall be prepaid, so that under any of such circumstances the
amount of interest contracted for, charged or received under the Notes or under
any of the Loan Documents or otherwise relating hereto, on the amount of
principal actually outstanding from time to time under the Notes shall exceed
the maximum amount of interest permitted by the usury laws of the state of
Texas and the United States, then, in any such event, (a) the provisions of
this paragraph shall govern and control, (b) neither Borrower hereof nor
successors or assigns or any other party liable for the payment hereof shall be
obligated to pay the amount of such interest to the extent that it is in excess
of the maximum amount permitted by applicable state or Federal law, (c) any
such excess which may have been
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collected shall be, at the holder's option (at maturity or in the Event of
Default hereunder), either applied as a credit against the then unpaid
principal amount thereof or refunded to Borrower, and (d) the effective rate of
interest shall be automatically subject to reduction to the maximum lawful
contract rate allowed under the usury laws of the state of Texas or the United
States as now or hereafter construed by the courts having jurisdiction.
10.08 Exhibits, etc. The exhibits, schedules and annexes
attached to or delivered in connection with this Agreement are incorporated
herein and shall be considered a part of this Agreement for all purposes,
except that in the event of conflict between any of the provisions of such
exhibits, schedules and annexes and the provisions of this Agreement, this
Agreement shall control.
10.09 References and Captions. All references in this
Agreement to articles, sections, subsections and other subdivisions refer to
corresponding articles, sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. The words "this Agreement",
"this instrument", "herein", "hereof", "hereby", "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Words used herein the singular number
shall include the plural and vice versa, unless otherwise specifically required
by the context. The article headings and section headings appearing in this
Agreement have been included solely for convenience and shall not be considered
in construing this Agreement.
10.10 Expenses. Whether or not the transactions contemplated
by this Agreement shall be consummated, Borrower will pay on demand all
out-of-pocket expenses of Lenders (including, without limitation, the
reasonable fees and expenses of counsel for Lenders) in connection with the
negotiation, preparation, and execution of this Agreement and the other Loan
Documents and the making, servicing and collection of the Loans, as well as any
and all costs of preparation, execution and delivery of any and all amendments,
modifications, supplements, consents, waivers or other documents or writings
relating to the transactions contemplated by this Agreement. Borrower will,
upon request, promptly reimburse Lenders for all amounts expended, advanced or
incurred by Lenders to satisfy any obligation of Borrower under this Agreement
or any other Loan Document, or to protect the property or business of Borrower
or to collect the Notes, or to enforce the rights of Lenders under this
Agreement or any other Loan Document, which amounts will include all court
costs, attorneys' fees, fees of auditors and accountants, and investigation
expenses reasonably incurred by Lenders in connection with any such matters,
together with interest at the Highest Lawful Rate. The obligations of Borrower
under this Section 10.10 shall survive the termination of this Agreement.
10.11 General Indemnification. BORROWER SHALL INDEMNIFY,
DEFEND, AND HOLD HARMLESS LENDERS AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
AGENTS, ATTORNEYS AND EMPLOYEES (COLLECTIVELY, THE "INDEMNITEES") FROM AND
AGAINST: (i) ANY AND ALL CLAIMS, DEMANDS, ACTIONS, OR CAUSES OF ACTION THAT ARE
ASSERTED AGAINST ANY INDEMNITEE BY ANY PERSON IF THE CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION DIRECTLY OR INDIRECTLY RELATES TO A CLAIM, DEMAND, ACTION, OR
CAUSE OF ACTION THAT THE PERSON ASSERTS OR MAY ASSERT AGAINST BORROWER, OR ANY
OFFICER,
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DIRECTOR OR SHAREHOLDER OF BORROWER, (ii) ANY AND ALL CLAIMS, DEMANDS, ACTIONS
OR CAUSES OF ACTION THAT ARE ASSERTED AGAINST ANY INDEMNITEE IF THE CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY RELATES TO THIS
AGREEMENT, THE USE OF PROCEEDS OF THE NOTES, OR THE RELATIONSHIP OF BORROWER
AND LENDERS UNDER THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED PURSUANT TO
THIS AGREEMENT, (iii) ANY ADMINISTRATIVE OR INVESTIGATIVE PROCEEDING BY ANY
GOVERNMENTAL AUTHORITY DIRECTLY OR INDIRECTLY RELATED TO A CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION DESCRIBED IN CLAUSES (i) OR (ii) ABOVE, AND (iv) ANY
AND ALL LIABILITIES, LOSSES, COSTS, OR EXPENSES (INCLUDING ATTORNEYS' FEES AND
DISBURSEMENTS) THAT ANY INDEMNITEE SUFFERS OR INCURS AS A RESULT OF ANY OF THE
FOREGOING; PROVIDED, HOWEVER, THAT ALTHOUGH THE FOREGOING INDEMNITY SHALL
INCLUDE CLAIMS, DEMANDS, ACTIONS OR CAUSES OF ACTION BASED UPON LENDERS'
NEGLIGENCE, BORROWER SHALL HAVE NO OBLIGATION UNDER THIS SECTION TO LENDERS
WITH RESPECT TO ANY OF THE FOREGOING ARISING OUT OF THE GROSS NEGLIGENCE OR
WILFUL MISCONDUCT OF LENDERS OR THE BREACH BY LENDERS OF THIS AGREEMENT.
10.12 Sale and Assignment. Lenders reserves the right to sell
participations or assign its interest, or both, in all or any part of the
Notes, so long as Lenders have obtained Borrower's preapproval thereof, which
approval will not be unreasonably withheld.
10.13 Entire Agreement. This Agreement and the other Loan
Documents embody the entire agreement and understanding between Borrower and
Lenders relating to the subject matter hereof and supersede all prior
proposals, negotiations, agreements, and understandings relating to such
subject matter. Borrower certifies that it is relying on no representation,
warranty, covenant or agreement except for those set forth in this Agreement
and the other Loan Documents of event date herewith.
10.14 Number of Copies. Unless herein expressly provided to
the contrary, whenever Borrower is required to deliver notices, certificates,
statements or other information hereunder to Agent, it shall do so in such
number of copies as Agent may reasonably specify.
10.15 Severability. If any provision of any Loan Document
shall be invalid, illegal or unenforceable in any respect under any applicable
law, the validity, legality and enforceability of the remaining provisions of
such Loan Document shall not be affected or impaired thereby.
10.16 Disclosures. Every reference in the Loan Documents to
disclosures to Agent in writing, to the extent that such references refer or
are intended to refer to disclosures at or prior to the execution of this
Agreement, shall be deemed strictly to refer only to written disclosures
delivered to Agent in an orderly manner concurrently with the execution hereof.
10.17 Business Loans. Borrower warrants and represents to
Lenders that the Revolving Credit Loans are for business, commercial,
investment or other similar purpose and
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not primarily for personal, family, household or agricultural use, as such
terms are used in Chapter One of the Texas Credit Code.
10.18 Article 15(b). Borrower and Lenders agree that, except
for Section 15(b) thereof, the provisions of Art. 5069-15.01, et seq. of the
Revised Civil Statutes of Texas, 1925, as amended (regulating certain revolving
credit loans and revolving triparty accounts) shall not apply to the Loan
Documents.
10.19 NO ORAL AGREEMENTS. THIS LOAN AGREEMENT REPRE- SENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement effective as of the
date first above written.
"BORROWER"
Address for Notice ASTROTECH INTERNATIONAL
CORPORATION
960 Penn Avenue, Suite 800
Pittsburgh, Pennsylvania 15222-3820
Telephone No.: (412) 391-1896 By: /s/ T. RICHARD MATHEWS
Telecopy No.: (412) 391-3347 -------------------------------
Name: T. Richard Mathews
-----------------------------
Title: President
----------------------------
"LENDERS"
Address for Notice: BANK ONE, TEXAS, N.A.
910 Travis Street
Houston, Texas 77002
Telephone No.: (713) 751-3831 By: /s/ BARRY A. KELLY
Telecopy No.: (713) 751-6199 ------------------------------
Barry A. Kelly, Vice President
Address for Notice: BANK OF AMERICA, TEXAS, N.A.
333 Clay Street, Suite 3600
Houston, Texas 77002
Telephone No.: (713) 652-3615 By: /s/ GEORGE SMITH
Telecopy No.: (713) 652-3619 ------------------------------
George Smith, Vice President
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