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EXHIBIT 10.2
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AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
HOME INTERIORS & GIFTS, INC.
CERTAIN LENDERS
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK, AS SYNDICATION AGENT
AND
CITICORP USA, INC.,
and
SOCIETE GENERALE
AS CO-AGENTS
As of June 30, 2001
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BANC OF AMERICA MONTGOMERY SECURITIES LLC, AS ARRANGER
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TABLE OF CONTENTS
<Table>
<Caption>
Page
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ARTICLE 1 Definitions.................................................................................1
Section 1.1 Defined Terms..........................................................................1
Section 1.2 Amendments and Renewals...............................................................26
Section 1.3 Construction..........................................................................26
ARTICLE 2 Advances...................................................................................26
Section 2.1 The Advances..........................................................................26
Section 2.2 Manner of Borrowing and Disbursement..................................................27
Section 2.3 Interest..............................................................................29
Section 2.4 Fees..................................................................................31
Section 2.5 Prepayment and Payments...............................................................31
Section 2.6 Reduction of Commitments..............................................................34
Section 2.7 Non-Receipt of Funds by the Administrative Agent......................................35
Section 2.8 Payment of Principal of Advances......................................................35
Section 2.9 Reimbursement.........................................................................37
Section 2.10 Manner of Payment.....................................................................37
Section 2.11 LIBOR Lending Offices.................................................................39
Section 2.12 Sharing of Payments...................................................................39
Section 2.13 Calculation of LIBOR Rate.............................................................40
Section 2.14 Booking Loans.........................................................................40
Section 2.15 Taxes.................................................................................40
Section 2.16 Letters of Credit.....................................................................43
Section 2.17 Revolving Credit Commitment Increase..................................................48
ARTICLE 3 Conditions Precedent.......................................................................50
Section 3.1 Conditions Precedent to the Initial Advances and the Initial Letters of Credit........50
Section 3.2 Conditions Precedent to All Advances and Letters of Credit............................52
Section 3.3 Conditions Precedent to Conversions and Continuations.................................53
ARTICLE 4 Representations and Warranties.............................................................53
Section 4.1 Representations and Warranties........................................................53
Section 4.2 Survival of Representations and Warranties, etc.......................................59
ARTICLE 5 General Covenants..........................................................................59
Section 5.1 Preservation of Existence and Similar Matters.........................................60
Section 5.2 Business; Compliance with Applicable Law..............................................60
Section 5.3 Maintenance of Properties.............................................................60
Section 5.4 Accounting Methods and Financial Records..............................................60
Section 5.5 Insurance.............................................................................60
Section 5.6 Payment of Taxes and Claims...........................................................61
Section 5.7 Visits and Inspections................................................................61
Section 5.8 Use of Proceeds.......................................................................61
</Table>
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<Table>
Section 5.9 INDEMNITY.............................................................................61
Section 5.10 Environmental Law Compliance..........................................................63
Section 5.11 Further Assurances....................................................................63
Section 5.12 Subsidiaries..........................................................................63
Section 5.13 Landlord's Waivers....................................................................63
Section 5.14 Deposit and Operating Accounts........................................................64
ARTICLE 6 Information Covenants......................................................................64
Section 6.1 Quarterly Financial Statements and Information........................................65
Section 6.2 Annual Financial Statements and Information; Certificate of No Default................65
Section 6.3 Compliance Certificate................................................................65
Section 6.4 Copies of Other Reports and Notices...................................................65
Section 6.5 Notice of Litigation, Default and Other Matters Deliveries............................66
Section 6.6 ERISA Reporting Requirements..........................................................67
Section 6.7 Monthly Financial Statements and Other Reports........................................68
ARTICLE 7 Negative Covenants.........................................................................68
Section 7.1 Indebtedness..........................................................................68
Section 7.2 Liens.................................................................................71
Section 7.3 Investments...........................................................................71
Section 7.4 Liquidation, Merger, New Subsidiaries.................................................73
Section 7.5 Sale of Assets........................................................................73
Section 7.6 Restricted Payments...................................................................73
Section 7.7 Affiliate Transactions................................................................74
Section 7.8 Leverage Ratio........................................................................74
Section 7.9 Senior Leverage Ratio.................................................................74
Section 7.10 Sale and Leaseback....................................................................75
Section 7.11 Capital Expenditures..................................................................75
Section 7.12 Amendments and Waivers of Senior Subordinated Notes...................................75
Section 7.13 Amendment of Organizational Documents.................................................75
Section 7.14 EBITDA................................................................................75
Section 7.15 Fixed Charge Coverage Ratio...........................................................76
ARTICLE 8 Default....................................................................................76
Section 8.1 Events of Default.....................................................................76
Section 8.2 Remedies..............................................................................78
ARTICLE 9 Changes in Circumstances...................................................................79
Section 9.1 LIBOR Basis Determination Inadequate..................................................79
Section 9.2 Illegality............................................................................79
Section 9.3 Increased Costs.......................................................................80
Section 9.4 Effect On Base Rate Advances..........................................................81
Section 9.5 Capital Adequacy......................................................................81
Section 9.6 Replacement of Lenders under Certain Circumstances....................................82
ARTICLE 10 Agreement Among Lenders....................................................................82
Section 10.1 Agreement Among Lenders...............................................................82
</Table>
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<Table>
Section 10.2 Lender Credit Decision................................................................85
Section 10.3 Benefits of Article...................................................................85
ARTICLE 11 Miscellaneous..............................................................................85
Section 11.1 Notices...............................................................................85
Section 11.2 Expenses..............................................................................87
Section 11.3 Waivers...............................................................................87
Section 11.4 Determination by the Lenders Conclusive and Binding...................................88
Section 11.5 Set-Off...............................................................................88
Section 11.6 Assignment............................................................................88
Section 11.7 Counterparts..........................................................................91
Section 11.8 Severability..........................................................................91
Section 11.9 Interest and Charges..................................................................91
Section 11.10 Headings..............................................................................91
Section 11.11 Amendment and Waiver..................................................................92
Section 11.12 No Liability of Issuing Bank..........................................................92
Section 11.13 Confidentiality.......................................................................93
Section 11.14 No Duties of Syndication Agent or Co-Agents...........................................93
Section 11.15 GOVERNING LAW.........................................................................93
Section 11.16 WAIVER OF JURY TRIAL..................................................................94
Section 11.17 ENTIRE AGREEMENT......................................................................94
Section 11.18 Waiver and Release....................................................................94
Section 11.19 Effect of Amendment and Restatement...................................................95
</Table>
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Schedules and Exhibits
Schedule 1: Commitments and Specified Percentages
Schedule 2: LIBOR Lending Offices
Schedule 3: Existing Liens
Schedule 4: Existing Litigation and Material Liabilities
Schedule 4.1(y): Deposit Accounts
Schedule 5: Subsidiaries
Schedule 6: Existing Investments
Schedule 7: Existing Indebtedness
Schedule 8: Authorization, Qualification and Good Standing
Schedule 9: Labor Matters
Schedule 10: Environmental Reports
Schedule 11: Taxes
Schedule 12: Sales of Assets
Exhibit A: Revolving Credit Note
Exhibit B: Facility A Term Loan Note
Exhibit C: Facility B Term Loan Note
Exhibit D: Security Agreement
Exhibit E: Compliance Certificate
Exhibit F: Assignment Agreement
Exhibit G: Subsidiary Guaranty
Exhibit H: Swing Line Note
Exhibit I: Deed of Trust
Exhibit J: Intellectual Property Security Agreement and Assignment
Exhibit K: Notice of Borrowing
Exhibit L: Notice of Continuation/Conversion
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AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 30, 2001, among
HOME INTERIORS & GIFTS, INC., a Texas corporation (the "Borrower"), the Lenders
from time to time party hereto, BANK OF AMERICA, N.A. (successor by merger to
NationsBank, N.A.), as administrative agent for the Lenders, THE CHASE MANHATTAN
BANK, as syndication agent, SOCIETE GENERALE, as a co-agent, and CITICORP USA,
INC., as a co-agent.
BACKGROUND
A. The Borrower, the Lenders, the Administrative Agent, the Syndication
Agent and the Co-Agents have executed and delivered that certain Credit
Agreement dated as of June 4, 1998, as amended by (a) that certain First
Amendment to Credit Agreement dated as of December 18, 1998, (b) that certain
Second Amendment to Credit Agreement dated as of March 12, 1999, (c) that
certain Third Amendment to Credit Agreement dated as of November 19, 1999, (d)
that certain Fourth Amendment to Credit Agreement dated as of July 26, 2000 but
effective as of July 3, 2000 and (e) that certain Fifth Amendment to Credit
Agreement dated as of March 30, 2001 (as amended, the "Existing Credit
Agreement").
B. The Borrower has requested that the Lenders (a) extend the Revolving
Commitment Maturity Date, the Facility A Term Loan Maturity Date and the
Facility B Term Loan Maturity Date, (b) amend the Applicable Base Rate Margin
and the Applicable LIBOR Rate Margin, (c) amend certain financial covenants and
(d) amend and restate the Existing Credit Agreement upon the terms and
conditions hereinafter set forth.
In consideration of the mutual covenants and agreements contained herein,
and other good and valuable consideration hereby acknowledged, the parties
hereto agree as follows:
DEFINITIONS
DEFINED TERMS. FOR PURPOSES OF THIS AGREEMENT:
"Acquisition" means any transaction pursuant to which the Borrower or any
of its Subsidiaries, (a) whether by means of a capital contribution or purchase
or other acquisition of stock or other securities or other equity participation
or interest, (i) acquires more than 50% of the equity interest in any Person
pursuant to a solicitation by the Borrower or such Subsidiary of tenders of
equity securities of such Person, or through one or more negotiated block,
market, private or other transactions, or a combination of any of the foregoing,
(ii) except as permitted by Section 7.3(d) hereof with respect to a newly-formed
corporation and Section 7.4(b) hereof with respect to an existing Subsidiary of
the Borrower, makes any corporation a Subsidiary of the Borrower or such
Subsidiary, or causes any corporation, other than a Subsidiary of the Borrower
or such Subsidiary, to be merged into the Borrower or such Subsidiary (or agrees
to be merged into any other corporation other than a wholly-owned Subsidiary of
the Borrower or such Subsidiary), or (iii) agrees to purchase all or more than
50% of the assets of any Person, pursuant
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to a merger, purchase of assets or other reorganization providing for the
delivery or issuance to the holders of such Person's then outstanding securities
or other equity interests, in exchange for such securities, of cash or
securities of the Borrower or such Subsidiary, or any combination thereof, or
(b) purchases in one transaction or a series of related transactions all or more
than 50% of the business or assets of any Person or of any operating division of
any Person.
"Acquisition Consideration" means the consideration given by the Borrower
or any of its Subsidiaries for an Acquisition, including but not limited to the
sum of (without duplication) (a) the fair market value of any cash, property or
services given (other than Capital Stock issued in respect of the Acquisition),
plus (b) the amount of any indebtedness for borrowed money and Capitalized Lease
Obligations assumed, incurred or guaranteed in connection with such Acquisition
by the Borrower or any of its Subsidiaries that is a Subsidiary immediately
prior to such Acquisition.
"Adjusted LIBOR Rate" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100th of 1%) determined by the Administrative Agent to be equal to the
quotient obtained by dividing (a) the LIBOR Rate for such LIBOR Advance for such
Interest Period by (b) 1 minus the Reserve Requirement for such LIBOR Advance
for such Interest Period.
"Adjustment Date" means, for purposes of the Applicable Base Rate Margin,
the Applicable LIBOR Rate Margin, the Commitment Fee payable pursuant to Section
2.4(a) hereof and the Letter of Credit fees payable pursuant to Section
2.16(f)(i) hereof, the date of receipt by the Administrative Agent of the
financial statements required to be delivered pursuant to Section 6.1 or 6.2
hereof, as applicable, and the Compliance Certificate required pursuant to
Section 6.3 hereof.
"Administrative Agent" means Bank of America, N.A., a national banking
association (successor by merger to NationsBank, N.A.), as administrative agent
for Lenders, or such successor administrative agent appointed pursuant to
Section 10.1(b) hereof.
"Advance" means any amount advanced or deemed advanced by a Lender to the
Borrower pursuant to Article 2 hereof on the occasion of any borrowing.
"Affected LIBOR Advances" has the meaning specified in Section 2.5(h)
hereof.
"Affiliate" means any Person that, directly or indirectly, through one or
more Persons, Controls or is Controlled By or Under Common Control with such
Person, or a Person who Controls or is Controlled By, such Person, or in the
case of any Lender which is an investment fund, the investment advisor thereof
and any investment fund having the same investment advisor.
"Agreement" means this Amended and Restated Credit Agreement, as amended,
modified, supplemented or restated from time to time.
"Agreement Date" means the date of this Agreement.
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"Applicable Base Rate Margin" means the margin of interest over the Prime
Rate that is applicable when any interest rate is determined under this
Agreement based upon the Prime Rate. The Applicable Base Rate Margin is subject
to adjustment (upwards or downwards, as appropriate) based upon the Leverage
Ratio. Effective as of each Adjustment Date, the Applicable Base Rate Margin
shall be adjusted to reflect the Applicable Base Rate Margin prescribed below
for the Leverage Ratio as demonstrated by the Compliance Certificate delivered
for that fiscal quarter:
<Table>
<Caption>
Revolving Loans and
Facility A Term Loan Facility B Term Loan
Leverage Ratio Advances Advances
-------------- -------------------- --------------------
Greater than or equal to 4.00 to 1.50% 2.00%
1.00
Less than 4.00 to 1.00, but 1.25% 1.75%
equal to or greater than 3.75 to
1.00
Less than 3.75 to 1.00, but 1.00% 1.75%
equal to or greater than 3.50 to
1.00
Less than 3.50 to 1.00, but 0.75% 1.75%
equal to or greater than 3.00 to
1.00
Less than 3.00 to 1.00 0.50% 1.75%
</Table>
If the financial statements required pursuant to Section 6.1 or 6.2 hereof, as
applicable, and the related Compliance Certificate are not received by the
Administrative Agent by the date required, the Applicable Base Rate Margin shall
be determined as if the Leverage Ratio is greater than or equal to 4.00 to 1.00
until such time as such financial statements and Compliance Certificate are
received. Notwithstanding the foregoing, the Applicable Base Rate Margin from
and after the Agreement Date until and including the Adjustment Date determined
following the date of receipt of the unaudited financial statements for the
fiscal quarter ending September 30, 2001, and related Compliance Certificate
shall be determined as if the Leverage Ratio is greater than or equal to 4.00 to
1.00.
"Applicable Environmental Laws" means applicable laws pertaining to health
or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid
Waste Disposal Act.
"Applicable Law" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and
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decrees of all courts and arbitrators in proceedings or actions to which the
Person in question is a party, and (b) in respect of contracts relating to
interest or finance charges that are made or performed in the State of Texas,
"Applicable Law" shall mean the laws of the United States of America, including
without limitation 12 USC Sections 85 and 86(a), as amended from time to time,
and any other statute of the United States of America now or at any time
hereafter prescribing the maximum rates of interest on loans and extensions of
credit, and the laws of the State of Texas, including, without limitation,
Chapter 303 of the Texas Finance Code, as amended, and any other statute of the
State of Texas now or at any time hereafter prescribing maximum rates of
interest on loans and extensions of credit; provided that the parties hereto
agree that the provisions of Chapter 346 of the Texas Finance Code, as amended,
shall not apply to Advances, this Agreement, the Notes or any other Loan
Documents.
"Applicable LIBOR Rate Margin" means the margin of interest over the
Adjusted LIBOR Rate that is applicable when any interest rate is determined
under this Agreement based upon the Adjusted LIBOR Rate. The Applicable LIBOR
Rate Margin is subject to adjustment (upwards or downwards, as appropriate)
based upon the Leverage Ratio. Effective as of each Adjustment Date, the
Applicable LIBOR Rate Margin shall be adjusted to reflect the Applicable LIBOR
Rate Margin prescribed below for the Leverage Ratio as demonstrated by the
Compliance Certificate delivered for that fiscal quarter:
<Table>
<Caption>
Revolving Loans and
Facility A Term Loan Facility B Term Loan
Leverage Ratio Advances Advances
-------------- -------------------- --------------------
Greater than or equal to 4.00 to 2.75% 3.25%
1.00
Less than 4.00 to 1.00, but 2.50% 3.00%
equal to or greater than 3.75 to
1.00
Less than 3.75 to 1.00, but 2.25% 3.00%
equal to or greater than 3.50 to
1.00
Less than 3.50 to 1.00, but 2.00% 3.00%
equal to or greater than 3.00 to
1.00
Less than 3.00 to 1.00 1.75% 3.00%
</Table>
If the financial statements required pursuant to Section 6.1 or 6.2 hereof, as
applicable, and the related Compliance Certificate are not received by the
Administrative Agent by the date required, the Applicable LIBOR Rate Margin
shall be determined as if the Leverage Ratio is greater than 4.00 to 1.00 until
such time as such financial statements and Compliance Certificate are received.
Notwithstanding the foregoing, the Applicable LIBOR Rate Margin from and after
the Agreement Date until and including the Adjustment Date determined following
the date of receipt of the unaudited financial statements for the fiscal quarter
ending September 30, 2001, and related Compliance Certificate shall be
determined as if the Leverage Ratio is greater than or equal to 4.00 to 1.00.
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"Applicable Specified Percentages" means the Revolving Credit Specified
Percentage, the Facility A Term Loan Specified Percentage, the Facility B Term
Loan Specified Percentage, or the Total Specified Percentage, as applicable in
the context used.
"Assignee" has the meaning specified in Section 11.6(d) hereof.
"Assignment Agreement" shall have the meaning ascribed thereto in Section
11.6 hereof and substantially in the form of Exhibit F hereto.
"Authorized Signatory" means the chief executive officer, the president,
any vice president, the treasurer, the chief financial officer, any assistant
treasurer, the secretary, or any assistant secretary or controller as may be or
is designated in writing by the Borrower, or any of its Subsidiaries to execute
documents, agreements and instruments on behalf of the Borrower or any
Subsidiary, and to request Advances hereunder.
"Bank of America" means Bank of America, N.A., a national banking
association (successor by merger to NationsBank, N.A.), in its capacity as a
Lender.
"Base Rate Advance" means any Advance bearing interest at the Base Rate
Basis.
"Base Rate Basis" means, for any day, a per annum interest rate equal to
the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on such
day plus (iii) the Applicable Base Rate Margin, or (b) the sum of (i) the Prime
Rate on such day plus (ii) the Applicable Base Rate Margin. The Base Rate Basis
shall be adjusted automatically as of the opening of business on the effective
date of each change in the Prime Rate or Federal Funds Rate, as applicable, to
account for such change.
"Borrower" has the meaning assigned to such term in the preamble.
"Business Day" means a day on which commercial banks are open (a) for the
transaction of business in Dallas, Texas and (b) with respect to any LIBOR
Advance, for the transaction of international business (including dealings in
Dollar deposits) in London, England.
"Capital Expenditures" means, for any period, expenditures made by the
Borrower and its Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements during such period
and the aggregate amount of items leased or acquired under Capital Leases at the
cost of the item) computed in accordance with GAAP, consistently applied
(excluding any such asset acquired (a) in connection with normal replacement and
maintenance programs properly expensed in accordance with GAAP, (b) with the
proceeds of any casualty insurance or any condemnation award (with such
expenditures to be made in accordance with and as permitted by Section 2.5(c)
hereof) and (c) with the cash proceeds of any asset sale made pursuant to
Section 7.5 hereof).
"Capital Leases" means capital leases and subleases, as defined in the
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 13, dated November 1976, as amended.
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"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
in any Person that is a corporation, each class of partnership interest in any
Person that is a partnership, and each class of membership interest in any
Person that is a limited liability company.
"Capitalized Lease Obligations" means that portion of any obligation of the
Borrower or any of its Subsidiaries as lessee under a lease which at the time
would be required to be capitalized on a balance sheet prepared in accordance
with GAAP.
"Carter Family" means Donald J. Carter, Sr., his lineal descendants whether
by adoption or otherwise, their respective spouses, any trusts for the benefit
of the foregoing persons, and the respective Affiliates of all of the foregoing.
"Cash and Cash Equivalents" means with respect to the Borrower and each of
its Subsidiaries (a) cash, (b) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition, (c) certificates of deposit and eurodollar time deposits
with maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any Lender or with any domestic commercial bank
having capital and surplus in excess of $500,000,000, (d) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (b) and (c) entered into with any financial institution
meeting the qualifications specified in clause (c) above, and (e) commercial
paper issued by any Lender or the Borrower corporation of any Lender, and
commercial paper rated A-1 or the equivalent thereof by Standard & Poor's
Ratings Group, a Division of McGraw-Hill, Inc., a New York corporation or P-1 or
the equivalent thereof by Moody's Investors Service, Inc. and in each case
maturing within six months after the date of acquisition.
"Change of Control" means the earlier to occur of (a) Hicks Muse, its
principals and their Affiliates and the management of the Borrower and its
Subsidiaries ("HMTF") shall cease to have the power, directly or indirectly, to
vote or direct the voting of securities having a majority of the ordinary voting
power for the election of directors of the Borrower, provided that the
occurrence of the foregoing event shall not be deemed a Change of Control if (i)
at any time prior to the consummation of an Initial Public Offering, and for any
reason whatsoever, (A) HMTF otherwise has the right to designate (and does so
designate) a majority of the board of directors of the Borrower or (B) HMTF and
their employees, directors and officers (the "HMTF Group") own of record and
beneficially an amount of common stock of the Borrower equal to at least 50% of
the amount of common stock of the Borrower owned by the HMTF Group of record and
beneficially as of the Closing Date and such ownership by the HMTF Group
represents the largest single block of voting securities of the Borrower held by
any Person or related group for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended or (ii) at any time after the consummation of
an Initial Public Offering, and for any reason whatsoever, (A) no "Person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), excluding the HMTF Group, shall become the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under such Act),
directly or indirectly, of more than the greater of (x) 15% of the shares
outstanding or (y) the percentage of the then outstanding voting stock of the
Borrower owned beneficially by the HMTF Group and (B) the
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board of directors of the Borrower shall consist of a majority of the Continuing
Directors and (b) any Change of Control as defined in any document pertaining to
the Senior Subordinated Notes.
"Co-Agents" means Citicorp USA, Inc. and Societe Generale.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any collateral granted by any Person to the
Administrative Agent to secure the Obligations.
"Collateral Document" means any document under which Collateral is granted
and any document related thereto.
"Commitment Fee" has the meaning specified in Section 2.4(a) hereof.
"Commitments" means, collectively, the Revolving Credit Commitment, the
Facility A Term Loan Commitment and the Facility B Term Loan Commitment.
"Compliance Certificate" means a certificate, signed by an Authorized
Signatory, in substantially the form of Exhibit E, appropriately completed.
"Consulting Agreements" means, collectively, that certain (a) Financial
Advisory Agreement, dated as of June 4, 1998, among the Borrower, each Guarantor
and Hicks, Muse & Co. Partners, L.P. and (b) Monitoring and Oversight Agreement,
dated as of June 4, 1998, among the Borrower, each Guarantor and Hicks, Muse &
Co. Partners, L.P., each as in effect as of the Agreement Date, and with only
such amendments or modifications thereto after the Agreement Date which do not
materially affect the interest of the Lenders or otherwise reasonably acceptable
to the Administrative Agent.
"Continuing Directors" means the directors of the Borrower on the Closing
Date and each other director, if, in each case, such other directors'
nominations for election to the board of directors of the Borrowers are
recommended by a majority of the then Continuing Directors or such other
director receives the vote of HMTF in his or her election by the stockholders of
the Borrower.
"Control" or "Controlled By" or "Under Common Control" means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise); provided, however, that in any event any Person which beneficially
owns, directly or indirectly, 25% or more (in number of votes) of the securities
having ordinary voting power for the election of directors of a corporation
shall be conclusively presumed to control such corporation.
"Controlled Group" means as of the applicable date, as to any Person not an
individual, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under common control with
such Person and which, together with such Person, are treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code;
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provided, however, that the Subsidiaries of the Borrower shall be deemed to be
members of the Borrower's Controlled Group.
"Converted Amount" has the meaning specified in Section 3.1(i) hereof.
"Crowley Investments" means Crowley Investments, Inc., a Texas corporation.
"Current Assets" means at any date, the amount which, in conformity with
GAAP, would be set forth opposite the caption "Total Current Assets" (or any
like caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries at such date, except that there shall be excluded therefrom Cash
and Cash Equivalents.
"Current Liabilities" means at any date, the amount which, in conformity
with GAAP, would be set forth opposite the caption "Total Current Liabilities"
(or any like caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries at such date, except that there shall be excluded therefrom the
current portion of (a) all Advances, and (b) all long-term Indebtedness for
borrowed money (including Capitalized Lease Obligations) in each case, to the
extent included therein.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to time
in effect.
"Deed of Trust" means any fee simple deed of trust or mortgage, as
applicable, relating to the real fee owned property of the Borrower and each of
its Subsidiaries required to be pledged to the Administrative Agent, in
substantially the form set forth in Exhibit I hereto, as amended, modified,
renewed, supplemented or restated from time to time.
"Default" means an Event of Default and/or any of the events specified in
Section 8.1, regardless of whether there shall have occurred any passage of time
or giving of notice that would be necessary in order to constitute such event an
Event of Default.
"Default Rate" means a simple per annum interest rate equal to (a) with
respect to Base Rate Advances the lesser of (i) the Highest Lawful Rate or (ii)
the Base Rate Basis plus two percent or (b) with respect to LIBOR Advances, the
lesser of (i) the Highest Lawful Rate or (ii) the LIBOR Basis plus two percent.
"Determining Lenders" means, on any date of determination, any combination
of Lenders whose Total Specified Percentages aggregate more than 50%; provided,
however, in the event that all of the Commitments have been terminated,
"Determining Lenders" means, on any date of determination, any combination of
Lenders having more than 50% of the Advances (other than Swing Line Advances)
then outstanding.
"Dividend" means, as to any Person, (a) any declaration or payment of any
dividend (other than a stock dividend) on, and (b) any purchase, redemption or
other acquisition or retirement for value by such Person of any shares of
Capital Stock of such Person.
"Dollar" or "$" means the lawful currency of the United States of America.
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"Domestic Subsidiary" means any Subsidiary of the Borrower other than a
Foreign Subsidiary.
"EBITDA" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (without
duplication) (a) Pretax Net Income (excluding therefrom, to the extent included
in determining Pretax Net Income, any items of extraordinary gain, including net
gains on the sale of assets other than asset sales in the ordinary course of
business, and adding thereto, to the extent included in determining Pretax Net
Income, any items of extraordinary loss, including net losses on the sale of
assets other than asset sales in the ordinary course of business), plus (b) to
the extent included in determining Pretax Net Income, interest expense
(including the amortization or write-off of debt discount and issuance costs and
commissions and discounts and other fees and charges associated with
Indebtedness), plus (c) to the extent included in determining Pretax Net Income,
depreciation and amortization, plus (d) to the extent included in determining
Pretax Net Income, other non-cash charges, minus (e) to the extent included in
determining Pretax Net Income, other non-cash credits, minus (f) cash payments
made with respect to non-cash charges added back in determining EBITDA in any
prior period which would otherwise be excluded in determining EBITDA, plus (g)
to the extent included in determining Pretax Net Income, reorganization related
expenses previously disclosed to the Lenders (regardless of the line items on
which such expenses are reported in the Borrower's financial statements) taken
or incurred in the fiscal years ending December 31, 2001 and December 31, 2002,
not to exceed $15,500,000 in the aggregate for both such years (including that
portion of the reorganization related expenses relating to the write-off of
deferred financing costs). For purposes of this definition, EBITDA shall be
computed utilizing the Borrower's revenue recognition policy in place prior to
the adoption of SEC staff Accounting Bulletin No. 101 ("SAB 101"). The
Borrower's Compliance Certificate shall disclose the adjustment to GAAP
operating results taking into account the effect of the adoption of SAB 101. The
Borrower's quarterly filings with the SEC on Form 10-Q and its annual filings on
Form 10-K will continue to include a reconciliation of EBITDA to income before
income taxes in accordance with the Borrower's GAAP financial statements. This
reconciliation will include an adjustment for the effect of adoption of SAB 101
on the Borrower's operating results.
"Environmental Reports" has the meaning specified in Section 4.1(q) hereof.
"Equity Offering" means any offering, sale or issuance of Capital Stock of
the Borrower other than in respect of the exercise of stock options of such
stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulation promulgated thereunder.
"ERISA Event" means, with respect to the Borrower and its Subsidiaries, (a)
a Reportable Event (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under regulations issued under Section 4043 of
ERISA) with respect to a Plan, (b) the withdrawal of any such Person or any
member of its Controlled Group from a Plan subject to Section 4063 of ERISA
during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate
under Section 4041(c) of ERISA, (d) the institution of proceedings to terminate
a Plan by the PBGC, (e) the
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failure to make required contributions which would result in the imposition of a
Lien under Section 412 of the Code or Section 302 of ERISA, (f) a withdrawal
from a Multiemployer Plan, or (g) any other event or condition which would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan or the imposition of any liability under Title IV of ERISA
other than PBGC premiums due but not delinquent under Section 4007 of ERISA.
"Event of Default" means any of the events specified in Section 8.1,
provided that any requirement for notice or lapse of time has been satisfied.
"Excess Cash Flow" means, for the Borrower and its Subsidiaries on a
consolidated basis for any period, an amount equal to (without duplication) (a)
EBITDA for such period, minus (b) cash taxes paid during such period, minus (c)
scheduled principal payments of Indebtedness for such period, minus (d) the
lesser of the actual Capital Expenditures during such period (excluding,
however, the portion of such Capital Expenditures, if any, financed by purchase
money debt (other than the Advances) or Capitalized Lease Obligations), or
$12,000,000, minus (e) cash interest expense for such period, minus (f) cash
payments made for reorganization related expenses described in clause (g) of the
definition of "EBITDA".
"Existing Equityholders" means Hicks Muse and the Carter Family and their
respective Affiliates.
"Existing LIBOR Borrowing" is defined in Section 11.19(b).
"Facility A Term Loan Advance" means an Advance made pursuant to Section
2.1(b) hereof.
"Facility A Term Loan Commitment" means the commitments of the Lenders,
subject to the terms and conditions hereof, to make Facility A Term Loan
Advances on the Agreement Date up to an aggregate principal amount of
$60,000,000, as terminated pursuant to Section 2.1(b) hereof.
"Facility A Term Loan Maturity Date" means December 31, 2004, or the
earlier date of acceleration of the Facility A Term Loan Advances pursuant to
Section 8.2 hereof.
"Facility A Term Loan Note" means any promissory note of the Borrower
evidencing Facility A Term Loan Advances hereunder, substantially in the form of
Exhibit B hereto, together with any extension, renewal or amendment thereof, or
substitution therefor.
"Facility A Term Loan Specified Percentage" means, as to any Lender, the
percentage indicated beside its name on Schedule 1 hereto as its Facility A Term
Loan Specified Percentage, or as adjusted or specified in any amendment to this
Agreement or in any Assignment Agreement.
"Facility B Term Loan Advance" means an Advance made pursuant to Section
2.1(c) hereof.
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"Facility B Term Loan Commitment" means the commitments of the Lenders,
subject to the terms and conditions hereof, to make Facility B Term Loan
Advances on the Agreement Date up to an aggregate principal amount of
$107,359,113.34, as terminated pursuant to Section 2.1(c) hereof.
"Facility B Term Loan Maturity Date" means December 31, 2006, or the
earlier date of acceleration of the Facility B Term Loan Advances pursuant to
Section 8.2 hereof.
"Facility B Term Loan Note" means any promissory note of the Borrower
evidencing Facility B Term Loan Advances hereunder, substantially in the form of
Exhibit C hereto, together with any extension, renewal or amendment thereof, or
substitution therefor.
"Facility B Term Loan Specified Percentage" means, as to any Lender, the
percentage indicated beside its name on Schedule 1 hereto as its Facility B Term
Loan Specified Percentage, or as adjusted or specified in any amendment to this
Agreement or in any Assignment Agreement.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to the
Administrative Agent by three federal funds brokers of recognized standing
selected by it.
"Fee Letter" has the meaning specified in Section 2.4(b) hereof.
"Financial Statements" has the meaning specified in Section 4.1(j)(i)
hereof.
"Fixed Charge Coverage Ratio" means, for any period, determined in
accordance with GAAP on a consolidated basis for the Borrower and its
Subsidiaries, the ratio of (a) EBITDA, minus cash taxes actually paid, minus
Maintenance Capital Expenditures, to (b) the sum of cash interest expense, and
scheduled principal payments made in respect of Indebtedness paid by the
Borrower or its Subsidiaries for such period. For each of the fiscal quarters
ending September 30, 2000, December 31, 2000, March 31, 2001 and June 30, 2001,
the amount of scheduled principal payments described in clause (b) in the
preceding sentence shall be deemed to be $2,500,000.
"Foreign Subsidiary" means any Subsidiary of the Borrower which is not
organized under the Laws of any state of the United States of America or the
District of Columbia.
"Form 4224" has the meaning specified in Section 2.15(e) hereof.
"Form 1001" has the meaning specified in Section 2.15(e) hereof.
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"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the rules and regulations of the Securities and
Exchange Commission, or their successors which are applicable in the
circumstances as of the date of determination, except that for purposes of
Sections 7.8 and 7.9 hereof, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used in the
preparation of the Financial Statements. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Determining Lenders, all
financial covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Accounting Changes had not occurred. The term
"Accounting Changes" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board or the American Institute of Certified Public
Accountants or, if applicable, the Securities and Exchange Commission (or
successors thereto or agencies with similar functions).
"Guarantor" means each direct and indirect Domestic Subsidiary of the
Borrower which executes a Subsidiary Guaranty.
"Guaranty" or "Guaranteed", means (a) as applied to an obligation of
another Person, (i) a guaranty, direct or indirect, in any manner, of any part
or all of such obligation, and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to amounts which may be drawn by
beneficiaries of outstanding letters of credit and (b) an agreement, direct or
indirect, contingent or otherwise, to maintain net worth, working capital,
earnings or other financial performance of another Person.
"Hicks Muse" means HMTF Operating, Inc., a Texas corporation.
"Highest Lawful Rate" means at the particular time in question the maximum
rate of interest which, under Applicable Law, the Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the weekly rate ceiling described in and computed in accordance with the
provisions of Chapter 303 of the Texas Finance Code, or (b) if the parties
subsequently contract as allowed by Applicable Law, the quarterly ceiling or the
annualized ceiling computed pursuant to Chapter 303 of the Texas Finance Code;
provided, however, that at
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any time the weekly rate ceiling, the quarterly ceiling or the annualized
ceiling shall be less than 18% per annum or more than 24% per annum, the
provisions of Chapter 303 of the Texas Finance Code shall control for purposes
of such determination, as applicable.
"HMTF" has the meaning specified in the definition of "Change of Control".
"HMTF Group" has the meaning specified in the definition of "Change of
Control".
"Increased Costs" has the meaning specified in Section 9.3(a) hereof.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, (d) all obligations issued or assumed as the deferred
purchase price of property or services (other than current trade payables and
accrued expenses incurred in the ordinary course of such Person's business), (e)
all obligations secured by any Lien on any property or asset owned by such
Person, whether or not the obligation secured thereby shall have been assumed,
(f) to the extent not otherwise included, all Capitalized Lease Obligations of
such Person, all obligations in respect of letters of credit, bankers'
acceptances and similar instruments, and all obligations under Interest Hedge
Agreements, (g) the principal portion of all obligations of such Person under
any Synthetic Lease, and (h) any Guaranty of such Person of any obligation of
another Person constituting obligations of a type set forth above. The amount of
any such indebtedness of any Person described in clause (e) shall be deemed to
be the lesser of such (i) indebtedness and (ii) the fair market value of such
asset or property encumbered, as determined by such Person in good faith.
"Indemnified Matters" has the meaning specified in Section 5.9(a) hereof.
"Indemnified Tax" has the meaning specified in Section 3.1(q) hereof.
"Indemnitees" has the meaning specified in Section 5.9(a) hereof.
"Initial Public Offering" means an underwritten public offering by the
Borrower of Capital Stock of the Borrower or any Subsidiary thereof pursuant to
a registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act of 1933, as amended.
"Intellectual Property Security Agreement" means the Intellectual Property
Security Agreement and Assignment executed by the Borrower and each of its
Subsidiaries, substantially in the form of Exhibit J hereto, as amended,
modified, renewed, supplemented or restated from time to time.
"Interest Hedge Agreements" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts and
warrants, as the
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same may be amended or modified and in effect from time to time, and any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Interest Period" means the period beginning on the day any LIBOR Advance
is made and ending one, two or three months thereafter (as the Borrower shall
select); provided, however, that all of the foregoing provisions are subject to
the following:
if any Interest Period would otherwise end on a day which is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day,
unless the result of such extension would be to extend such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day;
any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
a calendar month;
the Borrower may not select any Interest Period in respect of Advances having an
aggregate principal amount not less than $2,000,000; and
there shall be outstanding at any one time no more than ten Interest Periods in
the aggregate.
"Investment" means any (a) Acquisition or (b) any other direct or indirect
acquisition of assets of any Person which is not an Acquisition, or any other
direct or indirect purchase or other acquisition of, or beneficial interest in,
Capital Stock or other securities of any other Person, or any direct or indirect
loan, advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business),
capital contribution to, or investment in any other Person, including without
limitation the occurrence or sufferance of Indebtedness or the purchase of
accounts receivable of any other Person that are not current assets or do not
arise in the ordinary course of business. The amount of any equity Investment
shall be the original cost of such Investment plus the cost of all additions
thereto and the amount of any debt Investment shall be the outstanding principal
amount thereof, in each case without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"Issuing Bank" means Bank of America, N.A. (successor by merger to
NationsBank, N.A.) in its capacity as issuer of the Letters of Credit.
"Law" means any statute, law, ordinance, regulation, rule, order, writ,
injunction or decree of any Tribunal.
"Lender" means each financial institution shown on the signature pages
hereof so long as such financial institution maintains a portion of any of the
Commitments or is owed any part of the Obligations (including the Administrative
Agent in its individual capacity), and each Assignee that hereafter becomes
party hereto pursuant to Section 11.6 hereof, subject to the limitations set
forth therein.
"L/C Cash Collateral Account" has the meaning specified in Section 2.16(g)
hereof.
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"L/C Related Documents" has the meaning specified in Section 2.16(e)
hereof.
"Letter of Credit" has the meaning specified in Section 2.16(a) hereof,
provided that letters of credit which have been cash collateralized (excluding,
however, pursuant to the L/C Cash Collateral Account) or for which back-up
letters of credit have been obtained, in each case in a manner reasonably
acceptable to the Administrative Agent, shall no longer be considered Letters of
Credit.
"Letter of Credit Agreement" has the meaning specified in Section 2.16(b)
hereof.
"Letter of Credit Facility" means the amount of Letters of Credit the
Issuing Bank may issue pursuant to Section 2.16(a) hereof.
"Leverage Ratio" means, for any date of determination, the ratio of (a)
Total Debt as of the date of determination to (b) EBITDA for the immediately
preceding four consecutive fiscal quarters. For purpose of calculation of the
Leverage Ratio only, with respect to assets not owned at all times during the
four fiscal quarters immediately preceding the date of calculation of EBITDA,
there shall be (i) included in EBITDA, the pro forma EBITDA of any assets
acquired during any such four fiscal quarters as if acquired at the beginning of
the four fiscal quarters preceding the date of calculation and (ii) excluded
from EBITDA the EBITDA of any assets disposed of during any of such fiscal
quarters as if disposed of at the beginning of the four fiscal quarters
preceding the date of calculation.
"LIBOR Advance" means an Advance bearing interest at the LIBOR Basis.
"LIBOR Basis" means with respect to any LIBOR Advance, a per annum interest
rate equal to the lesser of (a) the Highest Lawful Rate, or (b) the sum of the
Adjusted LIBOR Rate plus the Applicable LIBOR Rate Margin.
"LIBOR Lending Office" means, with respect to a Lender, the office
designated as its LIBOR Lending Office on Schedule 2 attached hereto, and such
other office of the Lender or any of its affiliates hereafter designated by
notice to the Borrower and the Administrative Agent.
"LIBOR Rate" means, for any Interest Period the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term "LIBOR Rate"
shall mean, for any LIBOR Advance for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/100th of 1%).
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"Lien" means, with respect to any property, any mortgage, lien, pledge,
collateral assignment, hypothecation, charge, security interest, title retention
agreement or other encumbrance of any kind in respect of such property.
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation by or before any Tribunal, including, without limitation,
proceedings, claims, lawsuits, and/or investigations under or pursuant to any
environmental, occupational, safety and health, antitrust, unfair competition,
securities, Tax or other Law, or under or pursuant to any contract, agreement or
other instrument.
"Loan Documents" means this Agreement, the Notes, if any, the Security
Agreement, the Fee Letter, any Interest Hedge Agreements entered into with any
Lender or any Affiliate of any Lender, each Subsidiary Guaranty, the
Intellectual Property Security Agreement, the Deeds of Trust, and any other
agreement executed, delivered or performable by any Obligor in connection
herewith or as security for the Obligations.
"Maintenance Capital Expenditures" means, for any period and for any
Person, all Capital Expenditures incurred to repair or maintain the current
working condition of existing equipment and facilities in the ordinary course of
business, excluding any Capital Expenditures which are growth capital
expenditures or cost improvement capital expenditures.
"Material Adverse Effect" means any act or circumstance or event that has a
material adverse effect in or on (a) the business, assets, financial condition,
results of operations, or prospects of the Borrower and its Subsidiaries taken
as a whole, (b) the validity or enforceability of any Loan Documents or (c) the
rights or remedies of the Lenders or the Administrative Agent under any of the
Loan Documents.
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations.
"Multiemployer Plan" means, as to any Person, at any time, a "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA and to which such Person
or any member of its Controlled Group has any obligation or liability
(contingent or otherwise) under Title IV of ERISA.
"Necessary Authorization" means any right, franchise, license, permit,
consent, approval or authorization from, or any filing or registration with, any
governmental or other regulatory authority or any Person necessary or
appropriate to enable the Borrower or any of its Subsidiaries to maintain and
operate its business and properties, provided a failure to have such license,
permit, consent, approval or authorization could reasonably be expected to
result on a Material Adverse Effect.
"Negative Pledge" means any agreement, contract or other arrangement
whereby the Borrower or any of its Subsidiaries is prohibited from, or would
otherwise be in default as a result of, creating, assuming, incurring or
suffering to exist, directly or indirectly, any Lien on any of its assets.
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"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset by or of, or the issuance of Capital Stock to,
any Person or any Recovery Event, the amount of cash received by such Person in
connection with such transaction after deducting therefrom the aggregate,
without duplication, of the following amounts to the extent properly
attributable to such transaction or to any asset that may be the subject
thereof: (a) reasonable brokerage commissions, legal fees, finder's fees,
financial advisory fees, fees for solvency opinions, accounting fees,
underwriting fees, investment banking fees, survey, title insurance, appraisals,
notaries and other similar commissions and fees, and expenses, in each case, to
the extent paid, payable or reimbursed by such Person; (b) filing, recording or
registration fees or charges or similar fees or charges paid by such Person; (c)
taxes paid or payable by such Person or any shareholder, partner or member of
such Person to governmental taxing authorities as a result of such sale or other
disposition (after taking into account any available tax credits or deductions
or any tax sharing arrangements); (d) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Obligations) that is secured by a Lien on the asset in question; and
(e) any reserve for adjustment in respect of the price of any such sale, lease,
transfer or other disposition of such asset or assets.
"Net Income" means net profit (or loss) after taxes of the Borrower and its
Subsidiaries, on a consolidated basis, determined in accordance with GAAP.
"Non-Consenting Lender" has the meaning specified in Section 9.6 hereof.
"Non-Funding Lender" has the meaning specified in Section 9.6 hereof.
"Notes" means, collectively, the Revolving Credit Notes, the Facility A
Term Loan Notes, the Facility B Term Loan Notes and the Swing Line Notes.
"Notice of Borrowing" has the meaning specified in Section 2.2(a) hereof.
"Notice of Continuation/Conversion" has the meaning specified in Section
2.2(d) hereof.
"Notice of Issuance" has the meaning specified in Section 2.16(b) hereof.
"Obligations" means all obligations of any nature (whether matured or
unmatured, fixed or contingent, including the Reimbursement Obligations) of the
Borrower or any of its Subsidiaries to any Lender or any Affiliate of any Lender
under any of the Loan Documents as they may be amended from time to time.
"Obligor" means the Borrower and each Guarantor.
"Operating Lease" means any operating lease, as defined in the Financial
Accounting Standard Board Statement of Financial Accounting Standards No. 13,
dated November, 1976 or otherwise in accordance with GAAP.
"Other Taxes" has the meaning specified in Section 2.15(b) hereof.
"Ownership Information" has the meaning specified in Section 11.6(j)
hereof.
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"Participant" has the meaning specified in Section 11.6(c) hereof.
"Participation" has the meaning specified in Section 11.6(c) hereof.
"Payment Date" means the last day of the Interest Period for any LIBOR
Advance; provided, however, if the Interest Period for any LIBOR Advance exceeds
three months, "Payment Date" shall also mean each day which is three months, or
a whole multiple thereof after the first day of such Interest Period.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Issuance" means (a) the issuance by the Borrower of shares of
Capital Stock as dividends on issued and outstanding Capital Stock of the same
class of the Borrower or pursuant to any dividend reinvestment plan, (b) the
issuance by the Borrower of options or other equity securities of the Borrower
to outside directors, members of management or employees of the Borrower or any
Subsidiary of the Borrower, (c) the issuance of securities as interest or
dividends on pay-in-kind debt or preferred equity securities in accordance with
the terms permitted hereunder and under the other Loan Documents, (d) the
issuance to the Borrower or any Subsidiary (or any director, with respect to
such director's qualifying shares) by any of its Subsidiaries of any of their
respective Capital Stock, in each case with respect to this clause (d) to the
extent such Capital Stock issued to the Borrower or any Domestic Subsidiary is
pledged to the Administrative Agent pursuant to the applicable Loan Document,
(e) the issuance by the Borrower of shares of its Capital Stock in connection
with an Acquisition, (f) cash payments made in lieu of fractional shares of the
Borrower's Capital Stock in an aggregate amount not to exceed $200,000 in
aggregate amount during the term of this Agreement, (g) the issuance by the
Borrower of additional shares of Capital Stock of the Borrower to infuse
additional capital into the Borrower in an aggregate amount not to exceed
$25,000,000 during the term of this Agreement, and (h) the issuance by the
Borrower of additional shares of Capital Stock of the Borrower in connection
with the transaction described in Section 3.1(q).
"Permitted Liens" means, as applied to any Person:
(a) Any Lien in favor of the Lenders or the Administrative Agent to
secure the Obligations hereunder;
(i) Liens on real estate for ad valorem taxes not yet delinquent, (ii) Liens on
leasehold interests created by the lessor in favor of any mortgagee of the
leased premises, and (iii) Liens for taxes, assessments, governmental charges,
levies or claims not yet delinquent, or in each case for clauses (i) and (iii)
that are being diligently contested in good faith by appropriate proceedings and
for which adequate reserves shall have been set aside on such Person's books in
accordance with GAAP, but only so long as no foreclosure, restraint, sale or
similar proceedings have been commenced with respect thereto that has not been
stayed;
Liens of carriers, landlords, warehousemen, mechanics, laborers and materialmen
and other similar Liens incurred in the ordinary course of business for sums not
overdue for a period of
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more than 60 days or being contested in good faith, if such reserve or
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor;
(i) Liens incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or similar legislation and (ii)
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, insurance contracts, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
Easements, right-of-way, restrictions and other similar encumbrances on the use
of real property which do not materially interfere with the ordinary conduct of
the business of such Person or which are set forth in any title policy or
"marked up" commitment thereof delivered pursuant hereto and reasonably
acceptable to the Administrative Agent;
Liens created to secure the purchase price of assets acquired by such Person or
created to secure Indebtedness permitted by Section 7.1(c) or 7.1(n) hereof,
which is incurred solely for the purpose of financing the acquisition of such
assets and incurred at the time of acquisition or within 90 days thereafter, so
long as each such Lien shall at all times be confined solely to the asset or
assets so acquired (and proceeds thereof), and refinancings thereof so long as
any such Lien remains solely on the asset or assets acquired and the amount of
Indebtedness related thereto is not increased;
Liens in respect of judgments or awards for which appeals or proceedings for
review are being prosecuted and in respect of which a stay of execution upon any
such appeal or proceeding for review shall have been secured not constituting an
Event of Default under Section 8.1(h) hereof, provided that (i) such Person
shall have established adequate reserves for such judgments or awards, (ii) such
judgments or awards shall be fully insured and the insurer shall not have denied
coverage, or (iii) such judgments or awards shall have been bonded to the
satisfaction of the Determining Lenders;
Any Liens which are described on Schedule 3 hereto, and Liens resulting from the
refinancing, renewal, or extension of the related Indebtedness, provided that
the Indebtedness secured thereby shall not be increased and the Liens shall not
cover additional assets of the Borrower (other than after-acquired title in or
on such property and proceeds of the existing collateral in accordance with the
document creating such Lien);
Liens arising from precautionary Uniform Commercial Code financing statements
with respect to operating leases or consignment arrangements in the ordinary
course of business;
Liens in favor of banking institutions arising by operation of law encumbering
deposits (including the right of setoff) held by such banking institution
incurred in the ordinary course of business and which are within the general
parameters customary in the banking industry;
Liens existing on any property or asset at the time of acquisition thereof by
the Borrower and its Subsidiaries or existing on the property or assets of any
Person that becomes a Subsidiary after the Agreement Date at the time such
Person becomes a Subsidiary (provided, that (x) such Lien
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is not created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, as the case may be, (y) such Lien shall not
apply to any other property or assets of the Borrower or its Subsidiaries and
(z) such Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as the case
may be);
any obligations or duties affecting any of the property of the Borrower or its
Subsidiaries to any municipality or public authority with respect to any
franchise, grant, license or permit which do not materially impair the use of
such property for the purposes for which it is held and do not materially impair
the value of the Collateral;
Statutory (but, with respect to licenses, subleases and leases executed and
effective on or after March 31, 2001, not contractual) liens on property of the
Borrower and its Subsidiaries in favor of landlords securing licenses, subleases
and leases permitted hereunder and not interfering with the business of the
Borrower or any of its Subsidiaries; and
Licenses, leases or subleases permitted hereunder granted to others but not
interfering in any material respect with any rights to the Collateral or with
the business of the Borrower or any of its Subsidiaries.
"Person" means an individual, corporation, partnership, limited liability
company, trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
subject to Title IV of ERISA or Section 412 of the Code (other than a
Multiemployer Plan) pursuant to which any employees of the Borrower, its
Subsidiaries or any member of their Controlled Group participate.
"Pretax Net Income" means net profit (or loss) before taxes of the Borrower
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP.
"Prime Rate" means, at any time, the prime interest rate announced or
published by the Reference Lender from time to time as its reference rate for
the determination of interest rates for loans of varying maturities in Dollars
to United States residents of varying degrees of creditworthiness and being
quoted at such time by the Reference Lender as its "prime rate;" it being
understood that such rate may not be the lowest rate of interest charged by the
Reference Lender.
"Quarterly Date" means the last day of each March, June, September and
December, beginning September 30, 2001.
"Recovery Event" means any settlement of or payment in respect of any
property insurance or casualty insurance claim or any condemnation proceeding in
or deed in lieu thereof relating to any Collateral, excluding any such
settlement or payment which, together with any related settlement or payment,
yields gross proceeds to the Borrower or any of its Subsidiaries of less than
$5,000,000.00.
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"Reference Lender" means Bank of America; provided that if Bank of
America's portion of the Commitments shall terminate and it shall have no
Advances outstanding hereunder, Bank of America shall cease to be the Reference
Lender, and the Administrative Agent (after consultation with Borrower) shall,
with notice to the Borrower and the Lenders, designate another Lender as the
Reference Lender.
"Register" has the meaning specified in Section 11.6(j) hereof.
"Reimbursement Obligations" means, in respect of any Letter of Credit as at
any date of determination, the sum of (a) the maximum aggregate amount which is
then available to be drawn under such Letter of Credit plus (b) the aggregate
amount of all drawings under such Letter of Credit and not theretofore
reimbursed by the Borrower.
"Reinvestment Deferred Amount" means with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith which are not applied to prepay the
Advances.
"Reinvestment Event" means any Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice by an Authorized Signatory
stating that no Event of Default has occurred and is continuing and that the
Borrower (directly or indirectly through a Subsidiary) intends to use all or a
specified portion of the Net Cash Proceeds of a Recovery Event to acquire assets
useful in its business.
"Reinvestment Prepayment Amount" means with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire assets
useful in the Borrower's business.
"Reinvestment Prepayment Date" means with respect to any Reinvestment
Event, the earlier of (a) the date occurring 365 days after such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire assets useful in the Borrower's business
with all or any portion of the relevant Reinvestment Deferred Amount.
"Related Fund" means, with respect to any Lender which is a fund that
invests in loans, any other fund that invests in loans and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Release Date" means the date on which the Notes have been paid, all other
Obligations due and owing have been paid and performed in full, and the
Commitments have been terminated.
"Reportable Event" shall have the meaning set forth in Section 4043(b) of
ERISA.
"Required Facility A Term Loan Lenders" means, on any date of
determination, any combination of Lenders having more than 50% of the Facility A
Term Loan Advances then outstanding.
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"Required Facility B Term Loan Lenders" means, on any date of
determination, and combination of Lenders having more than 50% of the Facility B
Term Loan Advances then outstanding.
"Required Revolving Credit Lenders" means, on any date of determination,
any combination of Lenders whose Revolving Credit Specified Percentages
aggregate more than 50%, provided, however, in the event that the Revolving
Credit Commitment has terminated, "Required Revolving Credit Lenders" means, on
any date of determination, any combination of Lenders having more than 50% of
the Revolving Credit Advances then outstanding.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any category
of liabilities which includes deposits by reference to which the Adjusted LIBOR
Rate (as the case may be) is to be determined, or (ii) any category of
extensions of credit or other assets which include LIBOR Advances. The Adjusted
LIBOR Rate shall be adjusted automatically on and as of the effective date of
any change in the Reserve Requirement.
"Restatement Effective Time" is defined in Section 11.19(a).
"Restricted Payments" means, collectively, (a) Dividends, (b) any payment
or prepayment of principal, interest, premium or penalty on any of the Senior
Subordinated Notes of the Borrower or any of its Subsidiaries or any defeasance,
redemption, purchase, repurchase or other acquisition or retirement for value,
in whole or in part, of any of the Senior Subordinated Notes (including, without
limitation, the setting aside of assets or the deposit of funds therefor) of the
Borrower or any of its Subsidiaries, and (c) any payment of any management,
advisory, consulting or similar fees to any Affiliate of the Borrower or any of
its Subsidiaries other than an (i) Obligor and (ii) pursuant to the Consulting
Agreements.
"Revolving Commitment Fee" has the meaning specified in Section 2.4(a)
hereof.
"Revolving Commitment Maturity Date" means December 31, 2004, or the
earlier date of termination in whole of the Revolving Credit Commitment pursuant
to Section 2.6 or 8.2 hereof.
"Revolving Credit Advance" means an Advance made pursuant to Section 2.1(a)
hereof.
"Revolving Credit Availability" means, without duplication, an amount equal
to (a) the Revolving Credit Commitment, minus (b) the outstanding Revolving
Credit Advances, minus (c) the Reimbursement Obligations, minus (d) the
outstanding Swing Line Advances.
"Revolving Credit Commitment" means $30,000,000 as reduced or terminated
pursuant to Sections 2.6 or 8.2 hereof, and as may be increased pursuant to
Section 2.17 hereof.
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"Revolving Credit Note" means any promissory note of the Borrower
evidencing Revolving Credit Advances hereunder, substantially in the form of
Exhibit A hereto, together with any extension, renewal, or amendment thereof, or
substitution therefor.
"Revolving Credit Specified Percentage" means, as to any Lender, the
percentage indicated beside its name on Schedule 1 hereto as its Revolving
Credit Specified Percentage, or as adjusted or specified in any amendment to
this Agreement, in any Assignment Agreement, or as a result of any increase in
the Revolving Credit Commitment pursuant to Section 2.17 hereof.
"Rights" means rights, remedies, powers and privileges.
"Securities Exchange Agreement" has the meaning specified in Section 3.1(q)
hereof.
"Security Agreement" means that certain security agreement executed by the
Borrower and each of its Subsidiaries, substantially in the form of Exhibit D
hereto, as amended, modified, renewed, supplemented or restated from time to
time.
"Senior Leverage Ratio" means, for any date of determination, the ratio of
(a) the Total Debt, minus the Senior Subordinated Notes outstanding as of the
date of determination to (b) EBITDA for the immediately preceding four
consecutive fiscal quarters.
"Senior Preferred Stock" has the meaning specified in Section 3.1(m)
hereof.
"Senior Subordinated Notes" means (a) those certain senior subordinated
notes of the Borrower due 2008 issued by the Borrower on June 4, 1998, which are
subordinated to the Obligations on the terms set forth in the Senior
Subordinated Notes Indenture and (b) all senior subordinated notes of the
Borrower issued in exchange for the Senior Subordinated Notes on terms
substantially identical to the terms of the Senior Subordinated Notes. "Senior
Subordinated Notes Indenture" means that certain Indenture, dated as of June 4,
1998, by and among the Borrower, certain of its Subsidiaries as guarantors, and
United States Trust Company of New York, as Trustee.
"Solvent" means, with respect to any Person, that the fair value of the
assets of such Person (both at fair valuation and at present fair saleable
value) is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person
as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and such Person does not
have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.
"Special Counsel" means the law firm of Winstead Sechrest & Minick P.C., or
such other legal counsel as the Administrative Agent may select.
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"Specified Percentage" means, as applicable or as the context requires, the
Revolving Credit Specified Percentage, the Facility A Term Loan Specified
Percentage or the Facility B Term Loan Specified Percentage.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture, trust or estate or other Person of which (or
in which) more than 50% of:
(a) the outstanding Capital Stock having voting power to elect a
majority of the Board of Directors of such corporation (irrespective of
whether at the time Capital Stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency),
the interest in the capital or profits of such partnership or joint venture,
the beneficial interest of such trust or estate, or
the equity interest of such other Person,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries.
"Subsidiary Guaranty" means that certain Subsidiary Guaranty executed by
each Domestic Subsidiary of the Borrower, substantially in the form of Exhibit G
hereto, as amended, modified, renewed, supplemented or restated from time to
time.
"Swing Line Advance" means an Advance made pursuant to Section 2.1(d)
hereof.
"Swing Line Bank" means Bank of America, N.A. (successor by merger to
NationsBank, N.A.) and any successor thereto appointed in accordance with
Section 10.1(b) hereof.
"Swing Line Facility" has the meaning specified in Section 2.1(d) hereof.
"Swing Line Note" means the Amended and Restated Swing Line Note of the
Borrower payable to the order of the Swing Line Bank, evidencing Swing Line
Advances hereunder, substantially in the form of Exhibit H hereto, together with
any extension, renewal or amendment thereof or substitution therefor.
"Syndication Agent" means The Chase Manhattan Bank.
"Synthetic Lease" means any synthetic lease, tax retention generating
lease, or off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but which is classified
as an Operating Lease pursuant to GAAP.
"Taxes" has the meaning specified in Section 2.15 hereof.
"Term Loan Advance" means a Facility A Term Loan Advance or a Facility
B Term Loan Advance.
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"Total Debt" means, as of any date of determination, determined for the
Borrower and its Subsidiaries on a consolidated basis, without duplication, (a)
indebtedness for borrowed money, (b) obligations evidenced by bonds, debentures,
notes or other similar instruments, (c) obligations to pay the deferred purchase
price of property or services other than trade payables incurred in the ordinary
course of business, (d) Capitalized Lease Obligations, and (e) the face amount
of all letters of credit (other than documentary letters of credit and standby
letters of credit in aggregate face amount not in excess of $5,000,000) and,
without duplication, all unreimbursed amounts drawn thereunder; provided that to
the extent the Borrower has cash-collateralized any letters of credit, the
amount of such letters of credit secured by cash collateral shall not be
included in this clause (e).
"Total Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on Schedule 1 hereto as its Total Specified
Percentage, or as adjusted or specified in any amendment to this Agreement, in
any Assignment Agreement, or as a result of any increase in the Revolving Credit
Commitment pursuant to Section 2.17 hereof, as adjusted to account for any
permanent reductions in the Revolving Credit Commitment and any payments of
Facility A Term Loan Advances or Facility B Term Loan Advances which result in a
reduction of the outstanding Facility A Term Loan Advances or outstanding
Facility B Term Loan Advances.
"Tribunal" means any (a) state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision, agency, department,
commission, board, bureau, or instrumentality of a governmental or other
regulatory or public body or authority or (b) private arbitration board or
panel.
"UCC" means the Uniform Commercial Code of Texas, as amended from time to
time, as the same has been or may be amended or revised from time to time, or,
if so required with respect to any particular Collateral by mandatory provisions
of applicable law, as in effect in the jurisdiction in which such Collateral is
located.
"Unused Portion" means an amount equal to the result of (a) the Revolving
Credit Commitment minus (b) the sum of (i) the outstanding Revolving Credit
Advances plus (ii) outstanding Reimbursement Obligations in respect of the
Letters of Credit.
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AMENDMENTS AND RENEWALS. EACH DEFINITION OF AN AGREEMENT IN THIS ARTICLE 1 SHALL
INCLUDE SUCH AGREEMENT AS AMENDED TO DATE, AND AS AMENDED OR RENEWED FROM TIME
TO TIME IN ACCORDANCE WITH ITS TERMS.
CONSTRUCTION. THE TERMS DEFINED IN THIS ARTICLE 1 (EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS AGREEMENT) FOR ALL PURPOSES SHALL HAVE THE MEANINGS SET FORTH
IN SECTION 1.1 HEREOF, AND THE SINGULAR SHALL INCLUDE THE PLURAL, AND VICE
VERSA, UNLESS OTHERWISE SPECIFICALLY REQUIRED BY THE CONTEXT. ALL ACCOUNTING
TERMS USED IN THIS AGREEMENT WHICH ARE NOT OTHERWISE DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP ON A CONSOLIDATED BASIS FOR THE BORROWER AND
ITS SUBSIDIARIES, UNLESS OTHERWISE EXPRESSLY STATED HEREIN.
ADVANCES
THE ADVANCES
Revolving Credit Advances. Each Lender severally agrees, upon the terms and
subject to the conditions of this Agreement, to make Revolving Credit Advances
to the Borrower from time to time in an aggregate amount not to exceed its
Revolving Credit Specified Percentage of the Revolving Credit Commitment less
its Revolving Credit Specified Percentage of the aggregate amount of all (i)
Reimbursement Obligations then outstanding (assuming compliance with all
conditions to drawing) and (ii) Swing Line Advances then outstanding for the
purposes set forth in Section 5.8 hereof. Subject to Section 2.9 hereof,
Revolving Credit Advances may be repaid and then reborrowed. Notwithstanding any
provision in any Loan Document to the contrary, in no event shall the principal
amount of all outstanding Revolving Credit Advances, Reimbursement Obligations
and Swing Line Advances exceed the Revolving Credit Commitment.
Facility A Term Loan Advances. Each Lender severally agrees, upon the terms and
subject to the conditions of this Agreement, to make Facility A Term Loan
Advances to the Borrower on the Agreement Date in an aggregate amount not to
exceed its Facility A Term Loan Specified Percentage of the Facility A Term Loan
Commitment for the purposes set forth in Section 5.8 hereof. Notwithstanding any
provision in any Loan Document to the contrary, in no event shall the principal
amount of all outstanding Facility A Term Loan Advances exceed the Facility A
Term Loan Commitment. Immediately upon the making of the Facility A Term Loan
Advance, the Facility A Term Loan Commitment shall be automatically terminated.
Facility A Term Loan Advances may not be repaid and then reborrowed. As of the
date hereof, (i) the parties hereto hereby acknowledge and agree that
$44,897,168.27 of the Facility A Term Loan Advances under the Existing Credit
Agreement shall be deemed converted to Facility B Term Loan Advances under this
Agreement, and (ii) the parties hereto hereby acknowledge and agree that
$12,263,378.88 of the Facility A Term Loan Advances under the Existing Credit
Agreement shall be transferred to the Borrower in exchange for preferred equity
interests in the Borrower as described in Section 3.1(m).
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Facility B Term Loan Advances. Each Lender severally agrees, upon the terms and
subject to the conditions of this Agreement, to make Facility B Term Loan
Advances to the Borrower on the Agreement Date in an aggregate amount not to
exceed its Facility B Term Loan Specified Percentage of the Facility B Term Loan
Commitment for the purposes set forth in Section 5.8 hereof. Notwithstanding any
provision in any Loan Document to the contrary, in no event shall the principal
amount of all outstanding Facility B Term Loan Advances exceed the Facility B
Term Loan Commitment. Immediately upon the making of the Facility B Term Loan
Advance, the Facility B Term Loan Commitment shall be automatically terminated.
Facility B Term Loan Advances may not be repaid and then reborrowed.
Swing Line Advances. The Borrower may request the Swing Line Bank to make, and
the Swing Line Bank shall make, on the terms and conditions hereinafter set
forth, advances ("Swing Line Advances") to the Borrower from time to time on any
Business Day during the period from the Agreement Date to the Revolving
Commitment Maturity Date in an aggregate principal amount not to exceed at any
time outstanding the lesser of (a) $10,000,000 or (b) an amount equal to the
Revolving Credit Commitment minus (i) the aggregate principal amount of
Revolving Credit Advances then outstanding and (ii) the aggregate amount of all
Reimbursement Obligations then outstanding (the "Swing Line Facility"). Each
Swing Line Advance shall be in an amount not less than $100,000. Within the
limits of the Swing Line Facility and subject to the terms hereof, Swing Line
Advances may be repaid and then reborrowed.
Type and Number of Advances. Any Advance, other than a Swing Line Advance,
shall, at the option of the Borrower as provided in Section 2.2 hereof (and, in
the case of LIBOR Advances, subject to availability and to the provisions of
Article 9 hereof), be made as a Base Rate Advance or a LIBOR Advance; provided
that there shall not be outstanding to any Lender, at any one time, more than
ten LIBOR Advances.
MANNER OF BORROWING AND DISBURSEMENT
Base Rate Advances. In the case of Base Rate Advances (other than Swing Line
Advances), the Borrower, through an Authorized Signatory, shall give the
Administrative Agent prior to 11:00 a.m. (Dallas, Texas time), on the date of
any proposed Base Rate Advance irrevocable written notice in substantially the
form of Exhibit K hereto (a "Notice of Borrowing") of its intention to borrow or
reborrow a Base Rate Advance hereunder. Such Notice of Borrowing shall (i)
specify the requested funding date, which shall be a Business Day, the amount of
the proposed aggregate Base Rate Advances to be made by the Lenders, and whether
such Advance is a Revolving Credit Advance, Facility A Term Loan Advance or
Facility B Term Loan Advance, and (ii) confirm that no Default or Event of
Default has occurred and is continuing.
LIBOR Advances. In the case of LIBOR Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Agent at least three
Business Days' irrevocable written notice pursuant to a Notice of Borrowing, of
its intention to borrow or reborrow a LIBOR Advance hereunder. Notice shall be
given to the Administrative Agent prior to 11:00 a.m. (Dallas, Texas time), in
order for such Business Day to count toward the minimum number of Business Days
required. LIBOR Advances shall in all cases be subject to availability and to
Article 9 hereof. For LIBOR Advances, the Notice of Borrowing shall (i) specify
the requested
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funding date, which shall be a Business Day, the amount of the proposed
aggregate LIBOR Advances to be made by Lenders, whether such Advance is a
Revolving Credit Advance, Facility A Term Loan Advance or Facility B Term Loan
Advance, and the Interest Period selected by the Borrower, provided that no such
Interest Period shall extend past the Revolving Commitment Maturity Date, the
Facility A Term Loan Maturity Date or the Facility Term B Loan Maturity Date, as
appropriate, or prohibit or impair the Borrower's ability to comply with Section
2.5 or 2.8 hereof and (ii) confirm that no Default or Event of Default has
occurred and is continuing.
Swing Line Advances. In the case of Swing Line Advances, the Borrower,
through an Authorized Signatory, shall give the Swing Line Bank and the
Administrative Agent prior to 1:00 p.m. (Dallas, Texas time) on the date of any
proposed Swing Line Advance irrevocable written notice pursuant to a Notice of
Borrowing, of its intention to borrow or reborrow a Swing Line Advance. Such
Notice of Borrowing shall (i) specify the requested funding date, which shall be
a Business Day and the amount of the proposed Swing Line Advance and (ii)
confirm that no Default or Event of Default has occurred and is continuing.
Continuation/Conversion. Subject to Sections 2.1 and 2.9 hereof, the
Borrower shall have the option (i) to convert at any time all or any part of the
outstanding Base Rate Advances to LIBOR Advances and all or any part of the
outstanding LIBOR Advances to Base Rate Advances or (ii) upon expiration of any
Interest Period applicable to a LIBOR Advance, to continue all or any portion of
such LIBOR Advance equal to $2,000,000 and integral multiples of $500,000 in
excess of that amount as a LIBOR Advance and the succeeding Interest Period(s)
of such continued LIBOR Advance shall commence on the last day of the Interest
Period of the LIBOR Advance to be continued; provided, however, (a) LIBOR
Advances may be converted into Base Rate Advances at any time only if the
Borrower concurrently reimburses the Lenders in accordance with Section 2.9
hereof and (b) notwithstanding anything in this Agreement to the contrary, no
outstanding Advance may be continued as, or converted into, a LIBOR Advance when
any Event of Default has occurred and is continuing. Not later than 11:00 a.m.
(Dallas, Texas time) on the date of any proposed continuation of or a conversion
to a Base Rate Advance and not later than 11:00 a.m. (Dallas, Texas time) at
least three Business Days prior to any proposed continuation of or conversion to
a LIBOR Advance, the Borrower, through an Authorized Signatory, shall give the
Administrative Agent irrevocable written notice in substantially the form of
Exhibit L hereto (a "Notice of Continuation/Conversion"), stating (i) the
proposed conversion/continuation date (which shall be a Business Day), (ii) the
amount of the Advance to be converted/continued, (iii) in the case of a
conversion to, or a continuation of, a LIBOR Advance, the requested Interest
Period, and (iv) in the case of a conversion of a Base Rate Advance to a LIBOR
Advance or continuation of a LIBOR Advance, stating that no Event of Default has
occurred and is continuing. If the Borrower shall fail to give any notice in
accordance with this Section 2.2(d) prior to the expiration of any then-relevant
Interest Period with respect to any LIBOR Advance, the Borrower shall be deemed
irrevocably to have requested that such LIBOR Advance be converted to a Base
Rate Advance in the same principal amount.
Minimum Amounts. The aggregate amount of Base Rate Advances (other than
Swing Line Advances) to be made by the Lenders on any day shall be in a
principal amount which is at least
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$1,000,000 and which is an integral multiple of $500,000; provided, however,
that such amount may equal the unused amount of the applicable Commitment. The
aggregate amount of LIBOR Advances having the same Interest Period and to be
made by the Lenders on any day shall be in a principal amount which is at least
$2,000,000 and which is an integral multiple of $500,000.
Notice and Disbursement. The Administrative Agent shall promptly notify the
Lenders of each notice (other than with respect to a Swing Line Advance)
received from the Borrower pursuant to this Section. Each Lender shall, not
later than noon (Dallas, Texas time) on the date of any Advance, deliver to the
Administrative Agent, at its address set forth herein, such Lender's Revolving
Credit Specified Percentage, Facility A Term Loan Specified Percentage and
Facility B Term Loan Specified Percentage, as the case may be, of such Advance
in immediately available funds in accordance with the Administrative Agent's
instructions. Prior to 2:00 p.m. (Dallas, Texas time), on the date of any
Advance hereunder, the Administrative Agent shall, subject to satisfaction of
the conditions set forth in Article 3, disburse the amounts made available to
the Administrative Agent by the Lenders by (i) transferring such amounts by wire
transfer pursuant to the Borrower's instructions, or (ii) in the absence of such
instructions, crediting such amounts to the account of the Borrower maintained
with the Administrative Agent. All Revolving Credit Advances shall be made by
each Lender according to its Revolving Credit Specified Percentage. All Facility
A Term Loan Advances shall be made by each Lender according to its Facility A
Term Loan Specified Percentage. All Facility B Term Loan Advances shall be made
by each Lender in accordance with its Facility B Term Loan Specified Percentage.
Swing Line Advances. The Swing Line Bank shall, not later than 2:00 p.m.
(Dallas, Texas time), on the date of any Swing Line Advance, deliver to the
Administrative Agent at its address set forth herein, the amount of such Swing
Line Advance in immediately available funds in accordance with the
Administrative Agent's instructions. Prior to 2:30 p.m. (Dallas, Texas time), on
the date of any Swing Line Advance, the Administrative Agent shall, subject to
the conditions set forth in Article 3, disburse the amount made available to the
Administrative Agent by the Swing Line Bank by (i) transferring such amounts by
wire transfer pursuant to the Borrower's instruction or (ii) in the absence of
such instructions, crediting such amounts to the account of the Borrower
maintained with the Administrative Agent. Forthwith upon demand by the Swing
Line Bank at any time, including after a Default or Event of Default, and in any
event upon the making of the direction specified by Section 8.2 to authorize the
Administrative Agent to declare the Advances due and payable pursuant to the
provisions of Section 8.2, each Lender, including the Swing Line Bank,
notwithstanding the failure of the Borrower at such time to satisfy each
condition specified in Article 3, shall make by 12:00 noon (Dallas, Texas time)
on the first Business Day following receipt by such Lender of notice from the
Swing Line Bank, a Revolving Credit Advance which is a Base Rate Advance in an
amount equal to the product of (i) the Revolving Credit Specified Percentage of
such Lender times (ii) the aggregate outstanding principal amount of the Swing
Line Advances. The proceeds of such Revolving Credit Advances shall be applied
by the Administrative Agent to repay the outstanding Swing Line Advances.
INTEREST.
On Base Rate Advances.
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THE BORROWER SHALL PAY INTEREST ON THE OUTSTANDING UNPAID PRINCIPAL AMOUNT OF
THE BASE RATE ADVANCES OUTSTANDING FROM TIME TO TIME, UNTIL SUCH BASE RATE
ADVANCES ARE DUE (WHETHER AT MATURITY, BY REASON OF ACCELERATION, BY SCHEDULED
REDUCTION, OR OTHERWISE) AND REPAID AT A SIMPLE INTEREST RATE PER ANNUM EQUAL TO
THE BASE RATE BASIS FOR THE BASE RATE ADVANCES AS IN EFFECT FROM TIME TO TIME,
PROVIDED THAT INTEREST ON THE BASE RATE ADVANCES SHALL NOT EXCEED THE MAXIMUM
AMOUNT. IF AT ANY TIME THE BASE RATE BASIS WOULD EXCEED THE HIGHEST LAWFUL RATE,
INTEREST PAYABLE ON THE BASE RATE ADVANCES SHALL BE LIMITED TO THE HIGHEST
LAWFUL RATE, BUT THE BASE RATE BASIS SHALL NOT THEREAFTER BE REDUCED BELOW THE
HIGHEST LAWFUL RATE UNTIL THE TOTAL AMOUNT OF INTEREST ACCRUED ON THE BASE RATE
ADVANCES EQUALS THE AMOUNT OF INTEREST THAT WOULD HAVE ACCRUED IF THE BASE RATE
BASIS HAD BEEN IN EFFECT AT ALL TIMES.
INTEREST ON THE BASE RATE ADVANCES SHALL BE COMPUTED ON THE BASIS OF A YEAR OF
365 OR 366 DAYS, AS APPLICABLE, FOR THE NUMBER OF DAYS ACTUALLY ELAPSED, AND
SHALL BE PAYABLE IN ARREARS ON JULY 31, 2001, ON THE LAST DAY OF EACH CALENDAR
MONTH THEREAFTER, AND ON THE REVOLVING COMMITMENT MATURITY DATE, THE FACILITY A
TERM LOAN MATURITY DATE OR THE FACILITY B TERM LOAN MATURITY DATE, AS
APPROPRIATE.
On LIBOR Advances.
THE BORROWER SHALL PAY INTEREST ON THE UNPAID PRINCIPAL AMOUNT OF EACH LIBOR
ADVANCE, FROM THE DATE SUCH ADVANCE IS MADE UNTIL IT IS DUE (WHETHER AT
MATURITY, BY REASON OF ACCELERATION, BY SCHEDULED REDUCTION, OR OTHERWISE) AND
REPAID, AT A RATE PER ANNUM EQUAL TO THE LIBOR BASIS FOR SUCH ADVANCE. THE
ADMINISTRATIVE AGENT, WHOSE DETERMINATION SHALL BE CONTROLLING IN THE ABSENCE OF
MANIFEST ERROR, SHALL DETERMINE THE LIBOR BASIS ON THE SECOND BUSINESS DAY PRIOR
TO THE APPLICABLE FUNDING DATE AND SHALL NOTIFY THE BORROWER AND THE LENDERS OF
SUCH LIBOR BASIS.
SUBJECT TO SECTION 11.9 HEREOF, INTEREST ON EACH LIBOR ADVANCE SHALL BE COMPUTED
ON THE BASIS OF A 360-DAY YEAR FOR THE ACTUAL NUMBER OF DAYS ELAPSED, AND SHALL
BE PAYABLE IN ARREARS ON THE LAST DAY OF THE APPLICABLE INTEREST PERIOD THEREOF,
AND ON THE REVOLVING COMMITMENT MATURITY DATE, THE FACILITY A TERM LOAN MATURITY
DATE AND THE FACILITY B TERM LOAN MATURITY DATE, AS APPROPRIATE.
On Swing Line Advances.
THE BORROWER SHALL PAY INTEREST ON THE OUTSTANDING PRINCIPAL AMOUNT OF SUCH
SWING LINE ADVANCE, FROM THE DATE SUCH SWING LINE ADVANCE IS MADE UNTIL IT IS
DUE (WHETHER AT MATURITY, BY REASON OF ACCELERATION OR OTHERWISE) AND REPAID, AT
AN INTEREST RATE PER ANNUM EQUAL TO THE SUM OF (a) THE BASE RATE BASIS IN EFFECT
FROM TIME TO TIME MINUS (b) THE COMMITMENT FEE (SPECIFIED AS A PERCENTAGE) THEN
IN EFFECT, BUT IN NO EVENT HIGHER THAN THE HIGHEST LAWFUL RATE.
SUBJECT TO SECTION 11.9 HEREOF, INTEREST ON SWING LINE ADVANCES SHALL BE
COMPUTED ON THE BASIS OF A 365 OR 366-DAY YEAR, AS APPLICABLE, FOR THE ACTUAL
NUMBER OF DAYS ELAPSED, AND
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SHALL BE PAYABLE IN ARREARS ON JULY 31, 2001, ON THE LAST DAY OF EACH CALENDAR
MONTH THEREAFTER AND ON THE REVOLVING COMMITMENT MATURITY DATE.
Interest if No Notice of Selection of Interest Rate Basis. If the Borrower fails
to give the Administrative Agent timely notice of its selection of a LIBOR
Advance or an Interest Period for a LIBOR Advance, or if for any reason a
determination of a LIBOR Basis for any Advance is not timely concluded due to
the fault of the Borrower, the Base Rate Basis shall apply to the applicable
Advance.
Interest After an Event of Default. (i) After an Event of Default has occurred
hereof and during any continuance thereof, automatically and without any action
by the Administrative Agent or any Lender, the Obligations shall bear interest
at a rate per annum equal to the Default Rate. Such interest shall be payable on
the earlier of demand or the Revolving Commitment Maturity Date, the Facility A
Term Loan Maturity Date or the Facility B Term Loan Maturity Date, as
appropriate, and shall accrue until the earlier of (i) waiver or cure (to the
satisfaction of the Determining Lenders) of the applicable Event of Default,
(ii) agreement by the Lenders affected thereby to rescind the charging of
interest at the Default Rate, or (iii) payment in full of the Obligations. The
Lenders shall not be required to accelerate the maturity of the Advances, to
exercise any other rights or remedies under the Loan Documents, or to give
notice to the Borrower of the decision to charge interest at the Default Rate.
FEES
Revolving Commitment Fee. Subject to Section 11.9 hereof, the Borrower agrees to
pay to the Administrative Agent, for the ratable account of the Lenders, a
commitment fee on the daily average Unused Portion (the "Commitment Fee") at
0.50% per annum. The Commitment Fee shall be payable in arrears on each
Quarterly Date and on the Revolving Commitment Maturity Date. Subject to Section
11.9 hereof, the Commitment Fee shall be calculated on the basis of a 360-day
year for the actual number of days elapsed.
Other Fees. Subject to Section 11.9 hereof, the Borrower agrees to pay to the
Administrative Agent, for the account of the Administrative Agent and one of its
Affiliates, the fees provided for in the letter agreement (the "Fee Letter"),
dated as of the Agreement Date, between the Borrower and the Administrative
Agent on the dates and in the amounts specified therein.
PREPAYMENT AND PAYMENTS
Voluntary LIBOR Advance Prepayments. Upon three Business Days' prior telephonic
notice (to be promptly followed by written notice) by an Authorized Signatory to
the Administrative Agent, LIBOR Advances may be voluntarily prepaid but only so
long as the Borrower concurrently reimburses the Lenders in accordance with
Section 2.9 hereof. Any notice of prepayment shall be irrevocable unless such
notice is given in connection with a refunding of Advances under this Agreement
in full and a termination of this Agreement, in which case the parties hereto
acknowledge that such refunding may occur on a date after the date given in such
notice as a result of normal delay with respect to such refunding; provided,
however, the
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Borrower shall reimburse each Lender (to the extent required) in accordance with
Section 2.9 hereof.
Mandatory Prepayment. On or before the date of any reduction of the Revolving
Credit Commitment, the Borrower shall first, prepay applicable outstanding
Revolving Credit Advances and second, prepay Swing Line Advances in an amount
necessary to reduce the sum of outstanding Revolving Credit Advances, Swing Line
Advances and Reimbursement Obligations to an amount less than or equal to the
Revolving Credit Commitment as so reduced. To the extent required by the
preceding sentence, the Borrower shall first prepay all Base Rate Advances and
shall thereafter prepay LIBOR Advances. To the extent that any prepayment
requires that a LIBOR Advance be repaid on a date other than the last day of its
Interest Period, the Borrower shall reimburse each Lender in accordance with
Section 2.9 hereof. To the extent that aggregate outstanding Revolving Credit
Advances, Reimbursement Obligations, and Swing Line Advances exceed the
Revolving Credit Commitment after any reduction thereof, the Borrower shall
repay any such excess amount and all accrued interest attributable to such
excess Revolving Credit Advances on the date of such reduction.
Prepayments from Sales of Assets. Within 10 Business Days of the receipt of Net
Cash Proceeds from the sale or disposition by the Borrower or any of its
Subsidiaries of any assets (including the Capital Stock of any Subsidiary)
(other than any such sales or dispositions permitted under Sections 7.5(a), (c),
(e), (g), (h), (i) and (j) and such sales or dispositions permitted under
Section 7.5(b) and (d) to the extent not reinvested in accordance with such
Section), the Borrower shall prepay Facility A Term Loan Advances and Facility B
Term Loan Advances in an aggregate principal amount equal to the lesser of (A)
100% of such Net Cash Proceeds received, or (B) an amount, if any, which would
result in the Leverage Ratio being less than 3.50 to 1.00 after such prepayment.
Each such prepayment shall be applied as provided in Section 2.5(g) hereof.
Prepayments from Excess Cash Flow. Commencing on March 31, 2003 and on each
March 31 thereafter, the Borrower shall prepay Facility A Term Loan Advances and
Facility B Term Loan Advances in an aggregate principal amount equal to the
lesser of (i) 50% of Excess Cash Flow, if any, for the fiscal year ending
immediately preceding each such March 31 or (ii) an amount, if any, which would
result in the Leverage Ratio being less than 3.00 to 1.00 after such prepayment.
Each such prepayment shall be applied as provided in Section 2.5(g) hereof.
Prepayment from Recovery Events. Within 10 Business Days after receipt of Net
Cash Proceeds by the Borrower or any of its Subsidiaries from any Recovery
Event, unless a Reinvestment Notice shall have been delivered in respect
thereof, the Borrower shall prepay Facility A Term Loan Advances and Facility B
Term Loan Advances in an aggregate principal amount of 100% of such Net Cash
Proceeds received, provided that (i) no Reinvestment Notice may be delivered
when an Event of Default has occurred and is continuing, (ii) if a Reinvestment
Notice shall be delivered in respect thereof, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied to payment of the Advances on the Reinvestment Prepayment Date,
and (iii) the aggregate amount of Net Cash Proceeds outstanding and pending
reinvestment pursuant to this clause (iii) and Sections 7.5(b) and (d)
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shall not exceed $2,500,000 in any fiscal year. Each such prepayment shall be
applied as provided in Section 2.5(g) hereof.
Prepayment from Sales of Capital Stock. Concurrently with the receipt of Net
Cash Proceeds from the sale or disposition by the Borrower or any of its
Subsidiaries to any Person (other than to the Borrower or any of its
Subsidiaries) of any Capital Stock of the Borrower (other than those set forth
in subsections (a), (b), (c), (d), (e), (f) or (h) of the definition of
Permitted Issuance in Section 1.1), the Borrower shall prepay the Facility A
Term Loan Advances and the Facility B Term Loan Advances in an aggregate
principal amount equal to the lesser of (A) 100% of such Net Cash Proceeds
received, or (B) an amount, if any, which would result in the Leverage Ratio
being less than 3.50 to 1.00 after such prepayment. Each such prepayment shall
be applied as provided in Section 2.5(g) hereof.
Payments, Generally. Any partial payment of a (i) Base Rate Advance shall be in
a principal amount which is at least $100,000 and which is an integral multiple
of $100,000 and (ii) a LIBOR Rate Advance shall be in a principal amount which
is at least $1,000,000 and which is an integral multiple of $500,000, and to the
extent that any payment of a LIBOR Advance is made on a date other than the last
day of its Interest Period, the Borrower shall reimburse each Lender (to the
extent required) in accordance with Section 2.9 hereof. Any voluntary prepayment
of any Term Loan Advance shall be allocated among the Facility A Term Loan
Advances and the Facility B Term Loan Advances pro rata based on the outstanding
principal amount of the Facility A Term Loan Advances and the Facility B Term
Loan Advances and applied to the then remaining installments of the Facility A
Term Loan Advances and the Facility B Term Loan Advances pro rata based on the
number of then remaining installments in respect of the Facility A Term Loan
Advances and the Facility B Term Loan Advances (i.e. each then remaining
installment of the applicable Term Loan Advance shall be reduced by an amount
equal to the aggregate amount to be applied to such Term Loan Advances divided
by the number of the then remaining installments for such Term Loan Advances),
provided that if the amount to be applied to any installment required by this
Agreement would exceed the then remaining amount of such installment, then an
amount equal to such excess shall be applied to the remaining installments in
the order of maturity after giving effect to all prior reductions thereto
(including the amount of prepayments theretofore allocated pursuant to the
preceding portion of this sentence); provided further, however, notwithstanding
the foregoing, until the aggregate amount of voluntary prepayments of Term Loan
Advances exceeds $20,000,000, voluntary prepayments of Term Loan Advances may be
applied to any scheduled installment payments of Facility A Term Loan Advances
or Facility B Term Loan Advances, at the Borrower's discretion, so long as
applied to the Facility A Term Loan Advances and the Facility B Term Loan
Advances pro rata based on the outstanding principal amount of the Facility A
Term Loan Advances and the Facility B Term Loan Advances then outstanding. Any
prepayments required to be made pursuant to Sections 2.5(c), (d), (e) or (f)
hereof shall (i) include and be applied to accrued interest to the date of such
prepayment on the principal amount prepaid, (ii) be allocated among the Facility
A Term Loan Advances and the Facility B Term Loan Advances, pro rata based on
the outstanding principal amount of the Facility A Term Loan Advances and the
Facility B Term Loan Advances and applied to the then remaining installments of
the Facility A Term Loan Advances and the Facility B Term Loan Advances pro rata
based on the number of then remaining installments in respect of the Facility A
Term Loan Advances and the Facility B Term Loan Advances (i.e. each
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then remaining installment of the applicable Term Loan Advance shall be reduced
by an amount equal to the aggregate amount to be applied to such Term Loan
Advances divided by the number of the then remaining installments for such Term
Loan Advance), provided that if the amount to be applied to any installment
required by this Agreement would exceed the then remaining amount of such
installment, then an amount equal to such excess shall be applied to the
remaining installments in the order of maturity after giving effect to all prior
reductions thereto (including the amount of prepayments theretofore allocated
pursuant to the preceding portion of this sentence), (iii) not be subject to the
notice and minimum payment provisions of this Section 2.5; provided, however,
the Borrower shall be required to reimburse each Lender for any loss, cost or
expense incurred by each Lender in connection with any such prepayment as set
forth in Section 2.9 hereof if any prepayment results in a LIBOR Advance being
paid on a day other than the last day of an Interest Period for such LIBOR
Advance, and (iv) be applied first to Base Rate Advances, if any, and then to
LIBOR Advances. With respect to any voluntary payment of Term Loan Advances made
by the Borrower within 15 days of any Quarterly Date on which amortization of
any Term Loan Advance is required, the Borrower shall have the right to
designate such payment as a prepayment or as payment of the Term Loan Advances
required to be made on such Quarterly Date.
Notwithstanding the foregoing provisions of this Section 2.5, if at any time the
mandatory prepayment of any Advances pursuant to this Agreement would result,
after giving effect to the procedures set forth in this Agreement, in the
Borrower incurring costs under Section 2.9 hereof as a result of LIBOR Advances
("Affected LIBOR Advances") being prepaid other than on the last day of an
Interest Period applicable thereto, which costs are required to be paid pursuant
to Section 2.9 hereof, then, the Borrower may, in its sole discretion, initially
deposit a portion (up to 100%) of the amounts that otherwise would have been
paid in respect of the Affected LIBOR Advances with the Administrative Agent
(which deposit must be equal in amount to the amount of the Affected LIBOR
Advances not immediately prepaid) to be held as security for the obligations of
the Borrower to make such mandatory prepayment pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Administrative Agent, with such cash collateral to be directly applied upon
the first occurrence (or occurrences) thereafter of the last day of an Interest
Period applicable to the relevant Advance that is a LIBOR Advance (or such
earlier date or dates as shall be requested by the Borrower), to repay an
aggregate principal amount of such Advance equal to the Affected LIBOR Advances
not initially repaid pursuant to this sentence.
REDUCTION OF COMMITMENTS
Voluntary Reduction. The Borrower shall have the right, upon not less than two
Business Days' notice by an Authorized Signatory to the Administrative Agent (if
telephonic, to be confirmed by telex or in writing on or before the date of
reduction or termination), which shall promptly notify the Lenders, to terminate
or reduce the Revolving Credit Commitment, in whole or in part. Each partial
termination shall be in an aggregate amount which is at least $5,000,000 and
which is an integral multiple of $100,000, and no voluntary reduction in the
Revolving Credit Commitment shall cause any LIBOR Advance to be repaid prior to
the last day of its Interest Period, unless the Borrower shall reimburse each
Lender (to the extent required) in accordance with Section 2.9 hereof.
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Mandatory Reduction. On the Revolving Commitment Maturity Date, the Revolving
Credit Commitment shall automatically reduce to zero.
General Requirements. Upon any reduction of the Revolving Credit Commitment
pursuant to this Section, the Borrower shall immediately make a repayment of
applicable Advances in accordance with Section 2.5(b) hereof. The Borrower shall
reimburse each Lender for any loss or out-of-pocket expense incurred by each
Lender in connection with any such payment, as set forth in Section 2.9 hereof
to the extent applicable. The Borrower shall not have any right to rescind any
termination or reduction, except as otherwise provided in the last sentence of
Section 2.5(a) hereof. Once reduced, the Revolving Credit Commitment may not be
increased or reinstated.
NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. UNLESS THE ADMINISTRATIVE
AGENT SHALL HAVE BEEN NOTIFIED BY A LENDER PRIOR TO THE DATE OF ANY PROPOSED
ADVANCE (WHICH NOTICE SHALL BE EFFECTIVE UPON RECEIPT) THAT SUCH LENDER DOES NOT
INTEND TO MAKE THE PROCEEDS OF SUCH ADVANCE AVAILABLE TO THE ADMINISTRATIVE
AGENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH
PROCEEDS AVAILABLE TO THE ADMINISTRATIVE AGENT ON SUCH DATE, AND THE
ADMINISTRATIVE AGENT MAY IN RELIANCE UPON SUCH ASSUMPTION (BUT SHALL NOT BE
REQUIRED TO) MAKE AVAILABLE TO THE BORROWER A CORRESPONDING AMOUNT. IF SUCH
CORRESPONDING AMOUNT IS NOT IN FACT MADE AVAILABLE TO THE ADMINISTRATIVE AGENT
BY SUCH LENDER, THE ADMINISTRATIVE AGENT SHALL BE ENTITLED TO RECOVER SUCH
AMOUNT ON DEMAND FROM SUCH LENDER (OR, IF SUCH LENDER FAILS TO PAY SUCH AMOUNT
FORTHWITH UPON SUCH DEMAND, FROM THE BORROWER) TOGETHER WITH INTEREST THEREON IN
RESPECT OF EACH DAY DURING THE PERIOD COMMENCING ON THE DATE SUCH AMOUNT WAS
AVAILABLE TO THE BORROWER AND ENDING ON (BUT EXCLUDING) THE DATE THE
ADMINISTRATIVE AGENT RECEIVES SUCH AMOUNT FROM THE LENDER, WITH INTEREST THEREON
AT A PER ANNUM RATE EQUAL TO THE LESSER OF (I) THE HIGHEST LAWFUL RATE OR (II)
THE FEDERAL FUNDS RATE. NO LENDER SHALL BE LIABLE FOR ANY OTHER LENDER'S FAILURE
TO FUND AN ADVANCE HEREUNDER.
PAYMENT OF PRINCIPAL OF ADVANCES
Revolving Credit Advances. To the extent not otherwise required to be paid
earlier as provided herein, the principal amount of the Revolving Credit
Advances shall be due and payable on the Revolving Commitment Maturity Date.
Facility A Term Loan Advances. To the extent not otherwise required to be paid
earlier as provided herein, the principal amount of the Facility A Term Loan
Advances shall be repaid on each Quarterly Date (except as provided in the last
sentence of Section 2.5(g) hereof) and on the Facility A Term Loan Maturity Date
in such amounts as set forth next to each such date below:
<Table>
<Caption>
Amount of Reduction of Facility A
Quarterly Date Term Loan Advances as of each Date
-------------- ----------------------------------
September 30, 2001 $2,500,000
December 31, 2001 $2,500,000
March 31, 2002 2,500,000
June 30, 2002 $2,500,000
September 30, 2002 $3,750,000
</Table>
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<Table>
December 31, 2002 $3,750,000
March 31, 2003 $3,750,000
June 30, 2003 $3,750,000
September 30, 2003 $5,000,000
December 31, 2003 $5,000,000
March 31, 2004 $5,000,000
June 30, 2004 $5,000,000
September 30, 2004 $7,500,000
December 31, 2004 $7,500,000
or such other amount of Facility A Term Loan
Advances then outstanding
</Table>
Facility B Term Loan Advances. To the extent not otherwise required to be paid
earlier as provided herein, the principal amount of the Facility B Term Loan
Advances shall be repaid on each Quarterly Date (except as provided in the last
sentence of Section 2.5(g) hereof) and on the Facility B Term Loan Maturity Date
in such amounts as set forth next to each such date below:
<Table>
<Caption>
Amount of Reduction of Facility B
Quarterly Date Term Loan Advances as of each Date
-------------- ----------------------------------
September 30, 2001 $250,000
December 31, 2001 $250,000
March 31, 2002 $250,000
June 30, 2002 $250,000
September 30, 2002 $250,000
December 31, 2002 $250,000
March 31, 2003 $250,000
June 30, 2003 $250,000
September 30, 2003 $250,000
December 31, 2003 $250,000
March 31, 2004 $250,000
June 30, 2004 $250,000
September 30, 2004 $250,000
December 31, 2004 $250,000
March 31, 2005 $11,750,000
June 30, 2005 $11,750,000
September 30, 2005 $11,750,000
December 31, 2005 $11,750,000
March 31, 2006 $14,215,000
June 30, 2006 $14,215,000
September 30, 2006 $14,215,000
</Table>
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<Table>
December 31, 2006 $14,214,113.34
or such other amount of Facility B Term Loan
Advances then outstanding
</Table>
Swing Line Advances. To the extent not otherwise required to be paid earlier as
provided herein, the outstanding principal amount of each Swing Line Advance
shall be due and payable on the Revolving Commitment Maturity Date.
REIMBURSEMENT. WHENEVER ANY LENDER SHALL SUSTAIN OR INCUR ANY LOSSES OR
REASONABLE OUT-OF-POCKET EXPENSES IN CONNECTION WITH (A) FAILURE BY THE BORROWER
TO BORROW ANY LIBOR ADVANCE AFTER HAVING GIVEN NOTICE OF ITS INTENTION TO BORROW
IN ACCORDANCE WITH SECTION 2.2 HEREOF (WHETHER BY REASON OF THE BORROWER'S
ELECTION NOT TO PROCEED OR THE NON-FULFILLMENT OF ANY OF THE CONDITIONS SET
FORTH IN ARTICLE 3 HEREOF), (B) ANY PREPAYMENT FOR ANY REASON OF ANY LIBOR
ADVANCE IN WHOLE OR IN PART (INCLUDING A PREPAYMENT PURSUANT TO SECTION 9.3(B)
HEREOF) ON OTHER THAN THE LAST DAY OF AN INTEREST PERIOD APPLICABLE TO SUCH
LIBOR ADVANCE, (C) ANY PREPAYMENT OF ANY OF ITS LIBOR ADVANCES THAT IS NOT MADE
ON ANY DATE SPECIFIED IN A NOTICE OF PREPAYMENT GIVEN BY THE BORROWER, OR (D)
THE SELLING BY BANK OF AMERICA OF ITS RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT TO AN ASSIGNEE WITHIN 180 DAYS AFTER THE AGREEMENT DATE, THE BORROWER
AGREES TO PAY TO ANY SUCH LENDER, UPON ITS DEMAND, AN AMOUNT SUFFICIENT TO
COMPENSATE SUCH LENDER FOR ALL SUCH LOSSES AND OUT-OF-POCKET EXPENSES (PROVIDED
THAT WITH RESPECT TO SALES PURSUANT TO CLAUSE (D) ABOVE, BANK OF AMERICA SHALL
ONLY BE REIMBURSED FOR THE LOST PROFITS AND REASONABLE EXPENSES INCURRED BY IT
IN CONNECTION WITH THE RE-EMPLOYMENT OF FUNDS PREPAID AS A RESULT OF SUCH A
SALE), SUBJECT TO SECTION 11.9 HEREOF. SUCH LENDER'S GOOD FAITH DETERMINATION OF
THE AMOUNT OF SUCH LOSSES OR OUT-OF-POCKET EXPENSES, CALCULATED IN ITS USUAL
FASHION, ABSENT MANIFEST ERROR, SHALL BE CONTROLLING. SUCH LOSSES SHALL INCLUDE,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, LOST PROFITS AND REASONABLE
EXPENSES INCURRED BY SUCH LENDER IN CONNECTION WITH THE RE-EMPLOYMENT OF FUNDS
PREPAID, REPAID, CONVERTED OR NOT BORROWED, CONVERTED OR PAID, AS THE CASE MAY
BE. UPON REQUEST OF THE BORROWER, SUCH LENDER SHALL PROVIDE A CERTIFICATE
SETTING FORTH THE AMOUNT TO BE PAID TO IT BY THE BORROWER HEREUNDER AND
CALCULATIONS THEREFOR. THE COVENANTS SET FORTH IN THIS SECTION 2.9 SHALL SURVIVE
TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF ADVANCES IN FULL AND OTHER
AMOUNTS PAYABLE HEREUNDER FOR A PERIOD OF NINE MONTHS THEREAFTER.
MANNER OF PAYMENT
Payment Timing and Type. Each payment (including prepayments) by the Borrower
of the principal of or interest on the Advances, fees, and any other amount owed
under this Agreement or any other Loan Document shall be made not later than
12:00 noon (Dallas, Texas time) on the date specified for payment under this
Agreement to the Administrative Agent at the Administrative Agent's office, in
Dollars constituting immediately available funds.
Non-Business Day Payments. If any payment under this Agreement or any other Loan
Document shall be specified to be made upon a day which is not a Business Day,
it shall be made on the next succeeding day which is a Business Day, unless,
with respect to a payment due in respect of a LIBOR Advance, such Business Day
falls in another calendar month, in which case
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payment shall be made on the preceding Business Day. Any extension of time shall
in such case be included in computing interest and fees, if any, in connection
with such payment.
Payments without Deduction. The Borrower agrees to pay principal, interest, fees
and all other amounts due under the Loan Documents without deduction for set-off
or counterclaim or any deduction whatsoever.
Apportionment of Payments.
PRIOR TO (a) THE OCCURRENCE OF AN EVENT OF DEFAULT AND (b) DELIVERY BY THE
DETERMINING LENDERS OF THE NOTICE TO THE ADMINISTRATIVE AGENT REFERRED TO IN
SECTION 2.10(d)(ii)(b) BELOW, ALL PAYMENTS IN RESPECT OF THE OBLIGATIONS SHALL
BE APPLIED IN THE FOLLOWING ORDER:
first, to pay the Administrative Agent's fees and expenses incurred on
behalf of the Lenders then due and payable;
second, to pay all other fees then due and payable in respect of the
Advances and the Reimbursement Obligations under the Loan Documents;
third, to pay all other amounts other than principal and interest
(including, without limitation, expense reimbursements and indemnities) not
otherwise referred in clauses (1) and (2) immediately preceding then due and
payable in respect of the Advances and the Reimbursement Obligations under the
Loan Documents;
fourth, to pay interest then due and payable on the Advances and the
Reimbursement Obligations, to be applied in accordance with the Applicable
Specified Percentages (except that (a) prior to the Lenders making a Revolving
Credit Advance pursuant to Section 2.2(g) hereof, all interest due and payable
on the Swing Line Advances shall be payable to the Swing Line Bank and (b) at
such time, if any, that the Lenders make a Revolving Credit Advance pursuant to
Section 2.2(g) hereof, the Administrative Agent shall distribute all interest
payments in respect of Swing Line Advances to the Lenders in accordance with
their respective Revolving Credit Specified Percentages).
fifth, to pay principal then due and payable on the Advances and
Reimbursement Obligations, to be applied in accordance with Applicable Specified
Percentages (except that (a) prior to the Lenders making a Revolving Credit
Advance pursuant to Section 2.2(g) hereof, all principal due and payable on the
Swing Line Advances shall be payable to the Swing Line Bank and (b) at such
time, if any, that the Lenders make a Revolving Credit Advance pursuant to
Section 2.2(g) hereof, the Administrative Agent shall distribute all principal
payments in respect of Swing Line Advances to the Lenders in accordance with
their respective Revolving Credit Specified Percentages).
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AFTER (a) THE OCCURRENCE OF AN EVENT OF DEFAULT AND (b) THE DETERMINING LENDERS
SHALL HAVE DELIVERED THE NOTICE TO THE ADMINISTRATIVE AGENT TO APPLY PAYMENTS IN
RESPECT OF THE OBLIGATIONS AS PROVIDED IN THIS SECTION 2.10(d)(ii), ALL PAYMENTS
IN RESPECT OF THE OBLIGATIONS AND (PROCEEDS OF COLLATERAL AND PAYMENTS UNDER ANY
SUBSIDIARY GUARANTY) SHALL BE APPLIED IN THE FOLLOWING ORDER:
first, to pay the Administrative Agent's fees and expenses incurred on
behalf of the Lenders then due and payable;
second, to pay all other fees then due and payable in respect of the
Advances and the Reimbursement Obligations under the Loan Documents;
third, to pay all other amounts other than principal and interest
(including; without limitation, expense reimbursements and indemnities) not
otherwise referred to in clauses (1) and (2) immediately preceding then due and
payable in respect of the Advances and the Reimbursement Obligations under the
Loan Documents;
fourth, to pay interest then due and payable on the Advances and the
Reimbursement Obligations, to be applied in accordance with each Lenders' Total
Specified Percentage; and
fifth, to pay principal then due and payable on the Advances and
Reimbursement Obligations, and in the case of proceeds of Collateral and
payments under any Subsidiary Guaranty, to pay any other obligations to any
Secured Party (as defined in the Security Agreement) not covered in first
through four above, ratably among the Secured Parties in accordance with the
aggregate principal amount of Advances and the Reimbursement Obligations and, in
the case of proceeds of Collateral or payments under any Subsidiary Guaranty,
the obligations secured or guaranteed thereby, owed to each Secured Party.
LIBOR LENDING OFFICES. EACH LENDER'S INITIAL LIBOR LENDING OFFICE IS SET FORTH
OPPOSITE ITS NAME IN SCHEDULE 2 ATTACHED HERETO. EACH LENDER SHALL HAVE THE
RIGHT AT ANY TIME AND FROM TIME TO TIME TO DESIGNATE A DIFFERENT OFFICE OF
ITSELF OR OF ANY AFFILIATE AS SUCH LENDER'S LIBOR LENDING OFFICE, AND TO
TRANSFER ANY OUTSTANDING LIBOR ADVANCE TO SUCH LIBOR LENDING OFFICE. NO SUCH
DESIGNATION OR TRANSFER SHALL RESULT IN ANY LIABILITY ON THE PART OF THE
BORROWER FOR INCREASED COSTS OR EXPENSES RESULTING SOLELY FROM SUCH DESIGNATION
OR TRANSFER (EXCEPT ANY SUCH TRANSFER WHICH IS MADE BY A LENDER PURSUANT TO
SECTION 9.2 OR 9.3 HEREOF, OR OTHERWISE FOR THE PURPOSE OF COMPLYING WITH
APPLICABLE LAW).
SHARING OF PAYMENTS. ANY LENDER OBTAINING A PAYMENT (WHETHER VOLUNTARY OR
INVOLUNTARY, DUE TO THE EXERCISE OF ANY RIGHT OF SET-OFF, OR OTHERWISE) ON
ACCOUNT OF ITS ADVANCES (OTHER THAN PURSUANT TO SECTION 2.4(b) , 2.15, 2.16(d),
9.3 OR 9.5) IN EXCESS OF ITS SHARE OF PAYMENTS MADE BY THE BORROWER ACCORDING TO
(a) BEFORE THE DETERMINING LENDERS HAVE DELIVERED THE NOTICE TO THE
ADMINISTRATIVE AGENT REFERRED TO IN SECTION 2.10(d)(ii)(b) ABOVE, ITS APPLICABLE
SPECIFIED PERCENTAGE, AND (b) AFTER THE DETERMINING LENDERS HAVE DELIVERED THE
NOTICE TO THE ADMINISTRATIVE AGENT REFERRED TO IN SECTION 2.10(d)(ii)(b) ABOVE,
ITS TOTAL SPECIFIED PERCENTAGE, THEN IN EACH CASE, SUCH LENDER SHALL PURCHASE
FROM EACH OTHER LENDER SUCH PARTICIPATION IN THE ADVANCES MADE BY SUCH OTHER
LENDER AS SHALL BE NECESSARY TO CAUSE SUCH PURCHASING LENDER TO SHARE A RATABLE
PORTION OF THE EXCESS PAYMENT WITH EACH OTHER LENDER (BASED ON ITS
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APPLICABLE SPECIFIED PERCENTAGE IF THE DETERMINING LENDERS HAVE NOT DELIVERED
NOTICE TO THE ADMINISTRATIVE AGENT REFERRED TO IN SECTION 2.10(d)(ii)(b) ABOVE,
AND BASED ON ITS TOTAL SPECIFIED PERCENTAGE IF THE DETERMINING LENDERS HAVE
DELIVERED NOTICE TO THE ADMINISTRATIVE AGENT REFERRED TO IN SECTION
2.10(d)(ii)(b) ABOVE); PROVIDED, HOWEVER, THAT IF ALL OR ANY PORTION OF SUCH
EXCESS PAYMENT IS THEREAFTER RECOVERED FROM SUCH PURCHASING LENDER, THE PURCHASE
SHALL BE RESCINDED AND THE PURCHASE PRICE RESTORED TO THE EXTENT OF SUCH
RECOVERY, BUT WITHOUT INTEREST. THE BORROWER AGREES THAT ANY LENDER SO
PURCHASING A PARTICIPATION FROM ANOTHER LENDER PURSUANT TO THIS SECTION, TO THE
FULLEST EXTENT PERMITTED BY LAW, MAY EXERCISE ALL ITS RIGHTS OF PAYMENT
(INCLUDING THE RIGHT OF SET-OFF) WITH RESPECT TO SUCH PARTICIPATION AS FULLY AS
IF SUCH LENDER WERE THE DIRECT CREDITOR OF THE BORROWER IN THE AMOUNT OF SUCH
PARTICIPATION.
CALCULATION OF LIBOR RATE. THE PROVISIONS OF THIS AGREEMENT RELATING TO
CALCULATION OF THE LIBOR RATE ARE INCLUDED ONLY FOR THE PURPOSE OF DETERMINING
THE RATE OF INTEREST OR OTHER AMOUNTS TO BE PAID HEREUNDER THAT ARE BASED UPON
SUCH RATE, IT BEING UNDERSTOOD THAT EACH LENDER SHALL BE ENTITLED TO FUND AND
MAINTAIN ITS FUNDING OF ALL OR ANY PART OF A LIBOR ADVANCE AS IT SEES FIT.
BOOKING LOANS. ANY LENDER MAY MAKE, CARRY OR TRANSFER ADVANCES AT, TO OR FOR THE
ACCOUNT OF ANY OF ITS BRANCH OFFICES OR THE OFFICE OF ANY AFFILIATE. NO SUCH
ACTION SHALL RESULT IN ANY LIABILITY ON THE PART OF THE BORROWER FROM SUCH
ACTION (EXCEPT ANY SUCH ACTION WHICH IS MADE BY A LENDER PURSUANT TO SECTION 9.2
OR 9.3 HEREOF, OR OTHERWISE FOR THE PURPOSE OF COMPLYING WITH APPLICABLE LAW).
TAXES
Any and all payments by the Borrower and each other Obligor hereunder and under
the other Loan Documents (including, without limitation, payments pursuant to
Sections 2.9, 5.9, 9.3, 9.5, 11.2 hereof and this Section 2.15) shall be made,
in accordance with Section 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on, based upon or
measured by its overall net income, net worth or capital, and franchise taxes,
doing business taxes or minimum taxes imposed on it, (i) by the jurisdiction
under the laws of which such Lender or the Administrative Agent (as the case may
be) is organized and in which it has its applicable lending office or any
political subdivision thereof; (ii) by any other jurisdiction, or any political
subdivision thereof, other than those imposed solely by reason of (a) an
asserted relation of such jurisdiction to the transactions contemplated by this
Agreement, (b) the activities of the Borrower in such jurisdiction, or (c) the
activities in connection with the transactions contemplated by this Agreement or
any other Loan Document of a Lender or the Administrative Agent; (iii) by reason
of failure by the Lender or the Administrative Agent to comply with the
requirements of paragraph (e) of this Section 2.15; and (iv) in the case of any
Lender, any Taxes in the nature of transfer, stamp, recording or documentary
taxes resulting from a transfer (other than as a result of foreclosure) by such
Lender of all or any portion of its interest in this Agreement, the Notes or any
other Loan Documents (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any
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Lender or the Administrative Agent, (x) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.15) such
Lender or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (y) the
Borrower shall make such deductions and (z) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
In addition, the Borrower agrees to pay any and all stamp and documentary taxes
and any and all other excise and property taxes, charges and similar levies
(other than Taxes described in clause (iv) of the first sentence of Section
2.15(a)) that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
The Borrower will indemnify each Lender and the Administrative Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.15) paid by such Lender or the Administrative Agent (as the case may be) and
all liabilities (including penalties, additions to tax, interest and reasonable
expenses) arising therefrom or with respect thereto whether or not such Taxes or
Other Taxes were correctly or legally asserted, other than penalties, additions
to tax, interest and expenses arising as a result of gross negligence on the
part of such Lender or the Administrative Agent, provided, however, that the
Borrower shall have no obligation to indemnify such Lender or the Administrative
Agent unless and until such Lender or the Administrative Agent shall have
delivered to the Borrower a certificate setting forth in reasonable detail the
basis of the Borrower's obligation to indemnify such Lender or the
Administrative Agent pursuant to this Section 2.15. This indemnification shall
be made within 30 days from the date such Lender or the Administrative Agent (as
the case may be) makes written demand therefor.
Within 30 days after the date of any payment of Taxes, the Borrower will furnish
to the Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof. If no Taxes are payable in respect of any payment
hereunder, the Borrower will furnish to the Administrative Agent a certificate
from each appropriate taxing authority if available, stating that such payment
is exempt from or not subject to Taxes, provided, however, that such certificate
need only be given if: (i) the Borrower makes any payment from any account
located outside the United States, or (ii) the payment is made by a payor that
is not a United States Person. For purposes of this Section 2.15 the terms
"United States" and "United States Person" shall have the meanings set forth in
Section 7701 of the Code.
Each Lender which is not a United States Person hereby agrees that:
IT SHALL (EXCEPT AS PROVIDED IN SECTION 2.15(e)(vi) HEREOF), NO LATER THAN THE
AGREEMENT DATE (OR, IN THE CASE OF A LENDER WHICH BECOMES A PARTY HERETO
PURSUANT TO SECTION 11.6 AFTER THE AGREEMENT DATE, THE DATE UPON WHICH SUCH
LENDER BECOMES A PARTY HERETO) DELIVER TO THE BORROWER THROUGH THE
ADMINISTRATIVE AGENT, WITH A COPY TO THE ADMINISTRATIVE AGENT:
if any lending office is located in the United States of America, two
accurate and complete signed originals of Internal Revenue Service Form 4224 or
any successor thereto ("Form 4224"),
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if any lending office is located outside the United States of America, two
accurate and complete signed originals of Internal Revenue Service Form 1001 or
any successor thereto ("Form 1001").
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees
for the account of such lending office or lending offices under this
Agreement free from withholding of United States Federal income tax;
IF AT ANY TIME SUCH LENDER CHANGES ITS LENDING OFFICE OR LENDING OFFICES OR
SELECTS AN ADDITIONAL LENDING OFFICE IT SHALL, AT THE SAME TIME OR REASONABLY
PROMPTLY THEREAFTER BUT ONLY TO THE EXTENT THE FORMS PREVIOUSLY DELIVERED BY IT
HEREUNDER ARE NO LONGER EFFECTIVE, DELIVER TO THE BORROWER THROUGH THE
ADMINISTRATIVE AGENT, WITH A COPY TO THE ADMINISTRATIVE AGENT, IN REPLACEMENT
FOR THE FORMS PREVIOUSLY DELIVERED BY IT HEREUNDER:
if such changed or additional lending office is located in the United
States of America, two accurate and complete signed originals of Form 4224; or
otherwise, two accurate and complete signed originals of Form 1001, in each
case indicating that such Lender is on the date of delivery thereof entitled to
receive payments of principal, interest and fees for the account of such changed
or additional lending office under this Agreement free from withholding of
United States Federal income tax;
IT SHALL, BEFORE OR PROMPTLY AFTER THE OCCURRENCE OF ANY EVENT (INCLUDING THE
PASSING OF TIME BUT EXCLUDING ANY EVENT MENTIONED IN CLAUSE (ii) ABOVE)
REQUIRING A CHANGE IN THE MOST RECENT FORM 4224 OR FORM 1001 PREVIOUSLY
DELIVERED BY SUCH LENDER AND IF THE DELIVERY OF THE SAME BE LAWFUL, DELIVER TO
THE BORROWER THROUGH THE ADMINISTRATIVE AGENT WITH A COPY TO THE ADMINISTRATIVE
AGENT, TWO ACCURATE AND COMPLETE ORIGINAL SIGNED COPIES OF FORM 4224 OR FORM
1001 IN REPLACEMENT FOR THE FORMS PREVIOUSLY DELIVERED BY SUCH LENDER;
IT SHALL, PROMPTLY UPON THE REQUEST OF THE BORROWER TO THAT EFFECT, DELIVER TO
THE BORROWER SUCH OTHER FORMS OR SIMILAR DOCUMENTATION AS MAY BE REQUIRED FROM
TIME TO TIME BY ANY APPLICABLE LAW, TREATY, RULE OR REGULATION IN ORDER TO
ESTABLISH SUCH LENDER'S TAX STATUS FOR WITHHOLDING PURPOSES;
IT SHALL NOTIFY THE BORROWER WITHIN 30 DAYS AFTER ANY EVENT (INCLUDING AN
AMENDMENT TO, OR A CHANGE IN ANY APPLICABLE LAW OR REGULATION OR IN THE WRITTEN
INTERPRETATION THEREOF BY ANY REGULATORY AUTHORITY OR ANY JUDICIAL AUTHORITY, OR
BY RULING APPLICABLE TO SUCH LENDER OF ANY GOVERNMENTAL AUTHORITY CHARGED WITH
THE INTERPRETATION OR ADMINISTRATION OF ANY LAW) SHALL OCCUR THAT RESULTS IN
SUCH LENDER NO LONGER BEING CAPABLE OF RECEIVING PAYMENTS WITHOUT ANY DEDUCTION
OR WITHHOLDING OF UNITED STATES FEDERAL INCOME TAX; AND
IF SUCH LENDER IS NOT A "BANK" OR OTHER PERSON DESCRIBED IN SECTION 881(c)(3) OF
THE CODE AND CANNOT DELIVER EITHER FORM 4224 OR FORM 1001, A STATEMENT THAT SUCH
LENDER IS NOT A "BANK" UNDER SECTION 881(c)(3)(a) OF THE CODE AND TWO ORIGINAL
COPIES OF INTERNAL REVENUE
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SERVICE FORM W-8 (OR ANY SUCCESSOR FORM), PROPERLY COMPLETED AND DULY EXECUTED
BY SUCH LENDER.
Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.15 shall survive termination of this Agreement and the payment in full
of the Advances and all other amounts payable hereunder for a period of one year
thereafter.
Any Lender claiming any additional amounts payable pursuant to this Section 2.15
shall use its reasonable best efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its lending
office, if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts which may thereafter accrue and would
not, in the reasonable judgment of such Lender, be materially disadvantageous to
such Lender.
Each Lender (and the Administrative Agent with respect to payments to the
Administrative Agent for its own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver, by virtue of the location of any
Lender's lending office) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this Section 2.15; provided,
however, the Lenders and the Administrative Agent shall not be obligated by
reason of this Section 2.15(h) to contest the payment of any Taxes or Other
Taxes or to disclose any information regarding its tax affairs or tax
computations or reorder its tax or other affairs or tax or other planning.
Subject to the foregoing, to the extent the Borrower pays sums pursuant to this
Section 2.15 and the Lender or the Administrative Agent receives a refund of any
or all of such sums, such refund shall be applied to reduce any amounts then due
and owing under this Agreement or, to the extent that no amounts are due and
owing under this Agreement at the time such refunds are received, the party
receiving such refund shall promptly pay over all such refunded sums to the
Borrower, provided that no Default or Event of Default is in existence at such
time.
LETTERS OF CREDIT
The Letter of Credit Facility. The Borrower may request the Issuing Bank, on the
terms and conditions hereinafter set forth, to issue, and the Issuing Bank
shall, if so requested, issue, letters of credit to be denominated in Dollars
(the "Letters of Credit") for the account of the Borrower or for the joint
account of the Borrower and any of its Subsidiaries from time to time on any
Business Day from the date of the initial Advance until the Revolving Commitment
Maturity Date in an aggregate maximum amount (assuming compliance with all
conditions to drawing) not to exceed, at any time outstanding, the lesser of (i)
$20,000,000 (the "Letter of Credit Facility") and (ii) the sum of (a) the
Revolving Credit Commitment, minus (b) the aggregate principal amount of
Revolving Credit Advances and Swing Line Advances then outstanding. No Letter of
Credit shall have an expiration date (including all rights of renewal) later
than the earlier of (i) five Business Days before the Revolving Commitment
Maturity Date or (ii) one year after the date of issuance thereof (provided that
any Letter of Credit with a one-year term may provide for the renewal thereof
for additional one-year periods, which in no event extend
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beyond the date referred to in clause (i) of this sentence). Immediately upon
the issuance of each Letter of Credit, the Issuing Bank shall be deemed to have
sold and transferred to each Lender, and each Lender shall be deemed to have
purchased and received from the Issuing Bank, in each case irrevocably and
without any further action by any party, an undivided interest and participation
in such Letter of Credit, each drawing thereunder and the obligations of the
Borrower under this Agreement in respect thereof in an amount equal to the
product of (x) such Lender's Revolving Credit Specified Percentage times (y) the
maximum amount available to be drawn under such Letter of Credit (assuming
compliance with all conditions to drawing). Within the limits of the Letter of
Credit Facility and subject to the limits referred to above, the Borrower may
request the issuance of Letters of Credit under this Section 2.16(a) and request
the issuance of additional Letters of Credit under this Section 2.16(a).
Request for Issuance. Each Letter of Credit shall be issued upon notice, given
not later than 11:00 a.m. (Dallas, Texas time) on the third Business Day prior
to the date of the proposed issuance of such Letter of Credit, by the Borrower
to the Issuing Bank. Each Letter of Credit shall be issued upon notice given in
accordance with the terms of any separate agreement between the Borrower and the
Issuing Bank in form and substance reasonably satisfactory to the Borrower and
the Issuing Bank providing for the issuance of Letters of Credit pursuant to
this Agreement and containing terms and conditions not inconsistent with this
Agreement (a "Letter of Credit Agreement"), provided that if any such terms and
conditions are inconsistent with this Agreement, this Agreement shall control.
Each such notice of issuance of a Letter of Credit by the Borrower (a "Notice of
Issuance") shall be by telex, telecopier or cable, specifying therein, in the
case of a Letter of Credit, the requested (i) date of such issuance (which shall
be a Business Day), (ii) maximum amount of such Letter of Credit, (iii)
expiration date of such Letter of Credit, (iv) name and address of the
beneficiary of such Letter of Credit, (v) form of such Letter of Credit and (vi)
such other information as shall be required pursuant to the relevant Letter of
Credit Agreement. If the requested terms of such Letter of Credit are acceptable
to the Issuing Bank in its reasonable discretion, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article 3 hereof, make
such Letter of Credit available to the Borrower at its office referred to in
Section 11.1 or as otherwise agreed with the Borrower in connection with such
issuance. At the request of any Lender, but no more than once each calendar
month, the Administrative Agent shall obtain from the Issuing Bank and deliver
to such requesting Lender a summary report of the issued and outstanding Letters
of Credit.
Drawing and Reimbursement. The Borrower will pay to the Issuing Bank an amount
equal to each draft drawn under any Letter of Credit (i) on the Business Day of
such drawing if presented by noon (Dallas, Texas time) and (ii) by 11:00 a.m.
(Dallas, Texas time) on the first Business Day thereafter if presented after
noon (Dallas, Texas time). In the event that a drawing under any Letter of
Credit is not reimbursed by the Borrower by 11:00 a.m. (Dallas, Texas time) on
the first Business Day after such drawing, the Issuing Bank shall promptly
notify Administrative Agent and each other Lender. Each such Lender shall, on
the first Business Day following such notification, make a Revolving Credit
Advance (or, if as a result of any Debtor Relief Law, the Lenders are prohibited
from making a Revolving Credit Advance, each Lender shall fund its participation
purchased pursuant to Section 2.16(a) hereof by making such amount available to
the Administrative Agent), which shall bear interest at the Base Rate Basis, and
shall be used to repay the applicable portion of the Issuing Bank's Advance with
respect to such Letter of Credit,
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in an amount equal to the amount of its participation in such drawing for
application to reimburse the Issuing Bank (but without any requirement for
compliance with the applicable conditions set forth in Article 3 hereof) and
shall make available to the Administrative Agent for the account of the Issuing
Bank, by deposit at the Administrative Agent's office, in same day funds, the
amount of such Advance. In the event that any Lender fails to make available to
the Administrative Agent for the account of the Issuing Bank the amount of such
Advance, the Issuing Bank shall be entitled to recover such amount on demand
from such Lender together with interest thereon at a rate per annum equal to the
lesser of (i) the Highest Lawful Rate or (ii) the Federal Funds Rate.
Increased Costs. If the adoption, effectiveness, phase-in or applicability after
the Agreement of any Law (or any provision thereof) or if any change in any Law
or in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against letters of credit or guarantees issued by, or assets held by, or
deposits in or for the account of, the Issuing Bank or any Lender or (ii) impose
on the Issuing Bank or any Lender any other condition regarding this Agreement
or such Lender or any Letter of Credit, and the result of any event referred to
in the preceding clause (i) or (ii) shall be to increase the cost to the Issuing
Bank of issuing or maintaining any Letter of Credit or to any Lender of
purchasing any participation therein or making any Advance pursuant to Section
2.16(c) hereof, then, upon demand by the Issuing Bank or such Lender, the
Borrower shall, subject to Section 11.9 hereof, pay to the Issuing Bank or such
Lender, from time to time as specified by the Issuing Bank or such Lender,
additional amounts that shall be sufficient to compensate the Issuing Bank or
such Lender for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrower by the Issuing Bank or such Lender,
shall include in reasonable detail the basis for the demand for additional
compensation and shall be controlling for all purposes, absent manifest error.
The obligations of the Borrower under this Section 2.16(d) shall survive
termination of this Agreement. The Issuing Bank or any Lender claiming any
additional compensation under this Section 2.16(d) shall use reasonable efforts
(consistent with legal and regulatory restrictions) to reduce or eliminate any
such additional compensation which may thereafter accrue and which efforts would
not, in the sole discretion of the Issuing Bank or such Lender, be otherwise
disadvantageous.
Obligations Absolute. The obligations of the Borrower under this Agreement with
respect to any Letter of Credit, any Letter of Credit Agreement and any other
agreement or instrument relating to any Letter of Credit or any Revolving Credit
Advance pursuant to Section 2.16(c) hereof shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the following
circumstances unless such circumstance is caused by the gross negligence or
willful misconduct of the Issuing Bank:
ANY LACK OF VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, ANY LETTER OF CREDIT AGREEMENT, ANY LETTER OF CREDIT OR ANY OTHER
AGREEMENT OR INSTRUMENT RELATING THERETO (COLLECTIVELY, THE "L/C RELATED
DOCUMENTS");
(a) ANY CHANGE IN THE TIME, MANNER OR PLACE OF PAYMENT OF, OR IN ANY OTHER TERM
OF, ALL OR ANY OF THE OBLIGATIONS OF THE BORROWER IN RESPECT OF THE LETTERS OF
CREDIT OR ANY REVOLVING
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CREDIT ADVANCE PURSUANT TO SECTION 2.16(c) HEREOF OR (b) ANY OTHER AMENDMENT OR
WAIVER OF OR ANY CONSENT TO DEPARTURE FROM ALL OR ANY OF THE L/C RELATED
DOCUMENTS;
THE EXISTENCE OF ANY CLAIM, SET-OFF, DEFENSE OR OTHER RIGHT THAT THE BORROWER
MAY HAVE AT ANY TIME AGAINST ANY BENEFICIARY OR ANY TRANSFEREE OF A LETTER OF
CREDIT (OR ANY PERSONS FOR WHOM ANY SUCH BENEFICIARY OR ANY SUCH TRANSFEREE MAY
BE ACTING), THE ISSUING BANK, ANY LENDER OR ANY OTHER PERSON, WHETHER IN
CONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE
L/C RELATED DOCUMENTS OR ANY UNRELATED TRANSACTION;
ANY STATEMENT OR ANY OTHER DOCUMENT PRESENTED UNDER A LETTER OF CREDIT PROVING
TO BE FORGED, FRAUDULENT, INVALID OR INSUFFICIENT IN ANY RESPECT OR ANY
STATEMENT THEREIN BEING UNTRUE OR INACCURATE IN ANY RESPECT;
PAYMENT BY THE ISSUING BANK UNDER A LETTER OF CREDIT AGAINST PRESENTATION OF A
DRAFT OR CERTIFICATE THAT DOES NOT COMPLY WITH THE TERMS OF THE LETTER OF
CREDIT, EXCEPT FOR ANY PAYMENT MADE UPON THE ISSUING BANK'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT;
ANY EXCHANGE, RELEASE OR NON-PERFECTION OF ANY COLLATERAL, OR ANY RELEASE OR
AMENDMENT OR WAIVER OF OR CONSENT TO DEPARTURE FROM ANY GUARANTEE, FOR ALL OR
ANY OF THE OBLIGATIONS OF THE BORROWER IN RESPECT OF THE LETTERS OF CREDIT OR
ANY REVOLVING CREDIT ADVANCE PURSUANT TO SECTION 2.16(c) HEREOF; OR
ANY OTHER CIRCUMSTANCE OR HAPPENING WHATSOEVER, WHETHER OR NOT SIMILAR TO ANY OF
THE FOREGOING, INCLUDING, WITHOUT LIMITATION, ANY OTHER CIRCUMSTANCE THAT MIGHT
OTHERWISE CONSTITUTE A DEFENSE AVAILABLE TO, OR A DISCHARGE OF, THE BORROWER OR
A GUARANTOR, OTHER THAN THE ISSUING BANK'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
Compensation for Letters of Credit.
CREDIT FEE. SUBJECT TO SECTION 11.9 HEREOF, THE BORROWER SHALL PAY TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH LENDER A FEE (WHICH SHALL BE
PAYABLE QUARTERLY IN ARREARS ON EACH QUARTERLY DATE AND ON THE REVOLVING
COMMITMENT MATURITY DATE) EQUAL TO THE PRODUCT OF (a) AN AMOUNT EQUAL TO THE
REMAINDER OF (y) 100% OF THE APPLICABLE LIBOR RATE MARGIN FOR REVOLVING CREDIT
ADVANCES IN EFFECT FROM TIME TO TIME MINUS (z) 0.250% MULTIPLIED BY (b) THE
AVERAGE DAILY AMOUNT AVAILABLE FOR DRAWING UNDER ALL LETTERS OF CREDIT. SUBJECT
TO SECTION 11.9 HEREOF, SUCH FEE SHALL BE COMPUTED ON THE BASIS OF A 360-DAY
YEAR FOR THE ACTUAL NUMBER OF DAYS ELAPSED.
FRONTING FEE. SUBJECT TO SECTION 11.9 HEREOF, THE BORROWER SHALL PAY TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE ISSUING BANK A PER ANNUM FRONTING
FEE (WHICH SHALL BE PAYABLE QUARTERLY IN ARREARS ON EACH QUARTERLY DATE AND ON
THE REVOLVING COMMITMENT MATURITY DATE) IN AN AMOUNT EQUAL TO THE PRODUCT OF (a)
0.250% MULTIPLIED BY (b) THE AVERAGE DAILY AMOUNT AVAILABLE FOR DRAWING UNDER
ALL OUTSTANDING LETTERS OF CREDIT. SUBJECT TO SECTION 11.9 HEREOF, SUCH FEE
SHALL BE COMPUTED ON THE BASIS OF A 360-DAY YEAR FOR THE ACTUAL NUMBER OF DAYS
ELAPSED.
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L/C Cash Collateral Account.
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AND WITHIN FIVE DAYS OF DEMAND BY THE
ADMINISTRATIVE AGENT PURSUANT TO SECTION 8.2(c) (BUT IN THE CASE OF AN EVENT OF
DEFAULT SPECIFIED IN SECTION 8.1(f) OR (g) HEREOF IMMEDIATELY AND WITHOUT ANY
DEMAND OR TAKING OF ANY OTHER ACTION BY THE ADMINISTRATIVE AGENT OR ANY LENDER),
THE BORROWER WILL (a) PAY TO THE ADMINISTRATIVE AGENT IN IMMEDIATELY AVAILABLE
FUNDS AN AMOUNT EQUAL TO THE MAXIMUM AMOUNT THEN AVAILABLE TO BE DRAWN UNDER THE
LETTERS OF CREDIT THEN OUTSTANDING OR (b) DELIVER TO THE ISSUING BANK BACK-UP
LETTERS OF CREDIT ACCEPTABLE TO THE ISSUING BANK WHICH, TOGETHER WITH ANY FUNDS
DEPOSITED IN THE L/C CASH COLLATERAL ACCOUNT, ARE IN AN AMOUNT EQUAL TO THE
MAXIMUM AMOUNT THEN AVAILABLE TO BE DRAWN UNDER THE LETTERS OF CREDIT THEN
OUTSTANDING. ANY AMOUNTS SO RECEIVED BY THE ADMINISTRATIVE AGENT SHALL BE
DEPOSITED BY THE ADMINISTRATIVE AGENT IN A DEPOSIT ACCOUNT MAINTAINED BY THE
ADMINISTRATIVE AGENT (THE "L/C CASH COLLATERAL ACCOUNT").
AS SECURITY FOR THE PAYMENT OF ALL REIMBURSEMENT OBLIGATIONS AND FOR ANY OTHER
OBLIGATIONS, THE BORROWER HEREBY GRANTS, CONVEYS, ASSIGNS, PLEDGES, SETS OVER
AND TRANSFERS TO THE ADMINISTRATIVE AGENT (FOR THE BENEFIT OF THE ISSUING BANK
AND LENDERS), AND CREATES IN THE ADMINISTRATIVE AGENT'S FAVOR (FOR THE BENEFIT
OF THE ISSUING BANK AND LENDERS) A LIEN IN, ALL MONEY, INSTRUMENTS AND
SECURITIES AT ANY TIME HELD IN OR ACQUIRED IN CONNECTION WITH THE L/C CASH
COLLATERAL ACCOUNT, TOGETHER WITH ALL PROCEEDS THEREOF. THE L/C CASH COLLATERAL
ACCOUNT SHALL BE UNDER THE SOLE DOMINION AND CONTROL OF THE ADMINISTRATIVE AGENT
AND THE BORROWER SHALL HAVE NO RIGHT TO WITHDRAW OR TO CAUSE THE ADMINISTRATIVE
AGENT TO WITHDRAW ANY FUNDS DEPOSITED IN THE L/C CASH COLLATERAL ACCOUNT. AT ANY
TIME AND FROM TIME TO TIME, UPON THE ADMINISTRATIVE AGENT'S REQUEST, THE
BORROWER PROMPTLY SHALL EXECUTE AND DELIVER ANY AND ALL SUCH FURTHER INSTRUMENTS
AND DOCUMENTS, INCLUDING UCC FINANCING STATEMENTS, AS MAY BE NECESSARY,
APPROPRIATE OR DESIRABLE IN THE ADMINISTRATIVE AGENT'S JUDGMENT TO OBTAIN THE
FULL BENEFITS (INCLUDING PERFECTION AND PRIORITY) OF THE SECURITY INTEREST
CREATED OR INTENDED TO BE CREATED BY THIS PARAGRAPH (ii) AND OF THE RIGHTS AND
POWERS HEREIN GRANTED. THE BORROWER SHALL NOT CREATE OR SUFFER TO EXIST ANY LIEN
ON ANY AMOUNTS OR INVESTMENTS HELD IN THE L/C CASH COLLATERAL ACCOUNT OTHER THAN
THE LIEN GRANTED UNDER THIS PARAGRAPH (ii).
THE ADMINISTRATIVE AGENT SHALL (a) APPLY ANY FUNDS IN THE L/C CASH COLLATERAL
ACCOUNT ON ACCOUNT OF REIMBURSEMENT OBLIGATIONS WHEN THE SAME BECOME DUE AND
PAYABLE IF AND TO THE EXTENT THAT THE BORROWER SHALL FAIL DIRECTLY TO PAY SUCH
REIMBURSEMENT OBLIGATIONS AND (b) AFTER THE REVOLVING COMMITMENT MATURITY DATE,
APPLY ANY PROCEEDS REMAINING IN THE L/C CASH COLLATERAL ACCOUNT FIRST TO PAY ANY
UNPAID OBLIGATIONS THEN OUTSTANDING HEREUNDER AND THEN TO REFUND ANY REMAINING
AMOUNT TO THE BORROWER.
THE BORROWER, NO MORE THAN ONCE IN ANY CALENDAR MONTH, MAY DIRECT THE
ADMINISTRATIVE AGENT TO INVEST THE FUNDS HELD IN THE L/C CASH COLLATERAL ACCOUNT
(SO LONG AS THE AGGREGATE AMOUNT OF SUCH FUNDS EXCEEDS ANY RELEVANT MINIMUM
INVESTMENT REQUIREMENT) IN (a) DIRECT OBLIGATIONS OF THE UNITED STATES OR ANY
AGENCY THEREOF, OR OBLIGATIONS GUARANTEED BY THE UNITED STATES OR ANY AGENCY
THEREOF AND (b) ONE OR MORE OTHER TYPES OF INVESTMENTS PERMITTED BY THE
ADMINISTRATIVE AGENT, IN EACH CASE WITH SUCH MATURITIES AS THE BORROWER,
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WITH THE CONSENT OF THE ADMINISTRATIVE AGENT, MAY SPECIFY, PENDING APPLICATION
OF SUCH FUNDS ON ACCOUNT OF REIMBURSEMENT OBLIGATIONS OR ON ACCOUNT OF OTHER
OBLIGATIONS, AS THE CASE MAY BE. IN THE ABSENCE OF ANY SUCH DIRECTION FROM THE
BORROWER, THE ADMINISTRATIVE AGENT SHALL INVEST THE FUNDS HELD IN THE L/C CASH
COLLATERAL ACCOUNT (SO LONG AS THE AGGREGATE AMOUNT OF SUCH FUNDS EXCEEDS ANY
RELEVANT MINIMUM INVESTMENT REQUIREMENT) IN ONE OR MORE TYPES OF INVESTMENTS
WITH SUCH MATURITIES AS THE ADMINISTRATIVE AGENT MAY SPECIFY, PENDING
APPLICATION OF SUCH FUNDS ON ACCOUNT OF REIMBURSEMENT OBLIGATIONS OR ON ACCOUNT
OF OTHER OBLIGATIONS, AS THE CASE MAY BE. ALL SUCH INVESTMENTS SHALL BE MADE IN
THE ADMINISTRATIVE AGENT'S NAME FOR THE ACCOUNT OF THE LENDERS, SUBJECT TO THE
OWNERSHIP INTEREST THEREIN OF THE BORROWER. THE BORROWER RECOGNIZES THAT ANY
LOSSES OR TAXES WITH RESPECT TO SUCH INVESTMENTS SHALL BE BORNE SOLELY BY THE
BORROWER, AND THE BORROWER AGREES TO HOLD THE ADMINISTRATIVE AGENT AND THE
LENDERS HARMLESS FROM ANY AND ALL SUCH LOSSES AND TAXES. ADMINISTRATIVE AGENT
MAY LIQUIDATE ANY INVESTMENT HELD IN THE L/C CASH COLLATERAL ACCOUNT IN ORDER TO
APPLY THE PROCEEDS OF SUCH INVESTMENT ON ACCOUNT OF THE REIMBURSEMENT
OBLIGATIONS (OR ON ACCOUNT OF ANY OTHER OBLIGATION THEN DUE AND PAYABLE, AS THE
CASE MAY BE) WITHOUT REGARD TO WHETHER SUCH INVESTMENT HAS MATURED AND WITHOUT
LIABILITY FOR ANY PENALTY OR OTHER FEE INCURRED (WITH RESPECT TO WHICH THE
BORROWER HEREBY AGREES TO REIMBURSE THE ADMINISTRATIVE AGENT) AS A RESULT OF
SUCH APPLICATION.
REVOLVING CREDIT COMMITMENT INCREASE.
Amount and Timing of Increases. Upon written request by the Borrower to the
Administrative Agent not less than ten Business Days prior to the proposed
effective date of the proposed increase (or, in the case of each proposed
Lender, such lesser notice as any proposed Lender is willing to accept), subject
to the further terms and conditions set forth below, the Borrower shall be
entitled to increase the Revolving Credit Commitment not more than one time, in
an aggregate amount for such increase not to exceed $10,000,000.
Mechanics of Increases. Upon the Administrative Agent's receipt of the notice
referred to in Section 2.17(a), the Administrative Agent shall promptly make an
offer to the Lenders to elect to participate in such increase. Each Lender
electing to participate in such Revolving Credit Commitment increase shall
accept any allocation amount designated by the Borrower and the Administrative
Agent that is equal to or less than its proposed portion of the Revolving Credit
Commitment increase. Notwithstanding anything herein or in any other Loan
Document to the contrary, the Borrower and the Administrative Agent may agree to
add other creditors in connection with any such proposed increase (without any
further notice obligations to the existing Lenders and without retriggering the
timing requirements set forth in Section 2.17(a)) if one or more of the existing
Lenders having a Revolving Credit Specified Percentage do not elect to increase
their respective portions of the Revolving Credit Commitment in an amount equal
to the requested Revolving Credit Commitment increase within five Business Days
after the Borrower requests such increase pursuant to Section 2.17(a). If
requested, each Lender (including any new Lenders party hereto) shall upon the
surrender of any then-existing Revolving Credit Note held by such Lender receive
a new Revolving Credit Note evidencing its Revolving Credit Specified
Percentage, as adjusted.
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Conditions to Increase. The following conditions to the increase of the
Revolving Credit Commitment shall have been satisfied or waived to the
Administrative Agent's reasonable satisfaction:
ON ANY DATE OF PROPOSED INCREASE IN THE REVOLVING CREDIT COMMITMENT, THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE 4 HEREOF ARE TRUE AND
CORRECT ON SUCH DATE IN ALL MATERIAL RESPECTS, AS THOUGH MADE ON AND AS OF SUCH
DATE, EXCEPT TO THE EXTENT EXPRESSLY MADE ONLY AS OF A PRIOR DATE;
ON ANY DATE OF A PROPOSED INCREASE IN THE REVOLVING CREDIT COMMITMENT, NO
DEFAULT OR EVENT OF DEFAULT SHALL EXIST ON ANY SUCH DATE, AND NO DEFAULT OR
EVENT OF DEFAULT WOULD RESULT FROM SUCH INCREASE IN THE REVOLVING CREDIT
COMMITMENT AND THE SUBSEQUENT REVOLVING CREDIT ADVANCES TO THE BORROWER, UP TO
THE AMOUNT OF THE REVOLVING CREDIT COMMITMENT (AS INCREASED);
THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE FROM THE BORROWER TO
THE EFFECT THAT (A) SUCH INCREASE HAS RECEIVED ALL NECESSARY AUTHORIZATIONS, IF
NECESSARY, AND IS IN COMPLIANCE WITH ALL MATERIAL APPLICABLE LAWS, (B) NO OTHER
APPROVALS OR CONSENTS FROM ANY PERSON ARE REQUIRED BY ANY SUCH PERSON EXCEPT TO
THE EXTENT THEY HAVE BEEN RECEIVED OR ARE IMMATERIAL, AND (C) SUCH INCREASE IN
THE REVOLVING CREDIT COMMITMENT DOES NOT CONFLICT WITH, OR RESULT IN VIOLATION
OF, ANY MATERIAL AGREEMENT OR INSTRUMENT TO WHICH THE BORROWER OR ANY OF ITS
SUBSIDIARIES, OR ANY OF THEIR RESPECTIVE PROPERTIES, IS SUBJECT;
THE ADMINISTRATIVE AGENT SHALL HAVE DELIVERED TO EACH LENDER EVIDENCE OF NEW
REVOLVING CREDIT SPECIFIED PERCENTAGES AND TOTAL SPECIFIED PERCENTAGES ADJUSTED
TO GIVE EFFECT TO THE INCREASE IN THE REVOLVING CREDIT COMMITMENT AND ANY
REALLOCATION REQUIRED IN ORDER FOR EACH LENDER WITH A REVOLVING CREDIT SPECIFIED
PERCENTAGE TO HAVE A PROPORTIONATE SHARE OF THE REVOLVING CREDIT ADVANCES;
EACH NEW LENDER BEING ADDED TO THIS AGREEMENT SHALL DELIVER TO THE BORROWER AND
THE ADMINISTRATIVE AGENT DOCUMENTATION ACCEPTABLE TO THE ADMINISTRATIVE AGENT
EVIDENCING SUCH NEW LENDER'S ACCEPTANCE OF THIS AGREEMENT AND ALL THE OTHER LOAN
DOCUMENTS IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE
AGENT (AND MAKING SUCH LENDER A PARTY TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS);
THE ADMINISTRATIVE AGENT ON BEHALF OF EACH LENDER SHALL HAVE RECEIVED ALL
AMENDMENTS TO ANY LOAN DOCUMENTS AS THE ADMINISTRATIVE AGENT SHALL DEEM
REASONABLY NECESSARY; AND
THE ADMINISTRATIVE AGENT SHALL HAVE DELIVERED TO THE BORROWER A NOTICE OF THE
COST OF ANY LIBOR BREAKAGE OR OTHER COSTS INCURRED BY ANY LENDER AS A RESULT OF
SUCH INCREASE AND ANY REALLOCATION AMONG THE LENDERS, AND THE BORROWER SHALL PAY
SUCH COSTS ON THE DATE OF SUCH INCREASE IN IMMEDIATELY AVAILABLE FUNDS TO THE
ADMINISTRATIVE AGENT ON BEHALF OF SUCH LENDERS IN ACCORDANCE WITH THE TERMS OF
THIS CREDIT AGREEMENT.
Additional Agreements. Each Lender shall have the right (but not the obligation)
to increase the dollar amount of its share of the Revolving Credit Commitment.
In connection with any increase
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to the Revolving Credit Commitment in accordance with the terms of this Section
2.17, each existing Lender (regardless of whether such Lender is participating
in such increase) and the Borrower and its Subsidiaries agrees to execute any
and all agreements reasonably requested by the Administrative Agent to
effectuate the intent of this Section 2.17. Notwithstanding anything contained
herein to the contrary, the limitations placed upon assignments set forth in
Section 11.6 shall not apply to proposed increases pursuant to this Section.
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT TO THE INITIAL ADVANCES AND THE INITIAL LETTERS OF CREDIT.
THE OBLIGATION OF EACH LENDER TO MAKE THE INITIAL ADVANCE AND THE OBLIGATIONS OF
THE ISSUING BANK TO ISSUE ANY LETTER OF CREDIT ISSUED ON THE AGREEMENT DATE, IS
SUBJECT TO (i) RECEIPT BY THE ADMINISTRATIVE AGENT OF EACH OF THE FOLLOWING, IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO EACH LENDER, WITH A COPY (EXCEPT
FOR THE NOTES) FOR EACH LENDER, AND (ii) SATISFACTION OF THE FOLLOWING
CONDITIONS ON OR BEFORE JULY 16, 2001:
a loan certificate of each Obligor certifying as to the accuracy of its
representations and warranties in the Loan Documents, certifying that no Default
has occurred and is continuing, and including a certificate of incumbency with
respect to each officer executing any Loan Document, and including (i) a copy of
the articles or certificate of incorporation (or other similar organizational
documents) of such Obligor certified to be true, complete and correct by the
secretary of state of its state of incorporation or organization, (ii) a copy of
the by-laws, partnership agreement or other similar governance document of such
Obligor, as in effect on the Agreement Date, (iii) a copy of the resolutions of
such Obligor authorizing it to execute, deliver and perform the Loan Documents
to which it is a party and all other transactions contemplated thereby, and (iv)
a copy of a certificate of good standing and a certificate of existence for its
state of incorporation and each state in which it is qualified to do business;
a duly executed Revolving Credit Note, Facility A Term Loan Note and Facility B
Term Loan Note payable to the order of each Lender with a related Commitment and
in an amount for each Lender equal to its Specified Percentage of each such
Commitment, respectively, and which has specifically requested such Note;
the duly executed Swing Line Note, payable to the order of the Swing Line Bank
in the amount of the Swing Line Facility;
UCC searches in appropriate jurisdictions where Collateral is located;
opinion of counsel to the Borrower and each domestic Subsidiary addressed to the
Lenders;
reimbursement to the Administrative Agent for Special Counsel's reasonable and
customary fees (on an hourly basis) and expenses incurred through the date
hereof;
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the duly executed Fee Letter and any fees required to be paid pursuant to the
Fee Letter;
an amendment fee payable to the Administrative Agent for the ratable account of
the Lenders executing this Agreement in an amount equal to 0.25% of such
Lenders' Commitments;
a conversion fee payable to the Administrative Agent for the ratable account of
the Lenders converting a portion of their respective Facility A Term Loan
Commitment ("Converted Amount") to Facility B Term Loan Commitment in an amount
of 0.50% of such Lenders' Converted Amount;
duly executed and completed Security Agreements and Intellectual Property
Security Agreements or ratifications thereof executed by the Borrower and each
of its Domestic Subsidiaries, granting a first priority perfected Lien in all
Collateral covered thereby, together with related financing statements, stock
powers, stock certificates evidencing ownership of (i) 100% of the issued and
outstanding Capital Stock of each Domestic Subsidiary and (ii) 65% of the issued
and outstanding Capital Stock of each Foreign Subsidiary, and insurance
certificates listing the Administrative Agent as loss payee and additional
insured and otherwise in a form required by the Collateral Documents;
a duly executed and completed Subsidiary Guaranty or ratification thereof by
each Domestic Subsidiary;
duly executed and completed Deeds of Trusts or modification thereof, together
with such environmental reports and title insurance policies or commitments as
shall be required by the Administrative Agent, in form or substance reasonably
satisfactory to the Administrative Agent and Special Counsel;
evidence satisfactory to the Administrative Agent and its counsel confirming
that all or a portion of the Indebtedness of the Borrower owned by the Existing
Equityholders, which shall be in an amount not less than $94,900,000, plus
additional cash in an amount equal to $231,000, shall have been transferred to
the Borrower in exchange for 12.5% Senior Convertible Preferred Stock, par value
$0.01, in the Borrower ("Senior Preferred Stock");
evidence satisfactory to the Administrative Agent that no amendment to the
Senior Subordinated Notes Indenture permitting the conversion of all Senior
Subordinated Notes owned by any of HMTF into the equity instruments contemplated
by clause (m) above and permanently reducing the amount of Senior Subordinated
Notes which are subject to the Indenture by such amount is necessary;
the Revolving Credit Availability shall equal not less than $15,000,000 as of
the Agreement Date;
duly executed and completed assignments of the deposit accounts required by
Administrative Agent pursuant to Section 5.14 hereof;
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evidence satisfactory to the Administrative Agent that, if and to the extent the
Borrower becomes obligated to pay any taxes arising from the purchase by the
Existing Equityholders (the "Purchasers") of certain Indebtedness of the
Borrower, net of any tax benefit derived from any deduction, loss or other
allowance allowed to the Borrower as a result of the transactions contemplated
by clause (m) above or otherwise allocable to the acquisition or retention of
such Indebtedness by the Purchasers, and less the amount of $231,000 paid on
account of the taxes attributable to the disallowance to the Borrower of the
deduction for original issue discount under Section 163(e)(5) of the Code
through the date of the transactions contemplated by clause (m) (collectively,
the "Indemnified Tax"), the Purchasers shall, at their option, either make a
cash contribution to the capital of the Borrower or buy shares of Capital Stock
of the Borrower, in each case in an aggregate amount equal to the net amount of
the Indemnified Tax, as more specifically described in that certain Securities
Exchange Agreement dated as of July 16, 2001 by and among the Borrower, HI
Cayman, L.P., a Cayman Islands exempted limited partnership, and HI Senior Debt
Partners, L.P., a Texas limited partnership (the "Securities Exchange
Agreement"), such terms and conditions to be satisfactory to the Administrative
Agent;
a sufficient portion of the Facility A Term Loan Advances outstanding under the
Existing Credit Agreement shall have been converted into Facility B Term Loan
Advances to cause the Facility A Term Loan Advances to be not greater than
$60,000,000;
all accrued and unpaid interest on the Obligations under the Existing Credit
Agreement and all fees as provided therein outstanding on the Agreement Date
shall have been paid to the Administrative Agent; and
such other documents, instruments and certificates as the Administrative Agent
or any Lender may reasonably require in connection with the transactions
contemplated hereby.
CONDITIONS PRECEDENT TO ALL ADVANCES AND LETTERS OF CREDIT. THE OBLIGATION OF
EACH LENDER TO MAKE EACH ADVANCE HEREUNDER (INCLUDING THE INITIAL ADVANCE) AND
THE OBLIGATION OF THE ISSUING BANK TO ISSUE OR EXTEND EACH LETTER OF CREDIT
(INCLUDING THE INITIAL LETTER OF CREDIT) IS SUBJECT TO FULFILLMENT OF THE
FOLLOWING CONDITIONS IMMEDIATELY PRIOR TO OR CONTEMPORANEOUSLY WITH EACH SUCH
ADVANCE OR ISSUANCE OR EXTENSION:
With respect to each Advance and each issuance of a Letter of Credit, all of the
representations and warranties of the Borrower under this Agreement, which,
pursuant to Section 4.2 hereof, are made at and as of the time of such Advance
or Letter of Credit, shall be true and correct at such time in all material
respects, both before and after giving effect to the application of the proceeds
of such Advance or Letter of Credit;
There shall not exist a Default or Event of Default hereunder;
The aggregate Advances and Letters of Credit, after giving effect to such
proposed Advance or Letter of Credit, shall not exceed the maximum principal
amount then permitted to be outstanding hereunder;
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No order, judgment, injunction or decree of any Tribunal shall purport to enjoin
or restrain any Lender or the Issuing Bank from making any Advance or issuing
any Letter of Credit;
There shall be no Litigation pending against, or, to the Borrower's current
actual knowledge, threatened against the Borrower or any of its Subsidiaries, or
in any of their respective properties, which could reasonably be expected to
have a Material Adverse Effect; and
There shall have occurred no material adverse change in the business, assets,
condition (financial or otherwise) or results of operations of the Borrower and
its Subsidiaries, taken as a whole since the date of the last financial
statements delivered pursuant to Section 6.2(a) hereof.
Notwithstanding the above, the obligation of each Lender to make a
Revolving Credit Advance pursuant to Sections 2.2(g) and 2.16(c) hereof (or fund
its participation in respect of Letters of Credit pursuant to Section 2.16(c)
hereof) shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (i) the occurrence of any Default
or Event of Default, (ii) the failure of the Borrower to satisfy any condition
set forth in this Section 3.2, or (iii) any other circumstance, happening or
event whatsoever, except that the conditions precedent set forth in Section 3.1
and 3.2 hereof with respect to the Swing Line Advance or the Letter of Credit
for which such Revolving Credit Advance is made pursuant to Section 2.2(g) or
2.16(c) hereof (or participation funded) shall have been satisfied in full at
the time of the making of such Swing Line Advance or the issuance or extension
of such Letter of Credit.
CONDITIONS PRECEDENT TO CONVERSIONS AND CONTINUATIONS. THE OBLIGATION OF THE
LENDERS TO CONVERT ANY EXISTING BASE RATE ADVANCE INTO A LIBOR ADVANCE OR TO
CONTINUE ANY EXISTING LIBOR ADVANCE IS SUBJECT TO THE CONDITION PRECEDENT THAT
ON THE DATE OF SUCH CONVERSION OR CONTINUATION NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING OR WOULD RESULT FROM THE MAKING OF SUCH CONVERSION OR
CONTINUATION. THE ACCEPTANCE OF THE BENEFITS OF EACH SUCH CONVERSION AND
CONTINUATION SHALL CONSTITUTE A REPRESENTATION AND WARRANTY BY THE BORROWER TO
EACH OF THE LENDERS THAT NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING OR WOULD RESULT FROM THE MAKING OF SUCH CONVERSION OR CONTINUATION.
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES. THE BORROWER HEREBY REPRESENTS AND WARRANTS TO
EACH LENDER AS FOLLOWS:
Organization; Power; Qualification. As of the Agreement Date, the respective
jurisdiction of incorporation or organization and percentage ownership by the
Borrower or another Subsidiary of the Subsidiaries listed on Schedule 5 are true
and correct. All of the outstanding Capital Stock of the Borrower and its
Subsidiaries is validly issued, fully paid and non-assessable. Each of the
Borrower and its Subsidiaries is a corporation, partnership or limited liability
company duly organized, validly existing and in good standing under the laws of
its state of organization. Each of the Borrower and its Subsidiaries has the
corporate or other legal power and authority to own
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its properties and to carry on its business as now being and hereafter proposed
to be conducted. Each of the Borrower and its Subsidiaries is authorized to do
business, duly qualified and in good standing in the jurisdictions set forth in
Schedule 8 and no qualification or authorization is necessary in any other
jurisdictions in which the character of its properties or the nature of its
business requires such qualification or authorization except where the failure
to be so qualified or authorized would not have a Material Adverse Effect.
Authorization. The Borrower has the corporate power and has taken all necessary
corporate action to authorize it to borrow hereunder. Each Obligor has corporate
or other legal power and has taken all necessary corporate or other legal action
to execute, deliver and perform the Loan Documents to which it is party in
accordance with the terms thereof, and to consummate the transactions
contemplated thereby. Each Loan Document has been duly executed and delivered by
the Obligor executing it. Each of the Loan Documents to which an Obligor is a
party is a legal, valid and binding respective obligation of such Obligor,
enforceable in accordance with its terms, subject, to enforcement of remedies,
to the following qualifications: (i) equitable principles generally, and (ii)
Debtor Relief Laws (insofar as any such law relates to the bankruptcy,
insolvency or similar event of such Obligor).
Compliance with Other Loan Documents and Contemplated Transactions. The
execution, delivery and performance by each Obligor of the Loan Documents to
which it is a party, and the consummation of the transactions contemplated
thereby, do not and will not (i) require any consent or approval other than (x)
those already obtained, (y) consents under immaterial contractual obligations,
the failure to obtain which could not reasonably be expected to have a Material
Adverse Effect, and (z) UCC and mortgage filings in connection with the Loan
Documents, (ii) violate any material Applicable Law, the result of which could
not reasonably be expected to have a Material Adverse Effect, (iii) conflict
with, result in a breach of, or constitute a default under the certificate of
incorporation, by-laws, partnership agreement, operating agreement or other
similar governing document or agreement of such Obligor, (iv) conflict with,
result in a breach of, or constitute a default under any Necessary
Authorization, indenture, agreement or other instrument, to which such Obligor
is a party or by which they or their respective properties may be bound, or (v)
result in or require the creation or imposition of any Lien upon or with respect
to any property now owned or hereafter acquired by such Obligor other than the
Liens created pursuant to the Loan Documents.
Business. The Borrower and its Subsidiaries are engaged primarily in the
business of the manufacture, direct selling, direct marketing or home
furnishings business and activities reasonably related, ancillary or
complimentary thereto.
Licenses, etc. All Necessary Authorizations have been duly obtained, and are in
full force and effect without any known conflict with the rights of others and
free from any unduly burdensome restrictions.
Compliance with Law. The Borrower and its Subsidiaries are in compliance in all
respects with all Applicable Laws, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect.
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Title to Properties. The Borrower and its Subsidiaries have good and
indefeasible title to, or a valid leasehold interest in, all of their material
assets. None of their assets are subject to any Liens, except Permitted Liens.
No financing statement or other Lien filing (except relating to Permitted Liens
and other Liens for which releases and UCC-3 Termination Statements have been
obtained pursuant to Section 3.1(l) hereof) is on file in any state or
jurisdiction that names the Borrower or any of its Subsidiaries as debtor or
covers (or purports to cover) any assets of the Borrower or any of its
Subsidiaries, except for Indebtedness permitted hereunder or with respect to
which the requirements of Section 3.1(l) hereof have been satisfied. The
Borrower and its Subsidiaries have not signed any such financing statement or
filing, nor any security agreement authorizing any Person to file any such
financing statement or filing (except relating to Permitted Liens).
Litigation. Except as reflected on Schedule 4 hereto, as of the Agreement Date,
there is no Litigation pending against, or, to the Borrower's current actual
knowledge, threatened against the Borrower, or in any other manner relating
directly and adversely to the Borrower or any of its Subsidiaries, or any of
their properties, in, before, or by any Tribunal which if adversely determined
could reasonably be expected to have a Material Adverse Effect.
Taxes. Except as set forth in Schedule 11 hereto, all federal and other material
tax returns of the Borrower and its Subsidiaries required by law to be filed
have been duly filed or extensions have been timely filed, and all federal and
other material taxes, assessments and other governmental charges or levies upon
the Borrower, its Subsidiaries or any of their respective properties, income,
profits and assets, which are due and payable, have been paid, unless the same
are being contested in good faith by appropriate proceedings, with adequate
reserves established therefor, and no Lien (other than a Permitted Lien) has
attached and no foreclosure, distraint, sale or similar proceedings have been
commenced that have not been vacated, discharged, bonded or stayed. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of their taxes are, in the judgment of the Borrower, adequate.
Financial Statements; Material Liabilities.
THE BORROWER HAS HERETOFORE DELIVERED TO LENDERS THE AUDITED CONSOLIDATED
BALANCE SHEETS OF THE BORROWER AS AT DECEMBER 31, 2000, AND THE RELATED
STATEMENTS OF EARNINGS AND CHANGES IN SHAREHOLDERS' EQUITY AND STATEMENT OF CASH
FLOWS FOR THE TWELVE-MONTH PERIOD THEN ENDED (THE "FINANCIAL STATEMENTS"). THE
FINANCIAL STATEMENTS WERE PREPARED IN CONFORMITY WITH GAAP AND FAIRLY PRESENT,
IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF THE BORROWER AND ITS
SUBSIDIARIES AS AT THE DATE THEREOF AND THE COMBINED RESULTS OF OPERATIONS AND
CASH FLOWS FOR THE PERIOD COVERED THEREBY.
THE PROJECTED CONSOLIDATED FINANCIAL STATEMENTS OF THE BORROWER, DELIVERED TO
THE LENDERS PRIOR TO OR ON THE AGREEMENT DATE ARE BASED ON GOOD FAITH ESTIMATES
AND ASSUMPTIONS MADE BY THE MANAGEMENT OF THE BORROWER AND BELIEVED TO BE
REASONABLE AT THE TIME MADE, IT BEING RECOGNIZED BY THE LENDERS THAT SUCH
PROJECTIONS AS TO FUTURE EVENTS ARE NOT TO BE VIEWED AS FACTS AND THAT ACTUAL
RESULTS DURING THE PERIOD OR PERIODS COVERED BY ANY SUCH PROJECTIONS MAY DIFFER
FROM THE PROJECTED RESULTS.
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THE FINANCIAL STATEMENTS OF THE BORROWER AND ITS SUBSIDIARIES DELIVERED TO THE
LENDERS PURSUANT TO SECTION 6.1 AND 6.2 HEREOF FAIRLY PRESENT IN ALL MATERIAL
RESPECTS THEIR RESPECTIVE FINANCIAL CONDITION AND THEIR RESPECTIVE RESULTS OF
OPERATIONS AS OF THE DATES AND FOR THE PERIODS SHOWN, ALL IN ACCORDANCE WITH
GAAP, SUBJECT TO NORMAL YEAR-END ADJUSTMENTS. THE LATEST OF SUCH FINANCIAL
STATEMENTS REFLECTS ALL MATERIAL LIABILITIES, DIRECT AND CONTINGENT, OF THE
BORROWER AND EACH SUBSIDIARY OF THE BORROWER THAT ARE REQUIRED TO BE DISCLOSED
IN ACCORDANCE WITH GAAP.
No Adverse Change. Since the date of the Financial Statements and thereafter any
financial statements delivered pursuant to Section 6.2(a) hereof, no event or
circumstance has occurred or arisen which could reasonably be expected to have
as a Material Adverse Effect.
ERISA. None of the Borrower or any of its Subsidiaries maintains or contributes
to any Plan or Multiemployer Plan pursuant to which employees of the Borrower or
any of its Subsidiaries participate other than those disclosed to the
Administrative Agent in writing. Each such Plan (other than any Multiemployer
Plan) is in compliance in all material respects with the applicable provisions
of ERISA, the Code and any other Applicable Law, except where the failure to
comply could not reasonably be expected to have a Material Adverse Effect. No
accumulated funding deficiency (as defined in Section 412(a) of the Code) with
respect to a Plan has occurred (without regard to any waiver granted under
Section 412 of the Code), the result of which could reasonably be expected to
have Material Adverse Effect. None of the Borrower or any member of its
Controlled Group has failed to make any contribution or pay any amount due or
owing as required under the terms of any Plan or Multiemployer Plan, the result
of which could reasonably be expected to have Material Adverse Effect. There has
been no ERISA Event, the result of which could reasonably be expected to have a
Material Adverse Effect. The present value of the benefit liabilities, as
defined in Title IV of ERISA, of each Plan subject to Title IV of ERISA (other
than a Multiemployer Plan) of the Borrower and each member of its Controlled
Group does not exceed by more than $500,000 the present value of the assets of
each such Plan as of the most recent valuation date using each such Plan's
actuarial assumptions at such date. There are no pending, or to the Borrower's
knowledge threatened, claims, lawsuits or actions (other than routine claims for
benefits in the ordinary course) asserted or instituted against, and neither the
Borrower nor any member of its Controlled Group has knowledge of any threatened
litigation or claims against, the assets of any Plan or its related trust or
against any fiduciary of a Plan with respect to the operation of such Plan the
result of which could reasonably be expected to have a Material Adverse Effect.
None of the Borrower, any member of its Controlled Group, or any organization to
which the Borrower or any member of its Controlled Group is a successor or
parent corporation within the meaning of ERISA Section 4069(b) , has engaged in
a transaction within the meaning of ERISA Section 4069 the result of which could
reasonably be expected to have Material Adverse Effect.
Compliance with Regulations T, U and X. The Borrower is not engaged principally
or as one of its important activities in the business of extending credit for
the purpose of purchasing or carrying any margin stock within the meaning of
Regulations T, U and X of the Board of Governors of the Federal Reserve System,
and no proceeds of any Advances or Letters of Credit will be used, directly or
indirectly, to purchase or carry any such margin stock. No more than 25% of the
assets of the Borrower and its Subsidiaries will be margin stock. Neither the
making
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of any Advances, the issuance of any Letters of Credit nor the application of
any proceeds thereof will violate, or be inconsistent with, the provisions of
Regulations T, U and X of the Board of Governors of the Federal Reserve System.
Necessary Authorization. The Borrower and its Subsidiaries are not required to
obtain any Necessary Authorization that has not already been obtained from, or
effect any material filing or registration that has not already been effected
with, any federal, state or local regulatory authority in connection with the
execution and delivery of this Agreement or any other Loan Document, or the
performance thereof, in accordance with their respective terms, including any
borrowing hereunder.
Absence of Default. No event has occurred or failed to occur, which has not been
remedied or waived, the occurrence or non-occurrence of which constitutes, or
which with the passage of time or giving of notice or both would constitute, (i)
an Event of Default or (ii) a default by the Borrower or any of its Subsidiaries
under any indenture, agreement or other instrument, or any judgment, decree or
order to which the Borrower or any of its Subsidiaries or by which they or any
of their respective properties is bound, the result of which with respect to any
default set forth in clause (ii) immediately preceding could reasonably be
expected to have a Material Adverse Effect.
Governmental Regulation. Neither the Borrower nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended. Neither the entering into or performance by the
Borrower of this Agreement nor the issuance of the Notes violates any provision
of such act or requires any consent, approval, or authorization of, or
registration with, the Securities and Exchange Commission or any other Tribunal
pursuant to any provisions of such act.
Environmental Matters. Except as disclosed in Borrower's Environmental Reports,
(i) neither the Borrower nor any of its Subsidiaries has any current actual
knowledge that any substance deemed hazardous by any Applicable Environmental
Law, has been installed (a) on any real property fee title to which is now owned
by the Borrower or any of its Subsidiaries or (b) by Borrower or any of its
Subsidiaries on any real property leased by the Borrower or any of its
Subsidiaries, in either case in a manner which could give rise to a violation of
Applicable Environmental Laws which could reasonably be expected to have a
Material Adverse Effect; (ii) the Borrower and its Subsidiaries are not in
material violation of or subject to any existing, pending or, to the Borrower's
knowledge, threatened investigation or inquiry by any governmental authority or
to any material remedial obligations under any Applicable Environmental Laws
which could reasonably be expected to have a Material Adverse Effect; and (iii)
the Borrower and its Subsidiaries have obtained all permits, licenses, and
authorizations required by Applicable Environmental Laws except where failure to
obtain such permits would not have a Material Adverse Effect. The Borrower and
its Subsidiaries have taken reasonable steps to determine, and the Borrower and
its Subsidiaries have no current actual knowledge, that any hazardous substances
or solid wastes have been disposed of or otherwise released (y) on or
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to the real property fee title to which is owned by the Borrower or any of its
Subsidiaries or (z) by Borrower or any of its Subsidiaries on or to any real
property leased by Borrower or any of its Subsidiaries, all within the meaning
of the Applicable Environmental Laws, which could reasonably be expected to have
a Material Adverse Effect. For purposes of this Section 4.1(q), the Borrower's
Environmental Reports means those Environmental Assessments prepared by Law
Engineering in anticipation of the transaction hereunder and listed on Schedule
10 hereto.
Certain Fees. No broker's, finder's or other fee or commission will be payable
by the Borrower (other than to the Lenders hereunder and HMTF and its
Affiliates) with respect to the making of the Commitments or the Advances
hereunder. The Borrower agrees to indemnify and hold harmless the Administrative
Agent and each Lender from and against any claims, demand, liability,
proceedings, costs or expenses asserted with respect to or arising in connection
with any such fees or commissions.
Intellectual Property. The Borrower and its Subsidiaries have collectively
obtained or applied for or licensed or otherwise obtained the right to use all
patents, trademarks, service marks, trade names, copyrights, and other rights,
free from Liens (except Permitted Liens), that are necessary for the operation
of their business as presently conducted and as proposed to be conducted other
than those of which the failure to obtain or to apply for could not reasonably
be expected to have a Material Adverse Effect. Nothing has come to the current
actual knowledge of the Borrower or any of its Subsidiaries to the effect that
(i) any process, method, part or other material presently contemplated to be
employed by the Borrower or any of its Subsidiaries infringes any valid and
enforceable patent, trademark, service mark, trade name, copyright, license or
other right owned by any other Person, or (ii) there is pending or overtly
threatened any claim or litigation against or affecting the Borrower or any of
its Subsidiaries contesting its right to sell or use any such process, method,
part or other material, in each case which could reasonably be expected to
result in a Material Adverse Effect.
Disclosure. All factual information, reports, financial statements, exhibits and
schedules furnished in writing by the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender in connection with this Agreement or the
other Loan Documents prior to or on the Agreement Date is, and all other such
factual written information furnished by or on behalf of the Borrower or any of
its Subsidiaries to the Administrative Agent or any Lender after the Agreement
Date will be, true and accurate in all material respects (or, in the case of
projections based on reasonable estimates and assumptions) on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information not materially
misleading at such time in light of the circumstances under which such
information was provided. There is no fact known to the Borrower and not known
to the public generally that could reasonably be expected to have a Material
Adverse Effect, which has not been set forth in this Agreement or in the
documents, certificates and statements furnished to the Lenders by or on behalf
of the Borrower hereof in connection with the transactions contemplated hereby
or thereby.
Solvency. The Borrower is, and Borrower and its Subsidiaries on a consolidated
basis are, Solvent.
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Labor Relations. Except as set forth on Schedule 9 hereto, as of the Agreement
Date neither the Borrower nor any of its Subsidiaries is a party to a collective
bargaining agreement or similar agreement, and the Borrower and each of its
Subsidiaries is in compliance in all material respects with all Laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours and other laws related to the employment of its employees, and there
are no arrears in the payment of wages, withholding or social security taxes,
unemployment insurance premiums or other similar obligations of the Borrower or
any of its Subsidiaries or for which the Borrower or any such Subsidiary may be
responsible other than in the ordinary course of business. There is no strike,
work stoppage or labor dispute with any union or group of employees pending or
overtly threatened involving Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
Common Enterprise. The Borrower and its Subsidiaries are engaged in the
businesses set forth in Section 4.1(d) hereof. These operations require
financing on a basis such that the credit supplied can be made available from
time to time to the Borrower and various of its Subsidiaries, as required for
the continued successful operation of the Borrower and its Subsidiaries as a
whole. The Borrower and its Subsidiaries expect to derive benefit (and the
boards of directors of the Borrower and its Subsidiaries have determined that
the Borrower and its Subsidiaries may reasonably be expected to derive benefit),
directly or indirectly, from the credit extended by the Lenders hereunder, both
in their separate capacities and as members of the group of companies, since the
successful operation and condition of the Borrower and its Subsidiaries is
dependent on the continued successful performance of the functions of the group
as a whole.
Collateral. Pursuant to the Loan Documents, the Borrower and its Subsidiaries
have granted to the Administrative Agent for the benefit of the Lenders
perfected Liens upon substantially all of their assets other than those assets
specifically excluded from the Administrative Agent's Lien pursuant to the Loan
Documents.
Deposit Accounts. Attached hereto as Schedule 4.1(y) is a listing of all deposit
accounts of the Borrower and its Subsidiaries and the amounts on deposit therein
as of a date no earlier than June 30, 2001.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. ALL REPRESENTATIONS AND
WARRANTIES MADE UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
DEEMED TO BE MADE AT AND AS OF THE AGREEMENT DATE AND AT AND AS OF THE DATE OF
EACH ADVANCE, AND EACH SHALL BE TRUE AND CORRECT WHEN MADE, EXCEPT TO THE EXTENT
(a) PREVIOUSLY FULFILLED IN ACCORDANCE WITH THE TERMS HEREOF, (b) APPLICABLE TO
A SPECIFIC DATE OR OTHERWISE SUBSEQUENTLY INAPPLICABLE, OR (c) PREVIOUSLY WAIVED
IN WRITING BY THE DETERMINING LENDERS WITH RESPECT TO ANY PARTICULAR FACTUAL
CIRCUMSTANCE. ALL SUCH REPRESENTATIONS AND WARRANTIES SHALL SURVIVE, AND NOT BE
WAIVED BY, THE EXECUTION HEREOF BY ANY LENDER, ANY INVESTIGATION OR INQUIRY BY
ANY LENDER, OR BY THE MAKING OF ANY ADVANCE UNDER THIS AGREEMENT.
GENERAL COVENANTS
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
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PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. THE BORROWER SHALL, AND SHALL
CAUSE EACH SUBSIDIARY TO:
except as otherwise permitted pursuant to Section 7.4 hereof, preserve and
maintain, or timely obtain and thereafter preserve and maintain, (i) its
existence, and (ii) all rights, franchises, licenses, authorizations, consents,
privileges and all other Necessary Authorizations from federal, state and local
governmental bodies and any tribunal (regulatory or otherwise), the loss of
which could reasonably be expected to have a Material Adverse Effect; and
except as otherwise permitted pursuant to Section 7.4 hereof, qualify and remain
qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization, unless the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
BUSINESS; COMPLIANCE WITH APPLICABLE LAW. THE BORROWER AND ITS SUBSIDIARIES
SHALL (a) ENGAGE PRIMARILY IN THE BUSINESSES SET FORTH IN SECTION 4.1(d) HEREOF,
AND (b) COMPLY IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF ALL MATERIAL
APPLICABLE LAW.
MAINTENANCE OF PROPERTIES. THE BORROWER SHALL, AND SHALL CAUSE EACH SUBSIDIARY
TO, MAINTAIN OR CAUSE TO BE MAINTAINED ALL ITS MATERIAL PROPERTIES (WHETHER
OWNED OR HELD UNDER LEASE) IN REASONABLY GOOD REPAIR, WORKING ORDER AND
CONDITION, TAKEN AS A WHOLE, AND FROM TIME TO TIME MAKE OR CAUSE TO BE MADE ALL
APPROPRIATE REPAIRS, RENEWALS AND REPLACEMENTS AS BORROWER SHALL IN GOOD FAITH
DEEM NECESSARY.
ACCOUNTING METHODS AND FINANCIAL RECORDS. THE BORROWER SHALL, AND SHALL CAUSE
EACH SUBSIDIARY TO, MAINTAIN A SYSTEM OF ACCOUNTING ESTABLISHED AND ADMINISTERED
IN ACCORDANCE WITH GAAP, KEEP ADEQUATE RECORDS AND BOOKS OF ACCOUNT IN WHICH
COMPLETE ENTRIES WILL BE MADE AND ALL TRANSACTIONS REFLECTED IN ACCORDANCE WITH
SOUND BUSINESS PRACTICES, AND KEEP ACCURATE AND COMPLETE RECORDS OF ITS
RESPECTIVE ASSETS. THE BORROWER AND EACH OF ITS SUBSIDIARIES SHALL MAINTAIN A
FISCAL YEAR ENDING ON THE LAST DAY OF DECEMBER.
INSURANCE
The Borrower shall, and shall cause each Subsidiary to, maintain insurance from
responsible companies in such amounts and against such risks (but including in
any event public liability, business interruption and flood as to any portion of
the real estate Collateral which shall at any time be located in an identified
"flood prone" area in which flood insurance has been made available pursuant to
the Federal Flood Protection Act of 1973 as amended) as shall be customary and
usual in the industry for companies of similar size and capability. Each
insurance policy shall provide for at least 30 days' prior notice to the
Administrative Agent of any proposed termination or cancellation of such policy,
whether on account of default or otherwise and name the Administrative Agent as
loss payee or additional insured, as the case may be.
The Borrower shall furnish, upon request of the Administrative Agent, evidence
of the insurance required to be maintained in accordance with Section 5.5(a)
hereof in form and content reasonably satisfactory to the Administrative Agent.
If the Borrower or any of its Subsidiaries
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fails to maintain the insurance required to be maintained in accordance with
Section 5.5(a) hereof, the Administrative Agent may at its option obtain
insurance on the Collateral, and any premium thereby paid by the Administrative
Agent shall become part of the Obligation and shall bear interest at the lesser
of the (i) Base Rate Basis and (ii) Highest Lawful Rate. In the event that the
Administrative Agent maintains such substitute insurance, the additional premium
for such insurance shall be due on demand and payable by the Borrower to the
Administrative Agent in accordance with any notice delivered to the Borrower by
the Administrative Agent.
PAYMENT OF TAXES AND CLAIMS. THE BORROWER SHALL, AND SHALL CAUSE EACH SUBSIDIARY
TO, PAY AND DISCHARGE ALL MATERIAL TAXES, ASSESSMENTS AND GOVERNMENTAL CHARGES
OR LEVIES IMPOSED UPON IT OR ITS INCOME OR PROPERTIES PRIOR TO THE DATE OF
DELINQUENCY, AND TO PAY ALL LAWFUL MATERIAL CLAIMS FOR LABOR, MATERIALS AND
SUPPLIES WHICH, IF UNPAID, MIGHT BECOME A LIEN UPON ANY OF ITS PROPERTIES; IN
EACH CASE UNLESS SUCH TAX, ASSESSMENT, CHARGE, LEVY OR CLAIM IS BEING DILIGENTLY
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND FOR WHICH ADEQUATE
RESERVES SHALL HAVE BEEN SET ASIDE ON THE APPROPRIATE BOOKS IN ACCORDANCE WITH
GAAP, BUT ONLY SO LONG AS NO LIEN (OTHER THAN A PERMITTED LIEN) SHALL ATTACH
WITH RESPECT THERETO AND NO FORECLOSURE, DISTRAINT, SALE OR SIMILAR PROCEEDINGS
SHALL HAVE BEEN COMMENCED WHICH HAS NOT BEEN VACATED, DISCHARGED, BONDED OR
STAYED.
VISITS AND INSPECTIONS. THE BORROWER SHALL, AND SHALL CAUSE EACH OF ITS
SUBSIDIARIES TO, PERMIT REPRESENTATIVES OF THE ADMINISTRATIVE AGENT OR ANY
LENDER FROM TIME TO TIME AFTER REASONABLE NOTICE BY THE ADMINISTRATIVE AGENT OR
ANY LENDER TO (a) VISIT AND INSPECT THE PROPERTIES OF THE BORROWER AND ITS
SUBSIDIARIES (i) AS OFTEN AS THE ADMINISTRATIVE AGENT OR ANY LENDER SHALL
REASONABLY DEEM ADVISABLE, AND (ii) AT REASONABLE TIMES, (b) AUDIT, INSPECT AND
MAKE EXTRACTS FROM AND COPIES OF THE BORROWER'S AND EACH SUCH SUBSIDIARY'S BOOKS
AND RECORDS, AND (c) DISCUSS WITH THE BORROWER'S AND EACH SUCH SUBSIDIARY'S
DIRECTORS, OFFICERS, EMPLOYEES AND AUDITORS ITS BUSINESS, ASSETS, LIABILITIES,
FINANCIAL POSITIONS, RESULTS OF OPERATIONS AND BUSINESS PROSPECTS. THE BORROWER
SHALL PAY THE REASONABLE EXPENSES RELATED TO INSPECTIONS AND AUDITS PERFORMED BY
THE ADMINISTRATIVE AGENT. PRIOR TO THE OCCURRENCE OF AN EVENT OF DEFAULT, ALL
SUCH VISITS AND INSPECTIONS SHALL BE CONDUCTED DURING NORMAL BUSINESS HOURS AND,
OTHER THAN VISITS AND INSPECTIONS BY THE ADMINISTRATIVE AGENT AND/OR ANY
FINANCIAL ADVISOR TO THE ADMINISTRATIVE AGENT, SHALL NOT BE CONDUCTED MORE OFTEN
THAN ONCE PER FISCAL QUARTER. FOLLOWING THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, SUCH VISITS AND INSPECTIONS SHALL BE
CONDUCTED AT ANY TIME REQUESTED BY THE ADMINISTRATIVE AGENT OR ANY LENDER
WITHOUT ANY REQUIREMENT FOR ADVANCE NOTICE.
USE OF PROCEEDS. THE BORROWER SHALL USE THE PROCEEDS OF ADVANCES AND THE LETTERS
OF CREDIT TO FINANCE THE ONGOING WORKING CAPITAL AND GENERAL CORPORATE
REQUIREMENTS OF THE BORROWER AND ITS SUBSIDIARIES, INCLUDING ACQUISITIONS
PERMITTED HEREUNDER.
INDEMNITY
THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE
ADMINISTRATIVE AGENT, EACH LENDER, THE ISSUING BANK, EACH OF THEIR RESPECTIVE
AFFILIATES, AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS,
DIRECTORS,
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TRUSTEES, EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS (INCLUDING,
WITHOUT LIMITATION, THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR
ATTEMPTED SATISFACTION OF ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE
FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
CLAIMS, REASONABLE COSTS, REASONABLE EXPENSES AND REASONABLE DISBURSEMENTS OF
ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE REASONABLE
FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES IN CONNECTION WITH ANY
INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING, WHETHER OR NOT SUCH
INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL AND
WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND REGULATIONS, UNDER COMMON
LAW OR AT EQUITABLE CAUSE, OR ON CONTRACT, TORT OR OTHERWISE, ARISING FROM OR
CONNECTED WITH THE PAST, PRESENT OR FUTURE OPERATIONS OF THE BORROWER, OR ANY OF
ITS SUBSIDIARIES OR THEIR RESPECTIVE PREDECESSORS IN INTEREST, OR THE PAST,
PRESENT OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE BORROWER OR ANY OF
ITS SUBSIDIARIES), IN ANY MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT
OR TRANSACTION RELATING OR ATTENDANT HERETO OR THERETO, INCLUDING IN CONNECTION
WITH, OR AS A RESULT, IN WHOLE OR IN PART, OF ANY NEGLIGENCE OF ADMINISTRATIVE
AGENT OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY BY A
PARTICIPANT AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER AND NOT THE
BORROWER), OR THE USE OR INTENDED USE OF THE PROCEEDS OF THE ADVANCES OR LETTERS
OF CREDIT HEREUNDER, OR IN CONNECTION WITH ANY INVESTIGATION OF ANY POTENTIAL
MATTER COVERED HEREBY, BUT EXCLUDING (i) ANY CLAIM OR LIABILITY THAT ARISES AS
THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNITEE, AS
FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, AND (ii)
MATTERS RAISED BY ONE LENDER AGAINST ANOTHER LENDER OR BY ANY SHAREHOLDERS OF A
LENDER AGAINST A LENDER OR ITS MANAGEMENT AND (iii) LEGAL FEES OF ANY LENDER
EXCEPT AS OTHERWISE PROVIDED IN SECTION 11.2 HEREOF (COLLECTIVELY, "INDEMNIFIED
MATTERS").
IN ADDITION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST, REIMBURSE EACH
INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL REASONABLE EXPENSES
(INCLUDING THE REASONABLE COST OF ANY INVESTIGATION AND PREPARATION) INCURRED IN
CONNECTION WITH ANY INDEMNIFIED MATTER. THE REIMBURSEMENT, INDEMNITY AND
CONTRIBUTION OBLIGATIONS UNDER THIS SECTION SHALL BE IN
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ADDITION TO ANY LIABILITY WHICH THE BORROWER MAY OTHERWISE HAVE, SHALL EXTEND
UPON THE SAME TERMS AND CONDITIONS TO EACH INDEMNITEE, AND SHALL BE BINDING UPON
AND INURE TO THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL
REPRESENTATIVES OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND ALL
OTHER INDEMNITEES. THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT
AND PAYMENT OF THE OBLIGATIONS.
ENVIRONMENTAL LAW COMPLIANCE. THE BORROWER AND ITS SUBSIDIARIES SHALL COMPLY
WITH ALL APPLICABLE ENVIRONMENTAL LAWS, EXCEPT FOR NON-COMPLIANCE THE RESULT OF
WHICH COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
FURTHER ASSURANCES. AT ANY TIME OR FROM TIME TO TIME UPON REASONABLE REQUEST BY
THE ADMINISTRATIVE AGENT, THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL EXECUTE
AND DELIVER SUCH FURTHER DOCUMENTS AND DO SUCH OTHER ACTS AND THINGS AS THE
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST IN ORDER TO EFFECT FULLY THE
PURPOSES OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND TO PROVIDE FOR
PAYMENT OF THE OBLIGATIONS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS. AT THE TIME OF DELIVERY OF THE FINANCIAL STATEMENTS
SET FORTH IN SECTIONS 6.1 AND 6.2 HEREOF, IF THE INFORMATION PROVIDED THEREIN
HAS CHANGED SINCE THE LAST DELIVERY THEREOF, THE BORROWER AGREES TO UPDATE AND
DELIVER TO THE ADMINISTRATIVE AGENT SCHEDULE 5 HERETO(WITH RESPECT TO THE
IDENTITIES, JURISDICTIONS OF ORGANIZATION AND OWNERSHIP OF THE BORROWER'S
SUBSIDIARIES). THE BORROWER AGREES TO UPDATE THE INFORMATION ON SCHEDULE 2 TO
THE SECURITY AGREEMENTS PROMPTLY UPON DISCOVERY THAT THE INFORMATION PROVIDED
THEREIN IS NOT COMPLETE AND CORRECT.
SUBSIDIARIES. AT ANY TIME THAT ANY PERSON BECOMES A DOMESTIC SUBSIDIARY, (a)
SUCH SUBSIDIARY SHALL EXECUTE A SUBSIDIARY GUARANTY OF THE OBLIGATIONS AND
COLLATERAL DOCUMENTS GRANTING A FIRST PRIORITY LIEN IN ALL UNENCUMBERED ASSETS
OF SUCH SUBSIDIARY REQUIRED BY THE DETERMINING LENDERS TO BE PLEDGED, EXCEPT, TO
THE EXTENT APPLICABLE, FOR PERMITTED LIENS, TO SECURE THE OBLIGATIONS, (b) 100%
OF SUCH SUBSIDIARY'S CAPITAL STOCK SHALL BE PLEDGED TO SECURE THE OBLIGATIONS
AND (c) THE LENDERS SHALL RECEIVE SUCH BOARD RESOLUTIONS, OFFICER'S
CERTIFICATES, CORPORATE AND OTHER DOCUMENTS AND OPINIONS OF COUNSEL AS THE
ADMINISTRATIVE AGENT SHALL REASONABLY REQUEST IN CONNECTION WITH THE ACTIONS
DESCRIBED IN CLAUSES (a) AND (b) ABOVE. AT ANY TIME THAT ANY PERSON BECOMES A
DIRECT FOREIGN SUBSIDIARY, (a) 65% OF SUCH SUBSIDIARY'S CAPITAL STOCK SHALL BE
PLEDGED TO SECURE THE OBLIGATIONS AND (b) THE LENDERS SHALL RECEIVE SUCH BOARD
RESOLUTIONS, OFFICERS' CERTIFICATES, CORPORATE AND OTHER DOCUMENTS AND OPINIONS
OF COUNSEL AS THE ADMINISTRATIVE AGENT SHALL REASONABLY REQUEST IN CONNECTION
WITH THE ACTION DESCRIBED IN THE IMMEDIATELY PRECEDING CLAUSE (a) ABOVE.
LANDLORD'S WAIVERS. THE BORROWER SHALL, IN GOOD FAITH, USE COMMERCIALLY
REASONABLE EFFORTS TO OBTAIN, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ADMINISTRATIVE AGENT AND ITS COUNSEL, ONE OR MORE LANDLORD'S WAIVERS
EXECUTED BY THE LANDLORD OF THE PARKER EQUITIES PROPERTIES.
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DEPOSIT AND OPERATING ACCOUNTS. THE BORROWER AND ITS SUBSIDIARIES SHALL (a)
EXCEPT AS SET FORTH IN THE PROVISO BELOW, MAINTAIN ALL OF THEIR OPERATING,
DEPOSIT AND ALL OTHER ACCOUNTS WITH ANY LENDER WHICH IS A FINANCIAL INSTITUTION
AND (b) EXECUTE SUCH DOCUMENTS, INSTRUMENTS AND AGREEMENTS AS SHALL BE
REASONABLY NECESSARY TO CONFIRM THE FIRST PRIORITY PERFECTED SECURITY INTEREST
OF THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE LENDERS IN SUCH ACCOUNTS AND
ALL AMOUNTS ON DEPOSIT THEREIN, INCLUDING WITHOUT LIMITATION, ALL AMOUNTS WHICH
CONSTITUTE PROCEEDS OF COLLATERAL, SUCH DOCUMENTS, INSTRUMENTS AND AGREEMENTS TO
PROVIDE THAT THE LENDERS MAINTAINING SUCH ACCOUNTS SHALL PROVIDE NOT LESS THAN
FIVE BUSINESS DAYS PRIOR WRITTEN NOTICE OF ANY SETOFF TO THE BORROWER AND
ADMINISTRATIVE AGENT; PROVIDED, HOWEVER, THE BORROWER MAY MAINTAIN ACCOUNTS WITH
FINANCIAL INSTITUTIONS WHICH ARE NOT LENDERS, SO LONG AS THE BALANCE IN SUCH
ACCOUNTS DOES NOT EXCEED $10,000,000 IN THE AGGREGATE AT ANY TIME.
INFORMATION COVENANTS
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled), the Borrower shall furnish or cause to be furnished to
each Lender:
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QUARTERLY FINANCIAL STATEMENTS AND INFORMATION. WITHIN 45 DAYS AFTER THE END OF
EACH OF THE FIRST THREE FISCAL QUARTERS OF EACH FISCAL YEAR, AN UNAUDITED
CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS SUBSIDIARIES AS AT THE END OF
SUCH FISCAL QUARTER AND THE RELATED UNAUDITED CONSOLIDATED STATEMENT OF
OPERATIONS FOR SUCH FISCAL QUARTER AND FOR THE ELAPSED PORTION OF THE YEAR ENDED
WITH THE LAST DAY OF SUCH FISCAL QUARTER, AND AN UNAUDITED CONSOLIDATED
STATEMENT OF CASH FLOW OF THE BORROWER AND ITS SUBSIDIARIES FOR THE ELAPSED
PORTION OF THE YEAR ENDED WITH THE LAST DAY OF SUCH FISCAL QUARTER; ALL OF WHICH
SHALL BE CERTIFIED BY THE CHIEF EXECUTIVE OFFICER OR CHIEF FINANCIAL OFFICER OR
OTHER OFFICER OF THE BORROWER REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT,
TO BE, IN HIS OR HER OPINION ACTING SOLELY IN HIS OR HER CAPACITY AS AN OFFICER
OF THE BORROWER, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS AND TO PRESENT
FAIRLY, IN ACCORDANCE WITH GAAP, THE FINANCIAL POSITION AND RESULTS OF
OPERATIONS OF THE BORROWER AND ITS SUBSIDIARIES AS AT THE END OF AND FOR SUCH
FISCAL QUARTER, AND FOR THE ELAPSED PORTION OF THE YEAR ENDED WITH THE LAST DAY
OF SUCH FISCAL QUARTER, SUBJECT ONLY TO NORMAL YEAR-END ADJUSTMENTS.
ANNUAL FINANCIAL STATEMENTS AND INFORMATION; CERTIFICATE OF NO DEFAULT.
Within 90 days after the end of each fiscal year, (i) a copy of the consolidated
balance sheets of the Borrower and its Subsidiaries, as of the end of the
current and prior fiscal year and (ii) the consolidated statements of operations
of the Borrower and its Subsidiaries and consolidated statements of changes in
shareholders' equity of the Borrower and its Subsidiaries, and consolidated
statements of cash flow of the Borrower and its Subsidiaries for such fiscal
year, all of which are prepared in accordance with GAAP, and certified by
independent certified public accounts reasonably acceptable to the Lenders
(provided, however, any "big five" public accounting firm shall be acceptable to
the Lenders), whose opinion shall be in scope and substance in accordance with
generally accepted auditing standards and shall be unqualified.
Simultaneously with the delivery of the statements required by this Section 6.2,
a letter from the Borrower's public accountants certifying that no Default or
Event of Default under Sections 7.1, 7.2, 7.3, 7.5, 7.6, 7.8, 7.9 and 7.11 was
detected during the examination of the books and records of the Borrower and its
Subsidiaries.
As soon as available, but in any event within 90 days following the end of each
fiscal year, a copy of the annual consolidated operating budget of the Borrower
for such current fiscal year.
COMPLIANCE CERTIFICATE. AT THE TIME FINANCIAL STATEMENTS ARE FURNISHED PURSUANT
TO SECTIONS 6.1 AND 6.2 HEREOF, THE COMPLIANCE CERTIFICATE, COMPLETED AS
PROVIDED THEREIN.
COPIES OF OTHER REPORTS AND NOTICES.
Promptly upon their becoming available, a copy of (i) all final management
letters submitted to any Obligor by accountants in connection with any annual,
interim or special audit, (ii) each financial statement, report, notice or proxy
statement sent by any Obligor to stockholders generally, and (iii) each regular,
periodic or other report and any registration statement (other than statements
on Form S-8) or prospectus (or material written communication in respect of any
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thereof) filed by any Obligor with any securities exchange, with the Securities
and Exchange Commission or any successor agency;
Promptly upon becoming aware that (i) the holder(s) of any note(s) or other
evidence of indebtedness or other security of the Borrower or any of its
Subsidiaries in excess of $5,000,000 in the aggregate has given notice or taken
any action with respect to a breach, failure to perform, claimed default or
event of default thereunder, (ii) any occurrence or non-occurrence of any event
which constitutes or which with the passage of time or giving of notice or both
could constitute a material breach by the Borrower or any of its Subsidiaries
under any material agreement or instrument other than this Agreement to which
the Borrower or any of its Subsidiaries is a party or by which any of their
properties may be bound, or (iii) any event, circumstance or condition which
could reasonably be expected to be classified as a Material Adverse Effect, a
written notice specifying the details thereof (or the nature of any claimed
default or event of default) and what action is being taken or is proposed to be
taken with respect thereto;
Promptly upon becoming aware that any party to any Capitalized Lease Obligations
or any other lease obligations of the Borrower or any of its Subsidiaries, in
each case, in excess of $5,000,000, has given notice or taken any action with
respect to a breach, failure to perform, claimed default or event of default
thereunder, a written notice specifying the details thereof (or the nature of
any claimed default or event of default) and what action is being taken or is
proposed to be taken with respect thereto;
Promptly upon receipt thereof, information with respect to and copies of any
notices received from any federal, state or local regulatory agencies or any
tribunal relating to any order, ruling, law, information or policy that relates
to a breach of or noncompliance with any Law by the Borrower or any of its
Subsidiaries, or might result in the payment of money by any Obligor in an
amount of $5,000,000 or more in the aggregate, or otherwise have a Material
Adverse Effect, or result in the loss or suspension of any Necessary
Authorization; and
From time to time and promptly upon each request, such data, certificates,
reports, statements, documents or further information regarding the assets,
business, liabilities, financial position, projections, results of operations or
business prospects of the Borrower or any of its Subsidiaries, as the
Administrative Agent or any Lender may reasonably request.
NOTICE OF LITIGATION, DEFAULT AND OTHER MATTERS DELIVERIES.
Prompt notice of the following events after the Borrower has knowledge or notice
thereof:
THE COMMENCEMENT OF ALL PROCEEDINGS AND INVESTIGATIONS BY OR BEFORE ANY
GOVERNMENTAL BODY, AND ALL ACTIONS AND PROCEEDINGS IN ANY COURT OR BEFORE ANY
ARBITRATOR INVOLVING CLAIMS FOR DAMAGES (INCLUDING PUNITIVE DAMAGES) IN EXCESS
OF $5,000,000 (AFTER DEDUCTING THE AMOUNT WITH RESPECT TO WHICH CREDITWORTHY
INSURANCE COMPANIES HAVE NOT DENIED COVERAGE), AGAINST OR IN ANY OTHER WAY
RELATING DIRECTLY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY OF THEIR
RESPECTIVE PROPERTIES OR BUSINESSES AND WHICH IF ADVERSELY DETERMINED COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;
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PROMPTLY UPON THE HAPPENING OF ANY CONDITION OR EVENT OF WHICH THE BORROWER HAS
KNOWLEDGE WHICH CONSTITUTES A DEFAULT, A WRITTEN NOTICE SPECIFYING THE NATURE
AND PERIOD OF EXISTENCE THEREOF AND WHAT ACTION IS BEING TAKEN OR IS PROPOSED TO
BE TAKEN WITH RESPECT THERETO; AND
ANY CHANGE WITH RESPECT TO THE BUSINESS, ASSETS, LIABILITIES, FINANCIAL
POSITION, RESULTS OF OPERATIONS OR PROSPECTIVE BUSINESS OF THE BORROWER OR ANY
OF ITS SUBSIDIARIES THAT COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.
Promptly deliver to the Administrative Agent, together with the delivery of each
Compliance Certificate, Instruments (as defined in the Security Agreement), duly
endorsed as required by the Security Agreement, such that the aggregate
principal amount of all Instruments owned by the Borrower and its Subsidiaries
and not delivered to the Administrative Agent shall not exceed $5,000,000.
ERISA REPORTING REQUIREMENTS.
Promptly and in any event within 30 days after the Borrower or any member of its
Controlled Group has knowledge that any ERISA Event has occurred, a written
notice describing such event and describing what action is being taken or is
proposed to be taken with respect thereto, together with a copy of any notice of
event that is given to the PBGC;
Promptly and in any event within three Business Days after receipt thereof by
the Borrower or any member of its Controlled Group, copies of each notice
received by the Borrower or any member of its Controlled Group of the PBGC's
intention to terminate any Plan or to have a trustee appointed to administer any
Plan;
Promptly upon the request of the Administrative Agent, copies of each annual
report (including Schedule B thereto, if applicable) with respect to each Plan
covering employees of the Borrower or any of its Subsidiaries;
Promptly, and in any event within 10 Business Days after receipt thereof, a copy
of any correspondence the Borrower or any member of its Controlled Group
receives from the Plan Sponsor (as defined by Section 4001(a)(10) of ERISA) of
any Multiemployer Plan or Plan subject to Section 4064 of ERISA concerning
potential withdrawal liability pursuant to Section 4064, 4219 or 4202 of ERISA;
Notification within three Business Days after the Borrower or any member of its
Controlled Group knows that the Borrower or any such member of its Controlled
Group has filed or intends to file a notice of intent to terminate any Plan
under a distress termination within the meaning of Section 4041(c) of ERISA and
a copy of such notice; and
Within three Business Days after receipt of written notice of commencement
thereof, notice of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting the Borrower or any
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member of its Controlled Group with respect to any Plan, which, in the
aggregate, if adversely determined could reasonably be expected to have a
Material Adverse Effect.
MONTHLY FINANCIAL STATEMENTS AND OTHER REPORTS. WITHIN 30 DAYS AFTER THE END OF
EACH CALENDAR MONTH, (a) UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE
BORROWER AND ITS SUBSIDIARIES AS OF THE END OF SUCH FISCAL MONTH AND FOR THE
ELAPSED PORTION OF THE YEAR ENDED WITH THE LAST DAY OF SUCH FISCAL MONTH,
SETTING FORTH IN COMPARATIVE FORM THE FIGURES FOR THE CORRESPONDING PERIOD OF
THE BUDGET, ALL IN REASONABLE DETAIL CERTIFIED BY THE CHIEF EXECUTIVE OFFICER OR
CHIEF FINANCIAL OFFICER OR OTHER OFFICER OF THE BORROWER REASONABLY ACCEPTABLE
TO THE ADMINISTRATIVE AGENT, TO BE, IN HIS OR HER OPINION ACTING SOLELY IN HIS
OR HER CAPACITY AS AN OFFICER OF THE BORROWER, COMPLETE AND CORRECT IN ALL
MATERIAL RESPECTS AND TO PRESENT FAIRLY, IN ACCORDANCE WITH GAAP, THE FINANCIAL
POSITION, RESULTS OF OPERATIONS, AND CASH FLOWS OF THE BORROWER AND ITS
SUBSIDIARIES AS OF THE END OF AND FOR SUCH FISCAL MONTH, AND FOR THE ELAPSED
PORTION OF THE YEAR ENDED WITH THE LAST DAY OF SUCH FISCAL MONTH, SUBJECT ONLY
TO THE ABSENCE OF FOOTNOTES AND NORMAL YEAR-END ADJUSTMENTS; AND (b) A FLASH
REPORT INCLUDING THE NUMBER OF ORDERS SHIPPED, THE FULFILLMENT RATE, THE NUMBER
OF ACTIVE DISPLAYERS, THE AVERAGE ORDER SIZE, AND THE NUMBER OF ORDERS PER
DISPLAYER FOR SUCH CALENDAR MONTH, ALL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT.
NEGATIVE COVENANTS
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
INDEBTEDNESS. THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS
SUBSIDIARIES TO, CREATE, ASSUME, INCUR OR OTHERWISE BECOME OR REMAIN OBLIGATED
IN RESPECT OF, OR PERMIT TO BE OUTSTANDING, OR SUFFER TO EXIST ANY INDEBTEDNESS,
EXCEPT:
Indebtedness under the Loan Documents;
Accounts payable, accrued liabilities and deferred taxes incurred in the
ordinary course of business;
Indebtedness, including in respect of Capitalized Lease Obligations, incurred to
purchase, or to finance the purchase of assets which constitute property, plant
and equipment, not to exceed $15,000,000 in aggregate principal amount
outstanding at any time;
Interest hedging obligations under Interest Hedge Agreements, provided that such
Interest Hedge Agreements were entered into in the ordinary course of business
for the purpose of limiting risks that arise in the ordinary course of business;
Indebtedness (including as the result of intercompany transfers made in the
ordinary course of business) owing (i) among the Obligors, (ii) from any direct
Foreign Subsidiary to the Borrower
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or any Domestic Subsidiary, (iii) from any indirect Foreign Subsidiary to the
Borrower, any Domestic Subsidiary or any Foreign Subsidiary in an aggregate
principal amount not to exceed, together with Investments (excluding
Indebtedness) in indirect Foreign Subsidiaries pursuant to Section 7.3(d)(iii)
hereof, $15,000,000; provided, that (a) all such intercompany Indebtedness shall
be noted in the books and records and (b) all such intercompany Indebtedness
owed by the Borrower, any Obligor or any direct Foreign Subsidiary shall be
subordinated to the Obligations pursuant to terms reasonably acceptable to the
Determining Lenders;
(i) Indemnities and guaranties (including guaranties of Indebtedness if such
Indebtedness is permitted hereunder) made in the ordinary course of business
provided such indemnities and guaranties could not individually or in the
aggregate have a Material Adverse Effect, (ii) guaranties of (a) real property
leases and (b) personal property leases, (iii) indemnities in favor of the
Persons issuing title insurance policies, (iv) indemnities made in the Loan
Documents, the Consulting Agreements or in any agreements contemplated
thereunder or thereby and (v) in the corporate charter and/or bylaws or other
constituent documents of the Borrower and its Subsidiaries;
Indebtedness existing on the Agreement Date which is described on Schedule 7
hereto, including renewals, refinancings or extensions (but no increases in the
principal amount thereof other than pursuant to the instrument creating such
Indebtedness) thereof;
Indebtedness in respect of endorsement of negotiable instruments in the ordinary
course of business;
Indebtedness, including guaranties thereof, in respect of the Senior
Subordinated Notes;
Indebtedness (i) of the Borrower or any of its Subsidiaries to the seller in any
Acquisition or (ii) assumed in connection with any Acquisition;
At any time following the termination of the Revolving Credit Commitment and
following payment in full of principal of and interest on the Revolving Credit
Advances, the Swing Line Advances, the Reimbursement Obligations and all other
fees and other amounts payable herewith in respect of the Revolving Credit
Advances, the Swing Line Advances and the Letters of Credit, Indebtedness of the
Borrower or its Subsidiaries in respect of unsecured revolving lines of credit
in aggregate amount outstanding not to exceed $40,000,000 at any one time;
Indebtedness of all Foreign Subsidiaries of the Borrower for working capital
purposes and overdraft facilities in an aggregate amount not to exceed
$5,000,000 at any one time outstanding;
Other unsecured Indebtedness not to exceed $20,000,000 in the aggregate at any
time so long as no Default or Event of Default has occurred or will occur as a
result of the incurrence of such Indebtedness; and
Indebtedness in an aggregate amount not to exceed $15,000,000 at any one time
outstanding incurred in connection with imported inventory financing; provided
that the portion of such
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Indebtedness incurred to finance a particular shipment of inventory shall be
repaid within 15 days of delivery of such inventory to the Borrower or any
Subsidiary; provided, however, that no Indebtedness otherwise permitted pursuant
to clauses (c), (j), (m) or (n) above may be incurred if, immediately before or
after giving effect to the incurrence thereof, any Default or Event of Default
shall have occurred and be continuing.
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LIENS. THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS SUBSIDIARIES TO,
CREATE, ASSUME, INCUR, PERMIT OR SUFFER TO EXIST, DIRECTLY OR INDIRECTLY, ANY
LIEN ON ANY OF ITS ASSETS, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, EXCEPT
PERMITTED LIENS. EXCEPT WITH RESPECT TO THE SENIOR SUBORDINATED NOTES, THE
SENIOR SUBORDINATED NOTES INDENTURE, AND INDEBTEDNESS PERMITTED BY SECTIONS
7.1(c), (g), (j)(ii), (k), (l), (m) OR (n) HEREOF (PROVIDED THAT SUCH AGREEMENT
RELATES ONLY TO ANY ASSETS PURCHASED OR ACQUIRED WITH THE PROCEEDS OF SUCH
INDEBTEDNESS), THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS
SUBSIDIARIES TO ENTER INTO A NEGATIVE PLEDGE WITH ANOTHER PERSON.
INVESTMENTS. THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS
SUBSIDIARIES TO, MAKE ANY INVESTMENT, EXCEPT THAT THE BORROWER AND ITS
SUBSIDIARIES MAY MAKE, PURCHASE OR OTHERWISE ACQUIRE AND OWN:
Cash and Cash Equivalents;
Accounts receivable and trade credit that arise in the ordinary course of
business;
Investments in existence on the Agreement Date which are described on Schedule 6
hereto and including any extensions and renewals thereof;
Investments in (i) Domestic Subsidiaries (or Persons that become Domestic
Subsidiaries simultaneously with such Investments) (a) which have executed a
Subsidiary Guaranty and Collateral Documents granting a first priority Lien in
all unencumbered assets of such Subsidiary required by the Determining Lenders
to be pledged, to secure the Obligations, (b) 100% of whose Capital Stock shall
be pledged to secure the Obligations and (c) which have delivered to the Lenders
such board resolutions, officer's certificates, corporate and other documents
and opinions of counsel as the Administrative Agent shall reasonably request,
(ii) direct Foreign Subsidiaries 65% of whose Capital Stock shall be pledged to
secure the Obligations, (iii) indirect Foreign Subsidiaries not to exceed
$15,000,000 in aggregate amount outstanding at any time, and (iv) the Borrower
(including, in each of clauses (i), (ii) and (iii) any new Subsidiary);
Investments permitted under Sections 7.1, 7.4, 7.7 and 7.11 hereof;
Loans and advances by the Borrower and any of its Subsidiaries to their
respective displayers and independent contractors in an aggregate principal
amount not to exceed $5,000,000 at any one time outstanding;
Investments in Interest Hedge Agreements;
Investments (including debt obligations and Capital Stock) received in
connection with the bankruptcy or reorganization of suppliers and customers and
in settlement of delinquent obligations of and other disputes with, customers
and suppliers arising in the ordinary course of business;
Loans and advances by the Borrower and any of its Subsidiaries to its suppliers
in an aggregate principal amount not exceeding $2,000,000 at any one time
outstanding;
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Other Investments not to exceed in aggregate amount outstanding at any time 3%
of annual net sales of the Borrower and its Subsidiaries for the most recent
fiscal year, without regard to any write down or write up thereof; and
Acquisitions, if (i) immediately after giving effect to the proposed transaction
the Unused Portion shall be no less than $10,000,000, (ii) such Acquisition
shall not be opposed by the board of directors of the Person being acquired,
(iii) the Lenders shall have received written notice thereof at least 15
Business Days prior to the date of such Acquisition, (iv) the Administrative
Agent shall have received at least 10 Business Days prior to the date of such
Acquisition a Compliance Certificate setting forth the covenant calculations
both immediately prior to and after giving effect to the proposed Acquisition,
(v) the assets, property or business acquired shall be in the business described
in Section 4.1(d) hereof and the Administrative Agent for the benefit of the
Lenders shall have a first priority Lien in substantially all of such assets
(or, if less than substantially all of such assets, such assets required by the
Determining Lenders to be pledged), except for Permitted Liens, (vi) if such
Acquisition results in a Domestic Subsidiary, (A) such Subsidiary shall execute
a Subsidiary Guaranty of the Obligations and Collateral Documents granting a
first priority Lien in substantially all of such assets (or, if less than
substantially all of such assets, all assets required by the Determining Lenders
to be pledged), except for Permitted Liens to secure the Obligations, (B) 100%
of such Subsidiary's Capital Stock shall be pledged to secure the Obligations
and (C) the Administrative Agent on behalf of the Lenders shall have received
such board resolutions, officer's certificates and opinions of counsel as the
Administrative Agent shall reasonably request in connection with the actions
described in clauses (A) and (B) above, (vii) if such Acquisition results in a
Foreign Subsidiary, (x) 65% of such Subsidiary's Capital Stock shall be pledged
to secure the Obligations and (y) the Administrative Agent on behalf of the
Lenders shall have received such board resolutions, officer's certificates and
opinions of counsel as the Administrative Agent shall reasonably request in
connection with clause (x) immediately preceding and (viii) the aggregate
Acquisition Consideration expended during any period of four consecutive fiscal
quarters shall not exceed $5,000,000.
provided, however, (a) that no Investment otherwise permitted by clauses (e),
(j) and (k) above shall be permitted if, immediately before or after giving
effect thereto, any Default or Event of Default shall have occurred and be
continuing, and (b) notwithstanding anything in this Section 7.3 to the
contrary, Investments in indirect Foreign Subsidiaries shall not exceed
$15,000,000 in aggregate amount outstanding at any time.
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LIQUIDATION, MERGER, NEW SUBSIDIARIES. THE BORROWER SHALL NOT, AND SHALL NOT
PERMIT ANY OF ITS SUBSIDIARIES TO, AT ANY TIME:
liquidate or dissolve itself (or suffer any liquidation or dissolution) or
otherwise wind up, except that (i) a Subsidiary of the Borrower may liquidate or
dissolve into the Borrower or a Subsidiary of the Borrower which is an Obligor,
(ii) a Subsidiary of the Borrower which is not an Obligor may liquidate or
dissolve into the Borrower or a Subsidiary of the Borrower, and (iii) a
Subsidiary of the Borrower may dissolve if substantially all of its assets have
been conveyed pursuant to Section 7.5(e) hereof; or
enter into any merger or consolidation unless (i) with respect to a merger or
consolidation involving the Borrower, the Borrower shall be the surviving
corporation, (ii) with respect to a merger or consolidation involving a
Subsidiary of the Borrower which is an Obligor and not the Borrower, such
Subsidiary shall be the surviving corporation, or such merger or consolidation
shall be a part of an Acquisition permitted by Section 7.3 hereof or part of a
disposition permitted by Section 7.5 hereof, and (iii) no Default or Event of
Default shall then be in existence or occur as a result of such transaction.
SALE OF ASSETS. THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS
SUBSIDIARIES TO, SELL (INCLUDING FOR DISCOUNT OR OTHERWISE), LEASE, TRANSFER OR
OTHERWISE DISPOSE OF ASSETS, EXCEPT (a) SALES OF INVENTORY SOLD IN THE ORDINARY
COURSE OF BUSINESS, (b) SO LONG AS NO DEFAULT HAS OCCURRED AND IS CONTINUING,
SALES OR OTHER DISPOSITIONS OF WORN-OUT OR OBSOLETE ASSETS OR ASSETS NO LONGER
USEFUL IN THE CONDUCT OF THE BORROWER'S BUSINESS IN THE ORDINARY COURSE OF
BUSINESS IN WHICH THE NET CASH PROCEEDS THEREOF ARE USED WITHIN 365 DAYS OF SUCH
SALE TO PURCHASE ASSETS OF SIMILAR VALUE AND QUALITY AND BUSINESS UTILITY TO
THOSE ASSETS SOLD, PROVIDED THAT THE AGGREGATE AMOUNT OF NET CASH PROCEEDS
OUTSTANDING AND PENDING REINVESTMENT PURSUANT TO THIS CLAUSE (b) AND SECTIONS
7.5(d) AND SECTION 2.5(e) SHALL NOT EXCEED $2,500,000 IN ANY FISCAL YEAR, (c)
SALES OF CASH AND CASH EQUIVALENTS IN THE ORDINARY COURSE OF BUSINESS, (d) SO
LONG AS NO DEFAULT HAS OCCURRED AND IS CONTINUING, SALES OF ASSETS IN WHICH THE
NET CASH PROCEEDS THEREOF ARE USED WITHIN 365 DAYS OF SUCH SALE TO PURCHASE
ASSETS OF SIMILAR VALUE AND QUALITY AND BUSINESS UTILITY TO THOSE ASSETS SOLD,
PROVIDED THAT THE AGGREGATE AMOUNT OF NET CASH PROCEEDS OUTSTANDING AND PENDING
REINVESTMENT PURSUANT TO THIS CLAUSE (d) AND SECTIONS 7.5(b) AND SECTION 2.5(e)
SHALL NOT EXCEED $2,500,000 IN ANY FISCAL YEAR, (e) SALES AND DISPOSITIONS (i)
FROM ANY DOMESTIC SUBSIDIARY TO THE BORROWER OR ANY OTHER DOMESTIC SUBSIDIARY
AND (ii) FROM ANY FOREIGN SUBSIDIARY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES,
(f) TRANSFERS RESULTING FROM ANY CASUALTY OR CONDEMNATION OF PROPERTY OR ASSETS,
(g) THE SALE OR DISCOUNT OF OVERDUE ACCOUNTS RECEIVABLE IN THE ORDINARY COURSE
OF BUSINESS, IN CONNECTION WITH THE COMPROMISE OR COLLECTION THEREOF, (h)
LICENSES OR SUBLICENSES OF INTELLECTUAL PROPERTY AND GENERAL INTANGIBLES AND
LICENSES, LEASES OR SUBLEASES OF OTHER PROPERTY IN EACH CASE IN THE ORDINARY
COURSE OF BUSINESS AND WHICH DO NOT MATERIALLY INTERFERE WITH THE BUSINESS OF
THE BORROWER AND ITS SUBSIDIARIES, AND (i) SUCH OTHER SALES OR DISPOSITIONS
DESCRIBED IN SCHEDULE 12.
RESTRICTED PAYMENTS. THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS
SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY DECLARE, PAY OR MAKE ANY RESTRICTED
PAYMENTS, EXCEPT (a) DIVIDENDS PAYABLE BY A SUBSIDIARY TO THE BORROWER OR
ANOTHER SUBSIDIARY, (b) DIVIDENDS PAYABLE IN STOCK AND NOT CASH, (c) REGULARLY
SCHEDULED PAYMENTS OF INTEREST ON THE SENIOR SUBORDINATED NOTES,
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(d) RESTRICTED PAYMENTS AS A RESULT OF A PURCHASE OF CAPITAL STOCK MADE IN ORDER
TO FULFILL THE OBLIGATIONS OF THE BORROWER OR ITS SUBSIDIARIES UNDER AN EMPLOYEE
STOCK PURCHASE PLAN OR SIMILAR PLAN COVERING EMPLOYEES OF THE BORROWER OR ANY
SUBSIDIARY AS FROM TIME TO TIME IN EFFECT IN AN AGGREGATE NET AMOUNT NOT TO
EXCEED $10,000,000 DURING THE TERM OF THIS AGREEMENT, (e) PERMITTED ISSUANCES,
AND (f) MANAGEMENT, ADVISORY, CONSULTING AND SIMILAR FEES TO ANY AFFILIATE OF
THE BORROWER OR ANY OF ITS SUBSIDIARIES OTHER THAN (i) AN OBLIGOR AND (ii)
PURSUANT TO THE CONSULTING AGREEMENTS, SUBJECT TO SECTION 7.7; PROVIDED,
FURTHER, HOWEVER, THE BORROWER SHALL NOT PAY OR MAKE ANY RESTRICTED PAYMENTS
PERMITTED BY THIS SECTION 7.6 UNLESS THERE SHALL EXIST NO DEFAULT PRIOR TO OR
AFTER GIVING EFFECT TO ANY SUCH PROPOSED RESTRICTED PAYMENT.
AFFILIATE TRANSACTIONS.
The Borrower shall not, and shall not permit any of its Subsidiaries to, at any
time engage in any transaction with an Affiliate (other than the Borrower or any
of its Subsidiaries), nor make an assignment or other transfer of any of its
assets or properties to any Affiliate (other than the Borrower or any of its
Subsidiaries), unless such transaction is (i) otherwise permitted under this
Agreement, (ii) in the ordinary course of business of the Borrower and the
relevant Subsidiary of the Borrower, as the case may be, and (iii) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate.
In addition, notwithstanding the foregoing, the Borrower and its Subsidiaries
shall be entitled to make the following payments and/or enter into the
following: (i) the payment of reasonable and customary fees and reimbursement of
expenses payable to the directors of the Borrower; (ii) the payment of fees and
expenses pursuant to the Consulting Agreements; and (iii) the employment
arrangements with respect to the procurement of services of directors, officers
and employees in the ordinary course of business and the payment of reasonable
fees in connection therewith.
LEVERAGE RATIO. THE BORROWER WILL NOT PERMIT THE LEVERAGE RATIO (TESTED AT THE
END OF EACH FISCAL QUARTER) TO BE GREATER THAN (a) 5.25 TO 1.00 AT THE END OF
ANY FISCAL QUARTER OCCURRING DURING THE PERIOD FROM AND INCLUDING DECEMBER 31,
2001 THROUGH SEPTEMBER 30, 2002, (b) 4.50 TO 1.00 AT THE END OF ANY FISCAL
QUARTER OCCURRING DURING THE PERIOD FROM AND INCLUDING DECEMBER 31, 2002 THROUGH
SEPTEMBER 30, 2003, (c) 4.00 TO 1.00 AT THE END OF ANY FISCAL QUARTER OCCURRING
DURING THE PERIOD FROM AND INCLUDING DECEMBER 31, 2003 THROUGH SEPTEMBER 30,
2004 AND (d) 3.50 TO 1.00 THEREAFTER.
SENIOR LEVERAGE RATIO. THE BORROWER WILL NOT PERMIT THE SENIOR LEVERAGE RATIO
(TESTED AT THE END OF EACH FISCAL QUARTER) TO BE GREATER THAN (a) 2.90 TO 1.00
AT THE END OF ANY FISCAL QUARTER OCCURRING DURING THE PERIOD FROM AND INCLUDING
DECEMBER 31, 2001 THROUGH SEPTEMBER 30, 2002, (b) 2.30 TO 1.00 AT THE END OF ANY
FISCAL QUARTER OCCURRING DURING THE PERIOD FROM AND INCLUDING DECEMBER 31, 2002
THROUGH SEPTEMBER 30, 2003, (c) 2.00 TO 1.00 AT THE END OF ANY FISCAL QUARTER
OCCURRING DURING THE PERIOD FROM AND INCLUDING DECEMBER 31, 2003 THROUGH
SEPTEMBER 30, 2004 AND (d) 1.50 TO 1.00 THEREAFTER.
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SALE AND LEASEBACK. THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS
SUBSIDIARIES TO, ENTER INTO ANY ARRANGEMENT WHEREBY IT SELLS OR TRANSFERS ANY OF
ITS ASSETS, AND THEREAFTER RENTS OR LEASES SUCH ASSETS, EXCEPT THE PARKER EQUITY
PROPERTIES, PROVIDED THAT THIS SECTION 7.10 HEREOF DOES NOT PROHIBIT ANY SALE
AND LEASEBACK RESULTING FROM THE INCURRENCE OF ANY LEASE OR PURCHASE MONEY
FINANCING IN RESPECT OF ANY CAPITAL ASSETS ENTERED INTO WITHIN 90 DAYS OF THE
ACQUISITION OF SUCH CAPITAL ASSET FOR THE PURPOSE OF PROVIDING PERMANENT
FINANCING OF SUCH CAPITAL ASSET PERMITTED UNDER SECTION 7.1 HEREOF.
CAPITAL EXPENDITURES. THE BORROWER SHALL NOT PERMIT THE CAPITAL EXPENDITURES TO
BE PAID OR INCURRED BY IT AND ITS SUBSIDIARIES TO EXCEED AT ANY TIME IN THE
AGGREGATE (a) $15,500,000 DURING THE FISCAL YEAR ENDING DECEMBER 31, 2001 AND
(b) DURING ANY FISCAL YEAR OCCURRING THEREAFTER, THE SUM OF (x) $12,000,000,
PLUS (y) 50% OF EXCESS CASH FLOW ON OR AFTER DECEMBER 31, 2001. BEGINNING
DECEMBER 31, 2002, ANY AMOUNT NOT USED UNDER THIS SECTION 7.11 FOR THE PRIOR
FISCAL YEAR MAY BE CARRIED FORWARD INTO THE NEXT SUCCEEDING FISCAL YEAR ONLY.
AMENDMENTS AND WAIVERS OF SENIOR SUBORDINATED NOTES. THE BORROWER SHALL NOT, AND
SHALL NOT PERMIT ANY SUBSIDIARY TO, CHANGE OR AMEND (OR TAKE ANY ACTION OR FAIL
TO TAKE ANY ACTION THE RESULT OF WHICH IS AN EFFECTIVE AMENDMENT OR CHANGE) OR
ACCEPT ANY WAIVER OR CONSENT WITH RESPECT TO, ANY DOCUMENT, INSTRUMENT OR
AGREEMENT RELATING TO THE SENIOR SUBORDINATED NOTES THAT WOULD RESULT IN (a) AN
INCREASE IN THE PRINCIPAL, INTEREST, OVERDUE INTEREST, FEES OR OTHER AMOUNTS
PAYABLE UNDER THE SENIOR SUBORDINATED NOTES, (b) AN ACCELERATION IN ANY DATE
FIXED FOR PAYMENT OR PREPAYMENT OF PRINCIPAL, INTEREST, FEES OR OTHER AMOUNTS
PAYABLE UNDER THE SENIOR SUBORDINATED NOTES (INCLUDING, WITHOUT LIMITATION, AS A
RESULT OF ANY REDEMPTION), (c) A CHANGE IN THE DEFINITION OF "CHANGE OF CONTROL"
OR "CHANGE IN CONTROL" OR SIMILAR EVENT OR CIRCUMSTANCE, HOWEVER DEFINED OR
DESIGNATED, AS PROVIDED IN THE SENIOR SUBORDINATED NOTES WHICH WOULD RESULT IN
SUCH DEFINITION BEING MORE RESTRICTIVE THAN SUCH DEFINITION IN THIS AGREEMENT,
(d) A CHANGE IN ANY OF THE SUBORDINATION PROVISIONS OF THE SENIOR SUBORDINATED
NOTES, (e) A CHANGE IN ANY COVENANT, TERM OR PROVISION IN THE SENIOR
SUBORDINATED NOTES WHICH WOULD RESULT IN SUCH TERM OR PROVISION BEING MORE
RESTRICTIVE THAN THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR (f)
A CHANGE IN ANY TERM OR PROVISION OF THE SENIOR SUBORDINATED NOTES THAT COULD
HAVE, IN ANY MATERIAL RESPECT, AN ADVERSE EFFECT ON THE INTEREST OF THE LENDERS.
AMENDMENT OF ORGANIZATIONAL DOCUMENTS. THE BORROWER SHALL NOT, AND SHALL NOT
PERMIT ANY OF ITS SUBSIDIARIES TO, AMEND ITS ARTICLES OF INCORPORATION, BYLAWS
OR OTHER APPLICABLE ORGANIZATIONAL DOCUMENTS IN ANY MANNER THAT COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
EBITDA. THE BORROWER SHALL MAINTAIN AN EBITDA (TESTED AT THE END OF EACH FISCAL
QUARTER), CALCULATED FOR EACH OF THE THEN MOST RECENTLY ENDED FOUR FISCAL
QUARTERS, OF NOT LESS THAN (a) $65,000,000 AT THE END OF THE FISCAL QUARTER
ENDING DECEMBER 31, 2001, (b) $75,000,000 AT THE END OF ANY FISCAL QUARTER
OCCURRING DURING THE PERIOD FROM AND INCLUDING MARCH 31, 2002 THROUGH DECEMBER
31, 2003, AND (c) $85,000,000 FOR THE PERIODS BEGINNING MARCH 31, 2004 AND
THEREAFTER.
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FIXED CHARGE COVERAGE RATIO. BEGINNING WITH THE FISCAL QUARTER ENDING SEPTEMBER
30, 2001, THE BORROWER SHALL MAINTAIN A FIXED CHARGE COVERAGE RATIO (TESTED AT
THE END OF EACH FISCAL QUARTER FOR THE FOUR FISCAL QUARTERS THEN ENDED) OF NOT
LESS THAN 1.10 TO 1.00.
DEFAULT
EVENTS OF DEFAULT. EACH OF THE FOLLOWING SHALL CONSTITUTE AN EVENT OF DEFAULT,
WHATEVER THE REASON FOR SUCH EVENT, AND WHETHER VOLUNTARY, INVOLUNTARY, OR
EFFECTED BY OPERATION OF LAW OR PURSUANT TO ANY JUDGMENT OR ORDER OF ANY COURT
OR ANY ORDER, RULE OR REGULATION OF ANY GOVERNMENTAL OR NON-GOVERNMENTAL BODY:
Any representation or warranty made under any Loan Document shall prove to have
been incorrect or misleading in any material respect when made;
The Borrower shall fail to pay (i) principal of any Advance when due and (ii)
interest under any Advance or under any Loan Document or any fees payable
hereunder or any other costs, fees, expenses or other amounts payable hereunder
or under the other Loan Documents, when due, which failure to pay with respect
to clause (ii) above is not cured within five days after such amounts become due
in accordance with the terms hereof;
The Borrower or any of its Subsidiaries shall default in the performance or
observance of any agreement or covenant contained in Section 5.1(a) or Article 7
hereof;
The Borrower or any of its Subsidiaries shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1, and such default shall
not be cured within a period of 30 days after the earlier of (i) the date on
which such failure or neglect first becomes known to the Borrower or (ii) the
delivery of notice of such breach by the Administrative Agent;
The Borrower or any of its Subsidiaries shall default or breach in the
performance or observance of any agreement or covenant not specifically referred
to elsewhere in this Section 8.1 (after the expiration of any applicable notice
and cure or grace period) in any of the Loan Documents (other than this
Agreement) and such default or breach shall not be cured within a period of 30
days after written notice thereof from the Administrative Agent;
There shall be commenced an involuntary proceeding or an involuntary petition
shall be filed in a court having competent jurisdiction seeking (i) relief in
respect of the Borrower or any of its Subsidiaries or a substantial part of the
property or assets of the Borrower or any of its Subsidiaries under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
applicable Federal or state bankruptcy law or other similar law, (ii) the
appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official of the Borrower or any of its Subsidiaries, or
of any substantial part of any of their respective property or assets, or (iii)
the winding-up or liquidation of the affairs of the Borrower or any of its
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Subsidiaries, and any such proceeding or petition shall continue unstayed and in
effect for a period of 60 consecutive days;
Borrower or any of its Subsidiaries shall (i) file a petition, answer or consent
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, (ii) consent to the institution of proceedings thereunder or
to the filing of any such petition or to the appointment or taking of possession
of a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Borrower or any of its Subsidiaries or of any
substantial part of their respective properties, (iii) file an answer admitting
the material allegations filed against it in any such proceeding, (iv) make a
general assignment for the benefit of creditors, (v) fail generally to pay its
debts as they become due, or (vi) take any action in furtherance of any such
action;
A final judgment or judgments shall be entered by any court against the Borrower
or any of its Subsidiaries for the payment of money which exceeds $5,000,000 in
the aggregate, or a warrant of attachment or execution or similar process shall
be issued or levied against property of the Borrower or any of its Subsidiaries
which, together with all other such property of the Borrower and its
Subsidiaries subject to other such process, exceeds in value $5,000,000 in the
aggregate, and if such judgment or award is not insured or, within 45 days after
the entry, issue or levy thereof, such judgment, warrant or process shall not
have been paid or discharged or stayed pending appeal, or if, after the
expiration of any such stay, such judgment, warrant or process shall not have
been paid or discharged;
(i) the Borrower or any member of its Controlled Group shall incur any
accumulated funding deficiency, as defined in Section 412 of the Code; (ii) the
Borrower or any member of its Controlled Group shall incur any withdrawal
liability as a result of a complete or partial withdrawal within the meaning of
Section 4063, 4203 or 4205 of ERISA; (iii) the Borrower or any member of its
Controlled Group shall fail to make a required contribution by the due date
under Section 412 of the Code or Section 302 of ERISA which would result in the
imposition of a Lien under Section 412 of the Code or Section 302 of ERISA; (iv)
the Borrower or any member of its Controlled Group shall notify the PBGC of an
intent to terminate a Plan under Section 4201(c) of ERISA, or the PBGC shall
institute proceedings to terminate, any Plan; (v) a trustee shall be appointed
by a court of competent jurisdiction to administer any Plan or the assets
thereof; (vi) the benefits of any Plan shall be increased, or the Borrower or
any member of its Controlled Group shall begin to maintain, or begin to
contribute to, any Plan; or (vii) any ERISA Event with respect to a Plan shall
have occurred; provided, however, that the events listed in subsections (i)
through (vii) above shall constitute Events of Default only if, as of the date
thereof or any subsequent date, the amount of liability that the Borrower is
likely to incur in the aggregate under ERISA or any other provision of law with
respect to all such Plans, computed by the actuary of the Plan taking into
account any applicable rules and regulations of the PBGC at such time, and based
on the actuarial assumptions used by the Plan, resulting from or otherwise
associated with such event could reasonably be expected to have a Material
Adverse Effect;
Any Obligor shall challenge in any manner whatsoever the validity or
enforceability of all or any portion of the Loan Documents or the Collateral;
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The Borrower or any of its Subsidiaries shall default in any payment in respect
of Indebtedness beyond any grace period provided with respect thereto, or shall
default in the performance of any agreement or instrument under which such
Indebtedness is created or evidenced beyond any applicable grace period, or any
other event or condition shall occur in respect of such Indebtedness, if the
effect of such default, event or condition is to permit or cause the holder of
such Indebtedness (or a trustee on behalf of any such holder) to cause such
Indebtedness to become due, repurchased or redeemed prior to its date of
maturity, provided that a default, event or condition of the type described
above in this Section 8.1(k) shall not constitute an Event of Default under this
Agreement unless, at such time, one or more defaults, events or conditions of
the type described above in this Section 8.1(k) shall have occurred and be
continuing with respect to Indebtedness the outstanding amount of which exceeds
in the aggregate $5,000,000;
Any provision of any Loan Document shall for any reason cease to be valid and
binding on or enforceable against any party to it (other than the Administrative
Agent or any Lender) in all material respects unless released by the
Administrative Agent at the direction of the Determining Lenders or all Lenders
or as otherwise permitted by the terms of this Agreement or the other Loan
Documents;
Any Collateral Document shall for any reason (other than as expressly provided
or permitted pursuant to the terms thereof) cease to create a valid and
perfected first priority Lien in any Collateral, and if such invalidity is
amenable to cure, the relevant Obligor shall have failed to cure such invalidity
within 30 days after notice from the Administrative Agent;
A Change of Control shall have occurred; or
To the extent the tax liability referenced in Section 3.1(q) arises, either the
capital contribution or the stock issuance referenced in Section 3.1(q) hereof
shall fail to be consummated on or before the date the Borrower pays such tax
liability.
REMEDIES. IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND SHALL BE CONTINUING:
With the exception of an Event of Default specified in Section 8.1(f) or (g)
hereof, the Administrative Agent shall, (i) upon the direction of the Required
Revolving Credit Lenders, terminate the Revolving Credit Commitment, and/or (ii)
upon the direction of the Determining Lenders, terminate the Commitments and/or
declare the principal of and interest on the Advances and all Obligations and
other amounts owed under the Loan Documents to be forthwith due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, anything in the Loan Documents to the contrary
notwithstanding.
Upon the occurrence of an Event of Default specified in Section 8.1(f) or (g)
hereof, such principal, interest and other amounts shall thereupon and
concurrently therewith become due and payable and the Commitments shall
forthwith terminate, all without any action by the Administrative Agent, any
Lender or any holders of the Notes and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in the
Loan Documents to the contrary notwithstanding.
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If any Letter of Credit shall be then outstanding, the Administrative Agent may
demand upon the Borrower to, and within 5 days of such demand (but in the case
of an Event of Default specified in Section 8.1(f) or (g) hereof, immediately
and without any demand or taking of any other action by the Administrative Agent
or any Lender), the Borrower shall, pay to the Administrative Agent in same day
funds at the office of the Administrative Agent in such demand for deposit in
the L/C Cash Collateral Account, an amount equal to the maximum amount available
to be drawn under the Letters of Credit then outstanding and/or provide back-up
letters of credit satisfactory to the Issuing Bank in an amount, together with
any funds deposited in the L/C Cash Collateral Account, equal to the maximum
amount available to be drawn under the Letters of Credit then outstanding.
The Administrative Agent, and the Lenders may exercise all of the post-default
rights granted to them under the Loan Documents or under Applicable Law.
The rights and remedies of the Administrative Agent and the Lenders hereunder
shall be cumulative, and not exclusive.
CHANGES IN CIRCUMSTANCES
LIBOR BASIS DETERMINATION INADEQUATE. IF WITH RESPECT TO ANY PROPOSED LIBOR
ADVANCE FOR ANY INTEREST PERIOD, ANY LENDER REASONABLY DETERMINES THAT (I)
DEPOSITS IN DOLLARS (IN THE APPLICABLE AMOUNT) ARE NOT BEING OFFERED TO THAT
LENDER IN THE RELEVANT MARKET FOR SUCH INTEREST PERIOD OR (II) THE LIBOR RATE
FOR SUCH PROPOSED LIBOR ADVANCE DOES NOT ADEQUATELY COVER THE COST TO SUCH
LENDER OF MAKING AND MAINTAINING SUCH PROPOSED LIBOR ADVANCE FOR SUCH INTEREST
PERIOD, SUCH LENDER SHALL FORTHWITH GIVE NOTICE THEREOF TO THE BORROWER,
WHEREUPON UNTIL SUCH LENDER NOTIFIES THE BORROWER THAT THE CIRCUMSTANCES GIVING
RISE TO SUCH SITUATION NO LONGER EXIST (WHICH SUCH LENDER AGREES TO PROMPTLY
WHEN THE CIRCUMSTANCES GIVING RISE TO SUCH DETERMINATION NO LONGER EXIST), THE
OBLIGATION OF SUCH LENDER TO MAKE LIBOR ADVANCES SHALL BE SUSPENDED.
ILLEGALITY. IF ANY APPLICABLE LAW, RULE OR REGULATION, OR ANY CHANGE THEREIN OR
ADOPTION THEREOF, OR INTERPRETATION OR ADMINISTRATION THEREOF BY ANY
GOVERNMENTAL AUTHORITY, CENTRAL BANK OR COMPARABLE AGENCY CHARGED WITH THE
INTERPRETATION OR ADMINISTRATION THEREOF, OR COMPLIANCE BY ANY LENDER (OR ITS
LIBOR LENDING OFFICE) WITH ANY REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING THE
FORCE OF LAW) OF ANY SUCH AUTHORITY, CENTRAL BANK OR COMPARABLE AGENCY, SHALL
MAKE IT UNLAWFUL OR IMPOSSIBLE FOR SUCH LENDER (OR ITS LIBOR LENDING OFFICE) TO
MAKE, MAINTAIN OR FUND ITS LIBOR ADVANCES, SUCH LENDER SHALL SO NOTIFY THE
BORROWER AND THE ADMINISTRATIVE AGENT. BEFORE GIVING ANY NOTICE TO THE BORROWER
PURSUANT TO THIS SECTION, THE NOTIFYING LENDER SHALL DESIGNATE A DIFFERENT LIBOR
LENDING OFFICE OR OTHER LENDING OFFICE IF SUCH DESIGNATION WILL AVOID THE NEED
FOR GIVING SUCH NOTICE AND WILL NOT, IN THE REASONABLE JUDGMENT OF THE LENDER,
BE DISADVANTAGEOUS TO THE LENDER. UPON RECEIPT OF SUCH NOTICE, NOTWITHSTANDING
ANYTHING CONTAINED IN ARTICLE 2 HEREOF, THE BORROWER SHALL REPAY IN FULL THE
THEN OUTSTANDING PRINCIPAL AMOUNT OF EACH LIBOR ADVANCE OWING TO THE NOTIFYING
LENDER, TOGETHER WITH ACCRUED INTEREST THEREON, ON EITHER (a) THE LAST DAY OF
THE INTEREST PERIOD
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APPLICABLE TO SUCH ADVANCE, IF THE LENDER MAY LAWFULLY CONTINUE TO MAINTAIN AND
FUND SUCH ADVANCE TO SUCH DAY, OR (b) IMMEDIATELY, IF THE LENDER MAY NOT
LAWFULLY CONTINUE TO FUND AND MAINTAIN SUCH ADVANCE TO SUCH DAY. CONCURRENTLY
WITH REPAYING EACH AFFECTED LIBOR ADVANCE OWING TO SUCH LENDER IF THE BORROWER
DOES NOT TERMINATE THIS AGREEMENT, NOTWITHSTANDING ANYTHING CONTAINED IN ARTICLE
2 HEREOF, THE BORROWER SHALL BORROW A BASE RATE ADVANCE FROM SUCH LENDER, AND
SUCH LENDER SHALL MAKE SUCH BASE RATE ADVANCE, IN AN AMOUNT SUCH THAT THE
OUTSTANDING PRINCIPAL AMOUNT OF THE ADVANCES OWING TO SUCH LENDER SHALL EQUAL
THE OUTSTANDING PRINCIPAL AMOUNT OF THE ADVANCES OWING IMMEDIATELY PRIOR TO SUCH
REPAYMENT.
INCREASED COSTS.
If the adoption, effectiveness, phase-in or applicability after the Agreement
Date of any Law (or any provision thereof) or any change in the interpretation
or administration thereof after the Agreement Date by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Lender (or its LIBOR Lending Office)
with any request or directive (whether or not having the force of law) of any
such authority, central bank or compatible agency:
SHALL SUBJECT A LENDER (OR ITS LIBOR LENDING OFFICE) TO ANY TAX (NET OF ANY TAX
BENEFIT ENGENDERED THEREBY AND EXCLUDING ANY TAXES REFERRED TO IN CLAUSES (i)
THROUGH (iv) OF SECTION 2.15(a) HEREOF) WITH RESPECT TO ITS LIBOR ADVANCES OR
ITS OBLIGATION TO MAKE SUCH ADVANCES, OR SHALL CHANGE THE BASIS OF TAXATION OF
PAYMENTS TO A LENDER (OR TO ITS LIBOR LENDING OFFICE) OF THE PRINCIPAL OF OR
INTEREST ON ITS LIBOR ADVANCES OR IN RESPECT OF ANY OTHER AMOUNTS DUE UNDER THIS
AGREEMENT, AS THE CASE MAY BE, OR ITS OBLIGATION TO MAKE SUCH ADVANCES (EXCEPT
FOR CHANGES IN THE RATE OF TAX ON THE OVERALL NET INCOME, NET WORTH OR CAPITAL
OF THE LENDER AND FRANCHISE TAXES, DOING BUSINESS TAXES OR MINIMUM TAXES IMPOSED
UPON SUCH LENDER); OR
SHALL IMPOSE, MODIFY OR DEEM APPLICABLE ANY RESERVE (INCLUDING, WITHOUT
LIMITATION, ANY IMPOSED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM), SPECIAL DEPOSIT OR SIMILAR REQUIREMENT AGAINST ASSETS OF, DEPOSITS WITH
OR FOR THE ACCOUNT OF, OR CREDIT EXTENDED BY, A LENDER'S LIBOR LENDING OFFICE OR
SHALL IMPOSE ON THE LENDER (OR ITS LIBOR LENDING OFFICE) OR ON THE UNITED STATES
MARKET FOR CERTIFICATES OF DEPOSIT OR THE LONDON INTERBANK MARKET ANY OTHER
CONDITION AFFECTING ITS LIBOR ADVANCES OR ITS OBLIGATION TO MAKE SUCH ADVANCES;
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, in each case by an amount deemed by a
Lender to be material ("Increased Costs"), then, within 15 days after demand by
a Lender, the Borrower agrees to pay to such Lender such additional amount as
will compensate such Lender for such Increased Costs, subject to Section 11.9
hereof. The affected Lender will as soon as practicable notify the Borrower of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different LIBOR Lending Office or other lending office if such designation
will avoid the need for, or reduce the amount of, such compensation
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and will not, in the reasonable judgment of the affected Lender made in good
faith, be disadvantageous to such Lender. Notwithstanding the foregoing, any
Lender's demand for Increased Costs shall not include any Increased Costs with
respect to any period more than 90 days prior to the date that such Lender has
knowledge or should have knowledge of such Increased Costs.
A certificate of any Lender claiming compensation under this Section and setting
forth the additional amounts to be paid to it hereunder and calculations
therefor (and certifying that such Lenders generally charging such costs to
similarly situated borrowers) shall be controlling in the absence of manifest
error. In determining such amount, a Lender may use any reasonable averaging and
attribution methods. If a Lender demands compensation under this Section, the
Borrower may at any time, upon at least five Business Days' prior notice to the
Lender, after reimbursement to the Lender by the Borrower in accordance with
this Section of all costs incurred, prepay in full the then outstanding LIBOR
Advances of the Lender, together with accrued interest thereon to the date of
prepayment, along with any reimbursement required under Section 2.9 hereof.
Concurrently with prepaying such LIBOR Advances, the Borrower shall borrow a
Base Rate Advance from the Lender, and the Lender shall make such Base Rate
Advance, in an amount such that the outstanding principal amount of the Advances
owing to such Lender shall equal the outstanding principal amount of the
Advances owing immediately prior to such prepayment. The obligation of the
Borrower pursuant to this Section 9.3 shall survive termination of this
Agreement in full and all other amounts payable hereunder and repayment of the
Advances in full for a period of nine months thereafter.
EFFECT ON BASE RATE ADVANCES. F NOTICE HAS BEEN GIVEN PURSUANT TO SECTION 9.1,
9.2 OR 9.3 HEREOF SUSPENDING THE OBLIGATION OF A LENDER TO MAKE LIBOR ADVANCES,
OR REQUIRING LIBOR ADVANCES OF A LENDER TO BE REPAID OR PREPAID, THEN, UNLESS
AND UNTIL THE LENDER NOTIFIES THE BORROWER THAT THE CIRCUMSTANCES GIVING RISE TO
SUCH REPAYMENT NO LONGER APPLY WHICH SUCH LENDER AGREES TO DO WHEN THE
CIRCUMSTANCES GIVING RISE TO SUCH SUSPENSION NO LONGER EXIST, ALL ADVANCES WHICH
WOULD OTHERWISE BE MADE BY SUCH LENDER AS LIBOR ADVANCES SHALL BE MADE INSTEAD
AS BASE RATE ADVANCES.
CAPITAL ADEQUACY. IF EITHER (a) THE ADOPTION OR APPLICABILITY AFTER THE
AGREEMENT DATE OF ANY LAW (OR ANY PROVISION THEREOF) OR THE INTRODUCTION OF OR
ANY CHANGE IN OR IN THE INTERPRETATION OF ANY LAW AFTER THE AGREEMENT DATE OR
(b) COMPLIANCE BY A LENDER WITH ANY LAW OR ANY GUIDELINE OR REQUEST FROM ANY
CENTRAL BANK OR OTHER GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF
LAW) ADOPTED, PHASED-IN OR MADE APPLICABLE AFTER THE AGREEMENT DATE AFFECTS OR
WOULD AFFECT THE AMOUNT OF CAPITAL REQUIRED OR EXPECTED TO BE MAINTAINED BY A
LENDER OR ANY CORPORATION CONTROLLING SUCH LENDER, AND SUCH LENDER DETERMINES
THAT THE AMOUNT OF SUCH CAPITAL IS INCREASED BY OR BASED UPON THE EXISTENCE OF
SUCH LENDER'S COMMITMENT OR ADVANCES HEREUNDER AND OTHER COMMITMENTS OR ADVANCES
OF SUCH LENDER OF THIS TYPE, THEN, WITHIN 30 DAYS AFTER WRITTEN NOTICE AND
DEMAND BY SUCH LENDER, SUBJECT TO SECTION 11.9, THE BORROWER SHALL PAY TO SUCH
LENDER, FROM TIME TO TIME AS SPECIFIED BY SUCH LENDER, ADDITIONAL AMOUNTS
SUFFICIENT TO COMPENSATE SUCH LENDER WITH RESPECT TO SUCH CIRCUMSTANCES, TO THE
EXTENT THAT SUCH LENDER REASONABLY DETERMINES IN GOOD FAITH SUCH INCREASE IN
CAPITAL TO BE ALLOCABLE TO THE EXISTENCE OF SUCH LENDER'S PORTION OF THE
COMMITMENTS HEREUNDER. A CERTIFICATE AS TO SUCH AMOUNTS SUBMITTED TO THE
BORROWER BY A
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LENDER HEREUNDER, SHALL, IN THE ABSENCE OF MANIFEST ERROR, BE CONCLUSIVE AND
BINDING FOR ALL PURPOSES.
REPLACEMENT OF LENDERS UNDER CERTAIN CIRCUMSTANCES. IF AT ANY TIME (a) THE
BORROWER BECOMES OBLIGATED TO PAY ADDITIONAL AMOUNTS DESCRIBED IN SECTIONS 2.15,
9.2, 9.3, OR 9.5 HEREOF, OR ANY LENDER CEASES TO MAKE LIBOR ADVANCES PURSUANT TO
SUCH SECTIONS, (b) ANY LENDER BECOMES INSOLVENT AND ITS ASSETS BECOME SUBJECT TO
A RECEIVER, LIQUIDATOR, TRUSTEE, CUSTODIAN OR OTHER PERSON HAVING SIMILAR
POWERS, (c) ANY LENDER BECOMES A "NON-CONSENTING LENDER" (AS DEFINED BELOW IN
THIS SECTION 9.6) OR (d) ANY LENDER BECOMES A "NON-FUNDING LENDER" (AS DEFINED
BELOW IN THIS SECTION 9.6), THEN THE BORROWER MAY REPLACE SUCH LENDER BY CAUSING
SUCH LENDER TO (AND SUCH LENDER SHALL BE OBLIGATED TO) ASSIGN PURSUANT TO
SECTION 11.6 ALL OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT TO A LENDER
OR OTHER ENTITY SELECTED BY THE BORROWER AND REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT FOR A PURCHASE PRICE EQUAL TO THE OUTSTANDING PRINCIPAL
AMOUNT OF SUCH LENDER'S ADVANCES AND ALL ACCRUED INTEREST AND FEES AND OTHER
AMOUNTS PAYABLE HEREUNDER (INCLUDING AMOUNTS PAYABLE UNDER SECTIONS 9.2, 9.3 OR
9.5 HEREOF AS THOUGH SUCH ADVANCES WERE BEING PAID INSTEAD OF BEING PURCHASED).
IN THE EVENT THAT (x) THE BORROWER OR THE ADMINISTRATIVE AGENT HAS REQUESTED THE
LENDERS TO CONSENT TO A DEPARTURE OR WAIVER OF ANY PROVISIONS OF THE LOAN
DOCUMENTS OR TO AGREE TO ANY AMENDMENT THERETO, (y) THE CONSENT, WAIVER OR
AMENDMENT IN QUESTION REQUIRES THE AGREEMENT OF ALL LENDERS IN ACCORDANCE WITH
THE TERMS OF SECTION 11.10 HEREOF OR ALL THE LENDERS WITH RESPECT TO A CERTAIN
CLASS OF THE ADVANCES AND (z) DETERMINING LENDERS OR MORE THAN 50% OF THE CLASS
OF SUCH LENDERS HAVE AGREED TO SUCH CONSENT, WAIVER OR AMENDMENT THEN ANY LENDER
WHO DOES NOT AGREE TO SUCH CONSENT, WAIVER OR AMENDMENT SHALL BE DEEMED A
"NON-CONSENTING LENDER". IN THE EVENT THAT ANY LENDER HAS (y) FAILED TO MAKE ANY
ADVANCE REQUIRED TO BE MADE BY IT HEREUNDER OR (z) GIVEN NOTICE TO THE
ADMINISTRATIVE AGENT THAT IT WILL NOT MAKE, OR THAT IT HAS DISAFFIRMED OR
REPUDIATED ANY OBLIGATION TO MAKE, ANY ADVANCE REQUIRED TO BE MADE BY IT
HEREUNDER SUCH LENDER SHALL BE DEEMED A "NON-FUNDING LENDER". THE BORROWER'S
RIGHT TO REPLACE A NON-FUNDING LENDER PURSUANT TO THIS SECTION 9.6 IS, AND SHALL
BE, IN ADDITION TO, AND NOT IN LIEU OF, ALL OTHER RIGHTS AND REMEDIES AVAILABLE
TO THE BORROWER AGAINST SUCH NON-FUNDING LENDER UNDER THIS AGREEMENT, AT LAW, IN
EQUITY, OR BY STATUTE.
AGREEMENT AMONG LENDERS
AGREEMENT AMONG LENDERS. THE LENDERS AGREE AMONG THEMSELVES THAT:
Administrative Agent. Each Lender hereby appoints the Administrative Agent as
its nominee in its name and on its behalf, to receive all documents and items to
be furnished hereunder; to act as nominee for and on behalf of all Lenders under
the Loan Documents; to, except as otherwise expressly set forth herein, take
such action as may be requested by the Determining Lenders, provided that,
unless and until the Administrative Agent shall have received such requests, the
Administrative Agent may take such administrative action, or refrain from taking
such administrative action, as it may deem advisable and in the best interests
of the Lenders; to arrange the means whereby the proceeds of the Advances of the
Lenders are to be made available to the Borrower; to distribute promptly to each
Lender information, requests and documents
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received from the Borrower, and each payment (in like funds received) with
respect to any of such Lender's Advances, fee or other amount; and to deliver to
the Borrower requests, demands, approvals and consents received from the
Lenders. Administrative Agent agrees to promptly distribute to each Lender, at
such Lender's address set forth below information, requests, documents and
payments received from the Borrower. The Administrative Agent agrees to promptly
notify the Lenders of any receipt of cash collateral or back-up letter of credit
which would cause any Letter of Credit to no longer be considered a Letter of
Credit hereunder. The Administrative Agent shall have no fiduciary relationship
in respect of any Lender by reason of this Agreement or any other Loan Document.
The Administrative Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement. The duties of the Administrative Agent
are mechanical and administrative in nature.
Replacement of Administrative Agent. Should the Administrative Agent or any
successor Administrative Agent ever cease to be a Lender hereunder, or should
the Administrative Agent or any successor Administrative Agent ever resign as
Administrative Agent, or should the Administrative Agent or any successor
Administrative Agent ever be removed with cause or without cause by the action
of the Determining Lenders (other than the Administrative Agent), then the
Lender appointed by the other Lenders (with the consent of the Borrower, which
consent shall not be unreasonably withheld) shall forthwith become the
Administrative Agent, and the Borrower and the Lenders shall execute such
documents as such successors to the Administrative Agent may reasonably request
to reflect such change. If the Administrative Agent also then serves in the
capacity of the Swing Line Bank or the Issuing Bank, such resignation or removal
shall constitute resignation or removal of the Swing Line Bank and the Issuing
Bank and the successor Administrative Agent shall serve in the capacity of the
Swing Line Bank and the Issuing Bank. Any resignation or removal of the
Administrative Agent or any successor Administrative Agent shall become
effective upon the appointment by the Lenders of a successor Administrative
Agent; provided, however, if no successor Administrative Agent shall have been
so appointed and shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent,
which shall be a commercial bank organized under the Laws of the United States
of America or of any State thereof and having a combined capital and surplus of
at least $500,000,000 with the consent of the Borrower, which consent will not
be unreasonably withheld. Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents. Notwithstanding any Administrative Agent's resignation or
removal hereunder, the provisions of this Article shall continue to inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement.
Expenses. Each Lender shall pay its pro rata share, based on its Total Specified
Percentage, of any expenses paid by the Administrative Agent directly and solely
in connection with any of the Loan Documents if Administrative Agent does not
receive reimbursement therefor from other sources within 60 days after the date
incurred, unless payment of such fees is being diligently
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disputed by such Lender or the Borrower in good faith. Any amount so paid by the
Lenders to the Administrative Agent shall be returned by the Administrative
Agent pro rata to each paying Lender to the extent later paid by the Borrower or
any other Person on the Borrower's behalf to the Administrative Agent.
Delegation of Duties. The Administrative Agent may execute any of its duties
hereunder by or through officers, directors, employees, attorneys or agents, and
shall be entitled to (and shall be protected in relying upon) advice of counsel
concerning all matters pertaining to its duties hereunder.
Reliance by Administrative Agent. The Administrative Agent and its officers,
directors, employees, attorneys and agents shall be entitled to rely and shall
be fully protected in relying on any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telex or teletype message,
statement, order, or other document or conversation reasonably believed by it or
them in good faith to be genuine and correct and to have been signed or made by
the proper Person and, with respect to legal matters, upon opinions of counsel
selected the Administrative Agent. The Administrative Agent may, in its
reasonable judgment, deem and treat the payee of any Note as the owner thereof
for all purposes hereof unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent.
Limitation of Administrative Agent's Liability. Neither the Administrative Agent
nor any of its officers, directors, employees, attorneys or agents shall be
liable for any action taken or omitted to be taken by it or them hereunder in
good faith and believed by it or them to be within the discretion or power
conferred to it or them by the Loan Documents or be responsible for the
consequences of any error of judgment, except for its or their own gross
negligence or willful misconduct. Except as aforesaid, the Administrative Agent
shall be under no duty to enforce any rights with respect to any of the
Advances, or any security therefor. The Administrative Agent shall not be
compelled to do any act hereunder or to take any action towards the execution or
enforcement of the powers hereby created or to prosecute or defend any suit in
respect hereof, unless indemnified to its satisfaction against loss, cost,
liability and expense. The Administrative Agent shall not be responsible in any
manner to any Lender for the effectiveness, enforceability, genuineness,
validity or due execution of any of the Loan Documents, or for any
representation, warranty, document, certificate, report or statement made herein
or furnished in connection with any Loan Documents, or be under any obligation
to any Lender to ascertain or to inquire as to the performance or observation of
any of the terms, covenants or conditions of any Loan Documents on the part of
the Borrower. TO THE EXTENT NOT REIMBURSED BY THE BORROWER, EACH LENDER HEREBY
SEVERALLY INDEMNIFIES AND HOLDS HARMLESS THE ADMINISTRATIVE AGENT, PRO RATA
ACCORDING TO ITS TOTAL SPECIFIED PERCENTAGE, FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES AND/OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY
BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THE ADMINISTRATIVE AGENT IN ANY
WAY WITH RESPECT TO ANY LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE
ADMINISTRATIVE AGENT UNDER THE LOAN DOCUMENTS (INCLUDING ANY NEGLIGENT ACTION OF
THE ADMINISTRATIVE AGENT),
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EXCEPT TO THE EXTENT THE SAME ARE FINALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION TO RESULT FROM GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY THE
ADMINISTRATIVE AGENT. THE INDEMNITY PROVIDED IN THIS SECTION 10.1(f) SHALL
SURVIVE TERMINATION OF THIS AGREEMENT.
Liability Among Lenders. No Lender shall incur any liability (other than the
sharing of expenses and other matters specifically set forth herein and in the
other Loan Documents) to any other Lender, except for acts or omissions in bad
faith.
Rights as Lender. With respect to its commitment hereunder, the Advances made by
it and the Notes issued to it, the Administrative Agent shall have the same
rights as a Lender and may exercise the same as though it were not the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent or any Lender may accept deposits from, act
as trustee under indentures of, and generally engage in any kind of business
with, the Borrower and any of its Affiliates, and any Person who may do business
with or own securities of the Borrower or any of its Affiliates, all as if the
Administrative Agent were not the Administrative Agent hereunder and without any
duty to account therefor to the Lenders.
LENDER CREDIT DECISION. EACH LENDER ACKNOWLEDGES THAT IT HAS, INDEPENDENTLY AND
WITHOUT RELIANCE UPON THE ADMINISTRATIVE AGENT OR ANY OTHER LENDER AND BASED
UPON THE FINANCIAL STATEMENTS REFERRED TO IN SECTIONS 4.1(j), 6.1 AND 6.2
HEREOF, AND SUCH OTHER DOCUMENTS AND INFORMATION AS IT HAS DEEMED APPROPRIATE,
MADE ITS OWN CREDIT ANALYSIS AND DECISION TO ENTER INTO THIS AGREEMENT. EACH
LENDER ALSO ACKNOWLEDGES THAT IT WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON
THE ADMINISTRATIVE AGENT OR ANY OTHER LENDER AND BASED UPON SUCH DOCUMENTS AND
INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE TIME, CONTINUE TO MAKE ITS OWN
CREDIT DECISIONS IN TAKING OR NOT TAKING ACTION UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
BENEFITS OF ARTICLE. NONE OF THE PROVISIONS OF THIS ARTICLE SHALL INURE TO THE
BENEFIT OF ANY PERSON OTHER THAN LENDERS (AND WHERE THE BORROWER'S CONSENT IS
REQUIRED, THE BORROWER); CONSEQUENTLY, NO PERSON SHALL BE ENTITLED TO RELY UPON,
OR TO RAISE AS A DEFENSE, IN ANY MANNER WHATSOEVER, THE FAILURE OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO COMPLY WITH SUCH PROVISIONS.
MISCELLANEOUS
NOTICES.
All notices and other communications under this Agreement shall be in writing
(except in those cases where giving notice by telephone is expressly permitted)
and shall be deemed to have been given on the date personally delivered or sent
by telecopy (answerback received), or three days after deposit in the mail,
designated as certified mail, return receipt requested, postage-prepaid,
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or one day after being entrusted to a reputable commercial overnight delivery
service, or one day after being delivered to the telegraph office or sent out by
telex addressed to the party to which such notice is directed at its address
determined as provided in this Section. All notices and other communications
under this Agreement shall be given to the parties hereto at the following
addresses:
IF TO THE BORROWER, AT:
HOME INTERIORS & GIFTS, INC.
1649 FRANKFORD ROAD WEST
CARROLLTON, TEXAS 75007
FACSIMILE: (972) 386-1022
ATTENTION: CHIEF FINANCIAL OFFICER
With a copy to:
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Facsimile: (214) 720-7888
Attention: Joe Colonnetta and General Counsel
IF TO THE ADMINISTRATIVE AGENT, AT:
BANK OF AMERICA, N.A.
100 NORTH TRYON STREET
NC1-007-13-06
CHARLOTTE, NC 28255
FACSIMILE: (704) 386-9607
ATTENTION: ROBERT A. KLAWINSKI
With a copy to:
Bank of America, N.A.
101 North Tryon Street
NC1-001-15-04
Charlotte, NC 28255
Facsimile: (704) 388-1108
Attention: Agency Services
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IF TO A LENDER, AT ITS ADDRESS OR FACSIMILE NUMBER SHOWN BELOW ITS NAME ON THE
SIGNATURE PAGES HEREOF, OR IF APPLICABLE, SET FORTH IN ITS ASSIGNMENT AGREEMENT.
Any party hereto may change the address to which notices shall be directed by
giving 10 days' written notice of such change to the other parties.
Electronic mail and Internet and Intranet web sites may be used only to
distribute routine communications, such as financial statements and other
information, and to distribute Loan Documents for execution by the parties
thereto, and may not be used for any other purpose.
EXPENSES. THE BORROWER SHALL PROMPTLY PAY:
all reasonable out-of-pocket expenses of the Administrative Agent in connection
with the preparation, negotiation, execution and delivery of this Agreement and
the other Loan Documents, the transactions contemplated hereunder and
thereunder, and the making of Advances hereunder, including without limitation
the reasonable fees and disbursements of Special Counsel and financial advisors
to the Administrative Agent;
all reasonable out-of-pocket expenses and reasonable attorneys' fees of the
Administrative Agent in connection with the administration of the transactions
contemplated in this Agreement and the other Loan Documents and the preparation,
negotiation, execution and delivery of any waiver, amendment or consent by the
Administrative Agent relating to this Agreement or the other Loan Documents; and
all (i) costs and out-of-pocket expenses and attorneys' fees of the
Administrative Agent incurred for enforcement, collection, restructuring,
refinancing and "work-out", or otherwise incurred in obtaining performance under
the Loan Documents, which in each case shall include without limitation fees and
expenses of consultants, legal counsel for the Administrative Agent, and
administrative fees for the Administrative Agent; and (ii) from and after the
occurrence and during the continuance of an Event of Default, all costs and
out-of-pocket expenses of each Lender, including legal fees of one counsel for
all the Lenders.
WAIVERS. THE RIGHTS AND REMEDIES OF THE LENDERS UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL BE CUMULATIVE AND NOT EXCLUSIVE OF ANY RIGHTS OR
REMEDIES WHICH THEY WOULD OTHERWISE HAVE. NO FAILURE OR DELAY BY THE
ADMINISTRATIVE AGENT OR ANY LENDER IN EXERCISING ANY RIGHT SHALL OPERATE AS A
WAIVER OF SUCH RIGHT. THE LENDERS EXPRESSLY RESERVE THE RIGHT TO REQUIRE STRICT
COMPLIANCE WITH THE TERMS OF THIS AGREEMENT IN CONNECTION WITH ANY FUNDING OF A
REQUEST FOR AN ADVANCE OR ISSUANCE OF A LETTER OF CREDIT. IN THE EVENT THAT ANY
LENDER DECIDES TO FUND AN ADVANCE AT A TIME WHEN THE BORROWER IS NOT IN STRICT
COMPLIANCE WITH THE TERMS OF THIS AGREEMENT, SUCH DECISION BY SUCH LENDER SHALL
NOT BE DEEMED TO CONSTITUTE AN UNDERTAKING BY THE LENDER TO FUND ANY FURTHER
REQUESTS FOR ADVANCES OR PRECLUDE THE LENDERS FROM EXERCISING ANY RIGHTS
AVAILABLE UNDER THE LOAN DOCUMENTS OR AT LAW OR EQUITY. ANY WAIVER OR INDULGENCE
GRANTED BY THE LENDERS SHALL NOT CONSTITUTE A MODIFICATION OF THIS AGREEMENT,
EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN SUCH WAIVER OR INDULGENCE, OR
CONSTITUTE A COURSE OF DEALING BY THE LENDERS AT VARIANCE WITH THE TERMS OF THE
AGREEMENT SUCH AS TO REQUIRE FURTHER NOTICE BY THE LENDERS OF THE LENDERS'
INTENT TO REQUIRE STRICT ADHERENCE TO THE
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TERMS OF THE AGREEMENT IN THE FUTURE. ANY SUCH ACTIONS SHALL NOT IN ANY WAY
AFFECT THE ABILITY OF THE ADMINISTRATIVE AGENT OR THE LENDERS, IN THEIR
DISCRETION, TO EXERCISE ANY RIGHTS AVAILABLE TO THEM UNDER THIS AGREEMENT OR
UNDER ANY OTHER AGREEMENT, WHETHER OR NOT THE ADMINISTRATIVE AGENT OR ANY OF THE
LENDERS ARE A PARTY THERETO, RELATING TO THE BORROWER.
DETERMINATION BY THE LENDERS CONCLUSIVE AND BINDING. ANY CALCULATION REQUIRED OR
EXPRESSLY PERMITTED TO BE MADE BY THE ADMINISTRATIVE AGENT OR ANY LENDER UNDER
THIS AGREEMENT SHALL WHEN MADE, ABSENT MANIFEST ERROR, BE CONTROLLING.
SET-OFF. IN ADDITION TO ANY RIGHTS NOW OR HEREAFTER GRANTED UNDER APPLICABLE LAW
AND NOT BY WAY OF LIMITATION OF ANY SUCH RIGHTS, UPON THE OCCURRENCE AND DURING
THE CONTINUATION OF AN EVENT OF DEFAULT, EACH LENDER AND ANY SUBSEQUENT HOLDER
OF ANY NOTE, AND ANY ASSIGNEE OR PARTICIPANT IN ANY NOTE IS HEREBY AUTHORIZED BY
THE BORROWER AT ANY TIME OR FROM TIME TO TIME, WITHOUT NOTICE TO THE BORROWER OR
ANY OTHER PERSON, ANY SUCH NOTICE BEING HEREBY EXPRESSLY WAIVED, TO SET-OFF,
APPROPRIATE AND APPLY ANY DEPOSITS (GENERAL OR SPECIAL (EXCEPT TRUST AND ESCROW
ACCOUNTS), TIME OR DEMAND, INCLUDING WITHOUT LIMITATION INDEBTEDNESS EVIDENCED
BY CERTIFICATES OF DEPOSIT, IN EACH CASE WHETHER MATURED OR UNMATURED) AND ANY
OTHER INDEBTEDNESS AT ANY TIME HELD OR OWING BY SUCH LENDER OR HOLDER TO OR FOR
THE CREDIT OR THE ACCOUNT OF THE BORROWER, AGAINST AND ON ACCOUNT OF THE
OBLIGATIONS AND OTHER LIABILITIES OF THE BORROWER TO SUCH LENDER OR HOLDER,
IRRESPECTIVE OF WHETHER OR NOT (A) THE LENDER OR HOLDER SHALL HAVE MADE ANY
DEMAND HEREUNDER, OR (B) THE LENDER OR HOLDER SHALL HAVE DECLARED THE PRINCIPAL
OF AND INTEREST ON THE ADVANCES AND OTHER AMOUNTS DUE HEREUNDER TO BE DUE AND
PAYABLE AS PERMITTED BY SECTION 8.2, PROVIDED, HOWEVER, SUCH LENDER SHALL
PROMPTLY NOTIFY THE BORROWER AND THE ADMINISTRATIVE AGENT AFTER ANY SUCH SET-OFF
AND THE APPLICATION MADE BY SUCH LENDER. ANY SUMS OBTAINED BY ANY LENDER OR BY
ANY ASSIGNEE, PARTICIPANT OR SUBSEQUENT HOLDER OF ANY NOTE SHALL BE SUBJECT TO
PRO RATA TREATMENT AND SHARED AS PROVIDED IN SECTION 2.12 HEREOF.
ASSIGNMENT.
The Borrower may not assign or transfer any of its rights or obligations
hereunder or under the other Loan Documents without the prior written consent of
all of the Lenders.
No Lender shall be entitled to assign its interest in this Agreement, its Notes
(if any) or its Advances, except as hereinafter set forth.
Each Lender may sell participations to one or more banks or other entities (the
"Participants") in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of the Advances
or Reimbursement Obligations owing to it and any Note or Notes held by it) (the
"Participations"); provided, however, that (i) such Lender's obligations under
this Agreement (including, without limitation, its Specified Percentage of the
Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
(v) no
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Participant under any such Participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would (a) reduce the amount or postpone any date fixed for
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder or (b) increase the commitment of any Participant. The Lenders
may, subject to Section 11.13 hereof, provide copies of all financial
information received from the Borrower to such Participants.
Each Lender may assign to one or more banks, financial institutions or entities
other than the Borrower or an Affiliate of the Borrower (an "Assignee") its
rights and obligations under this Agreement and the other Loan Documents;
provided, however, that (i) each such assignment shall be subject to the prior
written consent of the Administrative Agent and Borrower, which consent shall
not be unreasonably withheld (provided, however, notwithstanding anything herein
to the contrary, no consent of the Borrower or the Administrative Agent is
required for any assignment (a) during any time that an Event of Default
specified in Section 8.1(f) or (g) hereof shall have occurred, (b) during any
time that any other Event of Default has occurred and is continuing for a period
of 30 consecutive days, (c) to an Affiliate of a Lender, (d) to an existing
Lender hereunder or (e) to a Related Fund), (ii) the applicable Lender, the
Administrative Agent and Assignee shall execute and deliver to the
Administrative Agent an Assignment and Acceptance Agreement (an "Assignment
Agreement") in substantially the form of Exhibit F hereto, together with any
Notes subject to such assignment, (iii) the Assignee or the assigning Lender, as
the case may be, shall deliver to the Administrative Agent a processing fee of
$2,500; and (iv) no such Assignment, other than to an Affiliate of a Lender, to
an existing Lender hereunder or to a Related Fund, shall be in an amount of less
than $5,000,000, unless the portion of the Commitments or Advances of a Lender
is less than $5,000,000, in which case such assignment may be in the total
amount of such Lender's portion of the Commitments or Advances; provided,
however, notwithstanding anything herein to the contrary, in no event shall the
portion of any Commitments or Advances retained by any Lender in connection with
and as a result of any such assignment be less than $1,000,000. Upon such
execution, delivery and acceptance from and after the effective date specified
in each Assignment Agreement, which effective date shall be at least three
Business Days after the execution thereof and the recordation of the information
therein in the Register pursuant to Section 11.6(j) hereof, (a) the Assignee
thereunder shall be party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment Agreement, have
the rights and obligations of a Lender hereunder and (b) the applicable Lender
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment Agreement, relinquish such rights and be released
from such obligations under this Agreement. Notwithstanding anything to the
contrary contained in this clause (d), (i) each Lender may assign to the
Existing Equityholders a portion of its rights and obligations under this
Agreement and the other Loan Documents in connection with the transactions
described in Section 3.1(m) so long as the Existing Equityholders
contemporaneously transfer all such rights and obligations to the Borrower in
exchange for Senior Preferred Stock of the Borrower and (ii) such assignment
described in clause (i) of this sentence shall be effective upon the effective
date specified in each Assignment Agreement.
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Notwithstanding anything in clause (d) above to the contrary, (i) any Lender may
assign and pledge all or any portion of its Advances to any Federal Reserve Bank
as collateral security pursuant to Regulation A of F.R.S. Board and any
Operating Circular issued by such Federal Reserve Bank and (ii) any Lender that
is a fund may at any time assign or pledge all or any portion of its rights
under this Agreement to secure such Lender's Indebtedness; provided, however,
that no such assignment under this clause (e) shall release the assignor Lender
from its obligations hereunder.
Upon its receipt of an Assignment Agreement executed by a Lender and an
Assignee, and any Note or Notes subject to such assignment, the Borrower shall,
within five Business Days after its receipt of such Assignment Agreement, at no
expense to the Borrower, execute and deliver to the Administrative Agent in
exchange for any such surrendered Notes new Notes to the order of such Assignee
in an amount equal to the portion of the Advances and Commitments assigned to it
pursuant to such Assignment Agreement and new Notes to the order of the
Administrative Agent in an amount equal to the portion of the Advances and
Commitments retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such Assignment Agreement and shall
otherwise be in substantially the form of Exhibit A, B or C hereto, as
applicable. The Administrative Agent agrees to promptly return the surrendered
Notes marked "exchanged" to the Borrower.
Any Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 11.6, disclose to the
Assignee or Participant or proposed assignee or Participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower, provided such Person agrees in writing to be bound by the standards
set forth in Section 11.14 hereof.
Except as specifically set forth in this Section 11.6, nothing in this Agreement
or any other Loan Documents, expressed or implied, is intended to or shall
confer on any Person other than the respective parties hereto and thereto and
their successors and assignees permitted hereunder and thereunder any benefit or
any legal or equitable right, remedy or other claim under this Agreement or any
other Loan Documents.
Notwithstanding anything in this Section 11.6 to the contrary, no Assignee or
Participant shall be entitled to receive any greater payment under Section 2.15
or Section 9.3 than such assigning or participating Lender or any other Lender
would have been entitled to receive with respect to the interest assigned or
participated to such Assignee or Participant.
The Administrative Agent shall maintain at its address referred to in Section
11.1 a copy of each Assignment Agreement delivered to and accepted by it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders, any U.S. taxpayer identification number, the applicable Specified
Percentages of the Lenders (the "Ownership Information"), whether such Lender is
an original Lender or the assignee of another Lender pursuant to an Assignment
Agreement and the effective date and amount of each Assignment Agreement
delivered to and accepted by it and the parties thereto. Any transfer of an
ownership interest in any Advance (whether or not evidenced by a Note),
including any right to principal or interest payable with
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respect to such Advance, shall be subject to and conditioned upon the due
recordation of such transfer and Ownership Information with respect to the
transferee in the Register and such transfer shall be effective only upon such
recordation (and not prior thereto). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes hereof.
The Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH
OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL, BUT ALL SUCH SEPARATE COUNTERPARTS
SHALL TOGETHER CONSTITUTE BUT ONE AND THE SAME INSTRUMENT. TELECOPIES OF
SIGNATURES SHALL BE BINDING AND EFFECTIVE AS ORIGINALS.
SEVERABILITY. ANY PROVISION OF THIS AGREEMENT WHICH IS FOR ANY REASON PROHIBITED
OR FOUND OR HELD INVALID OR UNENFORCEABLE BY ANY COURT OR GOVERNMENTAL AGENCY
SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY OR
UNENFORCEABILITY WITHOUT INVALIDATING THE REMAINING PROVISIONS HEREOF IN SUCH
JURISDICTION OR AFFECTING THE VALIDITY OR ENFORCEABILITY OF SUCH PROVISION IN
ANY OTHER JURISDICTION.
INTEREST AND CHARGES. IT IS NOT THE INTENTION OF ANY PARTIES TO THIS AGREEMENT
TO MAKE AN AGREEMENT IN VIOLATION OF THE LAWS OF ANY APPLICABLE JURISDICTION
RELATING TO USURY. REGARDLESS OF ANY PROVISION IN ANY LOAN DOCUMENTS, NO LENDER
SHALL EVER BE ENTITLED TO RECEIVE, COLLECT OR APPLY, AS INTEREST ON THE
OBLIGATIONS, ANY AMOUNT IN EXCESS OF THE MAXIMUM AMOUNT. IF ANY LENDER OR
PARTICIPANT EVER RECEIVES, COLLECTS OR APPLIES, AS INTEREST, ANY SUCH EXCESS,
SUCH AMOUNT WHICH WOULD BE EXCESSIVE INTEREST SHALL BE DEEMED A PARTIAL
REPAYMENT OF PRINCIPAL AND TREATED HEREUNDER AS SUCH; AND IF PRINCIPAL IS PAID
IN FULL, ANY REMAINING EXCESS SHALL BE PAID TO THE BORROWER. IN DETERMINING
WHETHER OR NOT THE INTEREST PAID OR PAYABLE, UNDER ANY SPECIFIC CONTINGENCY,
EXCEEDS THE MAXIMUM AMOUNT, THE BORROWER AND THE LENDERS SHALL, TO THE MAXIMUM
EXTENT PERMITTED UNDER APPLICABLE LAW, (a) CHARACTERIZE ANY NONPRINCIPAL PAYMENT
AS AN EXPENSE, FEE OR PREMIUM RATHER THAN AS INTEREST, (b) EXCLUDE VOLUNTARY
PREPAYMENTS AND THE EFFECT THEREOF, AND (c) AMORTIZE, PRORATE, ALLOCATE AND
SPREAD IN EQUAL PARTS, THE TOTAL AMOUNT OF INTEREST THROUGHOUT THE ENTIRE
CONTEMPLATED TERM OF THE OBLIGATIONS SO THAT THE INTEREST RATE IS UNIFORM
THROUGHOUT THE ENTIRE TERM OF THE OBLIGATIONS; PROVIDED, HOWEVER, THAT IF THE
OBLIGATIONS ARE PAID AND PERFORMED IN FULL PRIOR TO THE END OF THE FULL
CONTEMPLATED TERM THEREOF, AND IF THE INTEREST RECEIVED FOR THE ACTUAL PERIOD OF
EXISTENCE THEREOF EXCEEDS THE MAXIMUM AMOUNT, THE LENDERS SHALL REFUND TO THE
BORROWER THE AMOUNT OF SUCH EXCESS OR CREDIT THE AMOUNT OF SUCH EXCESS AGAINST
THE TOTAL PRINCIPAL AMOUNT OF THE OBLIGATIONS OWING, AND, IN SUCH EVENT, THE
LENDERS SHALL NOT BE SUBJECT TO ANY PENALTIES PROVIDED BY ANY LAWS FOR
CONTRACTING FOR, CHARGING OR RECEIVING INTEREST IN EXCESS OF THE MAXIMUM AMOUNT.
THIS SECTION SHALL CONTROL EVERY OTHER PROVISION OF ALL AGREEMENTS PERTAINING TO
THE TRANSACTIONS CONTEMPLATED BY OR CONTAINED IN THE LOAN DOCUMENTS.
HEADINGS. HEADINGS USED IN THIS AGREEMENT ARE FOR CONVENIENCE ONLY AND SHALL NOT
BE USED IN CONNECTION WITH THE INTERPRETATION OF ANY PROVISION HEREOF.
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AMENDMENT AND WAIVER. THE PROVISIONS OF THIS AGREEMENT MAY NOT BE AMENDED,
MODIFIED OR WAIVED EXCEPT BY THE WRITTEN AGREEMENT OF THE BORROWER AND THE
DETERMINING LENDERS; PROVIDED, HOWEVER, THAT NO SUCH AMENDMENT, MODIFICATION OR
WAIVER SHALL BE MADE (a) WITHOUT THE CONSENT OF EACH LENDER AFFECTED THEREBY, IF
IT WOULD (i) INCREASE ANY SPECIFIED PERCENTAGE OR COMMITMENT OF ANY LENDER, OR
(ii) EXTEND OR POSTPONE THE DATE OF MATURITY OF, EXTEND OR POSTPONE THE DUE DATE
FOR ANY PAYMENT OF PRINCIPAL OR INTEREST ON, REDUCE THE AMOUNT OF ANY
INSTALLMENT OF PRINCIPAL OR INTEREST ON, OR REDUCE THE RATE OF INTEREST ON, ANY
ADVANCE, THE REIMBURSEMENT OBLIGATIONS OR OTHER AMOUNT OWING UNDER ANY LOAN
DOCUMENTS, OR (iii) REDUCE THE FEES PAYABLE HEREUNDER TO WHICH SUCH LENDER IS
ENTITLED, OR (iv) WAIVE OR EXTEND THE DATE FOR PAYMENT OF ANY OF THE
OBLIGATIONS, (b) WITHOUT THE CONSENT OF ALL LENDERS, IF IT WOULD (i) RELEASE ALL
OR SUBSTANTIALLY ALL OF THE GUARANTORS OR ALL OR SUBSTANTIALLY ALL OF THE
COLLATERAL, (ii) REVISE THIS SECTION 11.11 OR (iii) AMEND THE DEFINITION OF
"DETERMINING LENDERS," "REVOLVING CREDIT PERCENTAGE", "FACILITY A TERM LOAN
SPECIFIED PERCENTAGE", "FACILITY B TERM LOAN SPECIFIED PERCENTAGE", "TOTAL
SPECIFIED PERCENTAGE", "REQUIRED REVOLVING CREDIT LENDER", "REQUIRED FACILITY A
TERM LOAN LENDER", OR "REQUIRED FACILITY B TERM LOAN LENDER"; (c) WITHOUT THE
CONSENT OF THE REQUIRED REVOLVING CREDIT LENDERS, AMEND, MODIFY OR WAIVE ANY
CONDITION PRECEDENT TO AN EXTENSION OF A REVOLVING CREDIT ADVANCE UNDER SECTION
3.2 HEREOF; (d) WITHOUT THE CONSENT OF THE ADMINISTRATIVE AGENT, IF IT WOULD
ALTER THE RIGHTS, DUTIES OR OBLIGATIONS OF THE ADMINISTRATIVE AGENT; (e) WITHOUT
THE CONSENT OF THE ISSUING BANK, IF IT WOULD ALTER THE RIGHTS, DUTIES OR
OBLIGATIONS OF THE ISSUING BANK; OR (f) WITHOUT THE CONSENT OF THE SWING LINE
BANK, IF IT WOULD ALTER RIGHTS, DUTIES OR OBLIGATIONS OF THE SWING LINE BANK.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO AMENDMENT, WAIVER
OR CONSENT THAT CHANGES THE APPLICATION OF PAYMENTS OR PREPAYMENTS TO, OR
ALLOCATIONS OF PAYMENTS OR PREPAYMENTS BETWEEN, THE FACILITY A TERM LOAN
ADVANCES AND THE FACILITY B TERM LOAN ADVANCES AND NO WAIVER OF ANY MANDATORY
PREPAYMENTS PURSUANT TO SECTIONS 2.5(c) (d), (e) OR (f) HEREOF MAY BE MADE
WITHOUT THE EXPRESS WRITTEN CONSENT OF THE REQUIRED FACILITY A TERM LOAN LENDERS
AND REQUIRED FACILITY B TERM LOAN LENDERS. NEITHER THIS AGREEMENT NOR ANY TERM
HEREOF MAY BE AMENDED ORALLY, NOR MAY ANY PROVISION HEREOF BE WAIVED ORALLY BUT
ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE ADMINISTRATIVE AGENT AND, IN THE
CASE OF AN AMENDMENT, BY THE BORROWER.
NO LIABILITY OF ISSUING BANK. THE BORROWER ASSUMES ALL RISKS OF THE ACTS OR
OMISSIONS OF ANY BENEFICIARY OR TRANSFEREE OF ANY LETTER OF CREDIT WITH RESPECT
TO ITS USE OF SUCH LETTER OF CREDIT. NEITHER THE ISSUING BANK NOR ANY LENDER NOR
ANY OF THEIR RESPECTIVE OFFICERS OR DIRECTORS SHALL BE LIABLE OR RESPONSIBLE
FOR: (a) THE USE THAT MAY BE MADE OF ANY LETTER OF CREDIT OR ANY ACTS OR
OMISSIONS OF ANY BENEFICIARY OR TRANSFEREE IN CONNECTION THEREWITH; (b) THE
VALIDITY, SUFFICIENCY OR GENUINENESS OF DOCUMENTS, OR OF ANY ENDORSEMENT
THEREON, EVEN IF SUCH DOCUMENTS SHOULD PROVE TO BE IN ANY OR ALL RESPECTS
INVALID, INSUFFICIENT, FRAUDULENT OR FORGED; (c) PAYMENT BY THE ISSUING BANK
AGAINST PRESENTATION OF DOCUMENTS THAT DO NOT COMPLY WITH THE TERMS OF A LETTER
OF CREDIT, INCLUDING FAILURE OF ANY DOCUMENTS TO BEAR ANY REFERENCE OR ADEQUATE
REFERENCE TO THE LETTER OF CREDIT, EXCEPT FOR ANY PAYMENT MADE UPON THE ISSUING
BANK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; OR (d) ANY OTHER CIRCUMSTANCES
WHATSOEVER IN MAKING OR FAILING TO MAKE PAYMENT UNDER ANY LETTER OF CREDIT,
EXCEPT THAT THE BORROWER SHALL HAVE A CLAIM AGAINST THE ISSUING BANK, AND THE
ISSUING BANK SHALL BE LIABLE TO THE BORROWER, TO THE EXTENT OF ANY DIRECT, BUT
NOT CONSEQUENTIAL, DAMAGES SUFFERED BY THE BORROWER THAT THE BORROWER PROVES
WERE CAUSED BY (i) THE ISSUING BANK'S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE IN
DETERMINING
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WHETHER DOCUMENTS PRESENTED UNDER ANY LETTER OF CREDIT COMPLY WITH THE TERMS OF
THE LETTER OF CREDIT OR (ii) THE ISSUING BANK'S WILLFUL FAILURE TO MAKE LAWFUL
PAYMENT UNDER A LETTER OF CREDIT AFTER THE PRESENTATION TO IT OF A DRAFT AND
CERTIFICATES STRICTLY COMPLYING WITH THE TERMS AND CONDITIONS OF THE LETTER OF
CREDIT. IN FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, THE ISSUING BANK
MAY ACCEPT DOCUMENTS THAT APPEAR ON THEIR FACE TO BE IN ORDER, WITHOUT
RESPONSIBILITY FOR FURTHER INVESTIGATION, REGARDLESS OF ANY NOTICE OR
INFORMATION TO THE CONTRARY.
CONFIDENTIALITY. EACH LENDER AND THE ADMINISTRATIVE AGENT AGREES (ON BEHALF OF
ITSELF AND EACH OF ITS AFFILIATES, DIRECTORS, OFFICERS AND EMPLOYEES) TO USE
REASONABLE EFFORTS TO KEEP CONFIDENTIAL, IN ACCORDANCE WITH CUSTOMARY PROCEDURES
FOR HANDLING CONFIDENTIAL INFORMATION OF THIS NATURE AND IN ACCORDANCE WITH SAFE
AND SOUND BANKING OR INVESTMENT PRACTICES, ANY NON-PUBLIC INFORMATION SUPPLIED
TO IT BY THE BORROWER OR ANY OF ITS AFFILIATES PURSUANT TO THIS AGREEMENT,
PROVIDED THAT NOTHING HEREIN SHALL LIMIT THE DISCLOSURE OF ANY SUCH INFORMATION
(a) TO THE EXTENT REQUIRED BY STATUTE, RULE, REGULATION OR JUDICIAL PROCESS, (b)
TO COUNSEL FOR ANY LENDER OR THE ADMINISTRATIVE AGENT, (c) TO BANK OR OTHER
EXAMINERS, REGULATORY BODIES (INCLUDING THE NATIONAL ASSOCIATION OF INSURANCE
COMMISSIONERS OR ANY SIMILAR ORGANIZATION, OR ANY NATIONALLY RECOGNIZED RATING
AGENCY THAT REQUIRES ACCESS TO INFORMATION ABOUT ANY LENDER'S INVESTMENT
PORTFOLIO), AUDITORS OR ACCOUNTANTS OF ANY LENDER, (d) TO THE ADMINISTRATIVE
AGENT OR ANY OTHER LENDER OR ANY AFFILIATE THEREOF, (e) IN CONNECTION WITH ANY
LITIGATION RELATING TO THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS TO
WHICH ANY ONE OR MORE OF LENDERS IS A PARTY, (f) TO THE EXTENT NECESSARY IN
CONNECTION WITH THE EXERCISE OF ANY RIGHT UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR (g) TO ANY ASSIGNEE OR PARTICIPANT (OR PROSPECTIVE ASSIGNEE OR
PARTICIPANT) OR TO ANY DIRECT OR INDIRECT CONTRACTUAL COUNTERPARTIES IN SWAP
AGREEMENTS OR TO THE PROFESSIONAL ADVISORS OF SUCH SWAP COUNTERPARTIES SO LONG
AS SUCH ASSIGNEE OR PARTICIPANT (OR PROSPECTIVE ASSIGNEE OR PARTICIPANT) OR
DIRECT OR INDIRECT CONTRACTUAL COUNTERPARTIES IN SWAP AGREEMENTS OR SUCH SWAP
COUNTERPARTIES' PROFESSIONAL ADVISORS AGREES IN WRITING TO BE BOUND BY THE
PROVISIONS OF THIS SECTION 11.13. NON-PUBLIC INFORMATION DOES NOT INCLUDE
INFORMATION THAT (a) WAS PUBLICLY KNOWN PRIOR TO THE TIME OF DISCLOSURE BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES, (b) AFTER DISCLOSURE BY THE BORROWER TO ANY
LENDER OR THE ADMINISTRATIVE AGENT BECOMES PUBLICLY KNOWN THROUGH NO ACT OR
OMISSION BY ANY LENDER OR THE ADMINISTRATIVE AGENT OR BY ANY PERSON ACTING ON
BEHALF OF ANY LENDER OR THE ADMINISTRATIVE AGENT OR (c) OTHERWISE BECOMES KNOWN
TO ANY LENDER OR THE ADMINISTRATIVE AGENT OTHER THAN THROUGH DISCLOSURE BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES OR AFFILIATES OR ANY OF THEIR RESPECTIVE
REPRESENTATIVES OR CONSULTANTS.
NO DUTIES OF SYNDICATION AGENT OR CO-AGENTS. THE BORROWER AND THE LENDERS
ACKNOWLEDGE THAT THE SYNDICATION AGENT AND THE CO-AGENTS SHALL HAVE NO DUTIES,
RESPONSIBILITIES OR LIABILITIES IN THEIR CAPACITIES AS SYNDICATION AGENT AND
CO-AGENTS.
GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS AND THE APPLICABLE FEDERAL LAWS OF THE
UNITED STATES OF AMERICA. THE LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS, DALLAS
COUNTY, TEXAS, AND BORROWER AND EACH SURETY, GUARANTOR, ENDORSER AND ANY OTHER
PARTY EVER LIABLE FOR PAYMENT OF ANY MONEY PAYABLE
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WITH RESPECT TO THE LOAN DOCUMENTS, JOINTLY AND SEVERALLY WAIVE THE RIGHT TO BE
SUED ELSEWHERE. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AND EACH
LENDER AGREE THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS
SHALL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS AND HEREBY SUBMITS WITH RESPECT TO ITSELF AND ITS
PROPERTY TO THE JURISDICTION OF ANY SUCH COURT FOR THE PURPOSE OF ANY SUIT,
ACTION OR PROCEEDING OR JUDGMENT RELATING TO OR ARISING OUT OF THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT.
WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE, TO
THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT
TO EACH LENDER ENTERING INTO THIS AGREEMENT AND MAKING ANY ADVANCES HEREUNDER.
ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. THIS AGREEMENT AMENDS AND RESTATES IN ITS ENTIRETY THE EXISTING CREDIT
AGREEMENT.
WAIVER AND RELEASE. IN ADDITION, TO INDUCE THE ADMINISTRATIVE AGENT, THE
SYNDICATION AGENT, THE CO-AGENTS AND THE LENDERS TO AGREE TO THE TERMS OF THIS
AGREEMENT, THE BORROWER AND EACH GUARANTOR (BY THEIR EXECUTION BELOW) REPRESENT
AND WARRANT THAT AS OF THE DATE OF THEIR EXECUTION OF THIS AGREEMENT THERE ARE
NO CLAIMS OR OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS TO THEIR RESPECTIVE
OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN ACCORDANCE THEREWITH THEY:
WAIVER. WAIVE ANY AND ALL SUCH CLAIMS, OFFSETS, DEFENSES OR COUNTERCLAIMS (OTHER
THAN COMPULSORY COUNTERCLAIMS), WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE
DATE OF THEIR EXECUTION OF THIS AGREEMENT AND
RELEASE. RELEASE AND DISCHARGE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE
CO-AGENTS AND THE LENDERS, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, SHAREHOLDERS, AFFILIATES AND ATTORNEYS (COLLECTIVELY THE "RELEASED
PARTIES") FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES, CLAIMS,
RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN OR
94
100
UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW OR EQUITY, WHICH THE BORROWER AND EACH
GUARANTOR EVER HAD, NOW HAVE, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED
PARTY ARISING PRIOR TO THE DATE HEREOF AND FROM OR IN CONNECTION WITH THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
The provisions of this Section 11.18 shall survive termination of the Credit
Agreement.
EFFECT OF AMENDMENT AND RESTATEMENT.
This Agreement is an amendment and restatement of the terms and provisions of
the Existing Credit Agreement. The indebtedness of the Borrower outstanding
under the Existing Credit Agreement and the Notes outstanding thereunder
immediately prior to the effectiveness hereof ("Restatement Effective Time") is
called the "Existing Indebtedness". Neither the execution and delivery of this
Agreement by the Borrower or any Lender, nor any of the terms or provisions
contained herein, shall be construed (i) other than as specifically contemplated
by Section 3.1(m) hereof, to be a payment on or with respect to the Existing
Indebtedness or any accrued interest thereon or (ii) to release, terminate or
otherwise adversely affect all or any part of any lien, claim or right or
security interest heretofore granted to or retained by the Administrative Agent
with respect to any Collateral. Without limiting the foregoing, the Borrower and
each of its Subsidiaries hereby ratifies and confirms each Loan Document to
which such Person is a party including without limitation the Subsidiary
Guaranties and the grant of a security interest pursuant to, and all other terms
and provisions of, the Collateral Documents.
Notwithstanding any provision of this Agreement to the contrary, all LIBOR
Advances which are outstanding at the Restatement Effective Time (each an
"Existing LIBOR Borrowing") shall continue to be maintained by the Lenders until
the last day of the current Interest Period therefor (except to the extent
prepaid or converted by the Borrower prior to such date).
================================================================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
================================================================================
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IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
HOME INTERIORS & GIFTS, INC.
By: /s/ Donald J. Carter, Jr.
------------------------------------
Name: Donald J. Carter, Jr.
Title: Chief Executive Officer
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102
BANK OF AMERICA, N.A. (successor by
merger to NationsBank, N.A.), as
Administrative Agent,
Issuing Bank, SwingLine Bank, and as a
Lender
By: /s/ Robert A. Klawinski
--------------------------------------
Robert A. Klawinski
Managing Director
Address:
NC1-007-13-06
100 North Tryon Street
Charlotte, NC 28255
Attention: Robert A. Klawinski
Fax: (704) 386-9607
Email: robert.a.klawinski@bankofamerica.com
97
103
THE CHASE MANHATTAN BANK, as
Syndication Agent and as a Lender
By: /s/ William J. Caggiano
------------------------------
Name: William J. Caggiano
Title: Managing Director
Address:
270 Park Avenue
New York, NY 10017
Attention: William J. Caggiano
Fax: (212) 972-0009
Email: bill.caggiano@chase.com
98
104
SOCIETE GENERALE, as Co-Agent and as a
Lender
By: /s/ Cynthia A. Jay
---------------------------------
Name: Cynthia A. Jay
Title: Managing Director
Address:
1221 Avenue of the Americas
New York NY 10020
Attention: Cynthia A. Jay
Fax: (212) 278-6178
Email: cynthia.jay@us.sccgen.com
99
105
CITICORP USA, INC., as Co-Agent and as a
Lender
By: /s/ J. Robert Cotton
-----------------------------------
Name: J. Robert Cotton
Title: Vice President
Address:
599 Lexington Avenue
21st Floor
New York, NY 10043
Attention: J. Robert Cotton
Fax: (212) 793-9470
Email: robert.cotton@citicorp.com
100
106
BANK ONE, NA (successor by merger to
Bank One, Texas, N.A.)
By: /s/ Kathy M. Turner
------------------------------------
Kathy M. Turner
Director
1717 Main Street, 3rd Floor
Dallas, Texas 75201
Attention: Kathy M. Turner
Director
Fax: (214) 290-2765
Email: kathy_turner@bankone.com
101
107
BANKERS TRUST COMPANY
By: /s/ Mary Kay Cole
------------------------------------
Name: Mary Kay Cole
Title: Managing Director
One Bankers Trust Plaza, 34th Floor
130 Liberty Street
New York, New York 10006
Attention:
-----------------------------
----------------------------------------
Fax:
-----------------------------------
Email:
---------------------------------
102
108
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Karl E. Kieffer
------------------------------------
Name: Karl E. Kieffer
Title: Duly Authorized Signatory
60 Long Ridge Road
Stamford, Connecticut 06927-5100
Attention: Stephen B. Trusa
Fax: (203) 316-7978
Email: stephen.trusa@gecapital.com
103
109
HELLER FINANCIAL, INC.
By: /s/ Julia F. Maslanka
------------------------------------
Name: Julia F. Maslanka
Title: Vice President
500 West Monroe
CF6 - 12th Floor
Chicago, Illinois 60661
Attention:
------------------------------
----------------------------------------
Fax:
------------------------------------
Email:
------------------------------------
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110
NATIONAL CITY BANK OF KENTUCKY
By: /s/ Tom Gurbach
------------------------------------
Name: Tom Gurbach
Title: Vice President
101 South Fifth Street, Locator #T08J
Louisville, Kentucky 40202
Attention:
------------------------------
----------------------------------------
Fax:
------------------------------------
Email:
------------------------------------
105
111
BALANCED HIGH-YIELD FUND I LTD.
By: BHF (USA) CAPITAL CORPORATION,
acting through its New York Branch,
as attorney-in-fact
By: /s/ Illegible
--------------------------------
Name:
--------------------------
Title: Senior Vice President
By:
--------------------------------
Name:
--------------------------
Title:
----------------------------
Address:
333 S. Grand Ave., Suite 4100
Los Angeles, CA 90049
Attention:
------------------------------
Fax: (213) 621-3795
Email:
---------------------------------
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112
KZH-ING-2 LLC
By: /s/ Virginia Conway
------------------------------------
Name: Virginia Conway
Title: Authorized Agent
Address:
The Chase Manhattan Bank
140 East 43rd Street - 11th Floor
New York, NY 10017
Attention: Virginia Conway
Fax: (212) 622-0123
Email: virginia.r.conway@chase.com
with a copy to:
Karen Morgan
Ing Capital Advisors, Inc.
333 S. Grand Avenue, Suite 4250
Los Angeles, CA 90071
Tel: (213) 346-3973
Fax: (213) 346-3995
Shan McSweeney
Weil, Gotshal & Manges LLP
767 Fifth Avenue, 34th Floor
New York, NY 10153
Tel: (212) 310-6857
Fax: (212) 310-8007
email: shan.mcsweeney@weil.com
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113
DELANO COMPANY
By: Pacific Investment Management
Company,
as its Investment Advisor
By: /s/ Illegible
------------------------------------
Name:
Title: Executive Vice President
840 Newport Center Drive, Suite 360
Newport Beach, California 92660
Attention: Sandy Benson
Fax: (929) 720-6361
with a copy to:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
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114
BHF (USA) CAPITAL CORPORATION
By: /s/ Jeffrey N. Frost
------------------------------------
Name: Managing Director
Title: Portfolio Management
By: Lisa Moraglia
Name: Lisa Moraglia
Title: Associate
Address:
590 Madison Avenue
New York, NY 10022
Attention: Lisa Moraglia
Fax: (212) 756-5536
Email: lmoraglia@bhf-us.com
109
115
VAN KAMPEN CLO II, LIMITED
By: Van Kampen Management, Inc.,
as Collateral Manager
By: /s/ Douglas L. Winchell
--------------------------------
Name: Douglas L. Winchell
Title: Vice President
Address:
----------------------------------------
----------------------------------------
----------------------------------------
Attention:
-----------------------------
Fax:
-----------------------------------
Email:
---------------------------------
110
116
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda), Ltd.,
as General Partner
By: /s/ Darryl L. Schall
--------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: TCW Investment Management Company,
as Investment Manager
By: /s/ Randolph R. Birkman
--------------------------------
Name: Randolph R. Birkman
Title: Managing Director
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (LINC II), L.P.,
as General Partner
By: TCW Advisers (Bermuda), Ltd.,
as General Partner
By: /s/ Darryl L. Schall
--------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: TCW Investment Management Company,
as Investment Manager
By: /s/ Randolph R. Birkman
--------------------------------
Name: Randolph R. Birkman
Title: Managing Director
111
117
TCW Shared Opportunity Fund III, L.P.
By: TCW Asset Management Company
Its Investment Adviser
By: /s/ Darryl L. Schall
--------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: /s/ Randolph R. Birkman
--------------------------------
Name: Randolph R. Birkman
Title: Managing Director
Address:
11100 Santa Monica Blvd.
Suite 2000
Los Angeles, CA 90025
Attention: Darryl L. Schall
Fax: (310) 235-5965
Email: schald@tcwgroup.com
112
118
TCW LEVERAGED INCOME TRUST IV, L.P.
By: TCW Asset Management Company,
as its Investment Adviser
By: /s/ Darryl L. Schall
--------------------------------
Name: Darryl L. Schall
Its: Managing Director
By: TCW (LINC IV), L.L.C.,
as General Partner
By: TCW Asset Management Company,
as its Managing Member
By: /s/ Darryl L. Schall
--------------------------------
Name: Darryl L. Schall
Its: Managing Director
By: /s/ Randolph R. Birkman
--------------------------------
Name: Randolph R. Birkman
Its: Managing Director
Address:
11100 Santa Monica Blvd.
Suite 2000
Los Angeles, CA 90025
Attention: /s/ Darryl L. Schall
-----------------------------
Fax: (310) 235-5965
Email: schald@tcwgroup.com
113
119
CAPTIVA III FINANCE LTD., as advised by
Pacific Investment Management Company
By: /s/ Illegible
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
Attention: Sandy Benson
Fax: (949) 720-6361
Email:
114
120
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors LLC
as Collateral Manager
By: /s/ Illegible
--------------------------------
Name:
--------------------------
Title: Senior Vice President
Address:
333 S. Grand Avenue, Suite 4100
Los Angeles, CA 90071
Attention:
-----------------------------
Fax: (213) 621-3795
Email:
---------------------------------
115
121
SEQUILS-ING I (HBDGM), LTD.
By: ING Capital Advisors LLC
as Collateral Manager
By: /s/ Illegible
--------------------------------
Name:
--------------------------
Title: Senior Vice President
Address:
333 S. Grand Avenue, Suite 4100
Los Angeles, CA 90071
Attention:
-----------------------------
Fax: (213) 621-3795
Email:
---------------------------------
116
122
ARCHIMEDES FUNDING III LTD.
By: ING Capital Advisors LLC
as Collateral Manager
By: /s/ Illegible
--------------------------------
Name:
--------------------------
Title: Senior Vice President
Address:
333 S. Grand Avenue, Suite 4100
Los Angeles, CA 90071
Attention:
-----------------------------
Fax: (213) 621-3795
Email:
---------------------------------
117
123
CREDIT SUISSE FIRST BOSTON
By: /s/ Howard Shams
------------------------------------
Name: Howard Shams
Its: Authorized Signatory
Address:
11 Madison Avenue
New York, NY 10010
Attention:
-----------------------------
Fax:
-----------------------------------
Email:
---------------------------------
118
124
ATHENA CDO LIMITED
By: /s/ Illegible
------------------------------------
Name:
------------------------------
Its: Executive Vice President
Address:
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
(949) 720-6361
Attention:
-----------------------------
Fax: benson@pimco.com
Email:
---------------------------------
119
125
ROYALTON COMPANY
By: /s/ Mohan V. Phansalkar
------------------------------------
Name: Mohan V. Phansalkar
Its: Executive Vice President
Address:
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
Attention: Sandy Benson
Fax: (949) 720-6361
Email: benson@pimco.com
120
126
PUTNAM HIGH YIELD ADVANTAGE FUND
By: /s/ John R. Verani
------------------------------------
Name: John R. Verani
Its:
-------------------------------
Address:
Putnam Investments c/o Ropes & Gray
One International Place
Boston, MA 02110
Attention: Chris Kirby
Fax: (617) 951-7050
Email: ckirby@ropesgray.com
121
127
PUTNAM HIGH YIELD TRUST
By: /s/ John R. Verani
------------------------------------
Name: John R. Verani
Its:
-------------------------------
Address:
Putnam Investments c/o Ropes & Gray
One International Place
Boston, MA 02110
Attention: Chris Kirby
Fax: (617) 951-7050
Email: ckirby@ropesgray.com
122
128
PUTNAM FUNDS TRUST - PUTNAM HIGH YIELD
TRUST II
By: /s/ John R. Verani
------------------------------------
Name: John R. Verani
Its:
-------------------------------
Address:
Putnam Investments c/o Ropes & Gray
One International Place
Boston, MA 02110
Attention: Chris Kirby
Fax: (617) 951-7050
Email: ckirby@ropesgray.com
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COMPASS BANK
By: /s/ Monica M. Alexander
------------------------------------
Name: Monica M. Alexander
Title: Vice President
Address:
8080 N. Central Expressway
Suite 250
Dallas, TX 75206
Attention: Monica M. Alexander
Fax: (214) 346-2746
Email: monica.alexander@compassbnk.com
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Each Guarantor hereby consents and agrees to this Agreement and agrees
that each Subsidiary Guaranty shall remain in full force and effect and shall
continue to (a) guarantee the Guarantied Obligations (as defined in such
Subsidiary Guaranty), and (b) be the legal, valid and binding obligation of such
Guarantor and enforceable against such Guarantor and collateral in accordance
with its terms. In addition, each Guarantor hereby agrees that each Security
Agreement, each Deed of Trust, each Intellectual Property Security Agreement and
each other Loan Document to which such Guarantor is a party shall remain in full
force and effect and shall continue to (a) secure the Obligations (as defined in
the Loan Documents other than the Deed of Trust) and Secured Indebtedness (as
defined in the Deed of Trust) and (b) be the legal, valid and binding obligation
of such Guarantor and enforceable against such Guarantor and collateral in
accordance with their respective terms.
GUARANTORS:
DWC GP, INC., a Delaware corporation
(formerly Dallas Woodcraft, Inc.)
GIA, INC., a Nebraska corporation
HOMCO, INC., a Texas corporation
By: /s/ Donald J. Carter
------------------------------------
Name: Donald J. Carter
Title: Sr. Vice President & President
HOMCO PUERTO RICO, INC., a Delaware
corporation
SPRING VALLEY SCENTS, INC., a Delaware
corporation
By: /s/ Donald J. Carter
------------------------------------
Name: Donald J. Carter
Title: President
LAREDO CANDLE COMPANY, L.P., a Texas
limited partnership
By: Spring Valley Scents, Inc., its
general partner
By: /s/ Donald J. Carter
--------------------------------
Name: Donald J. Carter
Title: President
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HIG INVESTMENTS, INC.,
a Delaware corporation
By: /s/ Gordon W. Stewart
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Name: Gordon W. Stewart
Title: President
DALLAS WOODCRAFT COMPANY, L.P.,
a Delaware limited partnership
By: DWC GP Inc.,
its general partner
By: /s/ Donald J. Carter
--------------------------------
Name: Donald J. Carter
Title: Senior Vice President
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