EXHIBIT 4(5)
LOAN AGREEMENT
AMONG
LASALLE BANK NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT
AND
LASALLE BANK NATIONAL ASSOCIATION
AND
THE OTHER LENDERS LISTED ON EXHIBIT 3
AS LENDERS
AND
LAYNE CHRISTENSEN COMPANY
AS BORROWER
JULY 31, 2003
LOAN AGREEMENT
In consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged, Layne Christensen
Company, a Delaware corporation (Borrower) and LaSalle Bank National Association
(LaSalle), as Administrative Agent, and LaSalle and the other lenders listed on
Exhibit 3 to this Agreement, as Lenders, agree as follows:
1. EFFECTIVE DATE. This Agreement is effective July 31, 2003.
2. DEFINITIONS AND RULES OF CONSTRUCTION.
2.1. LISTED DEFINITIONS. Capitalized words defined in the Glossary
attached hereto as Exhibit 2.1 shall have such defined meanings
wherever used in this Agreement and the other Loan Documents. The
inclusion of a defined term in the Glossary that is not used elsewhere
in this Agreement or in the other Loan Documents shall not affect the
interpretation or construction of this Agreement or the other Loan
Documents.
2.2. OTHER DEFINITIONS. If a capitalized word in this Agreement is not
defined in the Glossary, it shall have such meaning as defined
elsewhere herein, or if not defined elsewhere herein, the meaning
defined in the UCC. Terms are italicized in this Agreement where they
are defined.
2.3. REFERENCES TO COVERED PERSON. The words Covered Person, a Covered
Person, any Covered Person, each Covered Person and every Covered
Person refer to Borrower, each Guarantor and each of their now existing
or later acquired, created or organized Subsidiaries (including,
without limitation, all direct and indirect Subsidiaries of Borrower
and all Guarantors) separately. The words Covered Persons refers to
Borrower, Guarantors, and their now existing or later acquired, created
or organized Subsidiaries collectively.
2.4. REFERENCES TO REQUIRED LENDERS. The words Required Lenders means
any one or more Lenders whose shares of Lenders' Exposure at the
relevant time aggregate at least 66.666666667%.
2.5. ACCOUNTING TERMS. Unless the context otherwise requires,
accounting terms herein that are not defined herein shall be determined
under GAAP. All financial measurements contemplated hereunder
respecting Borrower shall be made and calculated for Borrower and all
of its now existing or later acquired, created or organized
Subsidiaries, if any, on a consolidated and consolidating basis in
accordance with GAAP unless expressly provided otherwise herein.
2.6. MEANING OF SATISFACTORY. Whenever herein a document or matter is
required to be satisfactory to Administrative Agent or satisfactory to
Lenders or satisfactory to Required Lenders, unless expressly stated
otherwise such document must be satisfactory to Administrative Agent,
Lenders or Required Lenders (as applicable) in both form and substance,
and unless expressly stated otherwise Administrative Agent, Lenders or
Required Lenders (as applicable) shall have the commercially reasonable
discretion to determine whether the document or matter is satisfactory.
2.7. COMPUTATION OF TIME PERIODS. In computing or defining periods of
time from a specified date to a later specified date, and in computing
the accrual of interest or fees, the word from shall mean from and
including and the words to and until shall each mean to but excluding.
Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are
expressly prescribed, and references in this Agreement to months and
years are to calendar months and calendar years unless otherwise
specified.
2.8. GENERAL. Unless the context of this Agreement clearly requires
otherwise: (i) references to the plural include the singular and vice
versa; (ii) references to any Person include such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement; (iii) references to one gender include all
genders; (iv) including is not limiting; (v) or has the inclusive
meaning represented by the phrase and/or; (vi) the words hereof,
herein, hereby, hereunder and similar terms in this Agreement refer to
this Agreement as a whole, including its Exhibits, and not to any
particular provision of this Agreement; (vii) the word Section or
section and Page or page refer to a section or page, respectively, of,
and the word Exhibit refers to an Exhibit to, this Agreement unless it
expressly refers to something else; (viii) reference to any agreement,
document, or instrument (including this Agreement and any other Loan
Document or other agreement, document or instrument defined herein),
means such agreement, document, or instrument as amended, modified,
restated or replaced and in effect from time to time in accordance with
the terms thereof and, if applicable, the terms hereof, and includes
all attachments thereto and documents incorporated therein, if any; and
(ix) general and specific references to any Law means such Law as
amended, modified, codified or reenacted, in whole or in part, and in
effect from time to time. Section captions and the Table of Contents
are for convenience only and shall not affect the interpretation or
construction of this Agreement or the other Loan Documents.
3. LENDERS' COMMITMENTS. Subject to the terms and conditions hereof, and in
reliance upon the Representations and Warranties, Lenders make the following
commitments to Borrower:
3.1. REVOLVING LOAN COMMITMENTS.
3.1.1. AGGREGATE AMOUNT; REDUCTIONS. Subject to the
limitations in Section 3.1.2 and elsewhere herein, each Lender
commits to make available to Borrower, from the Effective Date
to the Revolving Loan Maturity Date, such Lender's pro-rata
share (as listed on Exhibit 3 hereto) of an Aggregate
Revolving Loan Commitment of $30,000,000, by funding such
Lender's pro-rata share of Revolving Loan Advances made from
time to time by Administrative Agent as provided herein.
Subject to the limitations in Section 3.1.2 and elsewhere
herein, payments and prepayments that are applied to reduce
the Aggregate Revolving Loan may be re-borrowed through
Revolving Loan Advances. Borrower may reduce the amount of the
Aggregate Revolving Loan Commitment in whole multiples of
$500,000 at any time and from time to time, but only if (i)
Borrower gives Administrative Agent written notice of
Borrower's intention to make such reduction at least three (3)
Business Days prior to the effective date of the reduction,
and (ii) Borrower makes on the effective date of the reduction
any payment on the Aggregate Revolving Loan required hereunder
as a consequence of the reduction, including, principal,
interest and Eurodollar breakage fees (if any). Any such
reduction of the amount of the Aggregate Revolving Loan
Commitment, whether scheduled or voluntary, shall be
permanent. Each Lender's initial Revolving Loan Commitment is
its pro-rata share of the Aggregate Revolving Loan Commitment.
Upon any reduction of the Aggregate Revolving Loan Commitment,
each Lender's Revolving Loan Commitment will automatically
reduce by such Lender's pro-rata share of the reduction of the
Aggregate Revolving Loan Commitment.
3.1.2. LIMITATION ON REVOLVING LOAN ADVANCES. No Revolving
Loan Advance will be made which would result in the Aggregate
Revolving Loan exceeding the Maximum
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Available Amount and no Revolving Loan Advance will be made on
or after the Revolving Loan Maturity Date. Lenders may,
however, in their absolute discretion make such Revolving Loan
Advances, but shall not be deemed by doing so to have
increased the Maximum Available Amount and shall not be
obligated to make any such Revolving Loan Advances thereafter.
At any time that there is an Existing Default, the Aggregate
Revolving Loan Commitment may be canceled as provided in
Section 15.3. The Maximum Available Amount on any date shall
be a Dollar amount equal to (i) the Aggregate Revolving Loan
Commitment, minus (ii) the sum of (a) the Letter of Credit
Exposure on such date (except to the extent that a Revolving
Loan Advance will be used immediately to reimburse Letter of
Credit Issuer (including, without limitation with respect to
the Existing LCs) for unreimbursed draws on a Letter of
Credit), and (b) the Swingline Loan.
3.1.3. REVOLVING NOTES. The obligation of Borrower to repay
each Lender's Revolving Loan shall be evidenced by a
promissory note payable to the order of such Lender in a
maximum principal amount equal to the amount of its Revolving
Loan Commitment and otherwise in substantially the form of
Exhibit 3.1.3 attached hereto.
3.2. SWINGLINE COMMITMENT.
3.2.1. SWINGLINE ADVANCES. In order to reduce the frequency
of fundings of Revolving Loan Advances by Lenders, but subject
to the limitations in Section 3.2.2 and elsewhere herein,
Administrative Agent may in its absolute discretion make
Swingline Advances to Borrower from time to time from the
Effective Date to the Revolving Loan Maturity Date. Subject to
the limitations in Section 3.2.2 and elsewhere herein,
payments and prepayments that are applied to reduce the
Swingline Loan may be re-borrowed through Swingline Advances.
Administrative Agent may terminate the foregoing Swingline
Commitment at any time in its absolute discretion.
3.2.2. LIMITATIONS ON SWINGLINE ADVANCES. Administrative
Agent shall not be obligated to make any particular Swingline
Advance, the making of any particular Swingline Advance at any
particular time being absolutely discretionary. At anytime
Administrative Agent may choose to suspend Swingline Advances
and treat all subsequent requests for an Advance as Revolving
Loan Advances. In any event, no Swingline Advance will be made
on or after the Revolving Loan Maturity Date, and no Swingline
Advance will be made which would result in the Swingline Loan
exceeding the Maximum Swingline Amount. No Swingline Advance
will be made which would result in the Swingline Loan plus the
Lender acting as Administrative Agent's Revolving Loans and
such Lender's pro-rata share of the Letter of Credit Exposure
to exceed such Lender's Revolving Loan Commitment.
Administrative Agent may, however, in its absolute discretion
make such Swingline Advances, but shall not be deemed by doing
so to have increased the Maximum Swingline Amount and shall
not be obligated to make any such Swingline Advance
thereafter. The Maximum Swingline Amount on any date shall be
a Dollar amount equal to the lesser of (i) $5,000,000 or (ii)
an amount equal to (a) the Aggregate Revolving Loan
Commitment, minus (b) the sum of (i) the Letter of Credit
Exposure and (ii) the Aggregate Revolving Loan immediately
prior to the making of such Swingline Advance.
3.2.3. SWINGLINE NOTE. The obligation of Borrower to repay
the Swingline Loan shall be evidenced by a promissory note
payable to the order of Administrative Agent in a maximum
principal amount of $5,000,000 and otherwise in substantially
the form of
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Exhibit 3.2.3 attached hereto. Until such time as there is
more than one Lender a party hereto, Borrower shall not
execute a Swingline Note.
3.2.4. SPECIAL PROVISION REGARDING SWINGLINE. Until such
time as there is more than one Lender a party hereto, no
Advances shall be considered a Swingline Advance, and the
Swingline Commitment shall not be effective until such time as
there is more than one Lender a party hereto.
3.3. LETTER OF CREDIT COMMITMENT. Letter of Credit Issuer commits to
issue standby letters of credit and commercial (documentary) letters of
credit for the account of Borrower from time to time from the Effective
Date to the Revolving Loan Maturity Date, but only if the Letter of
Credit Exposure will not as a result of such issuance exceed the lesser
of (i) $15,000,000 and (ii) an amount equal to the difference between
(a) the Aggregate Revolving Loan Commitment, and (b) the Aggregate
Revolving Loan plus the Swingline Loan. The expiration date of any
Letter of Credit will be a Business Day that will be no more than one
(1) year from the date of issuance but in no event shall such date be
later than the date which is twenty-five days prior to the Revolving
Loan Maturity Date; provided, however, that the expiration date for a
Letter of Credit may be later than the date that is twenty-five (25)
days prior to the Revolving Loan Maturity Date if Letter of Credit
Issuer consents to such issuance and Borrower provides to Letter of
Credit Issuer cash collateral satisfactory to Letter of Credit Issuer
as security for Borrower's obligation to reimburse Letter of Credit
Issuer for all draws thereunder. Immediately upon the issuance by
Letter of Credit Issuer of a Letter of Credit in accordance with the
terms and conditions of this Agreement, Letter of Credit Issuer shall
be deemed to have sold and transferred to each other Lender, and such
other Lender shall be deemed to have purchased and received from Letter
of Credit Issuer, a pro-rata undivided interest and participation in
such Letter of Credit, the reimbursement obligation of Borrower with
respect thereto, and any guaranty thereof or collateral therefor. Such
other Lender's pro-rata undivided interest shall be the same as its
pro-rata share of the Aggregate Revolving Loan Commitment. In the event
of a direct and irreconcilable conflict between the terms of this
Agreement and the terms of the documents executed by Borrower in
connection with the issuance of any Letter of Credit (including any
Existing LC) including, without limitation, any letter of credit
application, master letter of credit agreement or reimbursement
agreement, the terms of this Agreement will control.
3.4. EXISTING LETTERS OF CREDIT. Borrower, Lenders and Administrative
Agent acknowledge that under the Existing Indebtedness Documents
LaSalle is the letter of credit issuer and pursuant thereto LaSalle has
issued certain letters of credit which remain outstanding as of the
Effective Date as set forth on Exhibit 3.4 (collectively, the "Existing
LCs"). With respect to the Existing LCs, LaSalle shall be entitled to
all of the benefits and rights that the Letter of Credit Issuer is
entitled to hereunder, and the Existing LCs shall be deemed to be
"Letters of Credit" hereunder and subject to all of the terms
hereunder, including, without limitation, interest on drawings and all
fees owing or payable in connection therewith as set forth in this
Agreement (including, without limitation, the Letter of Credit Fee).
LaSalle shall on the date of the initial Revolving Loan Advance
distribute, without setoff, to each other Lender its pro-rata share of
the Letter of Credit Fee (based on the Eurodollar Margin in effect on
the Effective Date) for each Existing LC for the remainder of the
current calendar quarter and thereafter quarterly in advance in
accordance with this Agreement. On the date of the initial Revolving
Loan Advance, LaSalle shall be deemed to have sold and transferred to
each other Lender, and each such other Lender shall be deemed to have
purchased and received from LaSalle, a pro-rata undivided interest and
participation in each Existing LC, the reimbursement obligation of
Borrower with respect thereto, and any guaranty thereof or collateral
therefor. Such other Lender's pro-rata undivided interest shall be the
same as its pro-rata share of the Aggregate Revolving Loan Commitment.
Borrower
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agrees to pay to LaSalle the Letter of Credit Fee and other fees
applicable to Letters of Credit on each Existing LC in the amounts set
forth in this Agreement, provided, however, in no event shall a
Fronting Fee be payable by Borrower with respect to the Existing LCs.
4. INTEREST.
4.1. INTEREST ON DRAWS ON LETTERS OF CREDIT. The unreimbursed amount of
each draw on a Letter of Credit shall bear interest at a rate per annum
equal to the Adjusted Base Rate applicable to Revolving Loans.
4.2. INTEREST ON THE SWINGLINE LOAN. The entire Swingline Loan shall be
a Base Rate Loan and shall bear interest at the Adjusted Base Rate.
4.3. INTEREST ON AGGREGATE LOANS. Borrower may, as provided in Section
7, designate the whole of an Advance or any part of an Advance (other
than, in either case, a Swingline Advance) to be either a Base Rate
Advance or a Eurodollar Advance; provided, however, during the
existence of an Existing Default, Borrower may not designate an Advance
or part of an Advance as a Eurodollar Advance. Each Base Rate Advance
when made will become a Base Rate Loan, which shall bear interest at
the Adjusted Base Rate. Each Eurodollar Advance when made will become a
Eurodollar Loan, which shall bear interest at the Adjusted Eurodollar
Rate. Borrower may also, as provided herein, convert some or all of a
Base Rate Loan into a Eurodollar Loan and some or all of a Eurodollar
Loan into a Base Rate Loan. For each Eurodollar Loan, Borrower shall
select an Interest Period as provided in Section 4.7. A Eurodollar Loan
shall bear interest at the Adjusted Eurodollar Rate throughout the
applicable Interest Period designated by Borrower.
4.4. ADJUSTED BASE RATE. The Adjusted Base Rate for any Base Rate Loan
which is a Revolving Loan or a Swingline Loan shall be the Base Rate
plus the applicable Base Rate Margin determined from the table in
Section 4.6.
4.5. ADJUSTED EURODOLLAR RATE. The Adjusted Eurodollar Rate for any
Eurodollar Loan which is a Revolving Loan shall be the Eurodollar Rate
plus the applicable Eurodollar Margin determined from the table in
Section 4.6.
4.6. BASE RATE MARGINS AND EURODOLLAR MARGINS.
- -----------------------------------------------------------------------------------------
IF THE RATIO OF
BORROWER'S TOTAL
FUNDED
INDEBTEDNESS TO
EBITDA (FOR THE
FOUR FISCAL QUARTER
PERIOD OF
BORROWER MOST EURODOLLAR BASE RATE REFERENCE
RECENTLY ENDED) IS MARGIN MARGIN UNUSED FEE RATE LEVEL
- -----------------------------------------------------------------------------------------
greater than or
equal to 2.75 to
1.00 2.75% .50% 0.500% I
- -----------------------------------------------------------------------------------------
greater than or
equal to 2.50 to
1.00 but less than
2.75 to 1.00 2.50% 0.25% 0.500% II
- -----------------------------------------------------------------------------------------
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- -----------------------------------------------------------------------------------------
greater than or
equal to 2.00 to
1.00 but less than
2.50 to 1.00 2.25% 0.00% 0.375% III
- -----------------------------------------------------------------------------------------
greater than or
equal to 1.50 to
1.00 but less than
2.00 to 1.00 2.00% 0.00% 0.250% IV
- -----------------------------------------------------------------------------------------
less than 1.50 to
1.00 1.75% 0.00% 0.250% V
- -----------------------------------------------------------------------------------------
The Increments applicable on the Effective Date shall be those of Level
IV through the computation date (as set forth in the next sentence) for
the January 31, 2004 Financial Statements and Compliance Certificate.
Thereafter, the applicable Increments shall be re-determined by
Administrative Agent based on the ratio of Borrower's Total Funded
Indebtedness to EBITDA for the four fiscal quarter period of Borrower
most recently ended, promptly after each delivery by Borrower to
Administrative Agent of Borrower's Financial Statements (and
accompanying Compliance Certificate) as required in Section 12.11 and
will become applicable on the third Business Day following the day when
Borrower delivers such Financial Statements (and accompanying
Compliance Certificate) to Administrative Agent.
4.7. INTEREST PERIODS FOR EURODOLLAR LOANS. For each Eurodollar Loan
Borrower shall select an Interest Period that is either 14, 30, 60, or
90 days; provided that:
(i) every such Interest Period for a Eurodollar Advance shall
commence on the date of the Advance or on the date of the
conversion or continuation of any Loan as a Eurodollar Loan;
(ii) if any Interest Period would otherwise expire on a day of
a calendar month which is not a Business Day, then such
Interest Period shall expire on the next succeeding Business
Day in that calendar month; provided, however, that if the
next succeeding Business Day would be in the following
calendar month, it shall expire on the first preceding
Business Day;
(iii) 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
the calendar month at the end of such Interest Period; and
(iv) no Interest Period for a Eurodollar Loan that is part of
the Aggregate Revolving Loan shall extend beyond the Revolving
Loan Maturity Date.
4.8. TIME OF ACCRUAL. Interest shall accrue on all principal amounts
outstanding from the date when first outstanding to the date when no
longer outstanding. Amounts shall be deemed outstanding until payments
are applied thereto as provided herein.
4.9. COMPUTATION. Interest shall be computed for the actual days
elapsed over a year deemed to consist of 360 days. Interest rates that
are based on the Base Rate shall change simultaneously with any change
in the Base Rate and shall be effective for the entire day on which
such change becomes effective. The Base Rate will be determined by
Administrative Agent before the initial
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Advances on the Effective Date and on each Business Day thereafter when
the Base Rate changes.
4.10. RATE AFTER MATURITY. Borrower shall pay interest on the Aggregate
Loans, the Swingline Loan and any Obligations with respect to Letters
of Credit after their Maturity, and, at the option of Administrative
Agent or at the direction of the Required Lenders, on the Aggregate
Loans, the Swingline Loan and on the other Loan Obligations after the
occurrence of an Event of Default, at a rate per annum of two percent
(2%) plus the then-applicable rates. Past due fees and other amounts
past due and owing hereunder shall bear interest at two percent (2%)
above the then-current Adjusted Base Rate.
5. FEES.
5.1. REVOLVING LOAN UNUSED FEE. Borrower shall pay to Administrative
Agent for the account of Lenders a non-refundable, recurring Revolving
Loan Unused Fee calculated by applying the daily equivalent of an
annual Unused Fee Rate determined pursuant to the table set forth in
Section 4.6 to the Unused Revolving Loan Commitment on each day during
the period from the Effective Date to the Revolving Loan Maturity Date.
The Unused Revolving Loan Commitment on any day shall be the difference
between (i) the amount of the Aggregate Revolving Loan Commitment and
(ii) the sum of (a) the Aggregate Revolving Loan, and (b) the face
amount of all outstanding Letters of Credit and (c) without duplication
of clause (b), the total of all amounts drawn on the outstanding
Letters of Credit but not reimbursed to the Letter of Credit Issuer by
Borrower as of the close of business on such day. The Revolving Loan
Unused Fee shall be payable quarterly in arrears commencing on the last
day of the first calendar quarter ending after the Effective Date and
continuing on the last day of each calendar quarter thereafter and on
the Revolving Loan Maturity Date. The Unused Fee Rate shall be
determined from the chart in Section 4.6 of this Agreement under the
heading "Unused Fee Rate." The Unused Fee Rate applicable on the
Effective Date shall be Level IV through the computation date (as set
forth in the next sentence) for the January 31, 2004 Financial
Statements and Compliance Certificate. Thereafter, the Borrower's ratio
of Total Funded Indebtedness to EBITDA for the four fiscal quarter
period of Borrower most recently ended will be calculated and applied
to determine the applicable Unused Fee Rate in the same manner used for
determination of the applicable Base Rate Margin, and Eurodollar Margin
as described in Section 4.6.
5.2. LETTER OF CREDIT FEE. Borrower shall pay to Administrative Agent
(or LaSalle in the case of the Existing LCs) for the account of Letter
of Credit Issuer (or LaSalle in the case of the Existing LCs) and each
other Lender with a Revolving Loan Commitment, a non-refundable
recurring Letter of Credit Fee for each Letter of Credit issued by
Letter of Credit Issuer (or LaSalle in the case of the Existing LCs).
The Letter of Credit Fee for any Letter of Credit shall be an amount
equal to the aggregate undrawn amount of such Letter of Credit
multiplied by the Eurodollar Margin in effect on the date such Letter
of Credit is issued. The Letter of Credit Fee for each Letter of Credit
shall be payable in advance for the remaining portion of the quarter
when issued and quarterly thereafter on the last day of each full
calendar quarter thereafter while such Letter of Credit is outstanding
and upon maturity or termination thereof pro-rata for the remaining
portion of the quarter in which such maturity or termination occurs.
All Letter of Credit Fees are to be paid to the Lenders pro-rata in
accordance with their respective pro-rata shares as set forth on
Exhibit 3.
5.3. LETTER OF CREDIT FRONTING FEE. Borrower shall pay to Letter of
Credit Issuer (for its own account) a non-refundable, one-time Fronting
Fee equal to .125% of the face amount of each Letter of Credit issued
by Letter of Credit Issuer. The Fronting Fee due for any Letter of
Credit
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shall be payable in advance, commencing on the issuance date of such
Letter of Credit. The fronting fee shall be due and payable only if
there are two or more Lenders.
5.4. OTHER LETTER OF CREDIT FEES. Borrower shall pay to Letter of
Credit Issuer (or LaSalle in the case of the Existing LCs) such Letter
of Credit Issuer's (or LaSalle's, in the case of the Existing LCs)
other customary fees for issuance, amendment, or renewal of a Letter of
Credit and, as Letter of Credit Issuer and Borrower may agree with
respect to each Letter of Credit, and for each negotiation of a draft
drawn under such Letter of Credit.
5.5. CALCULATION OF FEES. All of the foregoing fees and all other fees
payable to Administrative Agent or any Lender that are based on an
annual percentage shall be calculated on the basis of a year deemed to
consist of 360 days and for the actual number of days elapsed.
6. PAYMENTS.
6.1. SCHEDULED PAYMENTS ON AGGREGATE REVOLVING LOAN AND SWINGLINE LOAN.
6.1.1. INTEREST. Borrower shall pay interest accrued on each
Base Rate Loan included in the Aggregate Revolving Loan and on
the Swingline Loan monthly in arrears beginning on the last
day of the first month ending after the Effective Date and
continuing on the last day of each calendar month thereafter,
and on the Revolving Loan Maturity Date. Borrower shall pay
interest accrued on each Eurodollar Loan included in the
Aggregate Revolving Loan at the end of its Interest Period
and, in addition, for each such Eurodollar Loan with an
Interest Period longer than 90 days (if permitted hereunder),
Borrower shall pay interest accrued thereon quarterly on the
same date of each quarter as the date such Eurodollar Loan was
made. Borrower shall pay interest accrued thereon on each day
that would have been the end of an Interest Period with
respect to such Eurodollar Loan had successive Interest
Periods of 90 days' duration been applicable to such
Eurodollar Loan. Borrower shall pay interest accrued on each
Revolving Loan and the Swingline Loan after the Revolving Loan
Maturity Date on demand.
6.1.2. PRINCIPAL. Subject to Section 6.1.3, Borrower shall
repay the entire amount of the Aggregate Revolving Loan as
then outstanding on July 31 2006 (the Revolving Loan Maturity
Date), and Borrower shall repay the entire amount of the
Swingline Loan on demand, or if no demand is made, on the
Revolving Loan Maturity Date.
6.2. APPLICATION.
6.2.1. Payments shall be paid or applied by the
Administrative Agent (in each case up to the outstanding
principal amount of the applicable Loan) (i) first, to reduce
the Swingline Loan to zero, and then (ii) second, as set forth
in Section 16.10.
6.3. PREPAYMENTS.
6.3.1. VOLUNTARY PREPAYMENT. Subject to the limitations in
the following sentences, Borrower may wholly prepay any Base
Rate Loan, or Eurodollar Loan that is included in the
Aggregate Revolving Loan at any time and may make a partial
prepayment thereon from time to time, without penalty or
premium, but only if (i) Borrower gives Administrative Agent
written notice (which may be mailed, personally delivered or
telecopied as provided in Section 19.1) or telephonic notice
(promptly confirmed in
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writing in the manner provided in Section 19.1) of Borrower's
intention to make such prepayment by 12:00 p.m. Local Time on
the day of such prepayment, (ii) the total amount of such
prepayment is a whole multiple of $100,000, and (iii) Borrower
pays any amount that is due under Section 17.1 as a
consequence of the prepayment. Unless there is an Existing
Default, all payments on the Revolving Loan shall be made
first to the outstanding balance of the Swingline Loan, if
any, and then to the remaining amount of the Aggregate
Revolving Loan.
6.3.2. MANDATORY PREPAYMENTS WHEN OVER-ADVANCES EXIST. If at
any time the Aggregate Revolving Loan exceeds the Maximum
Available Amount, whether as a result of optional Revolving
Loan Advances by Lenders as contemplated by Section 3.1.2 or
otherwise, Borrower shall on demand make a payment in the
amount of the excess to Administrative Agent for the account
of Administrative Agent on the Swingline Loan and Lenders on
the Aggregate Revolving Loan. Each such prepayment will be
applied by Administrative Agent and Lenders first to reduce
the Swingline Loan (and consequently each Lender's risk
participation in such Swingline Loan) until it is reduced to
zero, then to reduce the Base Rate Loans that are included in
the Aggregate Revolving Loan (and consequently a ratable
portion of each Lender's Revolving Loan) until they are
reduced to zero and then to reduce the Eurodollar Loans that
are included in the Aggregate Revolving Loan (and consequently
a ratable portion of each Lender's Revolving Loan). In the
case of such a prepayment, Borrower will pay any accrued
interest on the amount prepaid at the time of such prepayment,
and Borrower will pay any amount that is due under Section
17.4 as a consequence of the prepayment.
6.4. REIMBURSEMENT OBLIGATIONS OF BORROWER. Borrower hereby
unconditionally agrees to immediately pay to Letter of Credit Issuer on
demand at the Letter of Credit Issuer's Applicable Lending Office all
amounts required to pay all drafts drawn under Letters of Credit issued
for the account of such Borrower, all fees associated with the Letters
of Credit, and all reasonable expenses incurred by Letter of Credit
Issuer in connection with such Letters of Credit and in any event and
without demand to remit to Letter of Credit Issuer (which may be
through obtaining Advances if permitted under Section 3.1.2) sufficient
funds to pay all debts and liabilities arising under any Letter of
Credit issued for the account of such Borrower. Borrower hereby
unconditionally agrees to immediately pay to LaSalle on demand at
LaSalle's Applicable Lending Office all amounts required to pay all
drafts drawn under the Existing LCs, all fees associated with the
Existing LCs, and all reasonable expenses incurred by LaSalle in
connection with such Existing LCs and in any event and without demand
to remit to LaSalle (which may be through obtaining Advances)
sufficient funds to pay all debts and liabilities arising under any
Existing LC.
6.5. MANNER OF PAYMENTS AND TIMING OF APPLICATION OF PAYMENTS.
6.5.1. PAYMENT REQUIREMENT. Unless expressly provided to the
contrary elsewhere herein, Borrower shall make each payment on
the Loan Obligations to Administrative Agent for the account
of Lenders as required under the Loan Documents at the
Applicable Lending Office of the Administrative Agent on the
date when due, without deduction, setoff or counterclaim. All
such payments will be distributed by Administrative Agent to
Lenders as provided in Section 16.10 for application to the
Loan Obligations as provided herein.
6.5.2. APPLICATION OF PAYMENTS AND PROCEEDS. All payments
received by Administrative Agent in immediately available
funds at or before 12:00 noon (Local
9
Time) on a Business Day will be distributed by Administrative
Agent to Lenders as provided in Section 16.10 on the same
Business Day. Such payments received on a day that is not a
Business Day or after 12:00 noon (Local Time) on a Business
Day will be distributed by Administrative Agent to Lenders as
provided in Section 16.10 on the next Business Day. The amount
so distributed to a Lender will be applied by such Lender to
the relevant Loan Obligation on the Business Day when
received.
6.5.3. INTEREST CALCULATION. Section 6.5.2 notwithstanding,
for purposes of interest calculation only, (i) a payment in
cash or by wire transfer or direct debit to an account of
Borrower received at or before 12:00 noon (Local Time) on a
Business Day shall be deemed to have been applied to the
relevant Loan Obligation on the Business Day when it is
received, and (ii) a payment in cash or by wire transfer or
direct debit to an account of Borrower received on a day that
is not a Business Day or after 12:00 noon (Local Time) on a
Business Day shall be deemed to have been applied to the
relevant Loan Obligation on the next Business Day. A payment
made by check, draft or other instrument will be applied for
interest purposes in Administrative Agent's commercially
reasonable discretion in a manner consistent with its
customary collection policies.
6.6. RETURNED INSTRUMENTS. If a payment is made by check, draft or
other instrument and the check, draft or other instrument is returned
unpaid, any application of the payment to the Loan Obligations will be
reversed and will be treated as never having been made.
6.7. COMPELLED RETURN OF PAYMENTS OR PROCEEDS. If Administrative Agent
or any Lender is for any reason compelled to surrender any payment
because such payment is for any reason invalidated, declared
fraudulent, set aside, or determined to be void or voidable as a
preference, an impermissible setoff, or a diversion of trust funds,
then this Agreement and the Loan Obligations to which such payment or
proceeds was applied or intended to be applied shall be revived as if
such application was never made; and Borrower shall be liable to pay to
Administrative Agent or such Lender, and shall indemnify Administrative
Agent or such Lender for and hold Administrative Agent or such Lender
harmless from any loss with respect to, the amount of such payment or
proceeds surrendered. This Section shall be effective notwithstanding
any contrary action that Administrative Agent or such Lender may take
in reliance upon its receipt of any such payment or proceeds. Any such
contrary action so taken by Administrative Agent or such Lender shall
be without prejudice to Administrative Agent's or such Lender's rights
under this Agreement and shall be deemed to have been conditioned upon
the application of such payment or proceeds having become final and
indefeasible. The provisions of this Section shall survive termination
of the Commitments, the expiration of the Letters of Credit and the
indefeasible full payment and satisfaction of all of the Loan
Obligations.
6.8. DUE DATES NOT ON BUSINESS DAYS. Subject to Section 4.7(ii), if any
payment required hereunder becomes due on a date that is not a Business
Day, then such due date shall be deemed automatically extended to the
next Business Day (including any interest accruing during any such
extension period).
7. PROCEDURE FOR OBTAINING ADVANCES AND LETTERS OF CREDIT.
7.1. INITIAL ADVANCES. Provided that all conditions thereto hereunder
are satisfied and subject to the limitations contained herein, Lenders
will fund and Administrative Agent will make the initial Revolving Loan
Advance on the Effective Date as directed by Borrower in a written
direction delivered to Administrative Agent. The manner of disbursement
shall be subject to Administrative Agent's approval.
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7.2. SUBSEQUENT REVOLVING LOAN ADVANCES.
7.2.1. BORROWER REQUESTS. Borrower may request subsequent
Revolving Loan Advances at any time, but not more often than
once each Business Day, by submitting a request therefor to
Administrative Agent as provided in Section 7.10.
Administrative Agent may treat every request for a Revolving
Loan Advance that is a Base Rate Advance as a request for a
Swingline Advance to the extent the requested amount does not
exceed the Maximum Swingline Amount and as a request for a
Revolving Loan Advance in the amount of the excess.
Administrative Agent may treat every request for an Advance as
a request for a Base Rate Advance if Borrower does not specify
that such Advance is to be a Eurodollar Advance in Borrower's
request for an Advance. Every request for a Revolving Loan
Advance shall be irrevocable. A request for a Revolving Loan
Advance received by Administrative Agent on a day that is not
a Business Day or that is received by Administrative Agent
after 12:00 noon (Local Time) (or 2:00 p.m. (Local Time) in
the case of a request for a Revolving Loan Advance which will,
subject to the terms of this Agreement, be treated by
Administrative Agent as a request for a Swingline Advance) on
a Business Day shall be treated as having been received by
Administrative Agent prior to 12:00 noon (Local Time) (or 2:00
p.m. (Local Time) in the case of a request for a Revolving
Loan Advance which will, subject to the terms of this
Agreement, be treated by Administrative Agent as a request for
a Swingline Advance) on the next Business Day.
7.2.2. REVOLVING LOAN ADVANCES TO REPAY THE SWINGLINE LOAN.
7.2.2.1. Administrative Agent may in its sole and
absolute discretion on any Business Day give notice
to Lenders of the amount of the Swingline Loan after
application of all payments to be applied thereto as
provided elsewhere herein. Such notice shall be given
no later than 1:00 p.m. (Local Time) and may include
a demand that the Swingline Loan be fully paid. If
Administrative Agent demands that the Swingline Loan
be fully paid, then prior to 3:00 p.m. (Local Time)
on such date, Lenders shall remit funds to
Administrative Agent sufficient to reduce the
Swingline Loan to zero. The aggregate of such
remittances shall be treated as a Revolving Loan
Advance and the Aggregate Revolving Loan increased
accordingly. Each such remittance by a Lender shall
be made in accordance with its pro-rata share of the
Aggregate Revolving Loan Commitment and shall be made
notwithstanding that (i) the amount of the aggregate
of such remittances by Lenders may not be in the
minimum amount for Revolving Loan Advances otherwise
required hereunder, (ii) any conditions to Advances
in Section 8 may not be then satisfied, (iii) there
is an Existing Default, (iv) the aggregate amount of
such remittances by Lenders would result in the
Aggregate Revolving Loan exceeding the Maximum
Available Amount, or (v) such remittances by Lenders
may be made after the Revolving Loan Maturity Date;
provided, however, that in no event shall any Lender
be required to make any such remittance that would
result in the sum of (a) the Revolving Loan of such
Lender, plus (b) such Lender's pro-rata share of the
Letter of Credit Exposure exceeding such Lender's
Revolving Loan Commitment.
7.2.2.2. If for any reason, including the
commencement of a proceeding in bankruptcy with
respect to Borrower, remittances by Lenders as
provided above cannot be made on the date otherwise
required above, then each Lender shall be
11
deemed automatically to have purchased from
Administrative Agent as of such date a pro-rata
undivided interest and participation in the Swingline
Loan so as to cause such Lender to share in the
Swingline Loan in accordance with its pro-rata share
of the Aggregate Revolving Loan Commitment. Each
Lender shall remit its pro-rata share of the
Swingline Loan to Administrative Agent promptly on
demand. All interest payable with respect to such
Lender's pro-rata share of the Swingline Loan shall
be for the account of Administrative Agent to the
date such remittance is made, and shall be for the
account of and remitted by Administrative Agent to
such Lender as a participant from and after such
date. Further, until such remittance is made, such
Lender shall pay to Administrative Agent, on demand,
interest on such Lender's pro-rata share of the
Swingline Loan at the Federal Funds Rate.
7.2.3. ADMINISTRATIVE AGENT'S RIGHT TO MAKE OTHER REVOLVING
LOAN ADVANCES.
7.2.3.1. PAYMENT OF LOAN OBLIGATIONS. Administrative
Agent shall have the right to make Revolving Loan
Advances at any time and from time to time to cause
timely payment of any of the Loan Obligations, and
Administrative Agent shall have the right to make
withdrawals from or debits against any accounts of
any Covered Person at Administrative Agent at any
time and from time to time to cause timely payment of
any of the Loan Obligations; provided, however,
except during an Existing Default, Administrative
Agent shall use its reasonable efforts to provide no
less than one (1) Business Day prior notice of any
such Advances, withdrawals or debits. Administrative
Agent may select the Advance Date for any such
Revolving Loan Advance, but such Advance Date may
only be a Business Day. Administrative Agent will
give notice to Borrower after any such Revolving Loan
Advance is made. Any such Revolving Loan Advance will
be a Base Rate Advance.
7.3. LETTERS OF CREDIT. Borrower may request the issuance of a Letter
of Credit by submitting an issuance request to Letter of Credit Issuer
and executing the reimbursement agreement required under Section 9.1 no
less than five (5) Business Days prior to the requested issue date for
such Letter of Credit.
7.4. FUNDINGS.
7.4.1. REVOLVING ADVANCES. Not later than 1:00 p.m. (Local
Time) on each Advance Date for an Advance other than a
Swingline Advance, Administrative Agent shall promptly notify
each Lender of the amount of the Advance to be made on that
Advance Date. Each Lender shall make immediately available to
Administrative Agent by 3:00 p.m. (Local Time) on the Advance
Date funds consisting solely of Dollars in the amount of its
pro-rata share of such Advance, rounded to the nearest penny,
in accordance with such remittance instructions as may be
given by Administrative Agent to Lenders from time to time.
7.4.2. DRAWS ON LETTERS OF CREDIT. In the event that a draw
is made on a Letter of Credit and Borrower does not reimburse
the amount of such draw in full to Letter of Credit Issuer
immediately on demand, Letter of Credit Issuer shall promptly
notify Administrative Agent of such failure. Upon
Administrative Agent's receipt of such notice from Letter of
Credit Issuer, Administrative Agent may notify each Lender
thereof and shall have the right to cause a Revolving Loan
Advance to be made, regardless whether
12
such Revolving Loan Advance would result in the Aggregate
Revolving Loan exceeding the Maximum Available Amount, by
notifying each Lender of the draw, the amount of the Revolving
Loan Advance required to fund reimbursement of such draw, and
the amount of such Lender's ratable share of such Revolving
Loan Advance. The Advance Date and time for such Revolving
Loan Advance shall not be later than 3:00 p.m. (Local Time) on
the first Business Day following Administrative Agent's
delivery of such notice to Lenders. By no later than such
Advance Date and time, each Lender shall make immediately
available to Administrative Agent funds consisting solely of
Dollars in the amount of its pro-rata share of such Revolving
Loan Advance, rounded to the nearest penny, in accordance with
such remittance instructions as may be given by Administrative
Agent to each Lender from time to time. Each Revolving Loan
Advance made by Administrative Agent pursuant to this Section
7.4.2 shall be deemed to be a Base Rate Advance.
In the event that a draw is made on an Existing LC and
Borrower does not reimburse the amount of such draw in full to
LaSalle immediately on demand, LaSalle shall promptly notify
each other Lender and Administrative Agent of such failure.
Upon each other Lender's and Administrative Agent's receipt of
such notice from LaSalle, Administrative Agent shall have the
right to cause a Revolving Loan Advance to be made, regardless
whether such Revolving Loan Advance would result in the
Aggregate Revolving Loan exceeding the Maximum Available
Amount, by notifying each Lender of the amount of the
Revolving Loan Advance required to fund reimbursement of such
draw, and the amount of such Lender's ratable share of such
Revolving Loan Advance. The Advance Date and time for such
Revolving Loan Advance shall not be later than 3:00 p.m.
(Local Time) on the first Business Day following
Administrative Agent's delivery of such notice to Lenders. By
no later than such Advance Date and time, each Lender
(including LaSalle) shall make immediately available to
Administrative Agent funds consisting solely of Dollars in the
amount of its pro-rata share of such Revolving Loan Advance,
rounded to the nearest penny, in accordance with such
remittance instructions as may be given by Administrative
Agent to each Lender from time to time. Each Revolving Loan
Advance made by Administrative Agent pursuant to this Section
7.4.2 shall be deemed to be a Base Rate Advance.
7.4.3. ALL FUNDINGS RATABLE. All fundings of Advances (other
than Swingline Advances) shall be made by Lenders as provided
herein in accordance with their pro-rata shares of the
respective Aggregate Commitments, as applicable. Except as
otherwise expressly provided herein, a Lender shall not be
obligated to fund Revolving Loan Advances that would result in
the sum of (a) such Lender's Revolving Loan, plus (b) such
Lender's pro-rata share of the Letter of Credit Exposure
exceeding its Revolving Loan Commitment, or make available any
more than its pro-rata share of any Advance.
7.5. ADMINISTRATIVE AGENT'S AVAILABILITY ASSUMPTION. 7.5.1. Unless
Administrative Agent has been given written notice by a Lender prior to
an Advance Date that such Lender does not intend to make immediately
available to Administrative Agent such Lender's pro-rata share of the
Advance which Administrative Agent will be obligated to make on the
Advance Date, Administrative Agent may assume that such Lender has made
the required amount available to Administrative Agent on the Advance
Date and Administrative Agent may, in reliance upon such assumption,
make available to Borrower a corresponding amount. If such
corresponding amount is not in fact made immediately available to
Administrative Agent by such Lender on the Advance Date, Administrative
Agent shall be entitled to recover such corresponding amount on demand
from such Lender. If such Lender does not pay such corresponding amount
(or an amount demanded
13
by Administrative Agent pursuant to Section 7.2.2.1) immediately upon
Administrative Agent's demand therefor, then Administrative Agent shall
promptly notify Borrower and the other Lenders and Borrower shall
immediately pay such corresponding amount to Administrative Agent.
Administrative Agent shall also be entitled to recover, either from
such defaulting Lender (a Defaulting Lender) or Borrower, interest on
such corresponding amount for each day from the date such corresponding
amount was made available by Administrative Agent to Borrower to the
date such corresponding amount is recovered by Administrative Agent, at
a rate per annum equal to (i) if paid by such Lender, the cost to
Administrative Agent of funding such amount at the Federal Funds Rate,
or (ii) if paid by Borrower, the applicable rate for the Advance in
question determined from the request therefor. Each Lender shall be
obligated only to fund its pro-rata share of an Advance subject to the
terms and conditions hereof, regardless of the failure of another
Lender to fund its pro-rata share thereof. In addition, the failure of
any Lender to pay its pro-rata share of any such Advance shall cause
such Lender to be a Defaulting Lender and such Defaulting Lender shall,
until such amount is paid to Administrative Agent (with interest at the
Federal Funds Rate), (a) permit Administrative Agent the unconditional
and irrevocable right of setoff against any amounts (including, without
limitation, payments of principal, interest, and fees, as well as
indemnity payments) received by Administrative Agent hereunder for the
benefit of any such Defaulting Lender, and (b) if such failure to pay
shall continue for a period of two Business Days, result in any such
Defaulting Lender forfeiting any right to vote on any matter that the
Required Lenders or all Lenders are permitted to vote for hereunder
(and the calculation of Required Lenders shall exclude such Defaulting
Lender's interest in the Lenders' Exposure); provided, however, once
such a failure is cured, then such Lender shall, subsequent thereto,
have all rights hereunder; provided, further, however, if any Lender
shall fail to make such a payment within the two Business Day period
specified in clause (b) above (other than by reason of events beyond
the reasonable control of such Lender) two or more times during the
term hereof, such Lender shall permanently forfeit its right to vote
hereunder (and the calculation of Required Lenders shall exclude such
Defaulting Lender's interest in the Lenders' Exposure).
7.5.2. Unless Administrative Agent has been given written
notice by Borrower prior to the date any payment to be made by
it is due, that it does not intend to remit such payment,
Administrative Agent may assume that the Borrower has timely
remitted such payment and Administrative Agent may, in
reliance upon such assumption, make available a corresponding
amount or pro-rata portion thereof to the Persons entitled
thereto. If such payment was not in fact remitted to the
Administrative Agent in immediately available funds, then,
each Lender shall immediately on demand repay to
Administrative Agent the corresponding amount or pro-rata
portion thereof made available to such Lender, together with
interest thereon in respect of each day from the date such
amount was made available by Administrative Agent to such
Lender to the date such amount is repaid to Administrative
Agent, at the Federal Funds Rate.
7.6. DISBURSEMENT. Provided that all conditions precedent herein to a
requested Advance or, if applicable, a Swingline Advance, have been
satisfied, Administrative Agent will make the amount of such requested
Advance available to Borrower on the applicable Advance Date in
immediately available funds in Dollars at Administrative Agent's
Applicable Lending Office.
7.7. RESTRICTIONS ON ADVANCES. No Advance will be made unless it is a
whole multiple of $500,000 and not less than $1,000,000, in the case of
a Eurodollar Advance, or a whole multiple of $10,000 and not less than
$100,000, in the case of a Base Rate Advance. No more than one
Revolving Loan Advance and no more than one Swingline Advance will be
made on any one day pursuant to a request for a Revolving Loan Advance.
Advances will only be made for the
14
purposes permitted in Section 12.1. No Eurodollar Advance will be made
so long as there is any Existing Default.
7.8. RESTRICTION ON NUMBER OF EURODOLLAR LOANS. No more than five (5)
Eurodollar Loans with different Interest Periods may be outstanding at
any one time.
7.9. EACH ADVANCE REQUEST AND LETTER OF CREDIT REQUEST A CERTIFICATION.
Each submittal of a request for an Advance and each submittal of a
request for the issuance of a Letter of Credit by a Borrowing Officer
shall constitute a certification by Borrower that (i) there is no
Existing Default, (ii) all conditions precedent hereunder to the making
of the requested Advance or issuance of the requested Letter of Credit
have been satisfied, and (iii) the Representations and Warranties are
then true, with such exceptions as have been disclosed to Lenders in
writing by Borrower or a Guarantor from time to time and are
satisfactory to Lenders, and will be true on the Advance Date or
issuance date, as applicable, as if then made with such exceptions.
7.10. REQUIREMENTS FOR EVERY ADVANCE REQUEST. Only a request (which
shall be in writing, or oral and confirmed in writing within one
Business Day, in the form attached hereto as Exhibit 7.10 and mailed,
personally delivered or telecopied as provided in Section 19.1) from a
Borrowing Officer to Administrative Agent that specifies the amount of
the Advance to be made, the Advance Date for the requested Advance, the
portion of the Advance which is requested to be a Eurodollar Advance
and the portion of the Advance which is requested to be a Base Rate
Advance, and the Interest Period to be applicable to the Eurodollar
Loan that will result from a requested Eurodollar Advance, shall be
treated as a request for an Advance. No Advance Date for any requested
Advance may be other than a Business Day. A request for a Eurodollar
Advance must be given prior to 12:00 noon, Local Time, at least three
(3) Business Days prior to the Advance Date for such Eurodollar
Advance. A request for a Base Rate Advance must be given prior to 12:00
noon, Local Time, on the Advance Date for such Base Rate Advance.
7.11. REQUIREMENTS FOR EVERY LETTER OF CREDIT REQUEST. Only a written
request (which may be mailed, personally delivered or telecopied as
provided in Section 19.1) from a Borrowing Officer to Administrative
Agent or an electronic initiation over an online service provided by
Letter of Credit Issuer that specifies the amount, requested expiry
date (which shall be a Business Day and in no event later than
twenty-five (25) days before the Revolving Loan Maturity Date) and
beneficiary of the requested Letter of Credit and other information
necessary for its issuance shall be treated as a request for issuance
of a Letter of Credit.
7.12. EXONERATION OF ADMINISTRATIVE AGENT AND LENDERS. Neither
Administrative Agent nor any Lender shall incur any liability to
Borrower for treating a request that meets the express requirements of
Section 7.10 or Section 7.11 as a request for an Advance or issuance of
a Letter of Credit, as applicable, if Administrative Agent believes in
good faith that the Person making the request is a Borrowing Officer or
if, in the case of a request for a Letter of Credit, it is
electronically initiated. Neither Administrative Agent nor any Lender
shall incur any liability to Borrower for failing to treat any such
request as a request for an Advance or issuance of a Letter of Credit,
as applicable, if Administrative Agent believes in good faith that the
Person making the request is not a Borrowing Officer.
8. CONDITIONS OF LENDING.
8.1. CONDITIONS TO INITIAL ADVANCE. Lenders will have no obligation to
fund the initial Revolving Loan Advance or any subsequent Revolving
Loan Advance unless:
15
8.1.1. LISTED DOCUMENTS AND OTHER ITEMS. Administrative
Agent shall have received on or before the Effective Date all
of the documents and other items listed or described in
Exhibit 8.1.1 hereto as being conditions to the initial
Revolving Loan Advances as being delivered or executed on or
before the Execution Date, with each being satisfactory to
Lenders and (as applicable) duly executed and (also as
applicable), attested, acknowledged, certified, or
authenticated.
8.1.2. FINANCIAL CONDITION. Lenders shall (A) have received
(i) unqualified, audited consolidated financial statements for
the Borrower for the fiscal years ending in 2001, 2002 and
2003 in a form acceptable to Administrative Agent, and (ii)
unaudited interim consolidated financial statements for the
Borrower for each monthly period ended after the latest fiscal
year referred to in clause (i) above, and such financial
statements shall not, in the judgment of the Lenders, disclose
any material adverse change in the consolidated financial
position of the Borrower from what was reflected in the
financial statements previously furnished to the Lenders, and
(B) have determined to their satisfaction that the proforma
financial statements for the remainder of fiscal year 2004 and
all of fiscal years 2005, 2006 and 2007, as furnished to
Administrative Agent and Lenders, and other information
furnished to Administrative Agent and Lenders by Borrower (i)
for the periods ended on or before the Effective Date, fairly
and accurately reflect the business and financial condition of
Borrower and the results of its operations for such periods,
and (ii) for the periods that will end after the Effective
Date, fairly and accurately forecast the business and
financial condition of Borrower and the results of its
operations for such periods.
8.1.3. NO DEFAULT. There shall be no Existing Default and no
Default or Event of Default will occur as a result of such
Advance being requested or made or the application of the
proceeds thereof.
8.1.4. REPRESENTATIONS AND WARRANTIES. The Representations
and Warranties shall be true and correct.
8.1.5. NO MATERIAL ADVERSE CHANGE. Since the date of the
Initial Financial Statements delivered to Administrative
Agent, there shall not have been any change which has or is
reasonably likely to have a Material Adverse Effect on any
Covered Person.
8.1.6. PENDING MATERIAL PROCEEDINGS. There shall be no
pending Material Proceedings.
8.1.7. PAYMENT OF FEES AND EXPENSES. Borrower shall have
paid and reimbursed to Lenders all fees, costs and expenses
that are payable or reimbursable to Lenders hereunder on or
before the Effective Date.
8.1.8. INSURANCE. Borrower shall have the insurance required
by Section 12.4.
8.1.9. EXISTING INDEBTEDNESS. Administrative Agent shall
have received satisfactory evidence that either prior to the
Effective Date or simultaneously with the funding of the
Initial Advance, that, all of the Existing Indebtedness shall
be fully repaid and all commitments of the lenders thereunder
and obligations of Borrower and each Covered Person thereunder
shall be terminated.
16
8.1.10. CLOSING CERTIFICATE. A closing certificate (on the
Effective Date and on the date of the initial Revolving
Advance) certifying as to the completion of the conditions to
closing, including without limitation, the matters in Sections
8.1.3 and 8.1.4.
8.1.11. TERM INDEBTEDNESS. Administrative Agent shall have
received evidence satisfactory to it that no less than
$40,000,000 of the Term Indebtedness will be funded
simultaneously with the initial Revolving Loan Advance and
shall be subject to the Intercreditor Agreement. The Term
Indebtedness Documents shall be in form and substance
satisfactory to Administrative Agent and shall be in full
force and effect.
8.1.12. MINIMUM EBITDA. Borrower shall have had at least
$18,000,000 in EBITDA for the twelve-month period ending June
30, 2003.
8.1.13. LEVERAGE. The ratio of Total Funded Indebtedness to
EBITDA shall be less than or equal to 2.50 to 1.00 as of June
30, 2003.
8.1.14. OTHER ITEMS. Administrative Agent shall have received
such other consents, approvals, opinions (but not with respect
to any foreign Subsidiaries, if any, executing a Guaranty),
certificates, documents or information as it reasonably deems
necessary. The Lenders shall be satisfied with the
capitalization and corporate structure of Borrower and its
Subsidiaries.
8.1.15. FEES AND EXPENSES. Administrative Agent and the
Lenders shall have received all fees required to be paid, and
all expenses for which invoices have been presented, on or
before the Effective Date.
8.2. CONDITIONS TO SUBSEQUENT ADVANCES. Lenders will have no obligation
to fund any Advance after the initial Revolving Loan Advance unless:
8.2.1. GENERAL CONDITIONS. All of the conditions to the
initial Advances in Section 8.1 (except the condition in
Section 8.1.2(B) with respect to proforma Financial Statements
delivered on or before the Effective Date, Section 8.1.4 and
Section 8.1.8) shall have been and shall remain satisfied.
8.2.2. REPRESENTATIONS AND WARRANTIES. The Representations
and Warranties are then true, with such exceptions as have
been disclosed to Lenders in writing by Borrower or any
Guarantor from time to time and are satisfactory to Lenders,
and will be true as of the time of such Advance, as if then
made with such exceptions.
8.2.3. NO PROHIBITIONS. No order, judgment or decree of any
Governmental Authority shall exist which purports by its terms
to enjoin or restrain Administrative Agent or any Lender from
making the requested Advance, and no Law or request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over Administrative
Agent or any Lender shall exist which prohibits, or requests
that Administrative Agent or any Lender refrain from, the
making of loans generally or Administrative Agent or any
Lender in particular, or imposes upon Administrative Agent or
any Lender with respect to such Advance any restriction or
reserve or capital requirement (for which Administrative Agent
or any Lender is not otherwise compensable by Borrower
hereunder).
17
8.2.4. NO DEFAULT. There shall be no Existing Default and no
Default or Event of Default will occur as a result of such
Advance being requested or made or the application of the
proceeds thereof.
9. CONDITIONS TO ISSUANCE OF LETTERS OF CREDIT. As conditions precedent to the
issuance of any Letter of Credit:
9.1. LETTER OF CREDIT APPLICATION/REIMBURSEMENT AGREEMENT. Borrower
shall have executed and delivered to Letter of Credit Issuer one or
more letter of credit applications and reimbursement agreements each in
form and substance satisfactory to Letter of Credit Issuer under which
Borrower further evidences its obligation to reimburse to Letter of
Credit Issuer on demand the amount of each draw on such Letter of
Credit as provided in Section 6.4, together with interest from the date
of the draw at the rate provided in Section 4.1 and (without
duplication) all reasonable expenses incurred by Letter of Credit
Issuer in connection with such Letter of Credit.
9.2. NO PROHIBITIONS. No order, judgment or decree of any Governmental
Authority shall exist which purports by its terms to enjoin or restrain
Letter of Credit Issuer or any other Lender from issuing such Letter of
Credit, and no Law or request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
Letter of Credit Issuer or any other Lender shall exist which
prohibits, or requests that Letter of Credit Issuer or any other Lender
refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular, or imposes upon Letter of Credit Issuer
or any other Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which Letter of
Credit Issuer or any other Lender is not otherwise compensable by
Borrower hereunder).
9.3. REPRESENTATIONS AND WARRANTIES. The Representations and Warranties
are then true, with such exceptions as have been disclosed to Lenders
in writing by Borrower or such Guarantor from time to time and are
satisfactory to Lenders, and will be true as of the time of the
issuance of such Letter of Credit, as if then made with no exceptions.
9.4. NO DEFAULT. There shall be no Existing Default and no Default or
Event of Default is reasonably likely to occur as a result of such
Letter of Credit being issued or a draw thereon being made or paid.
9.5. OTHER CONDITIONS. All of the conditions to the initial Advances in
Section 8.1 (except the condition in Section 8.1.4 and 8.1.8) shall
have been and shall remain satisfied.
10. REPRESENTATIONS AND WARRANTIES. Except as otherwise described in the
Disclosure Schedule attached hereto as Exhibit 10, Borrower represents and
warrants to Administrative Agent, Lenders, and Letter of Credit Issuer, on its
behalf and on behalf of each Covered Person, as follows:
10.1. ORGANIZATION AND EXISTENCE. Each Covered Person is duly
organized and existing in good standing under the Laws of the state of
its organization, is duly qualified to do business and is in good
standing in every state where the nature or extent of its business or
properties require it to be qualified to do business, except where the
failure to so qualify could not reasonably be expected to have a
Material Adverse Effect on any Covered Person. Each Covered Person has
the power and authority to own its properties and carry on its business
as now being conducted. With respect to each Covered Person, the
following information is fully, accurately and completely set forth on
section 10.1 of the Disclosure Schedule: (i) the full and exact legal
name of each Covered Person, (ii) state of organization/formation of
such Covered Person, (iii) the tax
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identification number (FEIN or social security number, as appropriate)
of each Covered Person, and (iv) the charter number (if available) of
each Covered Person.
10.2. AUTHORIZATION. Each Covered Person is duly authorized to
execute and perform every Loan Document to which such Covered Person is
a party, and Borrower is duly authorized to borrow hereunder, and this
Agreement and the other Loan Documents have been duly authorized by all
requisite corporate or membership action (in the case of limited
liability companies) of each Covered Person. No consent, approval or
authorization of, or declaration or filing with, any Governmental
Authority, and no consent of any other Person, is required in
connection with Borrower's execution, delivery or performance of this
Agreement and the other Loan Documents, except for those already duly
obtained.
10.3. DUE EXECUTION. Every Loan Document to which a Covered Person
is a party has been executed on behalf of such Covered Person by a
Person duly authorized to do so.
10.4. ENFORCEABILITY OF OBLIGATIONS. Each of the Loan Documents to
which a Covered Person is a party constitutes the legal, valid and
binding obligation of such Covered Person, enforceable against such
Covered Person in accordance with its terms, except to the extent that
the enforceability thereof against such Covered Person may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting creditors' rights generally or by equitable principles of
general application.
10.5. BURDENSOME OBLIGATIONS; DEFAULTS. Except as set forth in this
Agreement and the Term Indebtedness Documents, no Covered Person is a
party to or bound by any Contract, including, without limitation, any
Contract that would prohibit the granting of a Security Interest on its
assets or require that if a Security Interest is granted that it be
pari passu with any other Person's Security Interest in such assets, or
is subject to any provision in the Charter Documents of such Covered
Person which would, if performed by such Covered Person, result in a
Default or Event of Default either immediately or upon the elapsing of
time. There are no Defaults or Events of Default which have occurred
and are continuing. There is no breach or default with respect to any
of the Term Indebtedness.
10.6. LEGAL RESTRAINTS. The execution and performance of any Loan
Document by a Covered Person will not violate or constitute a default
under the Charter Documents of such Covered Person, any Material
Agreement of such Covered Person, or any Material Law, and will not,
except as expressly contemplated or permitted in this Agreement, result
in any Security Interest being imposed on any of such Covered Person's
property.
10.7. LABOR CONTRACTS AND DISPUTES. There is no pending or, to
Borrower's knowledge, threatened, strike, work stoppage, unfair labor
practice claim or other labor dispute against or affecting any Covered
Person or its employees which has or is reasonably likely to have a
Material Adverse Effect on any Covered Person.
10.8. NO MATERIAL PROCEEDINGS. There are no Material Proceedings
pending or, to the best knowledge of Borrower, threatened, against any
Covered Person.
10.9. MATERIAL LICENSES. All Material Licenses have been obtained or
exist for each Covered Person.
10.10. COMPLIANCE WITH MATERIAL LAWS. The operations and employee
compensation practices of every Covered Person comply in all material
respects with, and are not subject to any
19
judicial or administrative complaint, investigation, order or
proceeding alleging the violation of, any and all applicable
Environmental Laws which are Material Laws and Employment Laws which
are Material Laws.
10.11. PRIOR TRANSACTIONS. From and after the Effective Date, and
except for Permitted Acquisitions, no Covered Person has been a party
to any merger or consolidation, or acquired all or substantially all of
the assets of any Person, or acquired any of its property outside of
the ordinary course of business.
10.12. SOLVENCY.
Borrower is Solvent prior to and after giving effect to, the
transactions contemplated by the initial Revolving Loan Advance on the
Effective Date. Borrower is Solvent at the time of each request for an
Advance and immediately after the funding of each such Advance.
10.13. PROJECTIONS; PRO FORMA BALANCE SHEET. The projections of
Borrower's periodic financial condition, and results of operations, for
the periods ending January 31, 2007, a copy of which have been
delivered to Administrative Agent and each Lender, represent Borrower's
good faith best estimate of Borrower's future financial performance for
the periods set forth therein. Such projections have been prepared
consistent with GAAP on the basis of the assumptions set forth therein,
which Borrower believes are fair and reasonable in light of current and
reasonably foreseeable business conditions. The pro forma balance sheet
of Borrower as of the Effective Date, a copy of which has been provided
by Borrower to Administrative Agent and each Lender, has been prepared
consistent with GAAP (except the non year-end Financial Statements do
not contain footnotes and remain subject to normal year-end
adjustments) and presents fairly and accurately Borrower's financial
condition as of the Effective Date as if the transactions contemplated
by the initial advance had occurred on the Effective Date.
10.14. FINANCIAL STATEMENTS. The Financial Statements are complete
and correct in all material respects, have been prepared in accordance
with GAAP (except the non year-end Financial Statements do not contain
footnotes and remain subject to normal year end adjustments), and
fairly reflect the financial condition, results of operations and cash
flows of the Persons covered thereby as of the dates and for the
periods stated therein, subject in the case of interim Financial
Statements to normal year-end adjustments made in accordance with GAAP.
10.15. NO CHANGE IN CONDITION. Since the date of the Financial
Statements delivered to Administrative Agent and Lenders as required
herein, there has been no change which has or is reasonably likely to
have a Material Adverse Effect on any Covered Person.
10.16. NO DEFAULTS. No Covered Person has breached or violated or has
defaulted under any Material Agreement, or has defaulted with respect
to any Material Obligation of such Covered Person. No Default has
occurred which is continuing and no Event of Default has occurred.
10.17. INVESTMENTS. No Covered Person has any Investments in other
Persons except existing Permitted Investments.
10.18. INDEBTEDNESS. No Covered Person has any Indebtedness except
existing Permitted Indebtedness.
10.19. INDIRECT OBLIGATIONS. No Covered Person has any Indirect
Obligations except existing Permitted Indirect Obligations.
20
10.20. SECURITY INTERESTS. No Covered Person has granted or allowed
to exist any Security Interests on any of its assets except existing
Permitted Security Interests.
10.21. TAX LIABILITIES; GOVERNMENTAL CHARGES. Each Covered Person has
filed or caused to be filed all tax reports and returns required to be
filed by it with any Governmental Authority, except where extensions
have been properly obtained. Each Covered Person has paid or made
adequate provision for payment of all Taxes of such Covered Person,
except Taxes which are being diligently contested in good faith by
appropriate proceedings and as to which such Covered Person has
established adequate reserves in conformity with GAAP. No Security
Interest for any such Taxes has been filed and no claims are being
asserted with respect to any such Taxes which, if adversely determined,
has or is reasonably likely to have a Material Adverse Effect on such
Covered Person. There are no material unresolved issues concerning any
liability of a Covered Person for any Taxes which, if adversely
determined, will have or is reasonably likely to have a Material
Adverse Effect on such Covered Person.
10.22. PENSION BENEFIT PLANS. All Pension Benefit Plans maintained by
each Covered Person or an ERISA Affiliate of such Covered Person
qualify under Section 401 of the Code and are in compliance with the
provisions of ERISA to the extent ERISA is applicable and all other
Material Laws. Except with respect to events or occurrences which do
not have and are not reasonably likely to have a Material Adverse
Effect on any Covered Person, and to the extent ERISA is applicable to
any such Pension Benefit Plans:
10.22.1. PROHIBITED TRANSACTIONS. None of such Pension Benefit
Plans has participated in, engaged in or been a party to any
non-exempt PROHIBITED TRANSACTION as defined in ERISA or the
Code, and no officer, director or employee of such Covered
Person or of an ERISA Affiliate of such Covered Person has
committed a breach of any of the responsibilities or
obligations imposed upon fiduciaries by Title I of ERISA.
10.22.2. CLAIMS. There are no claims, pending or threatened,
involving any such Pension Benefit Plan by a current or former
employee (or beneficiary thereof) of such Covered Person or
ERISA Affiliate of such Covered Person, nor is there any
reasonable basis to anticipate any claims involving any such
Pension Benefit Plan which would likely be successfully
maintained against such Covered Person or such ERISA
Affiliate.
10.22.3. REPORTING AND DISCLOSURE REQUIREMENTS. There are no
violations of any reporting or disclosure requirements with
respect to any such Pension Benefit Plan and none of such
Pension Benefit Plans has violated any applicable Law,
including ERISA and the Code.
10.22.4. ACCUMULATED FUNDING DEFICIENCY. No such Pension
Benefit Plan has (i) incurred an accumulated funding
deficiency (within the meaning of Section 412(a) of the Code),
whether or not waived; (ii) been a Pension Benefit Plan with
respect to which a Reportable Event (to the extent that the
reporting of such events to the PBGC within thirty days of the
occurrence has not been waived) has occurred and is
continuing; or (iii) been a Pension Benefit Plan with respect
to which there exist conditions or events which have occurred
that present a significant risk of termination of such Pension
Benefit Plan by the PBGC.
10.22.5. MULTI-EMPLOYER PLAN. No Covered Person or ERISA
Affiliate of such Covered Person has received notice that any
such Multi-employer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and no
such Multi-employer
21
Plan is reasonably expected to be in reorganization or to be
terminated within the meaning of Title IV of ERISA.
10.23. WELFARE BENEFIT PLANS. No Covered Person or ERISA Affiliate of
any Covered Person maintains a Welfare Benefit Plan that has a
liability which, if enforced or collected, has or is reasonably likely
to have a Material Adverse Effect on any Covered Person. Each Covered
Person and each ERISA Affiliate of any Covered Person has complied in
all material respects with the applicable requirements of Section 4980B
of the Code pertaining to continuation coverage as mandated by COBRA.
10.24. RETIREE BENEFITS. No Covered Person or ERISA Affiliate of such
Covered Person has an obligation to provide any Person with any
medical, life insurance, or similar benefit following such Person's
retirement or termination of employment (or to such Person's
beneficiary subsequent to such Person's death) which has or is
reasonably likely to have a Material Adverse Effect on any Covered
Person.
10.25. STATE OF PROPERTY. Each Covered Person has good and marketable
or merchantable title to all real and personal property (tangible and
intangible) purported to be owned by it or reflected in the Initial
Financial Statements, except for personal property sold in the ordinary
course of business after the date of the Initial Financial Statements,
and all such real and personal property is in good working order and
condition, except for normal wear and tear. Borrower owns all
intellectual property (including, without limitation, patents,
trademarks, and copyrights) reasonably necessary for the operation of
its business.
10.26. NEGATIVE PLEDGES. Except as set forth in this Agreement and as
set forth in the Term Indebtedness Documents, no Covered Person is a
party to or bound by any Contract which prohibits the creation or
existence of any Security Interest upon or assignment or conveyance of
any of its assets.
10.27. AFFILIATES; SUBSIDIARIES. Borrower has no Subsidiaries, except
for those Subsidiaries listed in section 10.27 of the Disclosure
Schedule, which may be updated by Borrower from time to time without
the consent of Required Lenders so long as any such new Subsidiaries
executes a joinder agreement to the Guaranty if required by the
Administrative Agent in its reasonable discretion or as otherwise
required by this Agreement. Section 10.27 of the Disclosure Schedule
sets forth for each Subsidiary, its authorized capital stock,
membership interests or other equity interests and its issued and
outstanding capital stock, membership interests or other equity
interests; all issued and outstanding shares, membership interests or
other equity interests of such Subsidiaries are validly issued and
outstanding, fully paid and non-assessable, and are owned beneficially
and of record by the Persons listed.
10.28. MARGIN STOCK. No Covered Person is engaged or will engage,
principally or as one of its important activities, in the business of
extending credit for the purpose of PURCHASING or CARRYING MARGIN STOCK
(within the meaning of Regulation U), and no part of the proceeds of
any Advance will be used to purchase or carry any such margin stock or
to extend credit to others for the purpose of purchasing or carrying
any such margin stock or for any purpose which violates, or which would
be inconsistent with, the provisions of Regulation U. None of the
transactions contemplated by this Agreement, any of the other Loan
Documents, or any of the Acquisition Documents will violate Regulations
T, U or X of the FRB.
22
10.29. TAX MATTERS. Borrower does not intend to treat the Loans
and/or Letters of Credit and related transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4).
10.30. SECURITIES MATTERS. No proceeds of any Advance will be used to
acquire any security in any transaction which is subject to Sections 13
and 14 of the Securities Exchange Act of 1934.
10.31. INVESTMENT COMPANY ACT, ETC. No Covered Person is an
INVESTMENT COMPANY registered or required to be registered under the
Investment Company Act of 1940, or a company CONTROLLED (within the
meaning of such Investment Company Act) by such an INVESTMENT COMPANY
or an AFFILIATED PERSON of, or PROMOTER or PRINCIPAL UNDERWRITER for,
an INVESTMENT COMPANY, as such terms are defined in the Investment
Company Act of 1940. No Covered Person is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Interstate Commerce Act or any other Law limiting or regulating its
ability to incur Indebtedness for money borrowed.
10.32. NO IMPROPER PAYMENT OR INFLUENCE. Neither Borrower nor any
other Covered Person has directly or indirectly paid or delivered any
fee, commission or other money or property, or engaged in any lobbying,
influencing or other behavior, however characterized, to any agent,
government official, regulatory body, governmental agency or other
Person, in the United States or any other country, related to the
business or operations of the Borrower or any other Covered Person,
that the Borrower and each other Covered Person knows or has reason to
believe to have been illegal under any federal, state, or local law of
the United States or any other country having jurisdiction, or to have
been for the purpose of, and to have had the effect of, inducing or
encouraging the breach by the recipient thereof of any legal duties,
whether as an employee or otherwise to another Person.
10.33. FOREIGN ENEMIES AND REGULATIONS. The use of the proceeds of
the Loans as contemplated by this Agreement will not violate (A) any
regulations promulgated or administered by the Office of Foreign Assets
Control, United States Department of the Treasury, including without
limitation, the Foreign Assets Control Regulations, the Transaction
Control Regulations, the Cuban Assets Control Regulations, the Foreign
Funds Control Regulations, the Iranian Assets Control Regulations, the
Nicaraguan Trade Control Regulations, the South African Transaction
Regulations, the Iranian Transactions Regulations, the Iraqi Sanctions
Regulations, the Soviet Gold Coin Regulations, the Panamanian
Transaction Regulations or the Libyan Sanctions Regulations of the
United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as
amended, (B) the Trading with the Enemy Act, as amended, (C) Executive
Orders 8389, 9095, 9193, 12543 (Libya), 12544 (Libya), 12722 or 12724
(Iraq), 12775 or 12779 (Haiti), or 12959 (Iran), as amended, of the
President of the United States or (D) any rule, regulation or executive
order issued or promulgated pursuant to the laws or regulations
described in the foregoing clauses (A) -(C).
10.34. NO MATERIAL MISSTATEMENTS OR OMISSIONS. Neither the Loan
Documents, any of the Financial Statements nor any statement, list,
certificate or other information furnished or to be furnished by
Borrower or any other Covered Person to Administrative Agent or Lenders
in connection with the Loan Documents or any of the transactions
contemplated thereby contains any untrue statement of a material fact,
or omits to state a material fact necessary to make the statements
therein not misleading. Borrower has disclosed to Administrative Agent
and Lenders everything regarding the business, operations, property,
financial condition, or business prospects or itself and every Covered
Person that has or is reasonably likely to have a Material Adverse
Effect on any Covered Person.
23
10.35. FILINGS. All registration statements, reports, proxy
statements and other documents, if any, required to be filed by any
Covered Person with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, and the Securities Exchange Act of 1934,
have been filed, and such filings are complete and accurate in all
material respects and contain no untrue statements of material fact or
omit to state any material facts required to be stated therein or
necessary in order to make the statements therein not misleading.
11. MODIFICATION AND SURVIVAL OF REPRESENTATIONS. Except as specifically noted
herein, Borrower may at any time after the initial Advances are made propose to
Lenders in writing to modify the representations and warranties in Section 10,
the representations and warranties in any other Loan Document and any other
representation or warranty made in any certificate, report, opinion or other
document delivered by Borrower pursuant to the Loan Documents. If the proposed
modifications are satisfactory to Required Lenders as evidenced by their written
assent thereto, then such representations and warranties shall be deemed and
treated as so modified, but only as of the date of Borrower's written
modification proposal. If such proposed modifications are not satisfactory to
Required Lenders, then such proposed modifications shall not be deemed or
treated as modifying such representations and warranties. All such
representations and warranties, as made or deemed made as of a particular time,
shall survive execution of each of the Loan Documents and the making of every
Advance, and may be relied upon by Administrative Agent and Lenders as being
true and correct as of the date when made or deemed made until all of the Loan
Obligations are fully and indefeasibly paid, no Letters of Credit are
outstanding and the Letter of Credit Exposure is irreversibly zero.
12. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, while any of the
Commitments remains in effect and until all of the Loan Obligations are fully
and indefeasibly paid, no Letters of Credit are outstanding and the Letter of
Credit Exposure is irreversibly zero, Borrower shall do, or cause to be done by
each of the other Covered Persons, as applicable, the following:
12.1. USE OF PROCEEDS. The proceeds of Revolving Loan Advances and
Swingline Advances shall be used solely to (i) pay and retire the
Existing Indebtedness, (ii) provide for the working capital
requirements and general corporate purposes of the Borrower, and (iii)
to finance Permitted Acquisitions.
12.2. CORPORATE EXISTENCE. Each Covered Person shall maintain its
existence in good standing and shall maintain in good standing its
right to transact business in those states in which it is now or
hereafter doing business, except where the failure to so qualify will
not have and will not be reasonably likely to have a Material Adverse
Effect on any Covered Person. Each Covered Person shall obtain and
maintain all Material Licenses for such Covered Person.
12.3. MAINTENANCE OF PROPERTY AND LEASES. Each Covered Person shall
maintain in good condition and working order, and repair and replace as
required, all buildings, equipment, machinery, fixtures and other real
and personal property owned or leased by it whose useful economic life
has not elapsed and which is reasonably necessary for the ordinary
conduct of the business of such Covered Person. To the extent
applicable, all of each Covered Person's operations are operated in
accordance with the Federal Fair Labor Standards Act of 1938 and all
rules, regulations, and orders thereunder.
12.4. INSURANCE. Each Covered Person shall at all times keep insured
or cause to be kept insured, in insurance companies having a rating of
at least "A-" by Best's Rating Service, all property owned by it of a
character usually insured by others carrying on businesses similar to
that of such Covered Person in such manner and to such extent and
covering such risks as such
24
properties are usually insured subject to deductibles and self-insured
retention levels consistent with past practices. Each Covered Person
also shall carry business interruption insurance in such amounts, in
such manner and to such extent and covering such risks as such
businesses are usually insured subject to deductibles and self-insured
retention levels consistent with past practices. Each Covered Person
shall at all times carry insurance, in insurance companies having a
rating of at least "A-" by Best's Rating Service, against liability on
account of damage to persons or property (including product liability
insurance and insurance required under all Laws pertaining to workers'
compensation) and covering all other liabilities common to such Covered
Person's business, in such manner and to such extent as such coverage
is usually carried by others conducting businesses similar to that of
such Covered Person subject to deductibles and self-insured retention
levels consistent with past practices. All liability policies of
liability insurance maintained hereunder shall name Administrative
Agent as an additional insured for the benefit of Lenders, and such
policies of insurance maintained hereunder shall contain a clause
providing that such policies may not be canceled, without 30 days prior
written notice to Administrative Agent. Borrower shall upon request of
Administrative Agent at any time furnish to Administrative Agent
updated evidence of insurance (in the form required as a condition to
Administrative Agent's lending hereunder) for such insurance.
Notwithstanding the foregoing, if the Best's Rating Service rating of
any insurance carrier(s) of the Borrower or any other Covered Person
falls below "A-," then such event shall not be an Event of Default if,
within 90 days of such downgrading, Borrower shall put in place
insurance meeting the requirements of this Section with replacement
insurance carrier(s) with a Best's Rating Service rating of at least
"A-."
12.5. PAYMENT OF TAXES AND OTHER OBLIGATIONS. Each Covered Person
shall promptly pay and discharge or cause to be paid and discharged, as
and when due, any and all income taxes, federal or otherwise, lawfully
assessed and imposed upon it, and any and all lawful taxes, rates,
levies, and assessments whatsoever upon its properties and every part
thereof, or upon the income or profits therefrom and all claims of
materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons for labor, materials, supplies, storage or other items or
services which if unpaid might be or become a Security Interest or
charge upon any of its property; provided, however, that a Covered
Person may diligently contest in good faith by appropriate proceedings
the validity of any such taxes, rates, levies, assessments or tax
claims, provided such Covered Person has established adequate reserves
therefor in conformity with GAAP on the books of such Covered Person,
and no Security Interest, other than a Permitted Security Interest,
results from such non-payment.
12.6. COMPLIANCE WITH LAWS. Each Covered Person shall comply with
all Material Laws.
12.7. TERMINATION OF PENSION BENEFIT PLAN. No Covered Person or
ERISA Affiliate of such Covered Person shall terminate or amend any
Pension Benefit Plan maintained by such Covered Person or such ERISA
Affiliate if such termination or amendment would result in any
liability to such Covered Person or such ERISA Affiliate under ERISA or
any increase in current liability for the plan year for which such
Covered Person or such ERISA Affiliate is required to provide security
to such Pension Benefit Plan under the Code, which such liability could
reasonably be expected to have a Material Adverse Effect on such
Covered Person.
12.8. NOTICE TO ADMINISTRATIVE AGENT OF MATERIAL EVENTS. Borrower
shall, promptly upon any Responsible Officer of Borrower obtaining
knowledge or notice thereof, give notice to Administrative Agent of (i)
any breach of any of the covenants in Section 12, 13, or 14; (ii) any
Default or Event of Default; (iii) the commencement of any Material
Proceeding; and (iv) any loss of or damage to any assets of a Covered
Person or the commencement of any proceeding for the condemnation or
other taking of any of the assets of a Covered Person, if insurance
and/or
25
condemnation proceeds in excess of $500,000 are likely to be payable as
a consequence of such loss, damage or proceeding, or if such loss,
damage or proceeding has or is reasonably likely to have a Material
Adverse Effect on such Covered Person. In addition,
12.8.1. Borrower shall furnish to Administrative Agent from
time to time all information which Administrative Agent
reasonably requests with respect to the status of any Material
Proceeding.
12.8.2. Borrower shall furnish to Administrative Agent from
time to time all information which Administrative Agent
requests with respect to any Pension Benefit Plan established
by a Covered Person or an ERISA Affiliate of any Covered
Person.
12.8.3. Borrower shall promptly deliver to Administrative
Agent notice of any default or event of default, or the
occurrence of any event which would with the passage of time,
giving of notice or otherwise, constitute a default or event
of default with respect to any of the Permitted Indebtedness
which is in an amount which exceeds $1,000,000.
12.8.4. Borrower shall promptly deliver notice to
Administrative Agent of the assertion by the holder of any
capital stock, membership interest, or any other equity
interest in a Covered Person or any Indebtedness of a Covered
Person in the outstanding principal amount in excess of
$1,000,000 that a default exists with respect thereto or that
such Covered Person is not in compliance with the terms
thereof, or of the threat or commencement by such holder of
any enforcement action because of such asserted default or
noncompliance (including, without limitation, any shareholder
suits, derivative actions, suits against the officers and/or
directors, or similar proceedings).
12.8.5. Borrower shall, promptly after becoming aware
thereof, deliver notice to Administrative Agent of any pending
or threatened strike, work stoppage, unfair labor practice
claim or other labor dispute affecting a Covered Person which
has or is reasonably likely to have a Material Adverse Effect
on any Covered Person.
12.8.6. Borrower shall promptly deliver notice to
Administrative Agent of any change in the name, state of
organization, or form of organization of any Covered Person.
12.8.7. Borrower shall, promptly after becoming aware
thereof, deliver notice to Administrative Agent of any event
that has or is reasonably likely to have a Material Adverse
Effect on any Covered Person.
12.8.8. Borrower shall, promptly after becoming aware
thereof, deliver notice to Administrative Agent of an actual
or alleged violation of any Material Law applicable to a
Covered Person or the property of a Covered Person.
12.8.9. Borrower shall notify Administrative Agent promptly
in writing of any fact or condition of which Borrower is aware
which materially and adversely affects the value of its assets
taken as a whole.
12.9. BORROWING OFFICER. Borrower shall keep on file with
Administrative Agent at all times an appropriate instrument naming each
Borrowing Officer.
12.10. ACCOUNTING SYSTEM; TRACING OF PROCEEDS. Each Covered Person
shall maintain a system of accounting established and administered in
accordance with GAAP. Each Covered
26
Person shall maintain detailed and accurate records of all transfers of
any proceeds of the Loans from Borrower to such Covered Person.
Borrower shall maintain detailed and accurate records of proceeds of
the Loans and transfers of proceeds of the Loans (i) received by it
from the Lenders, (ii) transferred from it to any other Covered Person,
and (iii) received by it from another Covered Person. Borrower agrees
that (a) the business operations of Borrower and each Covered Person
are interrelated and complement one another, and such entities have a
common business purpose and common management, and (b) the proceeds of
Advances hereunder will benefit Borrower and each Covered Person,
severally and jointly, regardless of which Borrower requests or
receives part or all of any Advance.
12.11. FINANCIAL STATEMENTS. Borrower shall deliver to Administrative
Agent for each Lender:
12.11.1. ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
close of each fiscal year of Borrower (or, if earlier, such
date as the Borrower is required to file an annual report on
form 10-K with the SEC), year-end consolidated and, unless
otherwise noted, consolidating financial statements of
Borrower and its Subsidiaries, containing a balance sheet,
income statement, statement of cash flows (consolidated only)
and an audit report without qualification by an independent
certified public accounting firm selected by Borrower and
satisfactory to Administrative Agent, and accompanied by (i) a
Compliance Certificate of any of the Chief Financial Officer,
Vice President, Finance or Treasurer of Borrower, and (ii) the
management letter and report on internal controls delivered by
such independent certified public accounting firm in
connection with their audit, if any.
12.11.2. MONTHLY FINANCIAL STATEMENTS; QUARTERLY COMPLIANCE
CERTIFICATE. Within 30 days after the end of each fiscal
month, unaudited consolidated financial statements and, unless
otherwise noted, consolidating summary financial statements of
Borrower for each of the fiscal months not covered by the
latest year-end financial statements, in each case containing
a balance sheet, income statement, and statement of cash flows
(only quarterly and only consolidated); and in connection with
the delivery of such Financial Statements at the end of each
fiscal quarter, a Compliance Certificate of any of the Chief
Financial Officer, Vice President, Finance or Treasurer of
Borrower.
Each Compliance Certificate shall be in the form of Exhibit 12.11,
shall contain detailed calculations of the financial measurements
referred to in Section 14 for the relevant periods, and shall contain
statements by the signing officer to the effect that, except as
explained in reasonable detail in such Compliance Certificate, (i) the
attached Financial Statements are complete and correct in all material
respects (subject, in the case of Financial Statements other than
annual, to normal year-end audit adjustments) and have been prepared in
accordance with GAAP applied consistently throughout the periods
covered thereby and with prior periods (except as disclosed therein)
(ii) all of the Representations and Warranties are true and correct as
of the date such certification is given as if made on such date, and
(iii) there is no Existing Default. If any Compliance Certificate
delivered to Administrative Agent discloses that a representation or
warranty is not true and correct, or that there is an Existing Default
that has not been waived in writing by Required Lenders, such
Compliance Certificate shall state what action Borrower has taken or
proposes to take with respect thereto.
12.12. OTHER FINANCIAL INFORMATION; TAX INFORMATION. Borrower shall
also deliver the following to Administrative Agent:
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12.12.1. STOCKHOLDER REPORTS. Promptly upon being available,
copies of any proxy statements, financial statements and
reports which Borrower makes available to its stockholders,
members or partners.
12.12.2. PENSION BENEFIT PLAN REPORTS. Promptly upon the
reasonable request of Administrative Agent at any time or from
time to time, a copy of each annual report or other filing or
notice filed with respect to each Pension Benefit Plan of a
Covered Person or an ERISA Affiliate of a Covered Person.
12.12.3. TAX RETURNS. Promptly upon the reasonable request of
Administrative Agent at any time or from time to time, a copy
of each federal, state, or local tax return or report filed by
Borrower.
12.12.4. TAX MATTERS. In the event Borrower determines to take
any action inconsistent with its intention set forth in
Section 10.29, it will promptly notify the Administrative
Agent thereof. If Borrower so notifies the Administrative
Agent, Borrower acknowledges that one or more of the
Administrative Agent and the Lenders may treat its Loans
and/or its interest in Swingline Loans and/or Letters of
Credit as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and the Administrative Agent
and such Lender or Lenders, as applicable, will maintain the
lists and other records required by such Treasury Regulation.
Promptly after Borrower has notified the Administrative Agent
of any intention by Borrower to treat Loans and/or Letters of
Credit and related transactions as being a "reportable
transaction" (within the meaning of Treasury Regulation
Section 1.6011-4), a duly completed copy of IRS Form 8886 or
any successor form.
12.13. ANNUAL PROJECTIONS. Within 60 days after the first day of each
fiscal year of Borrower, projected balance sheets, statements of income
and expense, and statements of cash flows for Borrower and every other
Covered Person as of the end of and for each fiscal month of such
fiscal year and on an annual basis for the next three succeeding fiscal
years, in such detail as Administrative Agent may reasonably require.
12.14. OTHER INFORMATION. Promptly upon the reasonable request of
Administrative Agent, Borrower shall promptly deliver to Administrative
Agent such other information about the business, operations, revenues,
financial condition, property, or business prospects of Borrower and
every other Covered Person as Administrative Agent may, from time to
time, reasonably request.
12.15. ACCESS TO OFFICERS AND AUDITORS. Each Covered Person shall,
within three Business Days of a request from a Lender or Administrative
Agent, permit any Lender and Administrative Agent and each of their
representatives and agents to discuss the business, operations,
revenues, financial condition, property, or business prospects of such
Covered Person with its officers, employees, accountants and
independent auditors as often as Administrative Agent may request in
its reasonable discretion, and such Covered Person shall direct such
officers, employees, and accountants, and request its independent
auditors, to cooperate with Administrative Agent, Lenders, and their
representatives and agents, and make full disclosure to Administrative
Agent, Lenders, and their representatives and agents, of those matters
that they may deem relevant to the continuing ability of Borrower
timely to pay and perform the Loan Obligations.
12.16. ACQUISITION DOCUMENTS. Borrower shall fully perform all of its
material obligations under all Acquisition Documents, and shall enforce
all of its rights and remedies thereunder as it
28
deems appropriate in its reasonable business judgment; provided,
however, that Borrower shall not take any action or fail to take any
action which would result in a waiver or other loss of any right or
remedy of Borrower thereunder which could reasonably likely have a
Material Adverse Effect.
12.17. EXISTING LCs. Borrower has executed, an enforceable,
unconditional reimbursement agreement with LaSalle for each of the
Existing LCs and each other Letter of Credit and Borrower has an
unconditional obligation to reimburse LaSalle for any drawings
thereunder.
12.18. FURTHER ASSURANCES. Borrower shall execute and deliver, or
cause to be executed and delivered, to Administrative Agent such
documents and agreements, and shall take or cause to be taken such
actions, as Administrative Agent may from time to time reasonably
request to carry out the terms and conditions of this Agreement and the
other Loan Documents.
12.19. EXISTING UCC FILINGS. Borrower shall on or before October 15,
2003 (or such later date as Administrative Agent may approve in its
reasonable discretion), cause the amendment of all UCC filings of
record against Borrower and each Covered Person in a manner reasonably
acceptable to Administrative Agent that Administrative Agent reasonably
believes to be necessary so that such UCC financing statements no
longer include assets that should not be subject to any such Security
Interest.
12.20. COVERED PERSONS. Borrower shall cause each other Borrower and
each Covered Person to comply with each of the terms and provisions of
this Agreement and the other Loan Documents, and Borrower acknowledges
and agrees that failure of Borrower or any Covered Persons to comply
with the terms of this Agreement and the other Loan Documents, shall be
a Default hereunder and thereunder.
12.21. PARITY WITH OTHER INDEBTEDNESS. Other than with respect to
Priority Indebtedness if and to the extent permitted under this
Agreement, Borrower will, and will cause each other Covered Person to,
execute all such documents and take all such actions as the
Administrative Agent may reasonably request in order to assure that at
all times (i) the Loan Obligations shall rank in right of payment
senior to or pari passu with all other Indebtedness of the Borrower and
each other Covered Person, and (ii) each Guarantor's obligations under
its Guaranty shall rank in right of payment senior to or pari passu
with all other Indebtedness of such Guarantor.
12.22. GUARANTEES. Upon the request of the Administrative Agent,
Borrower shall cause any Subsidiaries of Borrower to execute a Guaranty
of all of the Loan Obligations in form and substance reasonably
satisfactory to Administrative Agent and to provide such authorizing
resolutions, certificates of incumbency and other corporate documents
as may be reasonably requested by Administrative Agent in connection
therewith; provided, however, if, at any time after the date of this
Agreement, any Subsidiary shall enter into a guaranty in respect of the
Term Indebtedness (or any refinancing thereof), or otherwise become
directly or indirectly liable for, all or any part of the Term
Indebtedness (or any refinancing thereof), the Borrower shall promptly
notify Administrative Agent and Borrower shall promptly cause each such
Subsidiary contemporaneously with entering into any such guaranty or
becoming directly or indirectly liable in respect of such Term
Indebtedness, to guaranty the Loan Obligations by executing a Guaranty
(such Guaranty to be in form and substance satisfactory to
Administrative Agent).
13. NEGATIVE COVENANTS. Borrower covenants and agrees that, while any of the
Commitments remain in effect and until all of the Loan Obligations are fully and
indefeasibly paid, no Letters of Credit are
29
outstanding and the Letter of Credit Exposure is zero, Borrower shall not,
directly or indirectly, do any of the following, or permit any Covered Person to
do any of the following:
13.1. INVESTMENTS. Make any Investments in any other Person except
the following:
13.1.1. Investments in (i) interest-bearing United States
government obligations; (ii) certificates of deposit issued by
any Lender; (iii) prime commercial paper rated A1 or better by
Standard and Poor's Corporation or Prime P1 or better by
Moody's Investor Service, Inc.; (iv) agreements involving the
sale to a Covered Person of United States government
securities and their guarantied repurchase the next Business
Day by a commercial bank chartered under the Laws of the
United States or any state thereof which has capital and
surplus of not less than $250,000,000, or (v) certificates of
deposit issued by and time deposits which do not extend more
than 364 days or money market accounts, with any commercial
bank chartered under the Laws of the United States or any
state thereof which has capital and surplus of not less than
$250,000,000.
13.1.2. Accounts arising in the ordinary course of business
and payable in accordance with Borrower's or such other
Covered Person's customary trade terms.
13.1.3. Any Investments that are Permitted Acquisitions.
13.1.4. Investments existing on the Execution Date and
disclosed in section 10.17 of the Disclosure Schedule.
13.1.5. Notes received by a Covered Person in settlement of
Indebtedness of other Persons to such Covered Person that was
incurred in the ordinary course of such Covered Person's
business.
13.1.6. Investments by any Covered Person in any other
Covered Person if such Covered Person in which the Investment
is made is also a Guarantor, provided, however, Investments in
Layne Energy must be by the Borrower and must be in the form
of Indebtedness.
13.1.7. Investments in the form of a loan to a Person to
finance the purchase of real property, personal property,
services or equipment from the Borrower or any Covered Person
provided that (a) if such loan exceeds $200,000, the Borrower
or such Covered Person shall retain a Security Interest on any
property or equipment sold to the extent permitted under
applicable law, (b) the aggregate principal amount of all such
loans to any Person or its Affiliates outstanding at any time
shall not exceed $2,500,000 in the aggregate at any time, and
(c) the aggregate principal amount of all such loans
outstanding at any time shall not exceed $5,000,000 in the
aggregate;
13.1.8. Investments in water wells drilled by the Borrower or
any Covered Person for local municipalities in connection with
which such municipality has entered into a contract with the
Borrower or such Covered Person to purchase water from the
well and to purchase the well from the Borrower or such other
Covered Person at a future date; provided the aggregate amount
invested by the Borrower and all other Covered Persons in all
such investments shall not exceed $2,500,000 in the aggregate
outstanding at any time; and
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13.1.9. So long as no Default has occurred and is continuing
or would be caused thereby, making Investments (excluding
interest on intercompany indebtedness and royalties) in (i)
Persons that are not Subsidiaries and (ii) Subsidiaries that
are not Guarantors; provided that the aggregate amount of all
such Investments in clauses (i) and (ii) made after the date
of this Agreement shall not at any time exceed 15% of Tangible
Net Worth plus up to $5,000,000 in the aggregate outstanding
at any time with respect to Layne Water Development of Texas,
LLC, in each case, as calculated as of any date.
13.1.10. Loans or advances to employees not in excess of
$750,000 in the aggregate outstanding at any time.
13.2. INDEBTEDNESS. Create, incur, assume, or allow to exist any
Indebtedness of any kind or description, except the following:
13.2.1. Indebtedness to trade creditors incurred in the
ordinary course of business, to the extent that it is not
overdue past the original due date by more than 90 days
(unless such Indebtedness is being contested in good faith by
such Covered Person and adequate reserves under GAAP have been
made).
13.2.2. The Loan Obligations.
13.2.3. The Term Indebtedness up to $60,000,000 in principal
outstanding in the aggregate at any one time if the
Intercreditor Agreement remains in effect and if at the time
of funding the Term Indebtedness there is no Existing Default
and the funding of any Term Indebtedness would not reasonably
likely give rise to a Default or Event of Default.
13.2.4. Priority Indebtedness up to 10% of Tangible Net Worth
as calculated as of any date.
13.2.5. Indebtedness to finance the premiums for Borrower's
insurance policies, which Indebtedness shall not exceed
$2,000,000.00 in the aggregate at any one time outstanding for
Borrower and all Covered Persons on a consolidated basis.
13.2.6. Indebtedness disclosed on section 10.18 of the
Disclosure Schedule, provided, however, the Indebtedness
disclosed thereon may not be increased above the amounts
existing on the Effective Date (except if such Indebtedness
would be subject to the terms of and permitted by the terms of
Section 13.1.6).
13.3. INDIRECT OBLIGATIONS. Create, incur, assume or allow to exist
any Indirect Obligations in an amount not to exceed $2,000,000 in the
aggregate outstanding at any time, except Indirect Obligations existing
on the Execution Date and disclosed on section 10.19 of the Disclosure
Schedule and Indirect Obligations of a Covered Person with respect to
the Permitted Indebtedness of any other Covered Person.
13.4. PREPAYMENT. Make any nonscheduled prepayment on any
Indebtedness if there is an Existing Default or a Default or Event of
Default is reasonably likely to occur as a result of any such payment.
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13.5. SECURITY INTERESTS. Create, incur, assume or allow to exist
any Security Interest upon all or any part of its property, real or
personal, now owned or hereafter acquired, except the following:
13.5.1. Security Interests for taxes, assessments or
governmental charges not delinquent or being diligently
contested in good faith and by appropriate proceedings and for
which adequate book reserves in accordance with GAAP are
maintained.
13.5.2. Security Interests arising out of deposits in
connection with workers' compensation insurance, unemployment
insurance, old age pensions, or other social security or
retirement benefits legislation.
13.5.3. Deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds, and
other obligations of like nature arising in the ordinary
course of business.
13.5.4. Security Interests imposed by any Law, such as
mechanics', workmen's, materialmen's, landlords', carriers',
or other like Security Interests arising in the ordinary
course of business which secure payment of obligations which
are not past due or which are being diligently contested in
good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP are maintained on Borrower's
books.
13.5.5. Minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or zoning
or other restrictions as to use of real property, that are
necessary for the conduct of the operations of the Borrower
and each Covered Person that customarily exist on properties
of corporations engaged in similar businesses and are
similarly situated and that do not in any event materially
impair their value or their use in the operations of the
Borrower and each other Covered Person;
13.5.6. Security Interests existing on the Effective Date and
disclosed on section 10.20 to the Disclosure Schedule.
13.5.7. Any attachment or judgment Lien if and only if (A)
the judgment it secures shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal or (B) the Borrower or the such other Covered
Person shall fail to actively contest such attachment or
judgment Lien within thirty (30) days after the entry thereof
and post within such time period a bond therefor in the full
amount of the judgment plus applicable statutory costs and
attorneys' fees or such other amount as may be ordered by the
applicable court; provided the aggregate amount of such
attachment or judgment Liens shall not secure obligations in
excess of $1,000,000 at any time;
13.5.8. Security Interests granted to joint venture partners
(including other Persons who Borrower or any other Covered
Person is in a business relationship with respect to coalbed
methane gas projects) on equity interests owned by the
Borrower or any Covered Person in connection with the
formation of a Person (other than an individual) in which the
ownership interests are held in part by the Borrower or a
Covered Person and a non-Affiliated Person; provided that such
Security Interests is limited solely to the equity in the
joint venture with no recourse to the Borrower or such Covered
Person except to the
32
extent disclosed on section 10.20(2) of the Disclosure
Schedule for such projects existing on the Effective Date.
13.5.9. A Security Interest in favor of the holder of the
Indebtedness permitted under Section 13.2.5 on Borrower's
insurance policies and any unearned premiums refundable with
respect thereto, which Security Interests may only secure the
Indebtedness of Borrower incurred pursuant to Section 13.2.5
herein to finance the annual premiums due with respect to such
insurance policies.
13.5.10. To the extent constituting Permitted Indebtedness,
Security Interests securing Priority Indebtedness.
Notwithstanding anything contained herein to the contrary, except to
the extent disclosed on section 10.20(2) of the Disclosure Schedule for
projects existing on the Effective Date, in no event shall the Borrower
or any other Covered Person permit any Security Interest at any time on
any of their respective current assets, which include without
limitation inventory, accounts, notes receivable and similar items. At
no time shall Borrower or any Covered Person allow to exist on or
against its assets any financing statements, mortgages or similar
documents, except as permitted in Section 13.5.6.
13.6. ACQUISITIONS. Acquire stock, membership interests, or any
other equity interest in a Person, or acquire all or substantially all
of the assets of a Person (including without limitation assets
comprising all or substantially all of an unincorporated business unit
or division of any Person), except for Permitted Acquisitions.
Permitted Acquisition means an acquisition of the stock, membership
interests, or any other equity interest in a Person, or the acquisition
of all or substantially all of the assets of a Person (including
without limitation assets comprising all or substantially all of an
unincorporated business unit or division of any Person), which
satisfies each of the following conditions: (i) the Borrower or the
Guarantor is the Acquiring Company (and if the Covered Person making
the acquisition is not a party to the Guaranty, it will execute a
joinder to the Guaranty or execute a new Guaranty, in each case in form
and substance reasonably acceptable to Administrative Agent), (ii) the
Borrower or a Guarantor is the Surviving Company, (iii) the Target
Company is in a substantially similar line of business as a Borrower
except as otherwise permitted in Section 13.13; (iv) Target Company has
an EBITDA (provided, however, that with respect to the purchase of
assets of less than an entire Target Company, EBITDA will be calculated
on a proforma basis prepared in good faith based on reasonable
assumptions) in excess of zero Dollars for the twelve month period
ended on the last day of the calendar month most recently ended prior
to the date such acquisition is consummated, (v) there is no Existing
Default, no Default or Event of Default has occurred and is continuing,
and no Default or Event of Default will occur or is reasonably likely
to occur as a result of or due to such acquisition (vi) the Maximum
Available Amount exceeds the Aggregate Revolving Loan by at least
$10,000,000 after giving effect to such acquisition, (vii) the purchase
price (including without limitation any deferred purchase price, seller
notes, assumed Indebtedness, or similar items) together with all
expenses incurred in connection with such acquisition does not exceed
$7,500,000 in the aggregate for all Acquisition since the Effective
Date, (viii) simultaneously with the closing of such acquisition, the
Target Company or the Surviving Company, as the case may be, executes
and delivers to Administrative Agent, if requested by the
Administrative Agent, a joinder agreement satisfactory to
Administrative Agent in which such Target Company or Surviving Company
becomes a Guarantor under the Guaranty executed by all other
Subsidiaries; (ix) prior to the closing of such acquisition, a
Responsible Officer of Borrower delivers to Administrative Agent a
certificate on behalf of Borrower certifying that such acquisition is a
Permitted Acquisition; (x) such acquisition is friendly, rather than
hostile, in nature; and (xi) Borrower has,
33
no less than 20 days prior to making such acquisition, prepared and
furnished to Administrative Agent the proforma financial statements
described below for the Target Company (if such acquisition is
structured as a purchase of equity) or the Surviving Company (if such
acquisition is structured as a purchase of assets or a merger),
demonstrating to the satisfaction of Administrative Agent that the
Target Company, all Surviving Companies, and Borrower, as the case may
be, will be Solvent upon consummation of such acquisition and upon the
passage of time thereafter, and that none of the covenants in Section
14 will be violated as a consequence of such acquisition or with the
passage of time thereafter, and Borrower has also provided to
Administrative Agent, no less than 20 days prior to making such
acquisition, copies of the audited financial statements (if available,
or unaudited financial statements if no audited financial statements
exist) for the Target Company for the three fiscal years (if available)
most recently ended and for each of the completed fiscal quarters in
the then current fiscal year. The proforma financial statements
referred to in clause (xi) shall contain consolidated and consolidating
balance sheets, income statements, statements of cash flows and such
other reports and disclosures of Borrower as well as the Target Company
(if such Permitted Acquisition is structured as a purchase of equity)
or the Surviving Company (if such Permitted Acquisition is structured
as a purchase of assets or a merger) and shall cover such forecast
periods, as Administrative Agent may in its reasonable discretion
require.
13.7. DISPOSAL OF PROPERTY. Transfer any of its assets except (i)
sales of inventory in the ordinary course of business; (ii) the sale of
obsolete or unused assets that are obsolete or are no longer necessary
or productive in the ordinary course of the Borrower's or such Covered
Person's business; (iii) any Transfer of assets from a Covered Person
to another Covered Person who is also a Guarantor; and (iv) Transfer of
assets not included in the foregoing clauses (i), (ii) and (iii), not
to exceed $2,000,000 in the aggregate during any fiscal year and not to
exceed $5,000,000 in the aggregate during the term of this Agreement.
At no time shall Borrower or any Covered Person sell any of its notes
receivables or accounts receivable.
13.8. GUARANTIES. Permit or allow any Covered Person to deliver a
guaranty in respect of the Term Indebtedness (or any refinancing
thereof) or otherwise become directly or indirectly liable for, all or
any part of the Term Indebtedness (or any refinancing thereof) unless
the parties to the Term Indebtedness have signed an Intercreditor
Agreement and such Covered Person has provided a Guaranty.
13.9. DISTRIBUTIONS; REDEMPTIONS. Permit or allow, or permit or
allow any Covered Person to, (a) declare or pay any dividends on any of
its capital stock (other than stock dividends), (b) purchase or redeem
any such stock or any warrants, options or other rights in respect of
such stock, (c) make any other distribution to shareholders (other than
the issuance of stock, or stock options in respect thereof, to
directors, officers and employees pursuant to written incentive
compensation plans), (d) prepay, purchase or redeem any subordinated
Indebtedness or (e) set aside funds for any of the foregoing; provided,
however, that (i) any Subsidiary may declare and pay dividends to
Borrower or to a wholly-owned Subsidiary, and (ii) so long as there is
no Existing Default and no Default or Event of Default is reasonably
likely to occur from such payment, Borrower may purchase stock of the
Borrower on the open market and re-issue such stock to officers and
employees of the Borrower in connection with written incentive
compensation plans or other agreements with officers, directors or
employees of the Borrower approved by the Board of Directors of the
Borrower or any compensation committee thereof and the Borrower may pay
dividends to its shareholders and/or repurchase stock of the Borrower,
provided that the aggregate amount of all such dividends and
repurchases described in this clause (ii) shall not exceed 50% of
Borrower's annual consolidated Net Income in any fiscal year if
declared and paid within ninety days follow such fiscal year end.
34
13.10. CHANGE OF CONTROL. (A) With respect to (i) Borrower, merge or
consolidate with or into another Person, except in connection with a
Permitted Acquisition, the Borrower may merge with a Target Company so
long as it is the Surviving Company and the core managers of the
Borrower prior to the merger or consolidation shall be the core
managers of the continuing or surviving entity, (ii) with respect to
any other Covered Person (other than Borrower, which is addressed in
clause (i)), merge or consolidate with or into another Person except
another Covered Person and except in connection with a Permitted
Acquisition, a Covered Person (other than Borrower, which is addressed
in clause (i)) may merge with a Target Company so long as it is the
Surviving Company and either is or becomes a Guarantor; or (B) (i) with
respect to Borrower, permit any Person or Group to become the record or
beneficial owner, directly or indirectly, on a fully diluted basis, of
securities representing 30% or more of the voting power of Borrower's
then outstanding securities having the power to vote or 30% or more of
Borrower's then outstanding capital stock, or to acquire the power to
elect a majority of the Board of Directors of Borrower, or (ii) with
respect to any Covered Person other than Borrower, permit any Person or
Group other than Borrower or another Covered Person to own, directly or
indirectly, any capital stock of such Covered Person (except, with
regards to Covered Persons incorporated or formed under the laws of a
jurisdiction outside the United States, director/officer qualifying
shares owned by such directors or officers).
13.11. AMENDMENT TO CHARTER DOCUMENTS; AMENDMENTS TO TERM
INDEBTEDNESS DOCUMENTS. Change its state of incorporation or formation;
otherwise amend, modify, supplement, restate, replace, or change any of
its Charter Documents, except to the extent such change could not
reasonably be expected to adversely effect Administrative Agent or any
Lender. Amend, modify, supplement, restate, replace, or change any of
the Term Indebtedness Documents, except to the extent such change could
not reasonably be expected to materially adversely effect
Administrative Agent or any Lender.
13.12. CAPITAL STRUCTURE; EQUITY SECURITIES. Make any change in the
capital structure of any Covered Person which has or is reasonably
likely to have a Material Adverse Effect on any Covered Person; or
issue or create any stock, membership interest, or other equity
interest (or class or series thereof, or non-equity interest that is
convertible into stock, membership interests or other equity interest
(or class or series thereof), in any Covered Person, except stock,
membership interests, or other equity interests (or class or series
thereof) that are subordinated in right of payment to all the Loan
Obligations in a manner satisfactory to Administrative Agent.
13.13. CHANGE OF BUSINESS. Engage in any business other than
substantially as conducted on the Effective Date; provided that the
Borrower or any Covered Person may engage in other businesses so long
as the aggregate amount invested (whether via acquisition of assets or
stock, loans or advances, or otherwise) by the Borrower and all other
Covered Persons in all such businesses after the Effective Date shall
not exceed $3,000,000 in the aggregate.
13.14. CONFLICTING AGREEMENTS. Enter into any agreement, that would,
if fully complied with by it, result in a Default or Event of Default
either immediately or upon the elapsing of time.
13.15. SALE AND LEASEBACK TRANSACTIONS. Enter into any arrangement
with any lender or investor or to which such lender or investor is a
party providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be Transferred by the
Borrower or any Subsidiary to such lender or investor or to any Person
to whom funds have been or are to be advanced by such lender or
investor on the security of such property or rental obligations of the
Borrower or any Subsidiary unless (i) such property is newly acquired
or newly
35
constructed property and the Borrower or a Subsidiary shall enter into
a lease, as lessee, within 90 days following the acquisition or
construction of such property, (ii) the aggregate value of property
acquired and sold pursuant to clause (i) hereof shall be less than
$2,500,000 in the aggregate in any fiscal year, and (iii) no Default or
Event of Default has occurred and is continuing and no Default or Event
of Default is reasonably likely to occur as a result of such
transaction.
13.16. FISCAL YEAR. Change its fiscal year from one ending on January
31.
13.17. TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT ON COVERED
PERSON. Enter into any transaction which has or is reasonably likely to
have a Material Adverse Effect on any Covered Person; or enter into any
transaction, or take or contemplate taking any other action, or omit or
contemplate omitting to take any action, which any Responsible Officer
knows, or reasonably should know is likely to cause a Default or Event
of Default hereunder.
13.18. TRANSACTIONS WITH AFFILIATES. Enter into or be a party to any
transaction or arrangement, including the purchase, sale or exchange of
property of any kind or the rendering of any service, with any
Affiliate (other than a Covered Person), or make any loans or advances
to any Affiliate (other than to a Covered Person and otherwise
permitted hereunder), except that each Covered Person may engage in
such transactions in the ordinary course of business and pursuant to
the reasonable requirements of its business and on fair and reasonable
terms substantially as favorable to it as those which it could obtain
in a comparable arm's-length transaction with a non-Affiliate. No
Covered Person may pay any management or other similar fees to any
Affiliate that is not a Covered Person. Notwithstanding the foregoing,
investments in Affiliates shall be permitted subject to the limitations
set forth in Section 13.1.9.
13.19. SUBSIDIARIES.
13.19.1. Sell or otherwise dispose of, or part with control
of, any shares of stock or Indebtedness of any Covered Person
(other than Borrower), except, unless there is an Existing
Default or a Default or Event of Default is reasonably likely
to occur as a result of the subject transaction and subject to
the other terms of this Agreement including, without
limitation, Section 13.7, (i) to the Borrower or another
Covered Person or (ii) that all shares of stock and
Indebtedness of any Subsidiary at the time owned by or owed to
the Borrower and all other Covered Persons may be sold as an
entirety for a cash consideration which represents the fair
value (as determined in good faith by the Board of Directors
of the Borrower) at the time of sale of the shares of stock
and Indebtedness so sold; provided that (A) such sale or other
disposition is treated as a Transfer of assets of such
Subsidiary and is otherwise permitted by this Agreement, and
(B) at the time of such sale, such Subsidiary shall not own,
directly or indirectly, any shares of stock or Indebtedness of
any other Subsidiary (unless all of the shares of stock and
Indebtedness of such other Subsidiary owned, directly or
indirectly, by the Borrower and all other Covered Persons are
simultaneously being sold as permitted by this Section).
13.19.2. Subject to the other terms of this Agreement
(although Section 13.7 shall not be applicable to the
transactions contemplated by this Section 13.19.2), sell up to
forty percent (40%) in the aggregate of the equity in Layne
Energy in one or more series of public offerings if: (i) no
Default or Event of Default has occurred and is continuing at
the time of such sale and no Default or Event of Default
occurs or is reasonably likely to occur from such sale, (ii)
for each of the two fiscal quarters prior to such sale, the
ratio in Section 14.3 is less than 2.25:1.00 with such
calculation being made as if Layne Energy
36
was not a Subsidiary for such periods and therefore excluded
from such calculation; (iii) Layne Energy promptly following
formation is a Guarantor and remains a Guarantor, but,
following any such initial public offering, only to the extent
of Layne Energy's Indebtedness to all Covered Persons taken as
a whole; and (iv) if Borrower chooses to repay Indebtedness
(such choice to be in Borrower's discretion) with the net
proceeds of any such initial public offering, then Borrower
shall repay the Loan Obligations and the Term Indebtedness on
a pro rata basis (unless the holders of the Term Indebtedness
decline such offer as set forth in the Term Indebtedness
Documents, in which case such proceeds shall be used solely to
repay the Loan Obligations), provided, however, the first
$5,000,000 of any such net proceeds of an initial public
offering may be used solely to repay the Loan Obligations.
13.20. MOST FAVORED LENDER. Enter into, assume or otherwise be bound
or obligated under any agreement creating or evidencing Indebtedness in
excess of $500,000 containing one or more Additional Covenants or
Additional Defaults, without the prior written consent of the Required
Lenders; provided, however, in the event the Borrower or any other
Covered Person shall enter into, assume or otherwise become bound by or
obligated under any such agreement without the prior written consent of
the Required Lenders, the terms of this Agreement shall, without any
further action on the part of the Borrower and each other Covered
Person or any Lender or the Administrative Agent, be deemed to be
amended automatically to include each Additional Covenant and each
Additional Default contained in such agreement. The Company further
covenants to promptly execute and deliver at its expense (including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent) an amendment to this Agreement in form and
substance satisfactory to the Required Lenders evidencing the amendment
of this Agreement to include such Additional Covenants and Additional
Defaults, provided that the execution and delivery of such amendment
shall not be a precondition to the effectiveness of such amendment as
provided for in this Section, but shall merely be for the convenience
of the parties hereto. Notwithstanding the foregoing, the Term
Indebtedness Documents as they exist on the Effective Date are not
implicated by this Section.
14. FINANCIAL COVENANTS.
14.1. SPECIAL DEFINITIONS. As used in this Section 14 and elsewhere
herein, the following capitalized terms have the following meanings:
EBITDA shall mean, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated Net Income of
such Person for such period determined in accordance with GAAP, minus
(b) the sum of (i) income tax benefits, (ii) interest income, (iii)
gain from extraordinary items for such period, (iv) any aggregate net
gain (but not any aggregate net loss) during such period arising from
the sale, exchange or other disposition of capital assets by such
Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and
all securities), and (v) any other non-cash gains that have been added
in determining consolidated Net Income, in each case to the extent
included in the calculation of consolidated Net Income of such Person
for such period in accordance with GAAP, but without duplication, plus
(c) the sum of (i) any provision for income taxes, (ii) Interest
Expense, (iii) loss from extraordinary items for such period, (iv) the
amount of non-cash charges (including depreciation and amortization but
excluding insurance expense) for such period, (v) amortized debt
discount for such period, (vi) any aggregate net loss (but not any
aggregate net gains) during such period arising from the sale, exchange
or other disposition of capital assets by such Person, and (vii) the
amount of any deduction to consolidated Net Income as the result of any
grant to any members of the management of such Person of any stock, in
each
37
case to the extent included in the calculation of consolidated Net
Income of such Person for such period in accordance with GAAP, but
without duplication. For purposes of this definition, the following
items shall be excluded in determining consolidated Net Income of a
Person: (1) the income (or deficit) of any other Person accrued prior
to the date it became a Covered Person of, or was merged or
consolidated into, such Person or any of such Person's Covered Persons;
(2) equity earnings of other Persons accounted for on an equity basis,
except to the extent received, on a consolidated basis, as cash
dividends or distributions; (3) equity losses of other Persons
accounted for on an equity basis, except to the extent such losses
represent, on a consolidated basis, cash losses; (4) the undistributed
earnings of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any contractual
obligation or requirement of law applicable to such Subsidiary; (5) any
restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during
such period; (6) any write-up of any asset; (7) any net gain from the
collection of the proceeds of life insurance policies; (8) any net gain
arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (9) in the case of a
successor to such Person by consolidation or merger or as a transferee
of its assets, any earnings of such successor prior to such
consolidation, merger or transfer of assets, (10) any deferred credit
representing the excess of equity in any Subsidiary of such Person at
the date of acquisition of such Subsidiary over the cost to such Person
of the investment in such Subsidiary, and (11) any income, gain or loss
during such period from any discontinued operations or the disposition
thereof.
EBITDAR shall mean, for any Person, for any period, EBITDA plus Rental
Expense.
Fixed Charges means, for any period of calculation, the sum of (i)
Rental Expense, (ii) Interest Expense, and (iii) all dividends,
distributions and redemptions with respect to any equity interests in
Borrower made in such period.
Intangibles means and includes, but is not limited to, at any date,
general intangibles; software developed in-house or purchased, licensed
or leased; accounts receivable and advances due from officers,
directors, employees, stockholders, members, and owners; licenses; good
will; prepaid expenses; escrow deposits; covenants not to compete; the
excess of cost over book value of acquired assets; franchise fees;
organizational costs; finance reserves held for recourse obligations;
capitalized research and development costs; the capitalized cost of
patents, trademarks, service marks and copyrights net of amortization;
and other intangible assets.
Interest Expense means for any period of calculation, the sum of any
interest and prepayment charges (except (i) any prepayment fees and
deferred charges associated with the Term Indebtedness Documents, and
(ii) the prepayment fees and deferred charges of the Existing
Indebtedness), if any, including without limitation, all net amounts
payable (or receivable) under Hedge Obligations and all imputed
interest in respect of Capitalized Lease Obligations paid or payable by
the Borrower and all other Covered Persons, during such period
consolidated or combined in accordance with GAAP.
Margined Assets means for any period of calculation, with respect to
the Borrower and all other Covered Persons on a consolidated basis the
sum of (i) 100% of cash and cash equivalents, plus (ii) 80% of customer
accounts receivable and costs and estimated earnings in excess of
billings on uncompleted contracts after deducting all reserves for bad
debts and other reserves applicable thereto, plus (iii) 50% of
inventories after deducting all reserves for obsolete inventory,
out-of-specification inventory and other reserves applicable thereto,
plus (iv) 50% of the book value of
38
property, plant and equipment after deducting all depreciation,
amortization and reserves applicable thereto.
Net Income means, for any computation period, with respect to the
Borrower and all other Covered Persons on a consolidated basis (other
than any Subsidiary which is restricted from declaring or paying
dividends or otherwise advancing funds to its parent whether by
contract or otherwise), cumulative net income earned during such period
as determined in accordance with GAAP.
Net Worth means, as at any time of determination thereof, an amount
equal to consolidated stockholders' equity of the Borrower and its
Subsidiaries determined in accordance with GAAP (less amounts
attributable to redeemable preferred stock and common stock).
Rental Expense means with reference to any period, the aggregate amount
of all payments for rent or additional rent (including all payments for
taxes and insurance made directly to the lessor, but excluding payments
for maintenance, repairs, alterations, construction, demolition and the
like) for which the Borrower and all other Covered Persons are directly
or indirectly liable (as lessee or as guarantor or other surety) under
all Operating Leases (as defined under GAAP) in effect at any time
during such period.
Senior Indebtedness means Total Funded Indebtedness plus the Letter of
Credit Exposure.
Tangible Net Worth means Net Worth less Intangibles.
Total Funded Indebtedness means the outstanding principal balance of
the Loan Obligations (excluding the Letter of Credit Exposure), other
Indebtedness for borrowed money including without limitation the Term
Indebtedness, and the initial capitalized cost of assets subject to
Capital Leases at the time of calculation; provided, however for
clarification the foregoing, for purposes of this definition only does
include: (i) Indebtedness secured by any Security Interest (other than
Security Interests permitted by Section 13.5.8) existing on property
owned subject to such Security Interest, whether or not the
Indebtedness secured thereby shall have been assumed; (ii) Indirect
Obligations (other than endorsement of negotiable instruments for
collection in the ordinary course of business) and other contractual
commitments (whether direct or indirect in connection with obligations,
stock or dividends of any person) including, without limitation,
liabilities in respect of letters of credit or instruments serving a
similar function issued or accepted for such Person's account by banks
or other financial institutions, but only in respect of and to the
extent of payments made under such letters of credit or instruments by
the issuers thereof; (iii) mandatory redeemable preferred stock; (iv)
Hedge Obligations, (v) unfunded pension liabilities; (vi) preferred
stock of Subsidiaries held by third parties; and (vii) the outstanding
balance of the purchase price of uncollected Accounts subject at such
time to a sale of receivables or other similar transaction, regardless
of whether such transaction is effected without recourse or in a manner
which would not be reflected on the balance sheet in accordance with
GAAP; and provided further, however for clarification, the foregoing,
for purposes of this definition only, does not include: items of
contingency reserves, accrued insurance expense, minority interest,
pension liabilities (other than unfunded pension liabilities), reserves
for deferred income taxes, ordinary course trade accounts payable and
accrued expenses shown as current liabilities on the Financial
Statements; and.
Upon completion of a Permitted Acquisition, the Target shall be
included in each of these covenants contained in this Section 14 only
for periods after the completion of any such Permitted Acquisition.
39
All other capitalized terms used in this Section 14 shall have their
meanings and shall be determined under GAAP.
Whether or not expressly stated, all of the financial covenants
contained in this Section 14 shall be calculated on a consolidated
basis for the Borrower and all of its Subsidiaries.
14.2. MINIMUM FIXED CHARGE COVERAGE. Borrower shall cause the ratio
of EBITDAR (plus, for the fiscal quarters ending July 31, 2003, October
31, 2003, January 31, 2004 and April 30, 2004, up to $1,000,000 in
prepayment fees and deferred charges paid on the Existing
Indebtedness), for the most recently ended four fiscal quarters to
Fixed Charges for the most recent ended four fiscal quarters, for the
fiscal quarters ended on the dates specified below, calculated as of
the last day of each such fiscal quarter, to not be less than the ratio
specified for such period:
- --------------------------------------------------------------------------------
FOUR FISCAL QUARTER PERIOD ENDED ON OR
MOST RECENTLY BEFORE THE FOLLOWING DATES: MINIMUM FIXED CHARGE COVERAGE RATIO
- --------------------------------------------------------------------------------
the last day of each fiscal quarter (each 2.00:1.00
January 31, April 30, July 31, and
October 31) beginning with July 31, 2003
- --------------------------------------------------------------------------------
14.3. MAXIMUM RATIO OF TOTAL FUNDED INDEBTEDNESS TO EBITDA. Borrower
shall cause the ratio of Total Funded Indebtedness to EBITDA for the
most recently ended four fiscal quarters, for the fiscal quarters ended
on the dates specified below, calculated as of the last day of each
such fiscal quarter, to not be greater than the ratio specified for
such period:
- -----------------------------------------------------------------------------
FOUR FISCAL QUARTER PERIOD ENDED ON OR MAXIMUM RATIO OF TOTAL FUNDED
MOST RECENTLY BEFORE THE FOLLOWING DATES: INDEBTEDNESS TO EBITDA
- -----------------------------------------------------------------------------
July 31, 2003, October 31, 2003, January 31, 3.00:1.00
2004, April 30, 2004, July 31, 2004, October
31, 2004 and January 31, 2005
- -----------------------------------------------------------------------------
April 30, 2005 and the last day of each 2.75:1.00
fiscal quarter thereafter
- -----------------------------------------------------------------------------
14.4. MINIMUM TANGIBLE NET WORTH. Borrower will not permit Tangible
Net Worth at any time to be less than $64,158,000 plus the sum of (i)
50% of positive Net Income (without reduction for losses in any period)
for the fiscal year ended January 31, 2004 and thereafter semi-annually
(on a fiscal year basis) on each July 31 and January 31 thereafter, and
(ii) 100% of the net proceeds (meaning the net cash proceeds from the
sale or issuance of any equity securities, net of all underwriters'
discounts and commissions, other marketing and selling expenses) from
the issuance and sale of equity securities after the date hereof.
14.5. MINIMUM ASSET COVERAGE. This Section 14.5 shall be applicable
for each fiscal quarter in which the calculation in Section 14.3 is
reported on the applicable Compliance Certificate to be greater than or
equal to 2.00 to 1.00. Subject to the preceding sentence, Borrower
shall cause the ratio of Margined Assets for the most recently ended
four fiscal quarters to Senior Indebtedness for the most recent ended
four fiscal quarters, for the fiscal quarters ended on the dates
specified below, calculated as of the last day of each such fiscal
quarter, to not be less than the ratio specified for such period:
40
- -------------------------------------------------------------------------
FOUR FISCAL QUARTER PERIOD ENDED ON OR
MOST RECENTLY BEFORE THE FOLLOWING DATES: MINIMUM ASSET COVERAGE RATIO
- -------------------------------------------------------------------------
the last day of each fiscal quarter 1.00:1.00
(each January 31, April 30, July 31 and
October 31) beginning with July 31, 2003
- -------------------------------------------------------------------------
15. DEFAULT.
15.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an event of default (an Event of Default) under this
Agreement:
15.1.1. FAILURE TO PAY PRINCIPAL OR INTEREST. Failure of
Borrower to pay any principal of the Loans or interest accrued
thereon when due, or failure of Borrower to pay any of the
other Loan Obligations on or within three (3) days of becoming
due.
15.1.2. FAILURE TO PAY AMOUNTS OWED TO OTHER PERSONS. Failure
of any Covered Person (i) to make any payment due on
Indebtedness for borrowed money of such Covered Person over
$1,000,000 to Persons (other than Lenders under the Loan
Documents), which in either case continues unwaived beyond any
applicable grace period specified in the documents evidencing
such Indebtedness, or (ii) to pay any other Indebtedness
(other than Indebtedness described in clause (i)) over
$1,000,000 in the aggregate if the holder of such Indebtedness
commences any legal action against such Covered Person;
provided, however, that the foregoing Events of Default alone
described in clauses (i) and (ii) shall not constitute an
Event of Default to the extent such Indebtedness is being
contested in good faith by such Covered Person and such
Covered Person makes adequate reserves therefor under GAAP.
15.1.3. REPRESENTATIONS OR WARRANTIES. Any of the
Representations and Warranties is discovered to have been
false in any material respect when made.
15.1.4. CERTAIN COVENANTS. Failure of any Covered Person to
comply with the covenants in Sections 12.1, 12.11, 12.15, 13,
or 14.
15.1.5. OTHER COVENANTS. Failure of any Covered Person to
comply with of any of the terms or provisions of the Agreement
or any of the other Loan Documents applicable to it (other
than a failure which constitutes an immediate Event of Default
hereunder, or for which some other grace period is specified
in any other Section of this 15.1) which is not remedied or
waived in writing by Administrative Agent within 30 days after
the initial occurrence of such failure.
15.1.6. ACCELERATION AND DEFAULT OF OTHER INDEBTEDNESS. Any
Obligation (other than a Loan Obligation) of a Covered Person
for the repayment of $1,000,000 or more of borrowed money
becomes or is declared to be due and payable or required to be
prepaid (other than by an originally scheduled prepayment)
prior to the original maturity thereof or is in default after
the expiration of any cure periods. Any "Default" or "Event of
Default" (as such terms are defined in the Term Indebtedness
Documents) has occurred and is continuing. Any breach or
default by the holder of the Term Indebtedness of the
Intercreditor Agreement.
41
15.1.7. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any
default or event of default under any agreement to which a
Covered Person is a party (other than the Loan Documents),
which default or event of default continues unwaived beyond
any applicable grace period provided therein and has or is
reasonably likely to have a Material Adverse Effect.
15.1.8. BANKRUPTCY; INSOLVENCY; ETC. A Covered Person (i)
fails to pay, or admits in writing its inability to pay, its
debts generally as they become due, or otherwise becomes
insolvent (however evidenced); (ii) makes an assignment for
the benefit of creditors; (iii) files a petition in
bankruptcy, is adjudicated insolvent or bankrupt, petitions or
applies to any tribunal for any receiver or any trustee of
such Covered Person or any substantial part of its property;
(iv) commences any proceeding relating to such Covered Person
under any reorganization, arrangement, readjustment of debt,
dissolution or liquidation Law of any jurisdiction, whether
now or hereafter in effect; (v) has commenced against it any
such proceeding which remains undismissed for a period of 60
days, or by any act indicates its consent to, approval of, or
acquiescence in any such proceeding or the appointment of any
receiver of or any trustee for it or of any substantial part
of its property, or allows any such receivership or
trusteeship to continue undischarged for a period of 60 days;
or (vi) takes any action to authorize any of the foregoing.
15.1.9. JUDGMENTS; ATTACHMENT; SETTLEMENT; ETC. A final
judgment or judgments for the payment of money in excess of
$1,000,000 in the aggregate at any time are outstanding
against one or more of the Covered Persons and the same are
not, within 30 days after the entry thereof, discharged or
execution thereof stayed or bonded pending appeal, or such
judgments are not discharged prior to the expiration of any
such stay.
15.1.10. PENSION BENEFIT PLAN TERMINATION, ETC. Any Pension
Benefit Plan termination by the PBGC or the appointment by the
appropriate United States District Court of a trustee to
administer any Pension Benefit Plan or to liquidate any
Pension Benefit Plan; or any event which constitutes grounds
either for the termination of any Pension Benefit Plan by PBGC
or for the appointment by the appropriate United States
District Court of a trustee to administer or liquidate any
Pension Benefit Plan shall have occurred and be continuing for
thirty (30) days after Borrower has notice of any such event;
or any voluntary termination of any Pension Benefit Plan which
is a DEFINED BENEFIT PENSION PLAN as defined in Section 3(35)
of ERISA while such defined benefit pension plan has an
ACCUMULATED FUNDING DEFICIENCY, unless Administrative Agent
has been notified of such intent to voluntarily terminate such
plan and Required Lenders have given their consent and agreed
that such event shall not constitute a Default; or the plan
administrator of any Pension Benefit Plan applies under
Section 412(d) of the Code for a waiver of the minimum funding
standards of Section 412(1) of the Code and Required Lenders
determine that the substantial business hardship upon which
the application for such waiver is based could subject any
Covered Person or ERISA Affiliate of any Covered Person to a
liability in excess of $500,000 which is not reserved for in
accordance with GAAP.
15.1.11. LIQUIDATION OR DISSOLUTION. A Covered Person files a
certificate of dissolution under applicable state Law or is
liquidated or dissolved or suspends or terminates the
operation of its business, or has commenced against it any
action or proceeding for its liquidation or dissolution or the
winding up of its business, or takes any corporate action in
furtherance thereof, except in connection with the
consolidation of such a Covered Person and its assets with
another Covered Person and its assets.
42
15.1.12. SEIZURE OF ASSETS. The property of any Covered Person
is nationalized, expropriated, seized or otherwise
appropriated, or custody or control of such property or of any
Covered Person shall be assumed by any Governmental Authority
or any court of competent jurisdiction at the instance of any
Governmental Authority, unless the same is being contested in
good faith by proper proceedings diligently pursued and a stay
of enforcement is in effect, and is reasonably likely to have
a Material Adverse Effect.
15.1.13. RACKETEERING PROCEEDING. There is filed against any
Covered Person any civil or criminal action, suit or
proceeding under any federal or state racketeering statute
(including, without limitation, the Racketeer Influenced and
Corrupt Organization Act of 1970), which action, suit or
proceeding is not dismissed within 60 days and could result in
the confiscation or forfeiture of any material portion of its
assets.
15.1.14. LOSS TO ASSETS. Any loss, theft, damage or
destruction of any item or items of a Covered Person's assets
occurs which is reasonably likely to have a Material Adverse
Effect.
15.1.15. GUARANTY; GUARANTOR. Any Guaranty ceases to be in
full force and effect or any action is taken to discontinue or
assert the invalidity or unenforceability of any Guaranty or
any Guarantor fails to comply with any of the terms or
provisions of any Guaranty, or any representation or warranty
of any Guarantor therein is discovered to have been false in
any material respect when made, or any Guarantor denies that
it has any further liability under any Guaranty or gives
notice to Lender to such effect.
15.1.16. MATERIAL ADVERSE CHANGE. There occurs any action or
event or there is a nonoccurrence of any action or event,
which has or is reasonably likely to have a Material Adverse
Effect.
15.2. CROSS DEFAULT. An Event of Default under this Agreement will
automatically and immediately constitute a default under all other Loan
Documents without regard to any requirement therein for the giving of
notice or the passing of time.
15.3. RIGHTS AND REMEDIES.
15.3.1. TERMINATION OF COMMITMENTS. Upon an Event of Default
described in Section 15.1.8, the Commitments shall be deemed
canceled. Upon any other Event of Default, and at any time
thereafter, Required Lenders may cancel the Commitments. Such
cancellation may be, in either case, without presentment,
demand or notice of any kind, which Borrower expressly waives.
15.3.2. ACCELERATION. Upon an Event of Default described in
Section 15.1.8, all of the outstanding Loan Obligations shall
automatically become immediately due and payable. Upon any
other Event of Default, and at any time thereafter, Required
Lenders may declare all of the outstanding Loan Obligations
immediately due and payable. Such acceleration may be, in
either case, without presentment, demand or notice of any
kind, which Borrower expressly waives.
15.3.3. RIGHT OF SETOFF. Upon the occurrence and during the
continuation of an Event of Default, each Lender is hereby
authorized, without notice to Borrower (any such notice being
expressly waived by Borrower), to the fullest extent permitted
by law, to set off
43
and apply against the Loan Obligations any and all deposits
(general or special, time or demand, provisional or final) at
any time held, or any other Indebtedness at any time owing by
such Lender (or its Affiliate) to or for the credit or the
account of Borrower, irrespective of whether or not such
Lender shall have made any demand under this Agreement or the
Notes or any Guaranty and although such Loan Obligations may
be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including, without
limitation, other rights of setoff) which such Lender may
otherwise have. All amounts received by each Lender on account
of the Loan Obligations pursuant to this Section shall be paid
over promptly to Administrative Agent for distribution to
Lenders as provided in this Agreement and shall be applied as
provided in this Agreement.
15.3.4. RIGHTS GENERALLY. Upon the occurrence and during the
continuation of an Event of Default and acceleration of the
Loan Obligations as provided herein, and at any time and from
time to time thereafter, Administrative Agent and Lenders may
exercise any or all of its rights they may have under the Loan
Documents or otherwise available in equity or under any other
applicable Law.
15.3.5. JOINT AND SEVERAL. Each Obligation and liability to
the Letter of Credit Issuer, Administrative Agent and each
Lender of Borrower and Guarantors, including, without
limitation, the Loan Obligations, are the joint and several
obligations of Borrower and Guarantors, and Administrative
Agent may proceed directly against Borrower, any Guarantor,
all of the foregoing, or any one of the foregoing or any
combination of the foregoing, without first proceeding against
Borrower, or without joining all Persons liable or potentially
liable for any portion of the Loan Obligations in one action.
15.4. APPLICATION OF FUNDS. Any funds received by Lenders or
Administrative Agent for the benefit of Lenders with respect to any
Loan Obligation after its Maturity, shall be applied as follows: (i)
first, to reimburse Lenders pro-rata for any amounts due to Lenders
under Section 18.8; (ii) second, to reimburse to Administrative Agent
all unreimbursed costs and expenses paid or incurred by Administrative
Agent that are payable or reimbursable by Borrower hereunder; (iii)
third, to reimburse to Lenders pro-rata all unreimbursed costs and
expenses paid or incurred by Lenders (including costs and expenses
incurred by Administrative Agent as a Lender that are not reimbursable
as provided in the preceding clause) that are payable or reimbursable
by Borrower hereunder; (iv) fourth, to the payment of accrued and
unpaid fees due hereunder and all other amounts due hereunder (other
than the Loans and interest accrued thereon); (v) fifth, to the payment
of the Loans of each of the Lenders and interest accrued thereon (which
payments shall be pro rata to each of the Lenders in accordance with
the amount of the Loans outstanding) and to the payment (pari passu
with the foregoing) of any Rate Hedging Obligations and cash collateral
to the Letter of Credit Issuer as collateral for the Letter of Credit
Exposure; and (vi) sixth, to the payment of the other Loan Obligations.
Any remaining amounts shall be applied to payment of all the
Obligations to Administrative Agent. Any further remaining amounts
shall be paid to Borrower or such other Persons as shall be legally
entitled thereto. Except as expressly provided otherwise herein,
Lenders may apply and reverse and reapply, payments to the Loan
Obligations in such order and manner as Lenders determine in their
absolute discretion.
16. ADMINISTRATIVE AGENT AND LENDERS.
16.1. APPOINTMENT, POWERS, AND IMMUNITIES. LaSalle is hereby
appointed Administrative Agent hereunder and under each of the other
Loan Documents. Each Lender hereby irrevocably appoints and authorizes
Administrative Agent to act as its agent under this Agreement and the
44
other Loan Documents with such powers and discretion as are
specifically delegated to Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Administrative Agent (which term
as used in this sentence and in Section 16.5 and the first sentence of
Section 16.6 hereof shall include its affiliates and its own and its
affiliates' officers, directors, employees, and agents): (a) shall not
have any duties or responsibilities except those expressly set forth in
this Agreement and shall not be a trustee or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital, statement,
representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document
referred to or provided for in, or received by any of them under, any
Loan Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Loan Document, or any other
document referred to or provided for therein or for any failure by any
Covered Person or any other Person to perform any of its obligations
thereunder or the validity; (c) shall not be responsible for or have
any duty to ascertain, inquire into, or verify the performance or
observance of any covenants or agreements by any Covered Person or the
satisfaction of any condition or to inspect the property (including the
books and records) of any Covered Person or any of its Subsidiaries or
affiliates; (d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and (e)
shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Loan Document, except for its own
gross negligence or willful misconduct. Administrative Agent may employ
agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
16.2. RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall
be entitled to rely upon any certification, notice, instrument,
writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and
correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Covered Person), independent
accountants, and other experts selected by Administrative Agent.
Administrative Agent may deem and treat the payee of any Note as the
holder thereof for all purposes hereof unless and until Administrative
Agent receives and accepts an Assignment and Acceptance executed in
accordance with Section 18.4 hereof. As to any matters not expressly
provided for by this Agreement, Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that Administrative Agent shall not be
required to take any action that exposes Administrative Agent to
personal liability or that is contrary to any Loan Document or
applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking any such action.
16.3. EMPLOYMENT OF AGENTS AND COUNSEL. Administrative Agent may
execute any of its duties hereunder by or through employees, agents,
and attorneys-in-fact and shall not be liable to any Lender, except
with respect to money or securities received by it or such agents or
attorneys-in-fact, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Administrative
Agent shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder and
shall not be liable to any Lender for acting or failing to act based as
advised by such counsel, except where doing so violates an express
obligation of Administrative Agent under the Loan Documents.
45
16.4. DEFAULTS. Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default
unless Administrative Agent has received written notice from a Lender
or the Borrower specifying such Default or Event of Default and stating
that such notice is a Notice of Default. In the event that
Administrative Agent receives such a notice of the occurrence of a
Default or Event of Default, Administrative Agent shall give notice
thereof to the Lenders. Administrative Agent shall (subject to Section
16.2 hereof) take such action with respect to such Default or Event of
Default as shall reasonably be directed by the Required Lenders,
provided that, unless and until Administrative Agent shall have
received such directions, Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
16.5. RIGHTS AS LENDER. With respect to its Commitment and the Loans
made by it, LaSalle (and any successor acting as Administrative Agent)
in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as
though it were not acting as Administrative Agent, and the term Lender
or Lenders shall, unless the context otherwise indicates, include
Administrative Agent in its individual capacity. LaSalle (and any
successor acting as Administrative Agent) and its affiliates may
(without having to account therefor to any Lender) accept deposits
from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with
any Covered Person or any of its Subsidiaries or Affiliates as if it
were not acting as Administrative Agent, and LaSalle (and any successor
acting as Administrative Agent) and its Affiliates may accept fees and
other consideration from any Covered Person or any of its Subsidiaries
or Affiliates for services in connection with this Agreement or
otherwise without having to account for the same to Lenders. The
Lenders acknowledge that, pursuant to such activities, Administrative
Agent or its Affiliates may receive information regarding Borrower or
its Affiliates (including information that may be subject to
confidentiality obligations in favor of Borrower or such Affiliates)
and acknowledge that Administrative Agent shall be under no obligation
to provide such information to the Lenders.
16.6. INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, Lenders agree to reimburse and indemnify
Administrative Agent upon demand (to the extent not reimbursed under
Section 18.7, but without limiting the obligations of Borrower under
Section 18.7) ratably in accordance with their respective Commitments,
for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including reasonable
attorneys' fees), or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against Administrative
Agent (including by any Lender) in any way relating to or arising out
of any Loan Document or the transactions contemplated thereby or any
action taken or omitted by Administrative Agent under any Loan
Document; provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the
foregoing, each Lender agrees to reimburse Administrative Agent
promptly upon demand for its ratable share of any costs or expenses
payable by Borrower under Section 18.7, to the extent that
Administrative Agent is not promptly reimbursed for such costs and
expenses by Borrower. The agreements contained in this Section shall
survive payment in full of the Loans and all other amounts payable
under this Agreement.
16.7. NOTIFICATION OF LENDERS. Each Lender agrees to use its good
faith efforts, upon becoming aware of anything which has or is
reasonably likely to have a Material Adverse Effect on any Covered
Person, to promptly notify Administrative Agent thereof. Administrative
Agent shall promptly deliver to each Lender copies of every written
notice, demand, report (including
46
any financial report), or other writing which Administrative Agent
gives to or receives from Borrower and which itself (a) constitutes, or
which contains information about, something that has or is reasonably
likely to have a Material Adverse Effect on any Covered Person, or (b)
is otherwise delivered to Administrative Agent by Borrower pursuant to
the Loan Documents and is deemed material information by Administrative
Agent in its sole discretion. Administrative Agent and its directors,
officers, agents, and employees shall have no liability to any Lender
for failure to deliver any such item to such Lender unless the failure
constitutes gross negligence or willful misconduct.
16.8. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
acknowledges that Administrative Agent has not made any representation
or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any review of the affairs of Borrower and
its Affiliates, shall be deemed to constitute any representation or
warranty by Administrative Agent to any Lender. Each Lender agrees that
it has, independently and without reliance on Administrative Agent or
any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Covered Persons
and their Subsidiaries and decision to enter into this Agreement and
that it will, independently and without reliance upon Administrative
Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan
Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to Lenders by
Administrative Agent hereunder, Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of
any Covered Person or any of its Subsidiaries or Affiliates that may
come into the possession of Administrative Agent or any of its
Affiliates.
16.9. RESIGNATION. Administrative Agent may resign at any time by
giving notice thereof to the Lenders and Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a
successor Administrative Agent which appointment shall be subject to
the consent (which consent will not be unreasonably withheld or
delayed) of Borrower so long as there is no Existing Default. If no
successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent which shall be a
commercial bank organized under the laws of the United States of
America having combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and
duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and
obligations hereunder. If no successor has accepted appointment as
Administrative Agent within thirty (30) days after the date on which
Administrative Agent first attempts to appoint a successor
Administrative Agent, the resigning Administrative Agent's resignation
shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Administrative Agent hereunder until
such time, if any, as the Required Lenders appoint a successor which
accepts such appointment. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this
Section 16.9 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
16.10. COLLECTIONS AND DISTRIBUTIONS TO LENDERS BY ADMINISTRATIVE
AGENT. Except as otherwise provided in this Agreement, including,
without limitation, with respect to the Swingline
47
Loan, all payments of interest, fees, principal and other amounts
received by Administrative Agent for the account of Lenders shall be
distributed by Administrative Agent to Lenders in accordance with their
pro-rata shares of the outstanding Loan Obligations at the time of such
distribution (or entirely to Administrative Agent in the case of
payments of interest, fees or principal with respect to the Swingline
Loan) on the same Business Day when received, unless received after
12:00 noon (Local Time) in which case they shall be so distributed by
12:00 noon (Local Time) on the next Business Day. All amounts received
by any Lender on account of the Loan Obligations, including amounts
received by way of setoff, shall be paid over promptly to
Administrative Agent for distribution to Lenders as provided above in
this Section. Such distributions shall be made according to
instructions that each Lender may give to Administrative Agent from
time to time. Unless there is an Existing Default (in which case the
Lenders may apply payments as they determine in their discretion),
payments received shall be applied (after application to the Swingline
Loan to reduce it to zero), first to reduce any Base Rate Loans
included in the Aggregate Revolving Loan owing to each Lender, and then
to any Eurodollar Loans included in the Aggregate Revolving Loan owing
to each Lender.
17. CHANGE IN CIRCUMSTANCES.
17.1. COMPENSATION FOR INCREASED COSTS AND REDUCED RETURNS.
17.1.1. LAW CHANGES OR TAX IMPOSITIONS. If, after the
Effective Date, the adoption of any applicable Law or any
change in any applicable Law or any change in the
interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable
Lending Office) with any request or directive (whether or not
having the force of law) of any such Governmental Authority,
central bank, or comparable agency:
(i) subjects such Lender (or its Applicable
Lending Office) to any Tax with respect to any
Eurodollar Loans or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts
payable to such Lender (or its Applicable Lending
Office) under this Agreement in respect of any
Eurodollar Loans (other than Taxes imposed on the
overall net income of such Lender by the jurisdiction
in which such Lender has its principal office or such
Applicable Lending Office);
(ii) imposes, modifies, or deems applicable any
reserve, special deposit, assessment or similar
requirement (other than the reserve requirement
utilized in the determination of the Eurodollar Rate)
relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or
commitments of, such Lender (or its Applicable
Lending Office), including the Commitment of such
Lender hereunder; or
(iii) imposes on such Lender (or its Applicable
Lending Office) or on the United States market for
certificates of deposit or the London Interbank
market any other condition affecting this Agreement,
its Commitments or its Note or any of such extensions
of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost
to such Lender (or its Applicable Lending Office) of making,
converting into, continuing, or maintaining any Loans or to
reduce any sum received or receivable by such Lender (or its
Applicable Lending Office) under this Agreement or any of its
Notes with respect to any Loans, then
48
Borrower shall pay to such Lender on demand such amount or
amounts as will compensate such Lender for such increased cost
or reduction. If any Lender requests compensation by Borrower
under this Section 17.1.1, Borrower may, by notice to such
Lender (with a copy to Administrative Agent), suspend the
obligation of such Lender to make or continue Loans of the
type with respect to which such compensation is requested, or
to convert Loans of any other type into Loans of such type,
until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of
Section 17.5 shall be applicable); provided, however, that
such suspension shall not affect the right of such Lender to
receive the compensation so requested.
17.1.2. CAPITAL ADEQUACY. If, after the Effective Date, any
Lender shall have determined that the adoption of any
applicable Law regarding capital adequacy or any change
therein or in the interpretation or administration thereof by
any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether
or not having the force of law) of any such governmental
authority, central bank, or comparable agency, has or would
have the effect of reducing the rate of return on the capital
of such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder to a level
below that which such Lender or such corporation could have
achieved but for such adoption, change, request, or directive
(taking into consideration its policies with respect to
capital adequacy), then from time to time upon demand Borrower
shall pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction.
17.1.3. NOTICE TO BORROWER. Each Lender shall promptly notify
Borrower and Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle
such Lender to compensation pursuant to this Section 17.1 and
will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such
Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 17.1 shall furnish to
Borrower and Administrative Agent a statement setting forth
the additional amount or amounts to be paid to it hereunder
which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable
averaging and attribution methods.
17.2. MARKET FAILURE. If on or prior to the first day of any
Interest Period for any Eurodollar Loan:
(i) Administrative Agent determines (which determination
shall be conclusive) that by reason of circumstances affecting
the relevant market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Interest
Period; or
(ii) the Required Lenders determine (which determination
shall be conclusive) and notify Administrative Agent that the
Eurodollar Rate will not adequately and fairly reflect the
cost to the Lenders of funding Eurodollar Loans for such
Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof,
and so long as such condition remains in effect, the Lenders shall be
under no obligation to make additional Eurodollar Loans, continue
Eurodollar Loans, or to convert Eurodollar Loans and Borrower shall, on
the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans either
49
prepay such Loans or convert such Loans into Base Rate Loans in
accordance with the terms of this Agreement.
17.3. ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Loans
hereunder, then such Lender shall promptly notify Borrower thereof and
such Lender's obligation to make, continue Eurodollar Loans or convert
Base Rate Loans into Eurodollar Loans shall be suspended until such
time as such Lender may again make, maintain, and fund Eurodollar Loans
(in which case the provisions of Section 17.5 shall be applicable).
17.4. COMPENSATION. Upon the request of any Lender, Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in
the reasonable opinion of such Lender) to compensate it for any loss,
cost, or expense (including loss of anticipated profits) incurred by it
as a result of:
(i) any payment, prepayment, or conversion of a
Eurodollar Loan for any reason (including, without limitation,
the acceleration of the Loans pursuant to the terms hereof) on
a date other than the last day of the Interest Period for such
Eurodollar Loan; or
(ii) any failure by Borrower for any reason to borrow,
convert, continue, or prepay a Eurodollar Loan on the date for
such borrowing, conversion, continuation, or prepayment
specified in the relevant notice of borrowing, prepayment,
continuation, or conversion under this Agreement.
If a Lender claims compensation under this Section 17.4, such Lender
shall furnish a certificate to Borrower that states the amount to be
paid to it hereunder and includes a description of the method used by
such Lender in calculating such amount. Borrower shall have the burden
of proving that the amount of any such compensation calculated by a
Lender is not correct. Any compensation payable by Borrower to a Lender
under this Section 17.4 shall be payable without regard to whether such
Lender has funded its pro-rata share of any Eurodollar Advance or
Eurodollar Loan through the purchase of deposits in an amount or of a
maturity corresponding to the deposits used as a reference in
determining the Eurodollar Rate.
17.5. TREATMENT OF AFFECTED LOANS. If the obligation of any Lender
to make a Eurodollar Loans or to continue any Eurodollar Loans, or to
convert any Base Rate Loan into a Eurodollar Loan shall be suspended
pursuant to Section 17.1, 17.2, or 17.3 (such Loans being herein called
Affected Loans), such Lender's Affected Loans shall be automatically
and immediately converted into Base Rate Loans on the last day(s) of
the then current Interest Period(s) for Affected Loans (or, in the case
of a conversion required by Section 17.3, on such earlier date as such
Lender may specify to Borrower with a copy to Administrative Agent)
and, unless and until such Lender gives notice as provided below that
the circumstances specified in Section 17.1, 17.2, or 17.3 that gave
rise to such conversion no longer exist:
(i) to the extent that such Lender's Affected Loans have
been so converted, all payments and prepayments of principal
that would otherwise be applied to such Lender's Affected
Loans shall continue to be made and applied as provided for
herein; and
(ii) all Loans that would otherwise be made or continued
by such Lender as Eurodollar Loans shall be made or continued
instead as Base Rate Loans, and all Loans of such Lender that
would otherwise be converted into Eurodollar Loans shall be
converted instead into (or shall remain as) Base Rate Loans.
50
If such Lender gives notice to Borrower (with a copy to Administrative
Agent) that the circumstances specified in Section 17.1, 17.2, or 17.3
hereof that gave rise to the conversion of such Lender's Affected Loans
pursuant to this Section 17.5 no longer exist (which such Lender agrees
to do promptly upon such circumstances ceasing to exist) at a time when
Loans of the type of the Affected Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Loans of the type of the Affected Loans,
to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding Loans of the type of the Affected Loans and
by such Lender are held pro rata (as to principal amounts, type of
interest, and Interest Periods) in accordance with their respective
Commitments.
17.6. TAXES.
17.6.1. GROSS-UP. Any and all payments by Borrower to or for
the account of any Lender or the Administrative Agent
hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any and all Taxes,
whether imposed now or in the future, excluding, in the case
of each Lender and the Administrative Agent, Taxes imposed on
its income, and franchise Taxes imposed on it, by the
jurisdiction under the Laws of which such Lender (or its
Applicable Lending Office) or the Administrative Agent (as the
case may be) is organized or any political subdivision
thereof. If Borrower is required by Law to deduct any Taxes
from or in respect of any sum payable under this Agreement or
any other Loan Document to any Lender or the Administrative
Agent, (i) the sum payable will be increased as necessary so
that after making all required deductions (including
deductions applicable to additional sums payable under this
Section 17.6) such Lender or the Administrative Agent receives
an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such
deductions, (iii) Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in
accordance with applicable Law, and (iv) Borrower shall
furnish to Administrative Agent, at its address referred to
herein, the original or a certified copy of a receipt
evidencing payment thereof. In addition, Borrower agrees to
pay any and all present or future stamp or documentary taxes
and any other excise or property taxes or charges or similar
levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery
of, or otherwise with respect to, this Agreement or any other
Loan Document (hereinafter referred to as Impositions).
Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes and
Impositions (including, without limitation, any Taxes or
Impositions imposed or asserted by any jurisdiction on amounts
payable under this Section 17.6) paid by such Lender or the
Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom
or with respect thereto. Within 30 days after the date of any
payment of Taxes, Borrower shall furnish to Administrative
Agent the original or a certified copy of the receipt
evidencing such payment.
17.6.2. LENDERS' UNDERTAKINGS.
(i) Each Lender organized under the Laws of a
jurisdiction outside the United States, on or prior
to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on
which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested
in writing by Borrower or
51
Administrative Agent (but only so long as such Lender
remains lawfully able to do so), shall provide
Borrower and Administrative Agent with (i) Internal
Revenue Service Form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the
United States is a party which reduces the rate of
withholding Tax on payments of interest or certifying
that the income receivable pursuant to this Agreement
is effectively connected with the conduct of a trade
or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or
any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate
required by any Governmental Authority (including any
certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such
Lender is entitled to an exemption from or a reduced
rate of Tax on payments pursuant to this Agreement or
any of the other Loan Documents. For any period with
respect to which a Lender has failed to provide
Borrower and Administrative Agent with the
appropriate form pursuant to this Section 17.6.2
(unless such failure is due to a change in treaty or
Law occurring subsequent to the date on which a form
originally was required to be provided), such Lender
shall not be entitled to indemnification under
Section 17.6.1 with respect to Taxes imposed by the
United States; provided, however, that should a
Lender, which is otherwise exempt from or subject to
a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form
required hereunder, Borrower shall take such steps as
such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(ii) If Borrower is required to pay additional
amounts to or for the account of any Lender or
Administrative Agent pursuant to this Section, then
such Lender or the Administrative Agent will agree to
use reasonable efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may
thereafter accrue if such change, in the judgment of
such Lender or the Administrative Agent, as the case
may be, is not otherwise disadvantageous to such
Lender or the Administrative Agent, as the case may
be.
17.6.3. SURVIVAL OF BORROWER'S OBLIGATIONS. Without prejudice
to the survival of any other agreement of Borrower hereunder,
the agreements and obligations of Borrower contained in this
Section 17.6 shall survive the termination of the Commitments,
the expiration of the Letters of Credit, the indefeasible full
payment and satisfaction of all of the Loan Obligations.
17.7. USURY. Notwithstanding any provisions to the contrary in
Section 4 or elsewhere in any of the Loan Documents, Borrower shall not
be obligated to pay interest at a rate which exceeds the maximum rate
permitted by Law. If, but for this Section 17.7, Borrower would be
deemed obligated to pay interest at a rate which exceeds the maximum
rate permitted by Law, or if any of the Loan Obligations is paid or
becomes payable before its originally scheduled Maturity and as a
result Borrower has paid or would be obligated to pay interest at such
an excessive rate, then (i) Borrower shall not be obligated to pay
interest to the extent it exceeds the interest that would be payable at
the maximum rate permitted by Law; (ii) if the outstanding Loan
Obligations have not been accelerated as provided in Section 15.3.2,
any such excess interest that has been paid by Borrower shall be
refunded; (iii) if the outstanding Loan Obligations have been
accelerated as provided in Section 15.3.2, any such excess that has
been paid by Borrower shall be applied to the
52
Loan Obligations as provided in Section 15.4; and (iv) the effective
rate of interest shall be deemed automatically reduced to the maximum
rate permitted by Law.
18. GENERAL.
18.1. LENDERS' RIGHT TO CURE. Required Lenders may from time to
time, in their absolute discretion, for Borrower's account and at
Borrower's expense, pay (or, with the consent of Required Lenders, make
a Revolving Loan Advance to pay) any amount or do any act required of
Borrower hereunder or requested by Administrative Agent or Required
Lenders to preserve, protect, maintain or enforce the Loan Obligations,
which Borrower is required to pay or do, but fails to pay or do,
including payment of any judgment against Borrower, insurance premium,
taxes or assessments, warehouse charge, finishing or processing charge,
landlord's claim, and any other Security Interest upon or with respect
to its assets. All payments that Lenders make pursuant to this Section
and all out-of-pocket costs and expenses that Lenders pay or incur in
connection with any action taken by them hereunder shall be a part of
the Loan Obligations. Any payment made or other action taken by Lenders
pursuant to this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to pursue Lender's other
rights and remedies with respect thereto. Administrative Agent agrees
that so long as there is no Existing Default, Administrative Agent will
use its reasonable efforts to give notice to Borrower prior to taking
any of the actions described in this Section 18.1; provided, however,
that Administrative Agent shall have no liability for failure to give
any such notice, unless such failure is intentional.
18.2. RIGHTS NOT EXCLUSIVE. Every right granted to Administrative
Agent and Lenders hereunder or under any other Loan Document or allowed
to it at law or in equity shall be deemed cumulative and may be
exercised from time to time.
18.3. SURVIVAL OF AGREEMENTS. All covenants and agreements made
herein and in the other Loan Documents shall survive the execution and
delivery of this Agreement, the Notes and other Loan Documents and the
making of every Advance. All agreements, obligations and liabilities of
Borrower under this Agreement concerning the payment of money to
Administrative Agent and Lenders, including Borrower's obligations
under Sections 18.7 and 18.8, but excluding the obligation to repay the
Loans and interest accrued thereon, shall survive the repayment in full
of the Loans and interest accrued thereon, whether or not indefeasible,
the return of the Notes to Borrower, the termination of the Commitments
and the expiration of all Letters of Credit.
18.4. ASSIGNMENTS.
18.4.1. PERMITTED ASSIGNMENTS. At any time after the
Execution Date, any Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of the Notes
payable to it, its Commitments and its Loans), provided that
the terms of assignment satisfy the following requirements:
18.4.1.1. Administrative Agent shall have accepted
the assignment, which acceptance shall not be
unreasonably withheld.
18.4.1.2. Each such assignment shall be of a
constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this
Agreement.
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18.4.1.3. For each assignment involving the issuance
and transfer of Notes, the assigning Lender shall
execute an Assignment and Acceptance in the form
attached hereto as Exhibit 18.4.1 together with any
Note subject to such assignment and a processing fee
of $3,500 payable by assigning Lender.
18.4.1.4. The minimum Commitment which shall be
assigned (which shall include the applicable portion
of the assigning Lender's Revolving Loan Commitment,
and Letter of Credit Commitment (and in the case of
Administrative Agent, the Swingline Commitment)) is
$4,000,000 or such lesser amount which constitutes
such Lender's entire Commitment; provided, however,
that no such minimum shall apply between a Lender and
its Affiliates, or between one Lender and another
Lender or an assignment of all of a Lender's rights
and obligations under this Agreement.
18.4.1.5. The assignee shall have an office located
in the United States and is otherwise an Eligible
Assignee.
18.4.1.6. If there is no Existing Default as of the
date of such assignment, Borrower shall have
consented to the assignment, which consent shall not
be unreasonably withheld or delayed.
18.4.2. CONSEQUENCES AND EFFECT OF ASSIGNMENTS. From and
after the effective date specified in any Assignment and
Acceptance, the assignee shall be deemed and treated as a
party to this Agreement and, to the extent that rights and
obligations hereunder and under the Notes held by the assignor
have been assigned or negotiated to the assignee pursuant to
such Assignment and Acceptance, to have the rights and
obligations of a Lender hereunder as fully as if such assignee
had been named as a Lender in this Agreement and of a holder
of such Notes, and the assignor shall, to the extent that
rights and obligations hereunder or under such Notes have been
assigned or negotiated by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its
future obligations under this Agreement. If the assignee is
not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to Borrower and
Administrative Agent certification as to the exemption from
deduction or withholding of Taxes in accordance with Section
17.6.
18.4.3. AGREEMENTS UPON ASSIGNMENT. By executing and
delivering an Assignment and Acceptance, the assignor
thereunder and the assignee confirm to and agree with each
other and the other parties hereto substantially as follows:
(i) the assignment made under such Assignment and Acceptance
is made under such Assignment and Acceptance without recourse;
(ii) such assignor makes no representation or warranty and
assumes no responsibility with respect to the financial
condition of any Covered Person or the performance or
observance by any Covered Person of any of its Loan
Obligations; (iii) such assignee confirms that it has received
a copy of this Agreement, together with copies of the
Financial Statements and such other Loan Documents and other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon Administrative Agent,
such assignor, or any other Lender, and based on such
documents and information as it deems appropriate at the time,
continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee appoints
and authorizes Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this
Agreement and the other Loan
54
Documents as are delegated to Agent by the terms hereof and
thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be
performed by it as a Lender and a holder of a Note.
18.4.4. REGISTER. Administrative Agent shall maintain at its
address referred to herein a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for
the recordation of the names and addresses of the Lenders and
the Commitment of and principal amount of Loans owing to, each
Lender from time to time (the Register). The entries in the
Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrower, Administrative Agent and
Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by
Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Upon its receipt of an
Assignment and Acceptance executed by the parties thereto,
together with any Note subject to such assignment and payment
of the processing fee, Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in
substantially the form of Exhibit 18.4.1 hereto, (i) accept
such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
18.4.5. NOTICE TO BORROWER OF ASSIGNMENT. Upon its receipt of
an Assignment and Acceptance executed by an assigning Lender,
if Administrative Agent accepts the assignment contemplated
thereby, Administrative Agent shall give prompt notice thereof
to Borrower. Borrower shall execute and deliver replacement
Notes to the assignor and assignee as requested by
Administrative Agent and necessary to give effect to the
assignment. If Borrower fails or refuses to execute and
deliver such replacement Notes, Administrative Agent may, as
agent and attorney-in-fact for Borrower, execute and deliver
such replacement Notes on behalf of Borrower. Borrower hereby
appoints Administrative Agent as its agent and
attorney-in-fact for such purpose and acknowledges that such
power is coupled with an interest and therefore irrevocable.
Administrative Agent shall not have any liability to Borrower
or anyone else, including any Lender, as a consequence of
exercising such power in any instance.
18.4.6. ASSIGNMENT TO FEDERAL RESERVE BANK. Notwithstanding
any other provision set forth in this Agreement, without
consent of Borrower or Administrative Agent, any Lender may at
any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
18.5. SALE OF PARTICIPATIONS. Each Lender may sell participations to
one or more Persons (other than Borrower or an Affiliate of Borrower)
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and its Loans); provided,
however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
the participant shall be entitled to the benefit of the yield
protection provisions contained in Section 17 and the right of setoff
contained in Section 15.3.3, (iv) the amount of the participation shall
be in a minimum amount of $5,000,000 or such lesser amount which
constitutes such Lender's entire Commitment, provided, however, that no
such minimum amount shall apply to participations between any of
Lenders or between any Lender and any of its
55
Affiliates; and (v) Borrower, the other Lenders and Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of Borrower relating to its Loans, its Notes and its
funding of Advances and to approve any amendment, modification, or
waiver of any provision of this Agreement, provided, however, that the
approval of a participant of a Lender may be required only for
amendments, modifications, or waivers that (a) forgive the amount of
principal of the Loans, (b) reduce the Eurodollar Margin or the Base
Rate Margin or reduce the Revolving Loan Unused Fee, or (c) extend the
Revolving Loan Maturity Date. The Lender selling a participation shall,
within two (2) Business Days of its effectiveness, provide written
notice of such event to the Administrative Agent. Notwithstanding the
foregoing provisions of this Section, the sale of any such
participations which require Borrower to file a registration statement
with the SEC or under the securities Laws of any state shall not be
permitted.
18.6. INFORMATION; CONFIDENTIALITY. Administrative Agent and each
Lender agrees that it will not disclose to third Persons any
information that it obtains about Borrower or its operations or
finances that are designated by Borrower in writing as confidential or
that Borrower has advised Administrative Agent and Lenders in writing
constitutes non-public information. Administrative Agent and Lenders
may, however, disclose such information to each other, to assignees and
participants (including prospective assignees and participants) and to
all of their respective officers, attorneys, auditors, accountants,
bank examiners, agents and representatives who have a need to know such
information in connection with the administration, interpretation or
enforcement of the Loan Documents or the lending and collection
activity contemplated therein or to the extent required by Law or a
Governmental Authority. Administrative Agent and Lenders shall advise
such Persons that such information is to be treated as confidential.
Administrative Agent and any Lender may also disclose such information
in any documents that it files in any legal proceeding to pursue,
enforce or preserve its rights under the Loan Documents to the extent
that its counsel advises in writing that such disclosure is reasonably
necessary. Administrative Agent's and Lenders' non-disclosure
obligation shall not apply to any information that (i) is disclosed to
Administrative Agent or any Lender by a third Person not affiliated
with or employed by Borrower who does not have a commensurate duty of
non-disclosure, or (ii) becomes publicly known other than as a result
of disclosure by Administrative Agent or a Lender.
Borrower agrees and shall cause each other Covered Person to agree that
neither it nor its Affiliates will in the future issue any press
releases or other public disclosure using the name of LaSalle Bank
National Association or its affiliates or referring to this Agreement,
the other Loan Documents without at least 2 Business Days' prior notice
to Administrative Agent and without the prior written consent of
LaSalle Bank National Association unless (and only to the extent that)
Borrower or such other Covered Person or Affiliate is required to do so
under law (including, without limitation, all rules and regulations
promulgated by the Securities and Exchange Commission) and then, in any
event, Borrower or such other Covered Person or Affiliate will consult
with Administrative Agent before issuing such press release or other
public disclosure. Borrower consents, and shall cause each other
Covered Person to consent, to the publication by Administrative Agent
or any Lender of a tombstone or similar advertising material relating
to the financing transactions contemplated by this Agreement.
Administrative Agent and each Lender reserves the right to provide to
industry trade organizations information necessary and customary for
inclusion in league table measurements.
Notwithstanding anything herein to the contrary, "information" shall
not include, and the Administrative Agent and each Lender may disclose
to any and all Persons, without limitation of any kind, any information
with respect to the "tax treatment" and "tax structure" (in each case,
56
within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to the
Administrative Agent or such Lender relating to such tax treatment and
tax structure; provided that with respect to any document or similar
item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other
information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax
structure of the Loans, Letters of Credit and transactions contemplated
hereby.
18.7. PAYMENT OF EXPENSES. Borrower agrees to pay or reimburse to
Administrative Agent all of Administrative Agent's out-of-pocket costs
incurred in connection with Administrative Agent's due diligence review
before execution of the Loan Documents; the negotiation and preparation
of proposals, a commitment letter and the Loan Documents; the
syndication of the Loans; the administration of this Agreement, the
Loan Documents and the Loans; the interpretation of any of the Loan
Documents; any amendment of or supplementation to any of the Loan
Documents; and any waiver, consent, enforcement, or forbearance with
respect to any Default or Event of Default. Borrower agrees to pay or
reimburse to Administrative Agent and each Lender all of Administrative
Agent's and such Lender's out-of-pocket costs incurred in connection
with the enforcement of such Lender's rights and remedies under the
Loan Documents after the occurrence and during the continuation of an
Event of Default. Administrative Agent's out-of-pocket costs may
include but are not limited to the following, to the extent they are
actually paid or incurred by Administrative Agent: title insurance fees
and premiums; the cost of searches for Security Interests existing
against Covered Persons; recording and filing fees; appraisal fees;
environmental consultant fees; litigation costs; and all attorneys' and
paralegals' expenses and reasonable fees. Each Lender's out-of-pocket
costs may include but are not limited to the following, to the extent
they are actually paid or incurred by a Lender: litigation costs and
all attorneys' and paralegals' expenses and reasonable fees. Attorneys'
and paralegals' expenses may include but are not limited to filing
charges; telephone, data transmission, facsimile and other
communication costs; courier and other delivery charges; and
photocopying charges. Litigation costs may include but are not limited
to filing fees, deposition costs, expert witness fees, expenses of
service of process, and other such costs paid or incurred in any
administrative, arbitration, or court proceedings involving a Lender
and any Covered Person, including proceedings under the Federal
Bankruptcy Code. All costs which Borrower is obligated to pay or
reimburse Administrative Agent or the Lenders are Loan Obligations
payable to Administrative Agent or Lender, as applicable, and are
payable on demand by Administrative Agent or such Lender.
18.8. GENERAL INDEMNITY.
18.8.1. Borrower agrees to indemnify and hold harmless
Administrative Agent, the Letter of Credit Issuer, LaSalle (as
issuer of the Existing LCs) and each Lender and each of their
Affiliates and their respective officers, directors,
employees, agents, and advisors (each, an Indemnified Party)
from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any
investigation, litigation, or proceeding or preparation of
defense in connection therewith) the Loan Documents, the
Acquisition Documents, any of the transactions contemplated
herein or therein or the actual or proposed use of the
proceeds of the Loans, or the manufacture, storage,
transportation, release or disposal of any Hazardous Material
on, from, over or affecting any of its assets or any of the
assets,
57
properties, or operations of any Covered Person or any
predecessor in interest, directly or indirectly, except to the
extent such claim, damage, loss, liability, cost, or expense
is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct. In the case of
an investigation, litigation or other proceeding to which the
indemnity in this Section 18.8 applies, such indemnity shall
be effective whether or not such investigation, litigation or
proceeding is brought by Borrower, its directors, shareholders
or creditors or an Indemnified Party or any other Person or
any Indemnified Party is otherwise a party thereto and whether
or not the transactions contemplated hereby are consummated.
Borrower agrees not to assert any claim against Administrative
Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys, agents,
and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or
otherwise relating to the Loan Documents, the Acquisition
Documents, any of the transactions contemplated herein or
therein or the actual or proposed use of the proceeds of the
Loans. Borrower shall pay, indemnify and hold harmless the
Indemnified Parties for, from and against, and shall promptly
reimburse the Indemnified Parties for, any and all claims,
damages, liabilities, losses, costs and expenses (including
reasonable attorneys' fees and expenses and amounts paid in
settlement) incurred, paid or sustained by the Indemnified
Parties, arising out of or relating to the Acquisition
Documents.
18.8.2. The obligations of Borrower under this Section 18.8
shall survive the termination of the Commitments, the
expiration of the Letters of Credit, and the indefeasible full
payment and satisfaction of all of the Loan Obligations.
18.8.3. To the extent that any of the indemnities required
from Borrower under this Section are unenforceable because
they violate any Law or public policy, Borrower shall pay the
maximum amount which it is permitted to pay under applicable
Law.
18.9. LETTERS OF CREDIT. Borrower assumes all risks of the acts or
omissions of any beneficiary of any of the Letters of Credit. Neither
Administrative Agent nor any of its directors, officers, employees,
agents, or representatives shall be liable or responsible for: (a) the
use which may be made of any of the Letters of Credit or for any acts
or omissions of beneficiary in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement(s)
thereon, even if such documents should in fact prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment
by Administrative Agent against presentation of documents which, on
their face, appear to comply with the terms of any Letter of Credit,
even though such documents may fail to bear any reference or adequate
reference to any such Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of
Credit in connection with which Administrative Agent would, pursuant to
the Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 (as
amended from time to time), be absolved from liability. In furtherance
and not in limitation of the foregoing, Letter of Credit Issuer (or
LaSalle in the case of Existing LCs)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.
18.10. CHANGES IN ACCOUNTING PRINCIPLES. If any Covered Person, at
the end of its fiscal year and with the concurrence of its independent
certified public accountants, changes the method of valuing the
inventory of such Covered Person, or if any other changes in accounting
principles from those used in the preparation of any of the Financial
Statements are required by or result from the promulgation of
principles, rules, regulations, guidelines, pronouncements or opinions
58
by the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants (or successors thereto or bodies with
similar functions), and any of such changes result in a change in the
method of calculation of, or affect the results of such calculation of,
any of the financial covenants, standards or terms found herein, then
the parties hereto agree to enter into and diligently pursue
negotiations in order to amend such financial covenants, standards or
terms so as to equitably reflect such changes, with the desired result
that the criteria for evaluating the financial condition and results of
operations of such Covered Person shall be the same after such changes
as if such changes had not been made; provided, however, that until
such changes are made, all financial covenants herein and all the
provisions hereof which contemplate financial calculation hereunder
shall remain in full force and effect.
18.11. LOAN RECORDS. The date and amount of all Advances to Borrower
and payments of amounts due from Borrower under the Loan Documents will
be recorded in the records that Administrative Agent normally maintains
for such types of transactions. The failure to record, or any error in
recording, any of the foregoing shall not, however, affect the
obligation of Borrower to repay the Loans and other amounts payable
under the Loan Documents. Borrower shall have the burden of proving
that such records are not correct. Borrower agrees that Administrative
Agent's and any Lender's books and records showing the Loan Obligations
and the transactions pursuant to this Agreement shall be admissible in
any action or proceeding arising therefrom, and shall constitute prima
facie proof thereof, irrespective of whether any Loan Obligation is
also evidenced by a promissory note or other instrument. Administrative
Agent will provide to Borrower a monthly statement of Advances,
payments, and other transactions pursuant to this Agreement. Such
statement shall be deemed correct, accurate and binding on Borrower and
an account stated (except for reversals and reapplications of payments
as provided in Section 6.7 and corrections of errors discovered by
Administrative Agent or a Lender), unless Borrower notifies
Administrative Agent in writing to the contrary within 45 days after
such statement is rendered. In the event a timely written notice of
objections is given by Borrower, only the items to which exception is
expressly made will be considered to be disputed by Borrower.
18.12. OTHER SECURITY AND GUARANTIES. Administrative Agent or any
Lender may, in each case, for the benefit of all other Lenders, without
notice or demand and without affecting Borrower's obligations
hereunder, from time to time: (a) take from any Person and hold
collateral for the payment of all or any part of the Loan Obligations
and exchange, enforce and release such collateral or any part thereof;
and (b) accept and hold any endorsement or guaranty of payment of all
or any part of the Loan Obligations and release or substitute any such
endorser or guarantor, or any Person who has given any Security
Interest in any other collateral as security for the payment of all or
any part of the Loan Obligations, or any other Person in any way
obligated to pay all or any part of the Loan Obligations.
18.13. LOAN OBLIGATIONS PAYABLE IN DOLLARS. All Loan Obligations that
are payable in Dollars under the terms of the Loan Documents shall be
payable only in Dollars. If, however, to obtain a judgment in any court
it is necessary to convert a Loan Obligation payable in Dollars into
another currency, the rate of exchange used shall be that at which
Administrative Agent, using its customary procedures, could purchase
Dollars with such other currency in New York, New York on the Business
Day immediately preceding the day on which such judgment is rendered.
If any sum in another currency is paid to a Lender or received by a
Lender and applied to a Loan Obligation payable in Dollars, such Loan
Obligation shall be deemed paid and discharged only to the extent of
the amount of Dollars that Administrative Agent, using its customary
procedures, is able to purchase in New York, New York with such sum on
the Business Day immediately following receipt thereof. Borrower agrees
to indemnify each Lender against any loss in Dollars
59
that it may incur on such Loan Obligation as a result of such payment
or receipt and application to such Loan Obligation.
19. MISCELLANEOUS.
19.1. NOTICES. All notices, consents, requests and demands to or
upon the respective parties hereto shall be in writing, and shall be
deemed to have been given or made when delivered in person to those
Persons listed on the signature pages hereof or when deposited in the
United States mail, postage prepaid, or the overnight courier services,
when delivered to the overnight courier service, or in the case of
telecopy notice, when sent, verification received, in each case
addressed as set forth on the signature pages hereof, or such other
address as either party may designate by notice to the other in
accordance with the terms of this Section. No notice given to or demand
made on Borrower by Administrative Agent or any Lender in any instance
shall entitle Borrower to notice or demand in any other instance.
19.2. AMENDMENTS AND MODIFICATIONS; WAIVERS AND CONSENTS. Unless
otherwise provided herein, no amendment to or modification of any
provision of this Agreement, or of any of the other Loan Documents
shall be effective unless it is in writing and signed by authorized
officers of Borrower and Required Lenders. Unless otherwise provided
herein, no waiver of, or consent to any departure by Borrower from, the
requirements of any provision of this Agreement or any of the other
Loan Documents shall be effective unless it is in writing and signed by
authorized officers of Required Lenders. Any such amendment,
modification, waiver or consent shall be effective only in the specific
instance and for the purpose for which given. The foregoing provisions
of this Section notwithstanding, no such amendment, modification or
consent or waiver shall, unless signed by authorized officers of
Administrative Agent, Borrower and of all Lenders: (i) reduce or
forgive the repayment of principal of any Advance or the reimbursement
of any draw on a Letter of Credit, (ii) reduce the Eurodollar Margin or
the Base Rate Margin or reduce the Revolving Loan Unused Fee except as
contemplated herein; (iii) extend the Revolving Loan Maturity Date,
(iv) change the provisions of Section 16 to the detriment of any
Lender, (v) change the definition of Required Lenders herein, (vi)
change the provisions of this Section, (vii) change any provisions of
this Agreement requiring ratable distributions to Lenders, and (viii)
increase the Dollar Amount of the Letter of Credit Commitment. In
addition, the Dollar amount of the Revolving Loan Commitment of any
Lender may not be increased without the consent of such Lender and the
Borrower and Administrative Agent. No failure by Administrative Agent
or any Lender to exercise, and no delay by Administrative Agent or any
Lender in exercising, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise by Administrative Agent or any Lender of any right, remedy,
power or privilege hereunder preclude any other exercise thereof, or
the exercise of any other right, remedy, power or privilege existing
under any Law or otherwise.
19.3. RIGHTS CUMULATIVE. Each of the rights and remedies of
Administrative Agent and Lenders under this Agreement shall be in
addition to all of its other rights and remedies under applicable Law,
and nothing in this Agreement shall be construed as limiting any such
rights or remedies.
19.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and all future holders
of the Notes and their respective successors and assigns, except that
Borrower may not assign, delegate or transfer any of its rights or
obligations under this Agreement without the prior written consent of
Administrative Agent and all Lenders. With respect to Borrower's
successors and assigns, such successors and assigns shall include any
receiver, trustee or debtor-in-possession of or for Borrower.
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19.5. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or lack of authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction
unless the ineffectiveness of such provision would result in such a
material change as to cause completion of the transactions contemplated
hereby to be unreasonable.
19.6. COUNTERPARTS. This Agreement may be executed by the parties
hereto on any number of separate counterparts, and all such
counterparts taken together shall constitute one and the same
instrument. It shall not be necessary in making proof of this Agreement
to produce or account for more than one counterpart signed by the party
to be charged.
19.7. GOVERNING LAW; NO THIRD PARTY RIGHTS. This Agreement, the
Notes and the other Loan Documents and the rights and obligations of
the parties hereunder and thereunder shall be governed by and construed
and interpreted in accordance with the internal Laws of the State of
Illinois applicable to contracts made and to be performed wholly within
such state, without regard to choice or conflicts of law principles.
This Agreement is solely for the benefit of the parties hereto and
their respective successors and assigns, and no other Person shall have
any right, benefit, priority or interest under, or because of the
existence of, this Agreement.
19.8. COUNTERPART FACSIMILE EXECUTION. For purposes of this
Agreement, a document (or signature page thereto) signed and
transmitted by facsimile machine or telecopier is to be treated as an
original document. The signature of any Person thereon, for purposes
hereof, is to be considered as an original signature, and the document
transmitted is to be considered to have the same binding effect as an
original signature on an original document. At the request of any party
hereto, any facsimile or telecopy document is to be re-executed in
original form by the Persons who executed the facsimile or telecopy
document. No party hereto may raise the use of a facsimile machine or
telecopier or the fact that any signature was transmitted through the
use of a facsimile or telecopier machine as a defense to the
enforcement of this Agreement or any amendment or other document
executed in compliance with this Section.
19.9. EFFECT OF MERGER OF BANK. Effective immediately upon the
merger of Administrative Agent or a Lender with or into another
financial institution, all references to Administrative Agent or such
Lender under every Loan Document shall be deemed to be references to
the surviving institution. If the surviving institution does not have a
"Prime Rate," references in the Loan Documents to Prime Rate shall be
deemed to be references to the reference rate (however it is
designated) established from time to time by the surviving institution
that is most similar to the Prime Rate.
19.10. NEGOTIATED TRANSACTION. Borrower, Administrative Agent and
each Lender represent each to the others that in the negotiation and
drafting of this Agreement and the other Loan Documents they have been
represented by and have relied upon the advice of counsel of their
choice. Borrower and Administrative Agent affirm that their counsel
have both had substantial roles in the drafting and negotiation of this
Agreement and each Lender affirms that its counsel has participated in
the drafting and negotiation of this Agreement; therefore, this
Agreement will be deemed drafted by all of Borrower, Administrative
Agent and Lenders, and the rule of construction to the effect that any
ambiguities are to be resolved against the drafter will not be employed
in the interpretation of this Agreement.
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19.11. CHOICE OF FORUM. SUBJECT ONLY TO THE EXCEPTION IN THE NEXT
SENTENCE, BORROWER, ADMINISTRATIVE AGENT, AND EACH LENDER HEREBY AGREES
TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL COURT OF THE NORTHERN
DISTRICT OF ILLINOIS AND THE STATE COURTS OF ILLINOIS LOCATED IN COOK
COUNTY AND WAIVES ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS
WITH RESPECT TO ANY ACTION INSTITUTED THEREIN, AND AGREES THAT ANY
DISPUTE CONCERNING THE RELATIONSHIP BETWEEN ADMINISTRATIVE AGENT,
LENDERS, AND BORROWER OR THE CONDUCT OF ANY OF THEM IN CONNECTION WITH
THIS AGREEMENT OR OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED
ABOVE. NOTWITHSTANDING THE FOREGOING: EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE
IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
19.12. SERVICE OF PROCESS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED)
DIRECTED TO BORROWER AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES
HEREOF, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5)
DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS; OR
AT ADMINISTRATIVE AGENT'S OR ANY LENDER'S OPTION, BY SERVICE UPON CT
CORPORATION, WHICH BORROWER IRREVOCABLY APPOINTS AS BORROWER'S AGENT
FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF
ILLINOIS. ADMINISTRATIVE AGENT OR SUCH LENDER SHALL PROMPTLY FORWARD BY
REGISTERED MAIL ANY PROCESS SO SERVED UPON SAID AGENT TO BORROWER AT
ITS ADDRESS ON THE SIGNATURE PAGES HEREOF. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
19.13. WAIVER OF JURY TRIAL. BORROWER, ADMINISTRATIVE AGENT, AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR EITHER OF THEM IN
RESPECT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE. BORROWER, ADMINISTRATIVE AGENT, AND EACH LENDER AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT EITHER MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
19.14. INCORPORATION BY REFERENCE. All of the terms of the other Loan
Documents are incorporated in and made a part of this Agreement by this
reference.
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19.15. STATUTORY NOTICE - INSURANCE. The following notice is given
pursuant to Section 10 of the Collateral Protection Act set forth in
Chapter 815 Section 180/1 of the Illinois Compiled Statutes (1996);
nothing contained in such notice shall be deemed to limit or modify the
terms of the Loan Documents:
UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR
AGREEMENT WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT
OUR INTERESTS IN YOUR COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT,
PROTECT YOUR INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY
CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION
WITH THE COLLATERAL. YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY
US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE
AS REQUIRED BY OUR AGREEMENT. IF WE PURCHASE INSURANCE FOR THE
COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY
IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE
COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL OUTSTANDING BALANCE
OR OBLIGATION. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF
INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.
19.16. STATUTORY NOTICE - ORAL COMMITMENTS. Nothing contained in the
following notice shall be deemed to limit or modify the terms of the
Loan Documents:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND
OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS
WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS
THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
Borrower acknowledges that there are no other agreements between
Administrative Agent, Lenders, and Borrower, oral or written,
concerning the subject matter of the Loan Documents, and that all prior
agreements concerning the same subject matter, including any proposal
or commitment letter, are merged into the Loan Documents and thereby
extinguished.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by appropriate duly authorized officers as of the Execution Date.
LAYNE CHRISTENSEN COMPANY, A DELAWARE CORPORATION, AS BORROWER
By: /s/ Jerry W. Fanska
--------------------------------
Name: Jerry W. Fanska
Title: Vice President - Finance
NOTICE ADDRESS:
Layne Christensen Company
1900 Shawnee Mission Parkway
Mission Woods, KS 66205
Attention: Vice President, Finance
Phone: 913-677-6858
Fax: 913-362-8823
With a copy to :
Layne Christensen Company
1900 Shawnee Mission Parkway
Mission Woods, KS 66205
Attention: Vice President and General Counsel
Phone: 913-677-6864
Fax: 913-362-8823
LASALLE BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND A LENDER
By: /s/ James C. Binz
--------------------------------
Name: James C. Binz
Title: First Vice President
NOTICE ADDRESS :
LaSalle Bank National Association
One Metropolitan Square
211 North Broadway, Suite 4050
St. Louis, MO 63102
Attention: James C. Binz, First Vice President
Phone: 314-613-1917
Fax: 314-621-1612
With a copy to:
Steven C. Drapekin, Esq.
Lewis, Rice & Fingersh, L.C.
500 N. Broadway, Suite 2000
St. Louis, MO 63102
Phone: 314-444-7600
Fax: 314-612-7692
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APPLICABLE LENDING OFFICE:
LaSalle Bank National Association
135 South LaSalle St.
Chicago, Illinois 60606
Attention: James C. Binz, First Vice President
Phone: 314-613-1917
Fax: 314-621-1612
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