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EXHIBIT 10.34
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 22,
2001 (this "Agreement") is among COMFORT SYSTEMS USA, INC., a Delaware
corporation (the "Company"), the Subsidiaries of the Company listed on the
signature pages hereto as Guarantors (together with each other person who
subsequently becomes a Guarantor, collectively the "Guarantors"), the banks and
other financial institutions listed on the signature pages hereto under the
caption "Banks" (together with each other person who becomes a Bank,
collectively the "Banks"), and BANK ONE, NA, formerly known as Bank One, Texas,
N.A., individually as a Bank ("Bank One") and as administrative agent for the
other Banks (in such capacity together with any other Person who becomes the
administrative agent, the "Administrative Agent"), BANKERS TRUST COMPANY,
individually as a Bank ("BTCo") and as syndication agent for the other Banks (in
such capacity together with any other Person who becomes the syndication agent,
the "Syndication Agent"), BANK OF AMERICA, N.A., individually as a Bank ("BofA")
and as documentation agent for the other Banks (in such capacity together with
any other Person who becomes the documentation agent, the "Documentation Agent";
and together with the Administrative Agent and the Syndication Agent, the
"Agents"), CREDIT LYONNAIS NEW YORK BRANCH, individually as a Bank and as
Co-Agent, NATIONAL CITY BANK, individually as a Bank and as Co-Agent, and THE
BANK OF NOVA SCOTIA, individually as a Bank and as Co-Agent (collectively,
"Co-Agents").
WHEREAS, the Company, Guarantors, Bank One and the Administrative Agent
are parties to the Existing Credit Agreement (this and other terms used in these
recitals without definition being used as defined in Section 1.1 which provides
for a revolving credit facility pursuant to which Bank One and the Banks named
therein committed to make loans of up to $280,000,000.00, including a letter of
credit facility not to exceed $10,000,000.00, to the Company for general
corporate purposes, including working capital, financing permitted acquisitions
and the issuance of letters of credit.
WHEREAS, the Company has requested the Banks to further amend and
restate the Existing Credit Agreement to modify certain terms and conditions
thereof, including, without limitation, to decrease the revolving credit
facility to $270,000,000.00, to increase the letter of credit facility to
$15,000,000, and to modify certain covenants, all as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth herein, the Company, the Guarantors, the Agents and the
Banks agree as follows:
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION
SECTION 1.1 Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Account" has the meaning stated in the Texas Uniform Commercial Code.
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"Administrative Agent" has the meaning specified in the introduction to
this Agreement.
"Administrative Questionnaire" means the questionnaire attached hereto
as Exhibit 1.1(a) to be completed by each Bank and returned to the
Administrative Agent.
"Advance" means an advance, pursuant to a Notice of Advance, comprised
of a single Type of Loans from all the Banks (or resulting from a conversion or
conversions on the same date having, in the case of Eurodollar Rate Advances,
the same Interest Period (except as otherwise provided in this Agreement)), made
by all of the Banks concurrently to the Company.
"Advance Date" means, with respect to each Advance, the Business Day
upon which the proceeds of such Advance are to be made available to the Company.
"Affiliate" means any other Person directly or indirectly controlling
(including all directors and officers of such Person), controlled by, or under
direct or indirect common control with such Person.
"Agents" has the meaning specified in the introduction to this
Agreement.
"Agreement" has the meaning specified in the introduction to this
Agreement.
"Alternate Base Rate" means, for any date, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (b) the
Prime Rate in effect on such day. For purposes hereof, the term "Prime Rate"
means, as of a particular date, the prime rate of Bank One most recently
announced by Bank One and in effect on such date, automatically fluctuating
upward or downward, as the case may be, with and at the time of each change
therein without notice to the Company or any other Person, which prime rate may
not necessarily represent the lowest or best rate actually charged to a
customer. "Federal Funds Effective Rate" means, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. If, for any reason, the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate, including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the terms hereof, the
Alternate Base Rate shall be determined without regard to clause (a) of the
first sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
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"Alternate Base Rate Advance" means any Advance bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of an Alternate Base Rate Advance and
such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Application for Letter of Credit" means a letter of credit application
in a form satisfactory to the Issuing Bank.
"Asset Sale" means the sale, transfer or other disposition for value,
whether voluntary or involuntary, by the Company or any of its Subsidiaries to
any Person other than the Company or any of its wholly-owned Subsidiaries of (i)
any of the stock of any of the Company's Subsidiaries, (ii) substantially all of
the Assets of any division or line of business of the Company and its
Subsidiaries, or (iii) any other Assets of the Company or any of its
Subsidiaries (other than (a) inventory and surplus or obsolete assets sold in
the ordinary course of business and (b) any such other Assets to the extent that
the aggregate value of such Assets sold in any single transaction or related
series of transactions is equal to $1,000,000 or less).
"Assets" (whether or not capitalized) means any interest in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible.
"Assignment and Acceptance" has the meaning specified in Section
12.10(c).
"Bank" has the meaning provided in the introduction to this Agreement.
"Bank One" means Bank One, NA, 910 ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
"Bankruptcy Code" has the meaning specified in Section 10.1(e).
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"BofA" means Bank of America, N.A., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
"Borrowing Base" means as to the Company and its Guarantors on a
consolidated basis at any time, an amount equal to the product of (a) eighty
percent (80%), times (b) the Eligible Accounts Receivable plus or minus the
Field Exam Adjustments, if any; provided that in the absence of a Borrowing Base
Certificate, the Administrative Agent shall determine the Borrowing Base from
time to time in its reasonable discretion, taking into account all information
reasonably available to it, and the Borrowing Base from time to time so
determined shall be the Borrowing Base for all purposes of this Agreement until
a Borrowing Base Certificate is furnished to and accepted by the Administrative
Agent.
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"Borrowing Base Certificate" means, as of any date, a certificate as to
the Borrowing Base as of such date in the form of Exhibit 7.1(i).
"BTCo" means Bankers Trust, One Bankers Trust Plaza, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Business Day" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of Texas) on which most banks are open for
business in Houston, Texas.
"Capitalized Lease Obligations" means all lease or rental obligations
which, pursuant to GAAP, are capitalized for balance sheet purposes.
"CERCLA" means the comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, state and local analogs, and all rules
and regulations and requirements thereunder in each case as now or hereafter in
effect.
"Change of Control" means any of (i) the acquisition by any Person
(other than the shareholders on the Effective Date), or two or more Persons
acting in concert, after the Effective Date of beneficial ownership of 50% or
more of the outstanding shares of voting stock of the Company, (ii) during any
period of 24 consecutive months, beginning on the Effective Date, the ceasing of
those individuals (the "Continuing Directors") who (a) were directors of the
Company on the first day of each such period or (b) subsequently became
directors of the Company and whose initial nomination for election subsequent to
that date was approved by a majority of the Continuing Directors then on the
board of directors of the Company, to constitute a majority of the board of
directors of the Company at any time during such period, (iii) all or
substantially all of the assets of the Company and its Subsidiaries are sold in
a single transaction or series of related transactions to any Persons or (iv)
the Company merges or consolidates with or into any other Person except as
permitted hereunder.
"Code" means the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.
"Collateral" means, collectively, all of the personal property
(including capital stock) in which Liens are purported to be granted pursuant to
the Collateral Documents as security for the Obligations.
"Collateral Account Agreement" means the Collateral Account Agreement
executed and delivered by the Company and Administrative Agent on the Effective
Date, substantially in the form of Exhibit 1.1(b) annexed hereto, as such
Collateral Account Agreement may hereafter be amended, supplemented or otherwise
modified from time to time.
"Collateral Documents" means the Collateral Account Agreement, the
Company Pledge Agreement, the Company Security Agreement, the Subsidiary Pledge
Agreements, the Subsidiary Security Agreements and all other instruments or
documents delivered by the Company or any Guarantor pursuant to this Agreement
or any of the
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other Loan Documents in order to grant to the Administrative Agent, on behalf of
the Banks, a Lien on the Collateral as security for the Obligations.
"Commitment" and "Commitments" means the obligation of each of the
Banks to enter into and perform this Agreement, to make available the Loans and
to issue or participate in the Letters of Credit to the Company in the amounts
shown on the signature page of each Bank hereto (as same are reduced pro rata by
reductions to the Total Commitment) and all other duties and obligations of the
Banks hereunder.
"Commitment Fee" has the meaning specified in Section 4.1(a).
"Company" has the meaning specified in the introduction to this
Agreement.
"Company Pledge Agreement" means the Company Pledge Agreement executed
and delivered by the Company on December 14, 1998, substantially in the form of
Exhibit 1.1(c) annexed hereto, as such Company Pledge Agreement may thereafter
be amended, supplemented or otherwise modified from time to time.
"Company Security Agreement" means the Company Security Agreement
executed and delivered by the Company on December 14, 1998, substantially in the
form of Exhibit 1.1(d) annexed hereto, as such Company Security Agreement may
thereafter be amended, supplemented or otherwise modified from time to time.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit 1.1(e) annexed hereto delivered to the Administrative Agent and the
Banks by the Company pursuant to Section 7.1(d).
"Consolidated Net Worth" means, at any date, an amount equal to the
consolidated stockholders' equity of the Company and its subsidiaries determined
in accordance with GAAP as of such date (including non-cash impairments to good
will resulting from changes to financial accounting standards to be added to
Consolidated Net Worth pursuant to Section 8.7).
"Conversion" or "Convert" (in each case whether or not capitalized)
means the changing of a Eurodollar Rate Advance to an Alternate Base Rate
Advance or vice versa in accordance with the provisions hereof.
"Credit Event" means the making of any Advance or the issuance or
extension of any Letter of Credit.
"Cumulative Consolidated Net Income" means, as of any date of
determination, (x) the consolidated net income (or loss) of the Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, less
(y) any Restricted Subordinated Debt Payments (other than interest payments) in
respect of any Subordinated Debt existing on the Effective Date made during the
period (taking as one accounting period) commencing on the Effective Date and
ending on the last day of the most recent fiscal quarter for which financial
statements have been delivered pursuant to Section 6.1.
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"Current Assets" and "Current Liabilities" means, as to the Company and
its Subsidiaries determined on a consolidated basis, at any time the aggregate
current assets or current liabilities (other than the repayment of the Loans) of
the Company, each as determined in accordance with GAAP.
"Default" means the occurrence of any event which with or without the
giving of notice or the passage of time or both could become an Event of
Default.
"Default Rate" means the lesser of (i) the Highest Lawful Rate and (ii)
with respect to (a) Alternate Base Rate Advances, the rate per annum which would
otherwise be applicable plus two percent (2.00%), and (b) Eurodollar Rate
Advances, the rate per annum which would otherwise be applicable plus three
percent (3.00%).
"Designated Payment Date" means March 31, June 30, September 30 and
December 31 of each year; provided, however, if a Designated Payment Date shall
be a day which is not a Business Day, such Designated Payment Date shall be the
next succeeding Business Day, and such extension of time shall be included in
determining the amount to be paid on such date.
"Documentation Agent" has the meaning specified in the introduction to
this Agreement.
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank, designated from time to time as its "Domestic Lending Office"
hereunder.
"EBITDA" means, for any period, the consolidated pre-tax income for
such period, plus the aggregate amount which was deducted for such period in
determining such consolidated, pre-tax income in respect of Interest Expense
(including amortization of debt discount, imputed interest and capitalized
interest), depreciation and amortization, provided, the calculation of EBITDA
for any period shall include non-cash impairments to good will resulting from
changes to financing accounting standards to be added to EBITDA pursuant to
Section 8.7; and further provided, the calculations of EBITDA after the
acquisition of assets or entities permitted under Section 8.5(d) shall include
pro forma adjustments consistent with the regulations and practices of the
United States Securities and Exchange Commission (whether or not applicable) to
account for such acquired entity's historical EBITDA for the relevant period or
similar adjustments in the case of an asset acquisition. For fiscal year 2000,
(and only for fiscal year 2000) the actual amount of pre-tax restructuring
charges incurred by the Company during fiscal year 2000 (but in no event in
excess of $31,250,000.00 in the aggregate) may be added back in determining
EBITDA, provided that such pre-tax restructuring charges may be added back to
the extent, and only to the extent, that such pre-tax restructuring charges were
deducted in calculating EBITDA.
"Effective Date" means the date on or before March 31, 2001, on which
all conditions to make an Advance set forth in Section 5.1 are first met or
waived in accordance with Section 12.1 hereof.
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"Eighty Percent Banks" means Banks holding at least 80% of the Advances
outstanding under the Loans, or, if no Advances are outstanding, Banks holding
such percentage of the Total Commitment (notwithstanding any reduction or
termination of the Total Commitment) or if there are no Advances or Commitments
outstanding, Banks holding such percentage of outstanding Letters of Credit.
"Eligible Accounts Receivable" means at any time an amount equal to the
aggregate net invoice or ledger amount (net of any reserves) due on all trade
Accounts of the Company and the Guarantors for goods sold or leased or services
rendered upon which Borrower's and Guarantors' rights to receive payment are
absolute and not contingent upon the fulfillment of any condition whatsoever;
provided, however, that Eligible Accounts Receivable shall include any retainage
due to the Company and the Guarantors with respect to jobs in progress.
"Eligible Assignee" means (a) any Bank; (b) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000.00; (c) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development or any successor organization, or a political
subdivision of any such country, and having total assets in excess of
$1,000,000,000.00; provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the Organization for Economic Cooperation and Development or any
successor organization; (d) the central bank of any country which is a member of
the Organization for Economic Cooperation and Development or any successor
organization; and (e) any other bank or similar financial institution approved
by the Administrative Agent, the Majority Banks and the Company, which consent
of the Company shall not be unreasonably withheld.
"Environmental Laws" means federal, state or local laws, rules or
regulations, and any judicial or administrative interpretations thereof,
including any judicial or administrative order, judgment, permit, approval,
decision or determination pertaining to conservation or protection of the
environment in effect at the time in question, including the Clean Air Act,
CERCLA, the Federal Water Pollution Control Act, the Occupational Safety and
Health Act, the Resource Conservation and Recovery Act, the Safe Drinking Water
Act, the Toxic Substances Control Act, the Superfund Amendment and
Reauthorization Act of 1986, the Hazardous Materials Transportation Act, and
comparable state and local laws, and other environmental conservation and
protection laws.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
the regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is either a member of the same "controlled group" or under
"common control," within the meaning of Section 414 of the Code and the
regulations thereunder, with the Company and (b) any Subsidiary of the Company.
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"Eurocurrency Liabilities" has the meaning specified in Regulation D as
in effect from time to time.
"Eurodollar Lending Office" means, with respect to each Bank. the
branches or affiliates of such Bank designated as its "Eurodollar Lending
Office" from time to time hereunder.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Advance,
the rate (rounded to 1/16 of 1%) at which dollar deposits approximately equal in
principal amount to the entire portion of such Advance and for a maturity equal
to the applicable Interest Period are offered in immediately available funds to
the Administrative Agent by prime banks in whatever Eurodollar interbank market
may be selected by the Administrative Agent in its sole and absolute discretion
at the time of determination and in accordance with the then usual practice in
such market at approximately 10:00 a.m. (Houston, Texas time) two Business Days
prior to the commencement of such Interest Period.
"Eurodollar Rate Advance" means any Advance bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the provisions
of Article II.
"Events of Default" has the meaning specified in Section 10.1.
"Existing Credit Agreement" means that certain Credit Agreement by and
among the Company, Guarantors, Bank One, the Administrative Agent and certain of
the Banks dated as of July 2, 1997, as such credit agreement was amended and
restated by that certain First Amended and Restated Credit Agreement dated as of
September 22, 1997 and by that certain Second Amended and Restated Credit
Agreement dated as of April 14, 1998, as such credit agreement was further
amended by that certain First Amendment to Second Amended and Restated Credit
Agreement dated as of June 30, 1998, and as such credit agreement was amended
and restated by that certain Third Amended and Restated Credit Agreement dated
as of December 14, 1998, as amended by that certain First Amendment dated as of
January 14, 1999, that certain Second Amendment dated as of August 18, 1999,
that certain Third Amendment dated as of August 11, 2000, and that certain
Fourth Amendment dated as of November 13, 2000.
"Federal Funds Effective Rate" has the meaning specified in the
definition of the term "Alternate Base Rate."
"Fees" has the meaning specified in Section 4.1.
"Field Exam Adjustments" means any increases or decreases to the
Borrowing Base as determined by (i) the Administrative Agent in the exercise of
its reasonable discretion, with respect to decreases, and (ii) the Majority
Banks in the exercise of their reasonable collective discretion, with respect to
increases, based on the results of the field exam of the Company's working
capital assets required under Section 7.2.
"Financial Compliance" means that the Company has either (i) incurred
Subordinated Debt (or other capital which is junior in right of payment to the
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Obligations) since the Effective Date with the approval of the Administrative
Agent and the Banks in a principal amount of not less than $25,000,000, with a
maturity date of no less than five (5) years from its date of issuance and
otherwise upon terms and conditions acceptable to the Administrative Agent and
the Banks, or (ii) not permitted for at least two consecutive fiscal quarters,
as of the last day of both of such fiscal quarters the ratio described in
Section 8.11 to exceed 2.50 to 1.00.
"Financial Condition Certificate" means the certificate substantially
in the form of Exhibit 1.1(f) annexed hereto, dated the Effective Date,
delivered by the Company pursuant to Section 5.1(i).
"Financials" has the meaning specified in Section 5.1(h).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Liens which as a matter of statutory law have priority over any other Lien
irrespective of the prior perfection or filing of such other Lien) and (ii) such
Lien is the only Lien (other than Permitted Liens and Liens otherwise permitted
pursuant to Section 8.4) to which such Collateral is subject.
"Funded Senior Debt" means all indebtedness for borrowed money
evidenced by a written document and subject to required payments of interest
and/or principal exclusive of Subordinated Debt.
"GAAP" means generally accepted accounting principles as in effect from
time to time as set forth in the opinions, statements and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, the Financial Accounting Standards Board and such other Persons who
shall be approved by a significant segment of the accounting profession and
concurred in by the independent certified public accountants certifying any
audited financial statements of the Company.
"Guaranteed Obligations" has the meaning specified in Section 9.1.
"Guarantors" has the meaning provided in the introduction to this
Agreement.
"Guaranty" means the obligations contained in Article IX hereof and in
any document containing similar obligations executed by subsequent Guarantors.
"Hazardous Materials" means (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable federal,
state or local law or regulation, (b) hazardous substances, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or
any other petroleum product or by-product, (d) toxic substances, as defined in
the Toxic Substances Control Act of 1976, or in any applicable federal, state or
local law or regulation, (e) asbestos or asbestos containing materials, or (f)
insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any applicable
federal, state or local law or regulation, as each such act, statute or
regulation may be amended from time to time.
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"Highest Lawful Rate" means, as to any Bank, the maximum nonusurious
rate of interest that, under applicable law, may be contracted for, taken,
reserved, charged or received by such Bank on the Loans or under the Loan
Documents at any time or from time to time. If the maximum rate of interest
which, under applicable law, any of the Banks are permitted to charge the
Company on the Loans shall change after the date hereof, to the extent permitted
by applicable law, the Highest Lawful Rate shall be automatically increased or
decreased, as the case may be, as of the effective time of such change without
notice to the Company or any other Person.
"Indebtedness" means, without duplication, (a) all indebtedness for
borrowed money (whether by loan or the issuance and sale of debt securities or
letters of credit issued under this facility, banker's acceptances or quasi
equity issues) or for the deferred purchase price of property or services, (b)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property, (c) all Capitalized Lease
Obligations, (d) hedge or swap agreements and Interest Rate Agreements (at a
▇▇▇▇ to market valuation); and (e) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
to indebtedness or obligations of another Person of the kinds referred to in
clauses (a) through (d) above.
"Information Systems and Equipment" means all computer hardware,
firmware and software, as well as other information processing systems, or any
equipment containing embedded microchips, whether directly or owned, licensed,
leased, operated or otherwise controlled by the Company or any of its
Subsidiaries, including through third-party service providers, and which, in
whole or in part, are used, operated, relied upon, or integral to, the Company's
or any of its Subsidiaries' conduct of their business.
"Interest Expense" means, with respect to the Company and its
Subsidiaries determined on a consolidated basis, for any period the total
interest expense for such period determined in conformity with GAAP including
any interest expense attributable to Capitalized Lease Obligations.
"Interest Period" has the meaning specified in Section 2.11.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedging agreement or other similar agreement or arrangement designed to protect
against fluctuations in interest rates to which the Company and any Bank are
parties.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of the assets, stock or other
securities of any other Person, or any direct or indirect loan, advance or
capital contribution by such Person to any other Person, and any other item
which would be classified as an "investment" on a balance sheet of such Person
in accordance with GAAP, including any direct or indirect contribution by such
Person of property or assets to a joint venture, partnership or other business
entity in which such Person retains an interest.
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"Issuing Bank" means, for each Letter of Credit, the Bank that agrees
or is otherwise obligated to issue such Letter of Credit, determined as provided
in Section 3.2(c).
"Letter of Credit" has the meaning specified in Section 3.1(a).
"Letter of Credit Fee" means the following computed on the undrawn face
amount of each Letter of Credit (i) a 1/8% per annum fronting fee payable to the
Issuing Bank and (ii) a fee payable to the Issuing Bank for the ratable benefit
of the Banks equal to the greater of (a) $500.00 or (b) a rate per annum
determined in accordance with the grid set forth below as a function of the
ratio of Total Funded Debt on the last day of the immediately preceding fiscal
quarter to EBITDA for the consecutive four fiscal quarters ending on the last
day of such fiscal quarter:
TOTAL FUNDED DEBT/EBITDA RATIO LETTER OF CREDIT FEE
------------------------------ --------------------
-4.00 3.500%
-3.50 but <4.00 3.250%
-3.00 but <3.50 3.000%
-2.50 but <3.00 2.750%
<2.50 2.500%
Any Letter of Credit Fees expressed as a rate per annum shall be
calculated on the basis of a 365 day-year.
"Letter of Credit Obligations" means at any time the sum of (a) the
aggregate then undrawn and unexpired amount of outstanding Letters of Credit and
(b) the aggregate amount of drawings under Letters of Credit not reimbursed
pursuant to Section 3.3(c).
"Letter of Credit Request" has the meaning specified in Section 3.2(a).
"Lien" means, when used with respect to any Person, any mortgage, lien,
charge, pledge, security interest, attachment or encumbrance of any kind
(whether voluntary or involuntary and whether imposed or created by operation of
law or otherwise) upon, or pledge of, any of its property or assets, whether now
owned or hereafter acquired, or any lease intended as security, any capital
lease in the nature of the foregoing, any conditional sale agreement or other
title retention agreement, in each case, for the purpose, or having the effect,
of protecting a creditor against loss or securing the payment or performance of
an obligation.
"Loan" and "Loans" has the meaning assigned thereto in Section 2.1.
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"Loan Documents" means this Agreement, the Notes, the Letters of Credit
(and any applications for, or reimbursement agreements or other documents or
certificates executed by the Company in favor of an Issuing Bank relating to,
the Letters of Credit), the Guaranty, the Collateral Documents, the Notice of
Advance, and the corporate resolutions authorizing the Loan Documents.
"Majority Banks" means Banks holding at least 66.67% of the Advances
outstanding under the Loans, or, if no Advances are outstanding, Banks holding
such percentage of the Total Commitment (notwithstanding any reduction or
termination of the Total Commitment) or if there are no Advances or Commitments
outstanding, Banks holding such percentage of outstanding Letters of Credit.
"Margin" means with respect to any Advance, the percentage determined
in accordance with the following table as a function of the ratio of Total
Funded Debt on the last day of the immediately preceding fiscal quarter to
EBITDA for the consecutive four fiscal quarters ending on the last day of such
fiscal quarter:
TOTAL FUNDED DEBT/ EBITDA EURODOLLAR RATE ADVANCE ALTERNATE BASE RATE ADVANCE
RATIO
------------------------- ----------------------- ---------------------------
-4.00 3.500% 2.000%
-3.50 but <4.00 3.250% 1.750%
-3.00 but <3.50 3.000% 1.500%
-2.50 but <3.00 2.750% 1.250%
<2.50 2.500% 1.000%
"Margin Period" means a period commencing on the date on which the
quarterly or annual financial statements of the Company are required to be
delivered pursuant to Section 7.1(a) or Section 7.1(b) as the case may be (or
have been delivered pursuant to such Sections in the Existing Credit Agreement),
and ending on the next date a financial statement is required to be so
delivered.
"Material Adverse Effect" means, relative to any occurrence of whatever
nature (including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding), (a) a material adverse effect on the
business, operations, properties, assets or condition (financial or otherwise)
of the Company and its Subsidiaries taken as a whole or (b) the impairment of
the ability of the Company and the Guarantors to perform, or of any Agent or any
Bank to enforce, the Obligations or the liens granted under the Collateral
Documents.
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13
"Material Subsidiary" means a Subsidiary of the Company that has annual
revenues or Assets with a book value of $5,000,000 or more for the most recently
ended fiscal year.
"Maturity Date" means January 1, 2003.
"Maximum Guaranteed Amount" means for each Guarantor the maximum amount
which any Guarantor could pay under the Guaranty without having such payment set
aside as a fraudulent transfer or conveyance or similar action under the
Bankruptcy Code or any applicable state or foreign law.
"Multiemployer Plan" means any plan which is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, cash
payments (including any cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with Asset Sale, including (i) income taxes reasonably
estimated to be actually payable within two years of the date of such Asset Sale
as a result of any gain recognized in connection with such Asset Sale and (ii)
payment of the outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness (other than the Loans) that is secured by a Lien on
the stock or assets in question and that is required to be repaid under the
terms thereof as a result of such Asset Sale.
"Net Cash Proceeds" means, with respect to the sale of any of the
Company's vehicles, the proceeds thereof in the form of cash (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received) of such
sale, net of amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder (other than any Lien pursuant to
a Loan Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof.
"Note" and "Notes" have the meaning specified in Section 2.2.
"Notice of Advance" has the meaning provided in Section 2.3(a).
"Notice of Conversion" has the meaning provided in Section 2.5.
"Notice of Default" has the meaning specified in Section 10.2.
"Obligations" means all the obligations of every nature of the Company
and each Guarantor owed to Agents, Banks or any of them now or hereafter
existing under the Loan Documents, whether for principal, interest, Fees,
expenses, indemnification or otherwise.
"Other Activities" has the meaning specified in Section 11.3.
- 13 -
14
"Other Financings" has the meaning specified in Section 11.3.
"Other Hedging Agreement" shall mean any foreign exchange
contract, currency swap agreements, commodity agreements or other
similar agreements or arrangements designed to protect against the
fluctuations in currency values to which the Company is a party.
"Payment Office" means the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or such other office as
the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or any of its functions under ERISA.
"Permitted Investments" means, as to any Person:
(a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or
instrumentality thereof (provided, that the full faith and
credit of the United States is pledged in support thereof)
having maturities of not more than twelve months from the date
of acquisition thereof,
(b) time deposits and certificates of deposit with
maturities of not more than twelve months from the date of
acquisition by such Person which deposits or certificates are
either: (a) fully insured by the Federal Deposit Insurance
Corporation or (b) in any Bank or other commercial bank
incorporated in the United States or any U.S. branch of any
other commercial bank, in each case having capital, surplus
and undivided profits aggregating $100,000,000.00 or more with
a long-term unsecured debt rating of at least A- from Standard
& Poor's Ratings Group or A3 from ▇▇▇▇▇'▇ Investors Service,
(c) commercial paper issued by any Person
incorporated in the United States rated at least A2 or the
equivalent thereof by Standard & Poor's Ratings Group or at
least P2 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service and, in each case, maturing not more than 270 days
after the date of issuance,
(d) investments in money market mutual funds having
assets in excess of $2,000,000,000.00 substantially all of
whose assets are comprised of securities of the types
described in clauses (a) through (c) above, and
(e) repurchase or reverse purchase agreements
respecting obligations with a term of not more than seven days
for underlying securities of the types described in clause (a)
above entered into with any bank listed in or meeting the
qualifications specified in clause (b) above.
"Permitted Liens" shall mean: (a) Liens for taxes,
assessments, levies or other governmental charges not yet due or which
are being contested in good faith by appropriate proceedings and for
which adequate reserves are maintained in accordance with GAAP; (b)
Liens in connection with worker's compensation, unemployment
- 14 -
15
insurance or other social security, old age pension or public liability
obligations not yet due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves are maintained
in accordance with GAAP; (c) operator's, vendors', carriers',
warehousemen's, repairmen's, mechanics', workers', materialmen's or
other like Liens arising by operation of law in the ordinary course of
business (or deposits to obtain the release of any such Lien) and
securing amounts not yet due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves are
maintained in accordance with GAAP; (d) deposits to secure insurance in
the ordinary course of business; (e) deposits to secure the performance
of bids, tenders, contracts (other than contracts for the payment of
money or the deferred purchase price of goods or services), leases,
licenses, franchises, trade contracts, statutory obligations, surety
and appeal bonds and performance bonds and other obligations of a like
nature incurred in the ordinary course of business; (f) easements,
rights of way, covenants, restrictions, reservations, exceptions,
encroachments, zoning and similar restrictions and other similar
encumbrances (other than to secure the payment of borrowed money or the
deferred purchase price of goods or services) or title defects, in each
case incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
singly or in the aggregate materially detract from the value or
usefulness of the Property subject thereto for the business conducted
by the Company and its Subsidiaries or materially interfere with the
ordinary conduct of the business of the Company and its Subsidiaries;
(g) bankers' liens arising by operation of law; and (h) inchoate Liens
arising under ERISA to secure contingent liabilities of the Company and
its Subsidiaries.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a foreign or domestic state or political subdivision thereof
or any agency of such state or subdivision.
"Plan" means any employee pension benefit plan (as defined in
Section 3(2) of ERISA), subject to Title IV of ERISA or Section 412 of
the Code, other than a Multiemployer Plan, with respect to which the
Company or an ERISA Affiliate contributes or has an obligation or
liability to contribute, including any such plan that may have been
terminated.
"Pledged Collateral" means, collectively, the "Pledged
Collateral" as defined in the Company Pledge Agreement and the
Subsidiary Pledge Agreements.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to
time, be prescribed by law and which, pursuant to applicable provisions
of the Code or an income tax treaty between the United States and the
country of residence of the Bank providing the form(s) or statement(s),
permit each of the Company and the Administrative Agent to make
payments hereunder for the account of such Bank free of deduction or
withholding of income and other taxes, or with deduction or withholding
of income or other taxes at a reduced rate under an applicable tax
treaty.
- 15 -
16
"Prime Rate" has the meaning set forth in the definition of
Alternate Base Rate.
"Property" (whether or not capitalized) means any interest in
any kind of property or asset, whether real, personal or mixed, or
tangible or intangible.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles).
"Reportable Event" means an event described in Section 4043(b)
of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC.
"Requirements of Environmental Laws" means, as to any Person,
the requirements of any applicable Environmental Law relating to or
affecting such Person or the condition or operation of such Person's
business or its properties, both real and personal.
"Required Subordinated Debt Holders" means the holders of
Subordinated Debt, the 2001 Subordinated Debt Principal for which
totals at least ninety percent (90%) of all 2001 Subordinated Debt
Principal.
"Reserve Percentage" means, for any Interest Period and for
any Bank, the reserve percentage applicable during such Interest Period
under regulations issued from time to time by the Board (or if more
than one such percentage is so applicable, the daily average for such
percentages for those days in such Interest Period during which any
such percentage shall be so applicable) for determining the actual
reserve requirement (including any marginal, supplemental or emergency
reserves) for such Bank in respect of liabilities or assets consisting
of or including Eurocurrency Liabilities.
"Responsible Officer" means, with respect to the Company, the
chairman of the board of directors, president, any vice president,
chief executive officer, chief operating officer, treasurer or chief
financial officer of the Company.
"Restricted Subordinated Debt Payments" means any payment or
prepayment of principal of, premium or penalty, if any, or interest on,
or redemption, purchase, retirement, defeasance (including in-substance
or legal defeasance), sinking fund or similar payment (i) with respect
to, any Subordinated Debt comprised in part of 2001 Subordinated Debt
Principal which has not been restructured as referenced in Section
5.1(l); (ii) in excess of $4,700,000 with respect to Subordinated Debt
which has been restructured as referenced in Section 5.1(l), which
prior to such restructuring had principal payments due in the calendar
quarters ending December 31, 2000 or March 31, 2001; (iii) in excess of
$4,700,000 with respect to Subordinated Debt which has been
restructured as referenced in Section 5.1(l), which prior to such
restructuring had principal payments due during the last three calendar
quarters of 2001; (iv) any such payment, other than regularly scheduled
payments of interest on any Subordinated Debt, on which the first
regularly scheduled payment of principal is not due until after the
- 16 -
17
calendar year 2001; and (v) with respect to any Subordinated Debt when
there is in existence a Default or an Event of Default.
"Sale and Leaseback Transaction" means any sale or other
transfer of Property by any Person with the intent to lease such
Property as lessee.
"Solvent" means, with respect to any Person, that as of the
date of determination both (a) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (z)
not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business
or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe)
that it will incur, debts beyond its ability to pay such debts as they
become due; and (b) such Person is "solvent" within the meaning given
that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition,
the amount of any contingent liability at any time shall be computed as
the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"Subsidiary" means and includes, with respect to any Person,
(a) any corporation more than 50% of whose stock of any class or
classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether
or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person, directly or
indirectly and (b) any partnership, association, joint venture or other
entity in which such Person, directly or indirectly, has greater than
50% of the equity interest. Unless otherwise provided or the context
otherwise requires, the term "Subsidiary" or "Subsidiaries" shall mean
a Subsidiary or Subsidiaries of the Company.
"Subsidiary Pledge Agreement" means each Subsidiary Pledge
Agreement executed and delivered by an existing Guarantor on the
Effective Date or executed and delivered by any additional Guarantor
from time to time thereafter in accordance with Section 7.8, in each
case substantially in the form of Exhibit 1.1(h) annexed hereto, as
such Subsidiary Pledge Agreement may be amended, supplemented or
otherwise modified from time to time, and "Subsidiary Pledge
Agreements" means all such Subsidiary Security Agreements.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by an existing Guarantor on the
Effective Date or executed and delivered by any additional Guarantor
from time to time thereafter in accordance with Section 7.8, in each
case substantially in the form of Exhibit 1.1(i) annexed hereto, as
such Subsidiary Security Agreement may be amended, supplemented or
otherwise
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18
modified from time to time, and "Subsidiary Security Agreements" means
all such Subsidiary Security Agreements.
"Subordinated Debt" means any Indebtedness of the Company or
any subsidiary of the Company which is expressly and validly
subordinated to the obligations of the Company hereunder and under the
Notes and other Loan Documents pursuant to terms and conditions
substantially in the form of the attached Exhibit 1.1(j).
"Syndication Agent" has the meaning specified in the
introduction to this Agreement.
"Total Commitment" means the sum of the Commitments for each
Bank totaling a maximum of $270,000,000.00 for all Banks at all times
prior to December 31, 2001, (ii) $250,000,000.00 for all Banks from
December 31, 2001 until June 29, 2002, and (iii) $240,000,000.00 for
all Banks at all times on and after June 30, 2002.
"Total Funded Debt" means Funded Senior Debt plus Subordinated
Debt.
"2001 Subordinated Debt Principal" means the aggregate amount
of all regularly scheduled principal payments due and payable on
Subordinated Debt from October 1, 2000 to December 31, 2001.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Unutilized Commitment" means the Total Commitment less Letter
of Credit Obligations less the outstanding Advances under the Loan, as
same may be reduced pursuant to Section 2.16.
SECTION 1.2 Types of Advances. Advances hereunder are distinguished by
"Type." The Type of an Advance refers to the determination whether such Advance
is a Eurodollar Rate Advance or an Alternate Base Rate Advance.
SECTION 1.3 Accounting Terms. All accounting terms not defined herein
shall be construed in accordance with GAAP, as applicable, and all calculations
required to be made hereunder and all financial information required to be
provided hereunder shall be done or prepared in accordance with GAAP.
SECTION 1.4 Schedules. Schedules hereto may be updated by the Company
from time to time to reflect transactions and other matters not prohibited by
the Loan Documents.
ARTICLE II
THE LOANS
SECTION 2.1 The Loans. Subject to the terms and conditions hereof, each
Bank severally agrees at any time and from time to time on and after the
Effective Date and prior to the Maturity Date, to make and maintain a loan or
loans (together with any Advances under a Letter of Credit described in Article
III, a "Loan" and collectively, the "Loans") to the Company
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19
not to exceed at any time outstanding the maximum amount of its Commitment,
which Loans (i) shall, at the option of the Company, be made and maintained
pursuant to one or more Advances comprised of Alternate Base Rate Advances or
Eurodollar Rate Advances; provided that, except as otherwise specifically
provided herein, all Advances made simultaneously under the Loan shall be of the
same Type, (ii) in the case of Eurodollar Rate Advances, shall be made in the
minimum amount of $1,000,000.00 and integral multiples of $100,000.00 and, in
the case of Alternate Base Rate Advances, in the minimum amount of $100,000.00
and integral multiples thereof, or, in either case, in the remaining balance of
the lesser of (w) the Total Commitment, and (x) the Borrowing Base, (iii) may be
repaid and, so long as no Default or Event of Default exists hereunder,
reborrowed, at the option of the Company in accordance with the provisions
hereof, and (iv) shall not, in the aggregate at any time outstanding and
together with all Letter of Credit Obligations, exceed the lesser of (y) the
Total Commitment, and (z) the Borrowing Base.
SECTION 2.2 The Notes. The Loans shall be evidenced by a Note in favor
of each Bank (individually a "Note" and collectively, the "Notes"),
substantially in the form of Exhibit 2.2(a).
SECTION 2.3 Notice of Advance.
(a) Whenever the Company desires an Advance, it shall give
written notice thereof (a "Notice of Advance") (or telephonic notice
promptly confirmed in writing) to the Administrative Agent (i) in the
case of an Alternate Base Rate Advance, not later than 11:00 a.m.
(Houston, Texas time) on the date of such Advance and (ii) in the case
of a Eurodollar Rate Advance, not later than noon (Houston, Texas time)
three Business Days prior to the date of such Advance. Each Notice of
Advance shall be irrevocable and shall be in the form of Exhibit 2.3
hereto, specifying (i) the aggregate principal amount of the Advance to
be made, (ii) the date of such Advance (which shall be a Business Day),
(iii) whether it is to be an Alternate Base Rate Advance or a
Eurodollar Rate Advance and (iv) if the proposed Advance is to be a
Eurodollar Rate Advance, the initial Interest Period to be applicable
thereto.
(b) The Administrative Agent shall promptly give the Banks
written notice or telephonic notice (promptly confirmed in writing) of
each proposed Advance, of each Bank's proportionate share thereof and
of the other matters covered by each Notice of Advance.
SECTION 2.4 Disbursement of Funds for Loans.
(a) No later than 1:00 p.m. (Houston, Texas time) on any
Advance Date for Loans, each Bank shall make available its pro rata
portion of the amount of such Advance in U.S. dollars and in
immediately available funds at the Payment Office. At such time, the
Administrative Agent shall credit the amounts so received to the
general deposit account of the Company maintained with the
Administrative Agent in immediately available funds or as otherwise
directed by the Company.
(b) Unless the Administrative Agent shall have been notified
by any Bank prior to disbursement of the Advance by the Administrative
Agent that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of the
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20
Advance to be made on such date, the Administrative Agent may assume
that such Bank has made such amount available to the Administrative
Agent on such Advance Date and the Administrative Agent may, in
reliance upon such assumption, make available to the Company a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Bank and the
Administrative Agent has made available same to the Company, the
Administrative Agent shall be entitled to recover such corresponding
amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Company,
and the Company shall pay such corresponding amount to the
Administrative Agent within two (2) Business Days after demand
therefor. The Administrative Agent shall also be entitled to recover
from such Bank or the Company, as the case may be, interest on such
corresponding amount from the date such corresponding amount was made
available by the Administrative Agent to the Company to the date such
corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) as to the Company, the Alternate Base Rate
or the Eurodollar Rate plus the applicable Margin, as appropriate or
(ii) as to any Bank, the Federal Funds Effective Rate on the date of
such Advance for a period of three (3) days and thereafter at the
Alternate Base Rate or the Eurodollar Rate plus the applicable Margin,
as appropriate. Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its Commitments hereunder or to prejudice any
rights which the Company may have against any Bank as a result of any
default by such Bank hereunder.
SECTION 2.5 Conversions and Continuances. The Company shall have the
option to convert or continue on any Business Day all or a portion of the
outstanding principal amount of one Type of Advance for any Loan into another
Type of Advance; provided, no Advances may be converted into or continued as
Eurodollar Rate Advances if a Default or Event of Default is in existence on the
date of the conversion or continuation. Any continuation of an Advance as the
same Type of Advance in the same amount shall be effected by the Company giving
notice to the Administrative Agent, in writing, or by telephone promptly
confirmed in writing, of its intention to continue such Advance as an Advance of
the same Type. Each such conversion shall be effected by the Company giving the
Administrative Agent written notice (each a "Notice of Conversion"),
substantially in the form of Exhibit 2.5 hereto, prior to noon (Houston, Texas
time) at least (a) three (3) Business Days prior to the date of such conversion
in the case of conversion into or continuance as Eurodollar Rate Advances and
(b) prior to 11:00 a.m. (Houston, Texas time) one Business Day prior to the date
of conversion in the case of a conversion into Alternate Base Rate Advances,
specifying each Advance (or portions thereof) to be so converted and, if to be
converted into or continued as Eurodollar Rate Advances, the Interest Period to
be initially applicable thereto. The Administrative Agent shall thereafter
promptly notify each Bank of such Notice of Conversion.
SECTION 2.6 Voluntary Prepayments. The Company shall have the right to
voluntarily prepay any Loan in whole or in part at any time on the following
terms and conditions: (a) no Eurodollar Rate Advance may be prepaid prior to the
last day of its Interest Period unless, simultaneously therewith, the Company
pays to the Administrative Agent for the benefit of the Banks, all sums
necessary to compensate the Banks for all costs and expenses resulting from such
prepayment, as reasonably determined by the Banks, including but not limited to
those costs
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21
described in Section 2.10(f), Section 2.14 and Section 2.15 hereof; and (b) each
prepayment pursuant to this section shall be applied first, to the payment of
accrued and unpaid interest, and then, to the outstanding principal of such
Advances.
SECTION 2.7 Mandatory Repayments. The Loans shall be repaid and/or the
Commitments shall be permanently reduced, in the amounts and under the
circumstances set forth below, all such repayments and/or reductions to be
applied as set forth below:
(a) Net Asset Sale Proceeds. No later than (i) the first
Business Day following the date of receipt by the Company or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any Asset
Sale (other than from a Sale and Leaseback Transaction permitted by
Section 8.3(n)) in excess of $5,000,000 for any single transaction or
related series of transactions the Company shall repay the Loans and
the Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to such Net Asset Sale Proceeds and (ii) the
first Business Day following the 360th day after receipt by the Company
or any Subsidiary of any Net Asset Sale Proceeds in respect of any
Asset Sale of $5,000,000 or less for any single transaction or related
series of transactions the Company shall repay the Loans and the
Revolving Loan Commitments shall be permanently reduced in an aggregate
amount equal to the amount of such Net Asset Sale Proceeds that were
not reinvested in the business of the Company or any of its
Subsidiaries on or before such date;
(b) Loans and Letter of Credit Obligations in Excess of Total
Commitment. The Company shall repay Loans on any day on which the
aggregate outstanding principal amount of the Loans together with the
outstanding Letter of Credit Obligations exceeds the lesser of (i) the
Total Commitment, and (ii) the Borrowing Base, in the amount of such
excess;
(c) Repayment Upon Maturity. The aggregate amount under the
Notes (and all accrued, unpaid interest) shall be due and payable, and
the Commitments shall terminate on the Maturity Date; and
(d) Sale and Leaseback Transaction Proceeds. The Company shall
apply all net proceeds generated from the Sale and Leaseback
Transaction permitted by Section 8.3(n) to permanently repay the Loans
and irrevocably reduce the Commitments.
SECTION 2.8 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement due from the
Company shall be made to the Administrative Agent for the benefit of the Banks
not later than 11:00 a.m. (Houston, Texas time) on the date when due and shall
be made in lawful money of the United States in immediately available funds at
the Payment Office.
SECTION 2.9 Pro Rata Advances. All Advances under this Agreement shall
be incurred from the Banks pro rata, on the basis of their respective
Commitments. It is understood that no Bank shall be responsible for any default
by any other Bank in its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Bank to fulfill its commitments
hereunder.
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SECTION 2.10 Interest.
(a) Subject to Section 12.8, the Company agrees to pay
interest on the total outstanding principal balance of all Alternate
Base Rate Advances from the date of each respective Advance to maturity
(whether by acceleration or otherwise) at a rate per annum which shall
at all times be equal to the lesser of (i) the Highest Lawful Rate and
(ii) the Alternate Base Rate in effect from time to time plus the
Margin for Alternate Base Rate Advances, which Margin shall be adjusted
on the first day of each Margin Period. If the Alternate Base Rate is
based on the Prime Rate, interest shall be computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the
case may be. If the Alternate Base Rate is based on the Federal Funds
Effective Rate, interest shall be computed on the basis of the actual
number of days elapsed over a year of 360 days.
(b) Subject to Section 12.8, the Company agrees to pay
interest on the total outstanding principal balance of all Eurodollar
Rate Advances from the date of each respective Advance to maturity
(whether by acceleration or otherwise) at a rate per annum (computed on
the basis of the actual number of days elapsed over a year of 360 days)
which shall, during each Interest Period applicable thereto, be equal
to the lesser of (i) the Highest Lawful Rate and (ii) the applicable
Eurodollar Rate for such Interest Period plus the Margin for Eurodollar
Rate Advances. The applicable Eurodollar Rate shall be fixed for each
Interest Period and shall not change during said Interest Period, but
the applicable Margin, which is added to said Eurodollar Rate to
determine the total interest payable to the Banks, shall be adjusted,
if applicable under the definition of "Margin," effective on the first
day of each Margin Period, whether or not said adjustment occurs at a
time other than the beginning of an Interest Period.
(c) Subject to Section 12.8, overdue principal and, to the
extent permitted by law, overdue interest in respect of any Advance and
all other overdue amounts owing hereunder shall bear interest for each
day that such amounts are overdue at a rate per annum equal to the
Default Rate.
(d) Interest on each Advance shall accrue from and including
the date of such Advance to but excluding the date of any repayment
thereof and shall be payable (i) in respect of Eurodollar Rate Advances
(A) on the last day of the Interest Period (as defined below)
applicable thereto and, in the case of any Interest Period in excess of
three (3) months, the date that is three months after the commencement
of such Interest Period, and (B) on the date of any voluntary or
mandatory repayment or any conversion or continuance, (ii) in respect
of Alternate Base Rate Advances (A) on each Designated Payment Date,
and (B) on the date of any voluntary or mandatory repayment of such
Advances on the principal amount repaid and (iii) in respect of each
Advance, at maturity (whether by acceleration or otherwise) and, after
maturity, on demand.
(e) The Administrative Agent, upon determining the Eurodollar
Rate for any Interest Period shall notify the Company thereof. Each
such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto. In addition, prior to the
due date for the payment of interest on any Advances set forth in the
- 22 -
23
immediately preceding paragraph, the Administrative Agent shall notify
the Company of the amount of interest due by the Company on all
outstanding Advances on the applicable due date, but any failure of the
Administrative Agent to so notify the Company shall not reduce the
Company's liability for the amount owed.
(f) The Company shall pay to the Administrative Agent for the
account of each Bank, so long as such Bank shall be required under
regulations of the Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of such
Bank's share of each Eurodollar Rate Advance, from the date of such
Advance until such principal amount is paid in full, at an interest
rate per annum equal at all times during the Interest Period for such
Advance to the lesser of (i) the Highest Lawful Rate and (ii) the
remainder obtained by subtracting (A) the Eurodollar Rate for such
Interest Period from (B) the rate obtained by dividing such Eurodollar
Rate referred to in clause (A) above by that percentage equal to 100%
minus the Reserve Percentage of such Bank for such Interest Period.
Such additional interest shall be determined by such Bank as incurred
and shall be payable upon demand therefor by the Bank to the Company.
Each determination by such Bank of additional interest due under this
Section shall be conclusive and binding for all purposes in the absence
of manifest error.
SECTION 2.11 Interest Periods.
(a) At the time the Company gives any Notice of Advance or
Notice of Conversion or provides notice of its intent to continue a
loan as the same Type in respect of the making of, or conversion into,
a Eurodollar Rate Advance, the Company shall have the right to elect,
by giving the Administrative Agent on the dates and at the times
specified in Section 2.3 or Section 2.5, as the case may be, notice of
the interest period (each an "Interest Period") applicable to such
Eurodollar Rate Advance, which Interest Period shall be either a one,
two, three or six month period; provided that:
(i) the initial Interest Period for any Eurodollar
Rate Advance shall commence on the date of such Eurodollar
Rate Advance (including the date of any conversion thereto or
continuance thereof pursuant to Section 2.5); each Interest
Period occurring thereafter in respect of such Eurodollar Rate
Advance shall commence on the expiration date of the
immediately preceding Interest Period;
(ii) if any Interest Period relating to a Eurodollar
Rate Advance begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire
on a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day; provided,
that if there are no more Business Days in that month, the
Interest Period shall expire on the preceding Business Day;
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24
(iv) no Interest Period for Advances shall extend
beyond the applicable Maturity Date; and
(v) the Company shall be entitled to have a maximum
of ten (10) separate Eurodollar Rate Advances hereunder for
all Loans outstanding at any one time.
(b) If, upon the expiration of any Interest Period applicable
to a Eurodollar Rate Advance, the Company has failed to elect a new
Interest Period to be applicable to such Advance as provided above, the
Company shall be deemed to have elected to convert such Advance into an
Alternate Base Rate Advance effective as of the expiration date of such
current Interest Period.
SECTION 2.12 Interest Rate Not Ascertainable. In the event that the
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) that on any date for
determining the Eurodollar Rate for any Interest Period, by reason of any
changes arising after the date of this Agreement affecting the Eurodollar
interbank market or the Administrative Agent's position in such market, adequate
and fair means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate, then, and in any such
event, the Administrative Agent shall forthwith give notice to the Company and
to the Banks of such determination. Until the circumstances giving rise to the
suspension described herein no longer exist, the obligations of the Banks to
make Eurodollar Rate Advances shall be suspended.
SECTION 2.13 Change in Legality.
(a) Notwithstanding anything to the contrary herein contained,
if any change in any law or regulation or in the interpretation thereof
by any governmental authority charged with the administration or
interpretation thereof shall make it unlawful for any Bank or its
Eurodollar Lending Office to make or maintain any Eurodollar Rate
Advance or to give effect to its obligations as contemplated hereby,
then, by prompt written notice to the Company, such Bank may:
(i) declare that Eurodollar Rate Advances will not
thereafter be made by such Bank hereunder, whereupon the
Company shall be prohibited from requesting Eurodollar Rate
Advances from such Bank hereunder unless such declaration is
subsequently withdrawn, provided, such request for a
Eurodollar Rate Advance shall, if the Company so indicates, be
automatically converted (as to such Bank) into a request for
an Alternate Base Rate Advance and the affected Bank or Banks
shall respond thereto as provided herein; and
(ii) require that all outstanding Eurodollar Rate
Advances made by such Bank be converted to Alternate Base Rate
Advances, in which event (A) all such Eurodollar Rate Advances
shall be automatically converted to Alternate Base Rate
Advances as of the effective date of such notice as provided
in paragraph (b) below if required by applicable law or
regulation, or if not so required, at the end of the current
Interest Period and (B) all payments and
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25
prepayments of principal which would otherwise have been
applied to repay the converted Eurodollar Rate Advances shall
instead be applied to repay the Alternate Base Rate Advances
resulting from the conversion of such Eurodollar Rate
Advances.
(b) For purposes of this Section, a notice to the Company by
the Administrative Agent pursuant to paragraph (a) above shall be
effective on the date of receipt thereof by the Company.
SECTION 2.14 Increased Costs, Taxes or Capital Adequacy Requirements.
(a) If any change in the application or effectiveness of any
applicable law or regulation or compliance by any Bank with any
applicable guideline or request issued after the date hereof from any
central bank or governmental authority having jurisdiction over such
Bank (whether or not having the force of law) (i) shall change the
basis of taxation of payments to such Bank of the principal of or
interest on any Eurodollar Rate Advance made by such Bank or any other
fees or amounts payable hereunder with respect to Eurodollar Rate
Advances (other than taxes imposed on the overall net income of such
Bank or its Applicable Lending Office or franchise taxes imposed upon
it by the jurisdiction in which such Bank or its Applicable Lending
Office has an office), (ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement with respect to
Eurodollar Rate Advances against assets of, deposits with or for the
account of, or credit extended by, such Bank (without duplication of
any amounts paid pursuant to Section 2.10(f) or (iii) shall impose on
such Bank any other condition affecting this Agreement with respect to
Eurodollar Rate Advances or any Eurodollar Rate Advance made by such
Bank, and the result of any of the foregoing shall be to increase the
cost to such Bank of maintaining its Commitment or of making or
maintaining any Eurodollar Rate Advance or to reduce the amount of any
sum received or receivable by such Bank hereunder (whether of
principal, interest or otherwise) in respect thereof by an amount
deemed in good faith by such Bank to be material, then the Company
shall pay to such Bank such additional amount as will compensate it for
such increase or reduction within ten (10) days after notice thereof
pursuant to Section 2.14(c).
(b) If any Bank shall have determined in good faith that any
change in any law, rule, regulation or guideline regarding capital
adequacy, or any change therein or any change in the interpretation or
administration thereof or compliance with any request or directive
regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency has or would have
the effect of reducing the rate of return on the capital of such Bank
as a consequence of, or with reference to, such Bank's obligations
hereunder to a level below that which it could have achieved but for
such adoption, change or compliance by an amount deemed by such Bank to
be material, then, from time to time, the Company shall pay to the
Administrative Agent for the benefit of such Bank such additional
amount as will reasonably compensate it for such reduction within ten
(10) days after notice thereof pursuant to Section 2.14(c).
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26
(c) Each Bank will notify the Company through the
Administrative Agent of any event occurring after the date of this
Agreement which will entitle it to compensation pursuant to this
Section, as promptly as practicable after it becomes aware thereof and
determines to request compensation and in any case, within 120 days
after becoming aware thereof. A certificate setting forth in reasonable
detail the amount necessary to compensate the Bank in question as
specified in paragraph (a) or (b) above, as the case may be, and the
calculation of such amount shall be delivered to the Company and shall
be conclusive absent manifest error. The failure on the part of any
Bank to demand increased compensation with respect to any Interest
Period shall not constitute a waiver of the right to demand
compensation thereafter within the 120 day time limit set forth above.
Each Bank agrees, to the extent it may lawfully do so without incurring
additional costs, to use its best efforts to minimize costs arising
under this section by designating another lending office for the Loans
affected, provided no Bank shall be required to do so.
(d) In the event any Bank gives a notice to the Company
pursuant to Section 2.13 or Section 2.14 that it cannot fund certain
Loans or that such funding will be at an increased cost, or is unable
to deliver the Prescribed Forms as required by Section 2.17 below, the
Company may give notice in response, with copies to the Administrative
Agent, that it wishes to seek one or more banks to replace such Bank in
accordance with the provisions set forth in Section 12.10. Each Bank
giving such a notice agrees that, at the request of the Company, it
will assign all of its interests hereunder and under the Notes and the
Commitment to a designated, Eligible Assignee for the full amount then
owing to it, all in accordance with Section 12.10. Thereafter, said
assignee shall have all of the rights hereunder and obligations of the
Assigning Bank (except as otherwise expressly set forth herein) and
such Bank shall have no further obligations to the Company hereunder.
(e) Any notice given pursuant to this Section 2.14 shall be
deemed to contain a representation by the Bank issuing such notice that
the increased costs and charges are common to substantially all of the
loan customers of such Bank and are not unique to the Company.
SECTION 2.15 Eurodollar Advance Prepayment and Default Penalties.
Subject to Section 12.8, the Company shall indemnify each Bank against any loss
or expense (excluding loss of anticipated profits) which it may sustain or incur
as a consequence of (a) an Advance of, or a conversion from or into, Eurodollar
Rate Advances that does not occur on the date specified therefor in a Notice of
Advance or Notice of Conversion or (b) any payment, prepayment or conversion of
a Eurodollar Rate Advance required by any other provision of this Agreement or
otherwise made on a date other than the last day of the applicable Interest
Period. Such loss or expense shall include an amount equal to the excess
determined by each Bank of (i) its cost of obtaining the funds for the Advance
being paid, prepaid or converted or not borrowed (based on the Eurodollar Rate)
for the period from the date of such payment, prepayment or conversion or
failure to borrow to the last day of the Interest Period for such Advance (or,
in the case of a failure to borrow, the Interest Period for the Advance which
would have commenced on the date of such failure to borrow) over (ii) the amount
of interest (as determined by each Bank) that would be realized in reemploying
the funds so paid, prepaid or converted or not borrowed for
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27
such period or Interest Period, as the case may be. The Administrative Agent, on
behalf of the Banks, will notify the Company of any loss or expense which will
entitle the Banks to compensation pursuant to this Section, as promptly as
possible after it becomes aware thereof, but failure to so notify shall not
affect the Company's liability therefor. A certificate of any Bank setting forth
any amount which it is entitled to receive pursuant to this Section shall be
delivered to the Company and shall be conclusive absent manifest error if such
determination is made on a reasonable basis. The Company shall pay to the
Administrative Agent for the account of the Banks the amount shown as due on any
certificate within ten (10) days after its receipt of the same. Without
prejudice to the survival of any other obligations of the Company hereunder, the
obligations of the Company under this Section shall survive the termination of
this Agreement and, with respect to the assigning Bank, the assignment of any of
the Notes, in each case for one hundred and twenty (120) days.
SECTION 2.16 Voluntary Reduction of Commitment. Upon at least three (3)
Business Days' prior written notice, the Company shall have the right, without
premium or penalty, to reduce or terminate the Commitments, in whole or in part,
in the amount of $5,000,000.00 or integral multiples thereof.
SECTION 2.17 Tax Forms. With respect to any Bank which is organized
under the laws of a jurisdiction outside the United States, on the date of the
initial Advance hereunder or on the date it becomes a party hereto, and from
time to time thereafter if requested by the Company or the Administrative Agent,
each such Bank shall provide the Administrative Agent and the Company with the
Prescribed Forms. Unless the Company and the Administrative Agent have received
such Prescribed Forms, the Administrative Agent and the Company if required by
applicable law or regulation, may withhold taxes from payments under the Loan
Documents at the applicable rate in the case of payments to or for any Bank
organized under the laws of a jurisdiction outside the United States; provided
the Company shall, unless otherwise directed in writing by the Administrative
Agent or unless otherwise required by law, make all payments in full to the
Administrative Agent without deducting any withholding or similar taxes. If the
Company is required by law to deduct or withhold any taxes from any Payment, the
Company shall: (a) make such deduction or withholding; (b) pay the amount so
deducted or withheld to the appropriate taxing authority not later than the date
when due (irrespective of the rate of such deduction or withholding); (c)
deliver to the relevant Administrative Agent or Bank, as the case may be,
promptly and in any event within 30 days after the date on which such taxes
become due, original tax receipts and other evidence satisfactory to such
Administrative Agent or Bank, as the case may be, of the payment when due of the
full amount of such taxes; and (d) pay to the respective Administrative Agent or
Bank, forthwith upon any request by such Administrative Agent or Bank, therefor
from time to time, such additional amounts as may be necessary so that such
Administrative Agent or Bank, as the case may be, receives, free and clear of
all taxes, the full amount of such Payment stated to be due under this
Agreement, the Notes or the other Loan Documents as if no such deduction or
withholding had been made. The Company hereby indemnifies each Agent and each
Bank, and holds each of them harmless for, any taxes and any loss, cost, damage,
penalty or expense whatsoever arising from any failure of the Company to make,
or delay in making, any deduction or withholding of taxes, or its failure to pay
when due the amount so deducted or withheld to the appropriate taxation
authority or its failure otherwise to comply with the terms and conditions of
this Section.
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ARTICLE III
LETTERS OF CREDIT
SECTION 3.1 Letters of Credit.
(a) Subject to and upon the terms and conditions herein set
forth, the Issuing Bank agrees that it will, at any time and from time
to time on or after the Effective Date and prior to the Maturity Date,
following its receipt of a Letter of Credit Request and Application for
Letter of Credit, issue for the account of the Company and in support
of the obligations of the Company or any of its Subsidiaries, one or
more standby and/or commercial letters of credit (the "Letters of
Credit") payable on a sight basis, up to a maximum amount outstanding
at any one time for all Letters of Credit of $15,000,000.00; provided
that the Issuing Bank shall not issue any Letter of Credit if at the
time of such issuance: (i) Letter of Credit Obligations shall be
greater than an amount which, when added to the sum of all Advances
then outstanding plus Letter of Credit Obligations, would exceed the
lesser of (x) the Total Commitment, and (y) the Borrowing Base; or (ii)
the expiry date or, in the case of any Letter of Credit containing an
expiry date that is extendable at the option of the Issuing Bank, the
initial expiry date, of such Letter of Credit is a date that is later
than the Maturity Date.
(b) The Issuing Bank shall neither renew or extend nor permit
the renewal or extension of any Letter of Credit (which renewal or
extension will not be for any period ending after the Maturity Date) if
any of the conditions precedent to such renewal set forth in Section
5.2 are not satisfied or waived or, after giving effect to such
renewal, the expiry date of such Letter of Credit would be a date that
is later than five (5) Business Days prior to the Maturity Date.
SECTION 3.2 Letter of Credit Requests.
(a) Whenever the Company desires that a Letter of Credit be
issued for its account or that the existing expiry date shall be
extended, it shall give the Issuing Bank (with copies to be sent to the
Administrative Agent and each Bank) (i) in the case of a Letter of
Credit to be issued, at least five (5) Business Days' prior written
request therefor and (ii) in the case of the extension of the existing
expiry date of any Letter of Credit, at least five (5) Business Days
prior to the date on which the Issuing Bank must notify the beneficiary
thereof that the Issuing Bank does not intend to extend such existing
expiry date. Each such request shall be executed by the Company and
shall be in the form of Exhibit 3.2 attached hereto (each a "Letter of
Credit Request") and shall be accompanied by an Application for Letter
of Credit therefor, completed to the reasonable satisfaction of the
Issuing Bank, and such other certificates, documents and other papers
and information as the Issuing Bank or the Administrative Agent may
reasonably request. Each Letter of Credit shall be denominated in U.S.
dollars, shall expire no later than the date specified in Section 3.1,
shall not be in an amount greater than is permitted under clause (i) of
Section 3.1(a) and shall be in such form as may be reasonably approved
from time to time by the Issuing Bank and the Company.
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(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Company that such
Letter of Credit may be issued in accordance with, and will not violate
the requirements of this Agreement. Unless the Issuing Bank has
received notice from any Bank before it issues the respective Letter of
Credit or extends the existing expiry date of a Letter of Credit that
one or more of the conditions specified in Article V are not then
satisfied, or that the issuance of such Letter of Credit would violate
this Agreement, then the Issuing Bank shall issue the requested Letter
of Credit for the account of the Company in accordance with the Issuing
Bank's usual and customary practices. Upon its issuance of any Letter
of Credit or the extension of the existing expiry date of any Letter of
Credit, as the case may be, the Issuing Bank shall promptly notify the
Company and the Administrative Agent and the Administrative Agent shall
notify each Bank of such issuance or extension, which notices shall be
accompanied by a copy of the Letter of Credit actually issued or a copy
of any amendment extending the existing expiry date of any Letter of
Credit, as the case may be.
(c) Upon receipt by a proposed Issuing Bank of a Letter of
Credit Request pursuant to Section 3.2(a) requesting the issuance of a
Letter of Credit, (a) in the event the Administrative Agent is the
proposed Issuing Bank, the Administrative Agent shall be the Issuing
Bank with respect to such Letter of Credit, notwithstanding the fact
that the Letter of Credit Obligations with respect to such Letter of
Credit and with respect to all other Letters of Credit issued by the
Administrative Agent, when aggregated with the Administrative Agent's
outstanding Loans, may exceed the Administrative Agent's Commitments;
and (b) in the event any other Bank is the proposed Issuing Bank, such
Bank shall promptly notify the Company and the Administrative Agent
whether or not, in its sole discretion, it has elected to issue such
Letter of Credit, and (1) if such Bank so elects to issue such Letter
of Credit, it shall be the Issuing Bank with respect thereto and (2) if
such Bank fails to so promptly notify the Company and the
Administrative Agent or declines to issue such Letter of Credit, the
Company may request the Administrative Agent or another Bank to be the
Issuing Bank with respect to such Letter of Credit in accordance with
the provisions of this Section 3.2.
SECTION 3.3 Letter of Credit Participations.
(a) All Letters of Credit issued subsequent hereto shall be
deemed to have been sold and transferred by the Issuing Bank to each
Bank, and each Bank shall be deemed irrevocably and unconditionally to
have purchased and received from the Issuing Bank, without recourse or
warranty, an undivided interest and participation, (to the extent of
such Bank's percentage participation in the Commitment) in each such
Letter of Credit (including extensions of the expiry date thereof),
each substitute Letter of Credit, each drawing made thereunder and the
obligations of the Company under this Agreement and the other Loan
Documents with respect thereto, and any security therefor or guaranty
pertaining thereto.
(b) In determining whether to pay under any Letter of Credit,
the Issuing Bank shall have no obligation relative to the Banks other
than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been
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delivered and that they appear to comply on their face with the
requirements of such Letter of Credit.
(c) In the event that the Issuing Bank makes any payment under
any Letter of Credit, the same shall be considered an Alternate Base
Rate Advance without further action by any Person. The Issuing Bank
shall promptly notify the Administrative Agent, which shall promptly
notify each Bank thereof. Each Bank shall immediately pay to the
Administrative Agent for the account of the Issuing Bank the amount of
such Lender's percentage participation of such Advance. If any Bank
shall not have so made its percentage participation available to the
Administrative Agent, such Lender agrees to pay interest thereon, for
each day from such date until the date such amount is paid at the
lesser of (i) the Federal Funds Effective Rate and (ii) the Highest
Lawful Rate.
(d) The Issuing Bank shall not be liable for, and the
obligations of the Company and the Banks to make payments to the
Administrative Agent for the account of the Issuing Bank with respect
to Letters of Credit shall not be subject to, any qualification or
exception whatsoever, including any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which the Company may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit, the Administrative Agent, any Issuing Bank,
any Bank, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transaction between the Company and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents; or
(v) the occurrence of any Default or Event of
Default.
(e) The Issuing Bank shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any
Letter of Credit, except for errors or omissions caused by such Issuing
Bank's gross negligence or willful misconduct. IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT SUCH ISSUING BANK, ITS OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS (OTHER THAN WITH RESPECT TO ANY CLAIMS
BY THE ISSUING BANK AGAINST ANY SUCH OFFICER, DIRECTOR, EMPLOYEE OR
AGENT THEREOF) SHALL BE INDEMNIFIED AND HELD HARMLESS FROM, SUBJECT TO
THE SAME TYPE OF PROTECTIONS SET FORTH IN SECTION 11.5(B), ANY ACTION
TAKEN OR OMITTED BY SUCH PERSON UNDER OR IN CONNECTION WITH ANY LETTER
OF CREDIT OR ANY RELATED DRAFT OR DOCUMENT ARISING OUT OF OR RESULTING
FROM
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SUCH PERSON'S SOLE OR CONTRIBUTORY NEGLIGENCE, BUT NOT FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PERSON AS DETERMINED BY A
COURT OF COMPETENT JURISDICTION. The Company agrees that any action
taken or omitted by the Issuing Bank under or in connection with any
Letter of Credit or the related drafts or documents, if done in
accordance with the standards of care specified in the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce, Publication No. 500 (and any subsequent revisions
thereof approved by a Congress of the International Chamber of Commerce
and adhered to by the Issuing Bank) or any other comparable or
successor publication or document and, to the extent not inconsistent
therewith, the Uniform Commercial Code of the State of New York, shall
not result in any liability of the Issuing Bank to the Company.
SECTION 3.4 Increased Costs.
(a) Notwithstanding any other provision herein, but subject to
Section 12.8, if any Bank shall have determined in good faith that any
change after the Effective Date of any law, rule, regulation or
guideline or the application or effectiveness of any applicable law or
regulation or any change after the Effective Date in the interpretation
or administration thereof, or compliance by any Bank (or any lending
office of such Bank) with any applicable guideline or request from any
central bank or governmental authority (whether or not having the force
of law) issued after the Effective Date either (i) shall impose, modify
or make applicable any reserve, deposit, capital adequacy or similar
requirement against Letters of Credit issued, or participated in, by
any Bank or (ii) shall impose on any Bank any other conditions
affecting this Agreement or any Letter of Credit; and the result of any
of the foregoing is to increase the cost to any Bank of issuing,
maintaining or participating in any Letter of Credit, or reduce the
amount received or receivable by any Bank hereunder with respect to
Letters of Credit, by an amount deemed by such Lender to be material,
then, from time to time, the Company shall pay to the Administrative
Agent for the account of such Lender such additional amount or amounts
as will reasonably compensate such Lender for such increased cost or
reduction by such Lender.
(b) Each Bank will notify the Company through the
Administrative Agent of any event occurring after the date of this
Agreement which will entitle such Bank to compensation pursuant to
Section 3.4(a) above, as promptly as practicable. A certificate of such
Lender (i) stating that the compensation sought to be recovered
pursuant to this Section 3.4 is generally being charged to other
similarly situated customers and (ii) setting forth in reasonable
detail such amount or amounts as shall be necessary to compensate such
Bank as specified in Section 3.4(a) above may be delivered to the
Company (with a copy to the Administrative Agent) and shall be
conclusive absent manifest error. The Company shall pay to the
Administrative Agent for the account of such Bank the amount shown as
due on any such certificate upon demand; provided that with respect to
events occurring prior to any notice given under this Section 3.4(b),
such Bank shall only be entitled to recover compensation for such
events occurring over a period of 120 days.
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(c) Except as expressly provided in Section 3.4(b), failure on
the part of any Bank to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on
capital with respect to any Letter of Credit shall not constitute a
waiver of such Bank's rights to demand compensation for any increased
costs or reduction in amounts received or receivables or reduction in
return on capital with respect to such Letter of Credit.
SECTION 3.5 Conflict between Applications and Agreement. To the extent
that any provision of any application related to any Letter of Credit is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control.
ARTICLE IV
FEES
SECTION 4.1 Fees. Subject to Section 12.8 hereof, the Company agrees to
pay the following fees (the "Fees"):
(a) The Company agrees to pay to the Administrative Agent for
the ratable account of the Banks a Commitment fee (the "Commitment
Fee") for the period from and including the Effective Date to the
Maturity Date computed at a rate per annum determined by the grid set
forth below and calculated on the basis of a 360 day-year on the daily
average of the Unutilized Commitment of each Bank. The rate for the
Commitment Fee shall be adjusted on the first day of each Margin
Period. Commitment Fees shall be due and payable in arrears on each
Designated Payment Date commencing on the first such date following the
Effective Date and on the Maturity Date.
TOTAL FUNDED DEBT/EBITDA COMMITMENT FEE
RATE
------------------------ --------------
-4.00x 0.500%
-3.50x and <4.00x 0.500%
-3.00x and <3.50x 0.500%
-2.50x and <3.00x 0.500%
<2.50x 0.375%
(b) The Letter of Credit Fees shall be due and payable at the
time the Issuing Bank is to issue or renew any Letter of Credit. The
Letter of Credit Fee shall be adjusted, if applicable under the
definition of "Letter of Credit Fee," on the first day of each Margin
Period.
(c) The fees described in those certain fee letters between
the Company and BTCo, BofA and Bank One and any of their respective
Affiliates.
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(d) A renewal fee payable to the Agent on the Effective Date
for the ratable benefit of the Banks equal to 37.5 basis points
multiplied by the Total Commitment.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1 Conditions Precedent to Effectiveness. The obligation of
each Bank under the Agreement is subject to, in addition to the conditions
precedent specified in Section 5.2, the prior or concurrent satisfaction of the
following conditions:
(a) Loan and other Related Documents. On or before the
Effective Date, the Company shall, and shall cause each Guarantor to,
deliver to the Agents the following, all in form and substance
satisfactory to the Agents, and, where relevant, executed by all
appropriate parties:
(i) this Agreement (which includes the Guaranty) and
all other Loan Documents;
(ii) one Note for each Bank;
(iii) a certificate of an officer and of the
secretary or an assistant secretary of the Company and of each
Guarantor, as applicable, dated as of the Effective Date
certifying, (i) true and complete copies of each of (1) the
articles or certificate of incorporation, marked as filed with
the applicable governmental authorities and as amended and in
effect, of the Company and each of the Guarantors not party to
the Existing Credit Agreement, (2) the bylaws, as amended and
in effect, of the Company and each of the Guarantors not party
to the Existing Credit Agreement and (3) the resolutions
adopted by the board of directors of the Company and each of
the Guarantors (A) authorizing the execution, delivery and
performance by the Company and each of its Subsidiaries of
this Agreement and the other Loan Documents to which it is or
will be a party and, in the case of the Company, the Advances
to be made hereunder, (B) approving the forms of the Loan
Documents to which it is or will be a party and which will be
delivered at or prior to the date of the initial Advance and
(C) authorizing officers of the Company and each of its
Subsidiaries to execute and deliver the Loan Documents to
which it is or will be a party and any related documents,
including, any agreement contemplated by this Agreement, in
each case as being in full force and effect without
modification or amendment, (ii) that the articles or
certificate of incorporation and bylaws of each of the
Guarantors party to the Existing Credit Agreement have not
been amended, supplemented, or otherwise modified since April
14, 1998, except as attached to such certificate, (iii) the
incumbency and specimen signatures of the officers of the
Company and each of its Subsidiaries executing any documents
on its behalf, and (iv) that since December 31, 1999 there has
been no change in the businesses, operations, properties,
assets, liabilities, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole
which could reasonably be expected to have a Material Adverse
Effect.
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(b) Security Interests in Personal Property. The Agents shall
have received evidence satisfactory to them that the Company and the
Guarantors shall have taken or caused to be taken all such actions,
executed and delivered or caused to be executed and delivered all such
agreements, documents and instruments, and made or caused to be made
all such filings and recordings (other than the filing or recording of
the items described in clauses (iii) and (iv) below) that may be
necessary or, in the opinion of the Agents, desirable in order to
create in favor of the Administrative Agent, for the benefit of the
Banks, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire Collateral. Such actions shall
include the following:
(i) Schedules to Collateral Documents. Delivery to
the Administrative Agent of accurate and complete schedules to
all of the applicable Collateral Documents;
(ii) Stock Certificates and Instruments. Delivery to
the Administrative Agent of (a) certificates (which
certificates shall be accompanied by irrevocable undated stock
powers, duly endorsed in blank and otherwise satisfactory in
form and substance to the Agents) representing substantially
all capital stock pledged pursuant to the Company Pledge
Agreement and the Subsidiary Pledge Agreements and (b)
substantially all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to the
Agents) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements.
Delivery to the Administrative Agent of (a) the results of a
recent search, by a Person satisfactory to the Agents, of all
jurisdictions where filings to perfect are material or a
material portion of the Collateral are located, together with
copies of all such filings disclosed by such search; and (b)
UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective UCC financing statements
or fixture filings disclosed in such search and affecting a
material portion of the Collateral (other than any such
financing statements or fixture filings in respect of Liens
permitted to remain outstanding pursuant to the terms of this
Agreement);
(iv) UCC Financing Statements. Delivery to the
Administrative Agent of UCC financing statements duly executed
by the Company and each applicable Guarantor with respect to
all Collateral of the Company or such Guarantor, for filing in
all jurisdictions as may be necessary or, in the opinion of
the Agents, desirable to perfect the security interests
created in such Collateral pursuant to the Collateral
Documents; and
(v) Opinions of Local Counsel. Delivery to the
Administrative Agent of an opinion of counsel (which counsel
shall be reasonably satisfactory to the Agents) under the laws
of Texas and such other jurisdictions as Agents may reasonably
request, in each case with respect to the creation and
perfection of the security interests in favor the
Administrative Agent on behalf of the Banks in such Collateral
and such other matters governed by the laws of such
jurisdiction
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35
regarding such security interests as the Agents may reasonably
request, in each case in form and substance reasonably
satisfactory to the Agents.
(c) Necessary Governmental Authorizations and Consents. The
Company and its Subsidiaries shall have obtained all authorizations,
consents, approvals, licenses or exemptions of or have made all filings
or registrations with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, and
shall have obtained all consents of other Persons, in each case that
are necessary or advisable in connection with the transactions
contemplated hereby and the continued operation of the businesses
conducted by the Company and its Subsidiaries in substantially the same
manner as conducted prior to the Effective Date, and each shall be in
full force and effect, in each case other than those the failure to
obtain, which either individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect;
(d) Opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P. The Banks shall
have received originally executed copies of one or more favorable
written opinions addressed to the Agents and the Banks from ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, L.L.P., counsel to the Company and the Guarantors dated as
of the Effective Date, substantially in the form of Exhibit 5.1(d)
annexed hereto and such other matters as the Agents acting on behalf of
the Banks may reasonably request;
(e) Intentionally deleted;
(f) Payment of Fees. The Company shall have paid to the
Administrative Agent, for distribution as appropriate to the Agents and
the Banks, the Fees payable on the Effective Date referred to in
Section 4.1 and all reasonable fees and expenses (including the
reasonable fees and expenses of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.) agreed upon by
such parties to be paid on the Effective Date;
(g) Good Standing and Related Certificates. On or prior to the
Effective Date, the Agents shall have received certificates of
appropriate public officials as to the existence, good standing and
qualification to do business as a foreign corporation, as applicable,
of the Company and its Subsidiaries in each jurisdiction in which the
ownership of its properties or the conduct of its business requires
such qualifications and where the failure to so qualify would have a
Material Adverse Effect; and
(h) Financial Statements; Pro Forma Balance Sheet. On or prior
to the Effective Date, the Banks shall have received from the Company
(i) the audited financial statements of the Company and its
Subsidiaries for the twelve (12) months ended December 31, 1999
consisting of a balance sheet and related consolidated statements of
income, stockholders' equity and cash flows for such period, (ii) the
unaudited financial statements of the Company and its Subsidiaries for
the fiscal periods most recently ended prior to the Effective Date
(including without limitation monthly income statements for any such
period of less than three months), in each case consisting of a balance
sheet and the related consolidated statements of income, stockholders'
equity and cash flows for such periods, all in reasonably detail and
certified by the chief financial officer of the
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36
Company that they fairly present the financial condition of the Company
and its Subsidiaries for such periods and the results of their
operations and their cash flows for such periods, subject to changes
resulting from audit and normal year-end adjustments, (iii) pro forma
consolidated balance sheets of the Company and its Subsidiaries as at
January 31, 2001, prepared in accordance with GAAP and reasonably
reflecting the transactions contemplated hereby, which pro forma
financial statements shall be in form and substance reasonably
satisfactory to the Agents, and (iv) projected consolidated financial
statements of the Company and its Subsidiaries for the three-year
period after the Effective Date consisting of a balance sheet and
consolidated statements of income, shareholders' equity and cash flows,
which projected financial statements shall be in form and substance
reasonably satisfactory to the Agents (such financial statements and
information described in clauses (i) through (iv) above are hereinafter
collectively referred to as the "Financials");
(i) Solvency Assurances. On the Effective Date, as to the
Company and its Subsidiaries, the Agents and the Banks shall have
received a Financial Condition Certificate with appropriate
attachments, demonstrating that, after giving effect to the
consummation of the transactions contemplated hereby, the Company and
its Subsidiaries will be Solvent;
(j) Due Diligence. The results of Agents' continuing
financial, legal, tax and accounting due diligence investigations with
respect to the Company and its Subsidiaries and the other transactions
contemplated hereunder shall be satisfactory in all respects to the
Agents and the other Banks, and any supplemental business or financial
due diligence that the Agents reasonably determine have become
necessary shall not have disclosed information not previously disclosed
to the Agents which causes the results of such diligences not to be
satisfactory in all respects to the Agents and the other Banks. The
Agents and the other Banks shall also have received any information
reasonably necessary to conduct their continuing due diligence.
(k) Evidence of Insurance. Agents shall have received a
certificate from the Company's insurance broker or other evidence
satisfactory to them that all insurance required to be maintained
pursuant to Section 7.3 is in full force and effect and that the
Administrative Agent on behalf of the Banks has been named as
additional insured and/or loss payee thereunder to the extent required
under Section 7.3.
(l) Restructuring of Subordinated Debt. Evidence satisfactory
to the Administrative Agent and the Banks that the Required
Subordinated Debt Holders have restructured the payments of principal
and interest owed on Subordinated Debt in a manner satisfactory to the
Administrative Agent and the Banks.
The acceptance of the benefits of the initial Credit Event shall
constitute a representation and warranty by the Company to the Administrative
Agent and each of the Banks that, all of the conditions specified in this
Section above shall have been satisfied or waived as of that time.
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37
SECTION 5.2 Conditions Precedent to Effectiveness and All Subsequent
Credit Events. The obligation of the Banks under this Agreement and to make any
Advance or issue any Letter of Credit after the Effective Date is subject to the
further conditions precedent that on the date of such Credit Event:
(a) The representations and warranties set forth in Article VI
and in each of the Collateral Documents shall be true and correct in
all material respects as of, and as if such representations and
warranties were made on, the date of the proposed Credit Event (unless
such representation and warranty expressly relates to an earlier date
or is no longer true and correct solely as a result of transactions
permitted by the Loan Documents), and the Company shall be deemed to
have certified to the Administrative Agent and the Banks that such
representations and warranties are true and correct in all material
respects by submitting a Notice of Advance or Letter of Credit Request.
(b) The Company shall have complied with the provisions of
Section 2.3 hereof.
(c) No Default or Event of Default shall have occurred and be
continuing or would result from such Credit Event.
(d) No Material Adverse Effect shall have occurred since the
delivery of the most recent financial statements delivered pursuant to
Section 7.1.
(e) The Administrative Agent shall have received such other
approvals or documents as the Administrative Agent or the Banks may
reasonably request.
The acceptance of the benefits of each such Credit Event shall
constitute a representation and warranty by the Company to the Administrative
Agent and each of the Banks that all of the conditions specified in this Section
above exist as of that time.
SECTION 5.3 Delivery of Documents. All of the Notes, certificates,
legal opinions and other documents and papers referred to in this Article V,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Banks and, except for the Notes, in sufficient
counterparts for each of the Banks and shall be reasonably satisfactory in form
and substance to the Banks.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company, as to itself and each of its Subsidiaries, makes, on or as
of the occurrence of each Credit Event (except to the extent such
representations or warranties relate to an earlier date or are no longer true
and correct in all material respects solely as a result of transactions not
prohibited by the Loan Documents), the following representations and warranties
to the Administrative Agent and the Banks:
SECTION 6.1 Organization and Qualification. Each of the Company and its
Subsidiaries (a) is duly formed or organized, validly existing and is in good
standing under the laws of the state of its organization, (b) has the power to
own its property and to carry on its business as now
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38
conducted, except where the failure to do so would not have a Material Adverse
Effect and (c) is duly qualified to do business and is in good standing in every
jurisdiction in which the failure to be so qualified would have a Material
Adverse Effect.
SECTION 6.2 Authorization and Validity. Each of the Company and its
Subsidiaries has the corporate power and authority to execute, deliver and
perform its obligations hereunder and under the other Loan Documents to which it
is a party and all such action has been duly authorized by all necessary
corporate proceedings on its part. The Loan Documents to which each of the
Company and its Subsidiaries is a party have been duly and validly executed and
delivered by such Person and constitute a valid and legally binding agreement of
such Person enforceable in accordance with the respective terms thereof, except,
in each case, as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to or affecting the enforcement of creditors' rights generally, and by general
principles of equity regardless of whether such enforceability is a proceeding
in equity or at law.
SECTION 6.3 Governmental Consents. No authorization, consent, approval,
license or exemption of or filing or registration with any court or governmental
department. commission, board, bureau, agency or instrumentality, domestic or
foreign, is necessary for the valid execution, delivery or performance by the
Company or any Subsidiary of any Loan Document.
SECTION 6.4 Conflicting or Adverse Agreements or Restrictions. Neither
the Company nor any Subsidiary is a party to any contract or agreement or
subject to any restriction which would reasonably be expected to have a Material
Adverse Effect. Neither the execution nor delivery of the Loan Documents nor
compliance with the terms and provisions hereof or thereof will be contrary to
the provisions of, or constitute a default under (a) the charter or bylaws of
the Company or any of its Subsidiaries or (b) any law, regulation, order, writ,
injunction or decree of any court or governmental instrumentality that is
applicable to the Company or any of its Subsidiaries or (c) any material
agreement to which the Company or any of its Subsidiaries is a party or by which
it is bound or to which it is subject.
SECTION 6.5 Title to Assets. Each of the Company and its Subsidiaries
has good title to all material personalty and good and indefeasible title to all
material realty as reflected on the Company's and the Subsidiaries' books and
records as being owned by them, except for properties disposed of in the
ordinary course of business, subject to no Liens, except those permitted
hereunder, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. All of such assets have been and are being
maintained by the appropriate Person in good working condition in accordance
with industry standards, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
SECTION 6.6 Litigation. No proceedings against or affecting the Company
or any Subsidiary are pending or, to the knowledge of the Company, threatened
before any court or governmental agency or department which involve a reasonable
material risk of having a Material Adverse Effect, individually or in the
aggregate, except those listed on Schedule 6.6 hereof.
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SECTION 6.7 Financial Statements. Prior to the Effective Date, the
Company has furnished to the Banks the Financials. The Financials have been
prepared in conformity with GAAP consistently applied (except as otherwise
disclosed in such financial statements) throughout the periods involved and
present fairly, in all material respects, the consolidated financial condition
of the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations for the periods then ended. As of the
Effective Date, no Material Adverse Effect has occurred since December 31, 1999.
SECTION 6.8 Default. Neither the Company nor any Subsidiary is in
default under any material provisions of any instrument evidencing any
Indebtedness or of any agreement relating thereto, or in default in any respect
under any order, writ, injunction or decree of any court, or in default in any
respect under or in violation of any order, injunction or decree of any
governmental instrumentality, in each case in such manner as to cause a Material
Adverse Effect.
SECTION 6.9 Investment Company Act. Neither the Company nor any
Subsidiary is, or is directly or indirectly controlled by or acting on behalf of
any Person which is, an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended.
SECTION 6.10 Public Utility Holding Company Act. Neither the Company
nor any Subsidiary is a non-exempt "holding company," or subject to regulation
as such, or, to the knowledge of the Company's or such Subsidiary's officers, an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 6.11 ERISA. No accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA), that would cause a Material
Adverse Effect whether or not waived, exists or is expected to be incurred with
respect to any Plan. No liability to the PBGC (other than required premium
payments) has been or is expected by the Company to be incurred with respect to
any Plan by the Company or any ERISA Affiliate that would cause a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any
withdrawal liability under Title IV of ERISA with respect to any Multi-Employer
Plans.
SECTION 6.12 Tax Returns and Payments. Each of the Company and its
Subsidiaries has filed all federal income tax returns and other tax returns,
statements and reports (or obtained extensions with respect thereto) which are
required to be filed and has paid or deposited or made adequate provision, in
accordance with GAAP for the payment of all taxes (including estimated taxes
shown on such returns, statements and reports) which are shown to be due
pursuant to such returns, except for such taxes as are being contested in good
faith and by appropriate proceedings.
SECTION 6.13 Environmental Matters. Each of the Company and its
Subsidiaries (a) possesses all environmental, health and safety licenses,
permits, authorizations, registrations, approvals and similar rights necessary
under law or otherwise for the Company or such Subsidiary to conduct its
operations as now being conducted (other than those with respect to which the
failure to possess or maintain would not, individually or in the aggregate for
the Company and such Subsidiaries, reasonably be expected to have a Material
Adverse Effect) and (b) each of such licenses, permits, authorizations,
registrations, approvals and similar rights is
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valid and subsisting, in full force and effect and enforceable by the Company or
such Subsidiary, and each of the Company and its Subsidiaries is in compliance
with all effective terms, conditions or other provisions of such permits,
authorizations, registrations, approvals and similar rights except for such
failure or noncompliance that, individually or in the aggregate for the Company
and such Subsidiaries, would not reasonably be expected to have a Material
Adverse Effect. Except as disclosed on Schedule 6.13, on the Effective Date,
neither the Company nor any of its Subsidiaries has received any notices of any
violation of, noncompliance with, or remedial obligation under, Requirements of
Environmental Laws (which violation or non-compliance has not been cured), and
there are no writs, injunctions, decrees, orders or judgments outstanding, or
lawsuits, claims, proceedings, investigations or inquiries pending or, to the
knowledge of the Company or any Subsidiary, threatened, relating to the
ownership, use, condition, maintenance or operation of, or conduct of business
related to, any property owned, leased or operated by the Company or such
Subsidiary or other assets of the Company or such Subsidiary, other than those
violations, instances of noncompliance, obligations, writs, injunctions,
decrees, orders, judgments, lawsuits, claims, proceedings, investigations or
inquiries that, individually or in the aggregate for the Company and such
Subsidiaries, would not have a Material Adverse Effect. Except as disclosed on
Schedule 6.13, there are no material obligations, undertakings or liabilities
arising out of or relating to Environmental Laws to which the Company or any of
its Subsidiaries has agreed, assumed or retained, or by which the Company or any
of its Subsidiaries is adversely affected, by contract or otherwise and,
further, except as disclosed on Schedule 6.13, neither the Company nor any of
its Subsidiaries has received a written notice or claim to the effect that the
Company or any of its Subsidiaries is or may be liable to any other Person as
the result of a Release or threatened Release of a Hazardous Material which, in
either case, could reasonably be expected to have a Material Adverse Effect.
SECTION 6.14 Purpose of Loans.
(a) The proceeds of the Loan will be used solely for general
corporate purposes, including working capital, to finance acquisitions
permitted hereunder, and for Letters of Credit.
(b) None of the proceeds of any Advance will be used directly
or indirectly for the purpose of purchasing or carrying any "margin
stock" within the meaning of Regulation U or for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin stock.
SECTION 6.15 Franchises and Other Rights. The Company and each of its
Subsidiaries has all franchises, permits, licenses and other authority as are
necessary to enable them to carry on their respective businesses as now being
conducted and is not in default in respect thereof where the absence of such or
any such default could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.
SECTION 6.16 Subsidiaries and Assets. The Subsidiaries listed on
Schedule 6.16 are all of the Subsidiaries of the Company as of the Effective
Date and the address given for such Guarantors is the correct mailing address as
of the Effective Date. The Company shall update such Schedule 6.16 within thirty
(30) days of new Subsidiaries being added.
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SECTION 6.17 Solvency. After giving effect to the initial Advance
hereunder and all other Indebtedness of the Company existing at the time of such
Advance, the Company and its Subsidiaries, viewed as a consolidated entity, is
Solvent.
SECTION 6.18 Payment of Certain Indebtedness. The Company has (a)
repaid in full all of the Indebtedness described on Schedule 8.3(b)(ii) and (b)
obtained, and where applicable recorded in all appropriate locations, releases
of Liens for all real and personal property securing same.
SECTION 6.19 Matters Relating to Collateral.
(a) Creation, Perfection and Priority of Liens. The execution
and delivery of the Collateral Documents by the Company and the
Guarantors, together with (i) the actions taken on or prior to the date
hereof pursuant to Section 5.1(b) and (ii) the delivery to the
Administrative Agent of any Pledged Collateral not delivered to the
Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has
been so delivered) are effective to create in favor of the
Administrative Agent for the benefit of the Banks, as security for the
respective Secured Obligations (as defined in the applicable Collateral
Document in respect of any Collateral), a valid and perfected First
Priority Lien on all of the Collateral, and all filings and other
actions necessary or desirable to perfect and maintain the perfection
and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC
financing statements delivered to the Administrative Agent for filing
(but not yet filed) and the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf
of the Administrative Agent.
(b) Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) pledge or grant
by the Company or any Guarantor of the Liens purported to be created in
favor of the Administrative Agent pursuant to any of the Collateral
Documents or (ii) the exercise by the Administrative Agent of any
rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or
created or provided for by applicable law), except for filings or
recordings contemplated by Section 6.19(a) and except as may be
required, in connection with the disposition of any Pledged Collateral,
by laws generally affecting the offering and sale of securities.
(c) Absence of Third-Party Filings. Except such as may have
been filed in favor of the Administrative Agent as contemplated by
Section 6.19(a) or filed in connection with a Permitted Lien, no
effective UCC financing statement, fixture filing or other instrument
similar in effect covering a substantial portion of the Collateral is
on file in any filing or recording office.
(d) Margin Regulations. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U
or X of the Board of Governors of the Federal Reserve System.
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(e) Information Regarding Collateral. All information supplied
to the Agents by or on behalf of the Company or any Guarantor with
respect to any of the Collateral (in each case taken as a whole with
respect to any particular Collateral) is accurate and complete in all
material respects.
(f) Collateral Value. The fair value of the Collateral is
equal to or greater than the amount of the Obligations taking into
account all prior Liens on the Collateral securing Indebtedness other
than the Obligations.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Company, as to itself and each of its Subsidiaries, covenants and
agrees that on and after the date hereof and for so long as this Agreement is in
effect and until the Obligations have been paid in full and the Commitments have
terminated:
SECTION 7.1 Information Covenants. The Company will furnish to each
Bank:
(a) As soon as available, and in any event within forty-five
(45) days after the close of each fiscal quarter, the consolidated
balance sheet of the Company and its Subsidiaries as of the end of such
period and the related consolidated statements of income and cash flow
for such period, setting forth, in each case, comparative consolidated
figures for the related periods in the prior fiscal year, all of which
shall be certified by the treasurer, chief financial officer, or chief
executive officer of the Company as fairly presenting in all material
respects, the financial position of the Company and its Subsidiaries as
of the end of such period and the results of their operations for the
period then ended in accordance with GAAP, subject to changes resulting
from normal year-end audit adjustments. In addition to the foregoing,
the Company shall also provide at such time: (i) summary balance sheet
and operating income information with respect to each direct Subsidiary
fairly representing in all material respects, the financial position of
each direct Subsidiary as of the end of such period and the results of
their operations for the period then ended, and (ii) a backlog report
for the Company and its Subsidiaries for the fiscal quarter then ended.
(b) As soon as available, and in any event within ninety (90)
days after the close of each fiscal year of the Company, the audited
consolidated balance sheets of the Company as at the end of such fiscal
year and the related consolidated and statements of income,
stockholders equity and cash flows for such fiscal year, setting forth.
in each case comparative figures for the preceding fiscal year and
certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or other independent certified public
accountants of recognized national standing, whose report shall be
without limitation as to the scope of the audit and reasonably
satisfactory in substance to the Banks. In addition to the foregoing,
the Company shall cause each Subsidiary to deliver summary income
statements within ninety (90) days after the close of each fiscal year
of the Company.
(c) Promptly after any Responsible Officer of the Company
obtains knowledge thereof, notice of:
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(i) any material violation of, noncompliance with, or
remedial obligations under, Requirements of Environmental Laws
that could cause a Material Adverse Effect;
(ii) any Release or threatened material Release of
Hazardous Materials affecting any property owned, leased or
operated by the Company or any of its Subsidiaries that could
cause a Material Adverse Effect;
(iii) any event or condition which constitutes a
Default or an Event of Default;
(iv) any condition or event which, in the opinion of
management of the Company, would reasonably be expected to
have a Material Adverse Effect;
(v) any Person having given any written notice to the
Company or taken any other action with respect to a claimed
material default or event under any material instrument or
material agreement;
(vi) the institution of any litigation which might
reasonably be expected in the good faith judgment of the
Company either to have a Material Adverse Effect or result in
a final, non-appealable judgment or award in excess of
$1,000,000.00 with respect to any single cause of action; and
(vii) all ERISA notices required by Section 7.7;
such notice shall specify the nature and period of existence thereof
and specifying the notice given or action taken by such Person and the
nature of any such claimed default, event or condition and, in the case
of an Event of Default or Default, what action has been taken, is being
taken or is proposed to be taken with respect thereto.
(d) At the time of the delivery of the financial statements
provided for in Section 7.1(a) and Section 7.1(b), a Compliance
Certificate of a Responsible Officer to the effect that, no Default or
Event of Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof and the action that is
being taken or that is proposed to be taken with respect thereto, which
certificate shall set forth the calculations required to establish (i)
whether the Company was in compliance with the provisions of Section
8.10 through Section 8.15 as at the end of such fiscal period or year,
as the case may be, and (ii) pro forma compliance with this Agreement
with respect to principal payments scheduled to be made during the next
fiscal quarter of the Company on Subordinated Debt which has been
restructured as required by Section 5.1(l).
(e) Promptly following request by the Administrative Agent
such environmental reports, studies and audits of the Company's
procedures and policies, assets and operations in respect of
Environmental Laws as the Administrative Agent may reasonably request.
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(f) Promptly upon receipt thereof, a copy of any report or
letter submitted to the Company by its independent accountants in
connection with any regular or special audit of the Company's records.
(g) From time to time and with reasonable promptness, such
other information or documents as the Administrative Agent or any Bank
through the Administrative Agent may reasonably request.
(h) As soon as available, and in any event within thirty (30)
days after the end of each calendar month (except at the close of a
fiscal quarter or fiscal year of the Company, when Section 7.1(a) and
Section 7.1(b), respectively, will apply), the consolidated balance
sheet of the Company and its Subsidiaries as of the end of such month
and the related consolidated statements of income for such period in
comparison to the same period for the prior year, along with summaries
of the accounts receivable, accounts payable balances and an accounts
receivable aging report as of the end of such month, all of which shall
be certified by the treasurer, chief financial officer, or chief
executive officer of the Company as fairly presenting in all material
respects, the financial position of the Company and its Subsidiaries as
of the end of such month in accordance with GAAP. In addition to the
foregoing, the Company shall also provide at such time a schedule and
explanation of the top fifteen (15) jobs in progress for which
projections indicate a negative deviation from the original anticipated
margins, which report shall include the amount of underbillings for
each such job.
(i) Within thirty (30) days after the end of each calendar
month, a completed Borrowing Base Certificate calculating and
certifying the Borrowing Base as of the last day of such calendar
month, signed by an officer and the secretary of the company and in the
form attached hereto as Exhibit 7.1(i).
(j) Promptly upon receipt, a copy of the Company's annual
management letter from the Company's independent auditors.
SECTION 7.2 Books, Records and Inspections. The Company and its
Subsidiaries will maintain, and will permit, or cause to be permitted, any
Person designated by any Bank or the Banks to visit and inspect any of the
properties of the Company and its Subsidiaries, to examine the corporate books
and financial records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and to discuss the affairs, finances and accounts
of any such corporations with the officers of the Company and its Subsidiaries
and with their independent public accountants, all at such reasonable times and
as often as the Administrative Agent or such Bank may reasonably request. Such
inspections shall include one field exam of the Company's working capital
assets, which shall be completed on or before the one hundred twentieth (120th)
day following the Effective Date. Such field exam shall be at the expense of the
Company. Inspections other than such field exam shall be at the expense of the
Bank or Banks requesting same unless there is in existence a Default at the time
of such request in which event such expense shall be at the expense of the
Company.
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SECTION 7.3 Insurance and Maintenance of Properties.
(a) Each of the Company and its Subsidiaries will keep
reasonably adequately insured by financially sound and reputable
insurers all of its material property, which is of a character, and in
amounts and against such risks, usually and reasonably insured by
similar Persons engaged in the same or similar businesses, including,
without limitation, insurance against fire, casualty and any other
hazards normally insured against. Each of the Company and its
Subsidiaries will at all times maintain insurance against its liability
for injury to Persons or property, which insurance shall be by
financially sound and reputable insurers and in such amounts and form
as are customary for corporations of established reputation engaged in
the same or a similar business and owning and operating similar
properties. The Company shall provide the Administrative Agent a
listing of all such insurance and such other certificates and other
evidence thereof, on or prior to the Effective Date hereof and annually
thereafter. Each policy of insurance that insures against loss or
damage with respect to any Collateral or against losses due to business
interruption shall name the Administrative Agent for the benefit of the
Banks as the loss payee thereunder for any covered loss in excess of
$500,000 and shall provide for at least thirty (30) days (fifteen (15)
days in the event of non-payment of premium) prior written notice to
the Administrative Agent of any modification or cancellation of such
policy.
(b) Each of the Company and its Subsidiaries will cause all of
its material properties used or useful in the conduct of its business
to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
reasonably necessary repairs, renewals and replacements thereof, all as
in the reasonable judgment of such Person may be reasonably necessary
so that the business carried on in connection therewith may be properly
conducted at all times, except where such failure could not reasonably
be expected to have a Material Adverse Effect.
SECTION 7.4 Payment of Taxes. Each of the Company and its Subsidiaries
will pay and discharge all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties belonging
to it, prior to the date on which penalties attach thereto, except for such
amounts that are being contested in good faith and by appropriate proceedings,
except where such failure could not reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate.
SECTION 7.5 Corporate Existence. Each of the Company and its
Subsidiaries will do all things necessary to preserve and keep in full force and
effect (a) the existence of the Company, and (b) unless the failure to do so
would not reasonably be expected to have a Material Adverse Effect, individually
or in the aggregate, the rights and franchises of each of the Company and its
Subsidiaries.
SECTION 7.6 Compliance with Statutes. Each of the Company and its
Subsidiaries will comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its
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business and the ownership of its property, except to the extent the failure to
do so would not reasonably be expected to have a Material Adverse Effect.
SECTION 7.7 ERISA. Promptly after any Responsible Officer of the
Company or any of its Subsidiaries knows or has reason to know any of the
following items are true the Company will deliver or cause to be delivered to
the Banks a certificate of the chief financial officer of the Company setting
forth details as to such occurrence and such action, if any, the Company or its
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Company or its ERISA
Affiliate with respect thereto: that a Reportable Event has occurred or that an
application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard; that a Multiemployer
Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that any required contribution to a Plan or
Multiemployer Plan has not been or may not be timely made; that proceedings may
be or have been instituted under Section 4069(a) of ERISA to impose liability on
the Company or an ERISA Affiliate or under Section 4042 of ERISA to terminate a
Plan or appoint a trustee to administer a Plan; that the Company or any ERISA
Affiliate has incurred or may incur any liability (including any contingent or
secondary liability) on account of the termination of or withdrawal from a Plan
or a Multiemployer Plan; and that the Company or an ERISA Affiliate may be
required to provide security to a Plan under Section 401(a)(29) of the Code.
SECTION 7.8 Additional Subsidiaries. The Company will cause any Person
that becomes a Material Subsidiary subsequent to the Effective Date, within
thirty (30) Business Days after becoming a Material Subsidiary, (A) to execute
and deliver (i) a Guaranty or a counterpart of this Agreement and deliver same
to the Administrative Agent (together with certificates and all other
instruments for such Material Subsidiary as required by Section 5.1(a)(iii)
hereof); (ii) a Subsidiary Pledge Agreement or a counterpart of a Subsidiary
Pledge Agreement executed by each such new Guarantor; and (iii) a Subsidiary
Security Agreement or a counterpart of a Subsidiary Security Agreement executed
by each such new Guarantor; provided if said Material Subsidiary is not
incorporated under the laws of the United States or one of its states or
territories, no such Guaranty, Subsidiary Pledge Agreement or Subsidiary
Security Agreement, will be required if the Company makes arrangements,
satisfactory to the Administrative Agent, in its sole discretion, regarding
restrictions on transfer of funds or other assets by the Company or any
Subsidiary to said new foreign Material Subsidiary; and (B) to take all such
other further actions and executed all such further documents and instruments
(including actions, documents and instruments comparable to those described in
Section 5.1(b)) as may be necessary or, in the opinion of the Administrative
Agent, desirable to create in favor of the Administrative Agent, for the benefit
of the Banks, a valid and perfected First Priority Lien on all of the personal
property assets of such Subsidiary described in the applicable forms of the
Collateral Documents.
SECTION 7.9 Additional Collateral. The Company and the Guarantors shall
re-title or otherwise indicate the Administrative Agent's lien on behalf of the
Banks on the certificate of title of any titled vehicles at such time as the
Administrative Agent notifies the Company that such action is required.
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47
SECTION 7.10 Outside Consultant.
(a) In the event that there shall occur an Event of Default as
a result of a breach of Section 8.10 through Section 8.15 inclusive,
the Administrative Agent and the Banks will appoint a consultant to
review and opine on the Company's practices, procedures, systems and
overall business operations.
(b) If the results of the field exam required under Section
7.2 are deemed unsatisfactory by the Majority Banks, the Administrative
Agent and the Majority Banks will appoint a consultant to review and
opine on the Company's practices, procedures, systems and overall
business operations.
(c) In each of the cases (a) and (b) above, the reasonable
fees, costs and expenses of said consultant, the Administrative Agent
and the Banks in connection with said review, shall be at the expense
of the Company, and the Company shall cooperate with such consultant in
the manner described in Section 7.2. Upon completion of such review,
the Company will diligently pursue in a commercially reasonable manner
the incorporation of the recommendations of said consultant into its
ordinary course of business.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees, as to itself and, except as otherwise
provided herein, each of its Subsidiaries, that on and after the date hereof and
for so long as this Agreement is in effect and until the Obligations have been
paid in full and the Commitments have terminated:
SECTION 8.1 Change in Business. The Company will not, and will not
permit any of its Subsidiaries to, engage in any businesses not of the same
general type or reasonably related thereto as those conducted by the Company on
the Effective Date.
SECTION 8.2 Consolidation, Merger or Sale of Assets. Except as
disclosed to the Administrative Agent on or before the Effective Date in
writing, the Company will not, and will not permit any of its Subsidiaries to,
wind up, liquidate or dissolve their affairs, or enter into any transaction of
merger or consolidation, or enter into any Asset Sales, except for (a) mergers
permitted under Section 8.5(d),so long as the Company is the surviving entity
and so long as no Event of Default occurs immediately before or after such
merger, (b) mergers by the Company with any of its wholly-owned Subsidiaries and
mergers by the Company's wholly-owned Subsidiaries with another of the Company's
wholly-owned Subsidiaries, so long as the Company is the surviving entity and so
long as no Event of Default occurs immediately before or after such merger, (c)
mergers by a wholly-owned Subsidiary of the Company with another Person in
connection with an Investment permitted under Section 8.5(d), so long as the
relevant Subsidiary is the surviving entity and so long as no Event of Default
occurs immediately before or after such merger, (d) wind ups, liquidations,
dissolutions, mergers or consolidations with respect to the Subsidiaries listed
on Exhibit 8.2(d) attached hereto and incorporated herein by reference and Asset
Sales with respect to the stock of such Subsidiaries and the assets owned by
such
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48
Subsidiaries as of the Effective Date; provided that all proceeds received from
such transactions permitted by this Section 8.2(d) shall be applied to the
Obligations then outstanding under the Loan Documents, and (e) Sale and
Leaseback Transactions permitted under Section 8.3(n). No amendment,
modification, termination, waiver or consent shall be made with respect to this
Section 8.2 or with respect to the definition of "Asset Sales" without the
consent of Banks holding at least eighty percent (80%) of the Advances
outstanding under the Loans, or, if no Advances are outstanding, Banks holding
such percentage of the Total Commitment (notwithstanding any reduction or
termination of the Total Commitment) or if there are no Advances or Commitments
outstanding, Banks holding such percentage of outstanding Letters of Credit.
SECTION 8.3 Indebtedness. Neither the Company nor any Subsidiary of the
Company will create, incur, assume or permit to exist any Indebtedness of the
Company or any Subsidiary except:
(a) Indebtedness existing hereunder;
(b) Indebtedness existing on the Effective Date not otherwise
permitted in this Section 8.3 listed on Schedule 8.3(b)(i) and (ii);
(c) Indebtedness arising as a result of the endorsement in the
ordinary course of business of negotiable instruments in the course of
collection;
(d) accounts payable and unsecured, current and long-term,
liabilities (including accrued insurance related liabilities), not the
result of indebtedness for borrowed money, to vendors, suppliers and
other Persons for goods and services in the ordinary course of
business;
(e) agreements to acquire any Person or assets entered into by
the Company or any of its Subsidiaries in anticipation of acquiring
such Person or assets if such acquisition is not prohibited by this
Agreement, and so long as the Indebtedness represented by such
agreements is not otherwise prohibited hereunder;
(f) intercompany Indebtedness of any Subsidiary of the Company
to the Company or any other Subsidiary and Indebtedness of the Company
to any Subsidiary of the Company provided that same is subordinate to
the Obligations in the manner provided in Section 8.5 hereof;
(g) current and deferred taxes;
(h) other Indebtedness not in excess of $10,000,000.00 in the
aggregate at any time outstanding;
(i) Subordinated Debt incurred by the Company or any of its
Subsidiaries solely in connection with Investments permitted by Section
8.5(d) and Subordinated Debt incurred to refinance the then outstanding
aggregate principal amount of any such Subordinated Debt incurred
solely in connection with Investments permitted by Section 8.5(d);
provided that such refinancing Subordinated Debt (1) shall be in an
aggregate
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49
principal amount not to exceed the then outstanding aggregate principal
amount of such Subordinated Debt to be refinanced plus the amount of
accrued and unpaid interest thereon; (2) shall not mature earlier than
twelve months after the Maturity Date; and (3) shall contain such other
terms and conditions that are not more favorable to the holders of such
refinancing Subordinated Debt than to the holders of the Subordinated
Debt being refinanced;
(j) Indebtedness assumed or acquired in connection with
Investments permitted under Section 8.5(d); provided that all of such
Indebtedness in excess of three percent (3%) of the net book value of
the assets acquired in any such Investment shall be retired within 60
days after the date of such Investment;
(k) renewals and extensions with the same lenders (in the same
or lesser principal amount on similar terms and conditions) of any
Indebtedness listed in Section 8.3(a) through Section 8.3(i) but
excluding Section 8.3(h) above;
(l) vehicle leases not to exceed $30,000,000.00 in face value;
(m) Indebtedness under Interest Rate Agreements and Other
Hedging Agreements to which the Company and any Bank are parties;
provided that the Company or any of its Subsidiaries may enter into
Interest Rate Agreements and Other Hedging Agreements with lenders
other than Banks so long as such Interest Rate Agreements and Other
Hedging Agreements are unsecured and are entered into in the ordinary
course of business for non-speculative purposes; and
(n) Sale and Leaseback Transactions in the ordinary course of
business with respect to the Company's vehicles owned on the Effective
Date; provided that one hundred percent (100%) of the Net Cash Proceeds
generated from same is applied as set forth in Section 2.7(d).
SECTION 8.4 Liens and Related Matters.
(a) Prohibition on Liens. Neither the Company nor any
Subsidiary of the Company will create, incur, assume or suffer to exist
any Lien upon or with respect to any of its property or assets of any
kind whether now owned or hereafter acquired, except:
(i) Liens existing on the Effective Date and listed
on Schedule 8.4(a);
(ii) Liens existing on the Effective Date securing
currently secured Indebtedness permitted under Section 8.3(b)
or Section 8.3(h) above;
(iii) Permitted Liens;
(iv) Liens securing Indebtedness permitted under
Section 8.3(h) and Section 8.3(j);
(v) Liens granted pursuant to the Collateral
Documents; and
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(vi) any renewal, extension or replacement of any
Lien referred to above with the same lenders; provided that no
Lien arising or existing as a result of such extension,
renewal or replacement shall be extended to cover any property
not theretofore subject to the Lien being extended, renewed or
replaced; and provided further that the principal amount of
the Indebtedness secured thereby shall not exceed the
principal amount of the Indebtedness so secured at the time of
such extension, renewal or replacement.
(b) Equitable Lien in Favor of Lenders. If the Company or any
of its Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other
than Liens excepted by the provisions of Section 8.4(a), it shall make
or cause to be made effective provision whereby the Obligations will be
secured by such Lien equally and ratably with any and all other
Indebtedness secured thereby as long as any such Indebtedness shall be
so secured; provided that, notwithstanding the foregoing, this covenant
shall not be construed as a consent by Majority Banks to the creation
or assumption of any such Lien not permitted by the provisions of
Section 8.4(a).
(c) No Further Negative Pledges. Except with respect to
specific property encumbered to secure payment of particular
Indebtedness or to be sold pursuant to an executed agreement with
respect to an Asset Sale, neither the Company nor any of its
Subsidiaries shall enter into any agreement (other than an agreement
prohibiting only the creation of Liens securing Subordinated Debt)
prohibiting the creation or assumption on any Lien upon any of its
properties or assets, whether now or owned or hereafter acquired.
SECTION 8.5 Investments. Neither the Company nor any Subsidiary will,
directly or indirectly, make or own any Investment in any Person, except:
(a) Permitted Investments;
(b) Investments owned on the Effective Date as set forth on
Schedule 8.5(b), including Investments in the Subsidiaries, direct and
indirect;
(c) Investments arising out of loans and advances for
expenses, travel per diem and similar items in the ordinary course of
business to officers, directors and employees and intercompany
Indebtedness permitted by Section 8.3(f);
(d) Provided that the Company has obtained the prior written
consent of the Eighty Percent Banks with respect thereto, Investments
in the stock, warrants, stock appreciation rights, other securities
and/or other assets of domestic entities engaged in the same general
type of business as the Company on the Effective Date, in which the
Company or one of its wholly owned Subsidiaries is the surviving
entity.
(e) other Investments having cost to the Company and its
Subsidiaries not exceeding $2,000,000.00 in the aggregate at any one
time outstanding during the term of this Agreement,
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51
(f) Investments in the form of stock buybacks allowed under
Section 8.6; and
(g) Investments in capital stock of wholly-owned Subsidiaries
of the Company in existence on the Effective Date.
SECTION 8.6 Restricted Payments. The Company will not, without the
prior written consent of the Majority Banks, pay any dividend or other
distribution, direct or indirect, on account of, or redeem, retire, purchase or
guaranty the value of or make any other acquisition, direct or indirect, of any
shares of any class of stock of the Company, or of any warrants, rights or
options to acquire any such shares, now or hereafter outstanding.
SECTION 8.7 Change in Accounting. The Company will not and will not
permit any Subsidiary to, change its method of accounting including a change of
the Company's fiscal year except for (a) changes permitted by GAAP in which the
Company's auditors concur, (b) changes with respect to any Person or assets
acquired by the Company to conform with the Company's policies and procedures
and which are permitted by GAAP, (c) changes required by GAAP, or (d) changes
required by regulatory agencies. The Company shall advise the Administrative
Agent in writing promptly upon making any material change to the extent same is
not disclosed in the financial statements required under Section 7.1 hereof. In
the event of any such change, the Company, the Banks and the Administrative
Agent agree to negotiate amendments to Section 8.10 through Section 8.14 hereof
(and related definitions, if relevant) so as to equitably reflect such changes
thereon with the intended result that the criteria for evaluating the financial
condition of the Company and its Subsidiaries shall be substantially the same
after such changes as before.
SECTION 8.8 Change of Certain Indebtedness. The Company will not, and
will not permit any of its Subsidiaries, after the occurrence and during the
continuance of any Default or Event of Default, to make any voluntary
prepayments of principal or interest on any of the Company's Indebtedness other
than Indebtedness evidenced by this Agreement.
SECTION 8.9 Transactions with Affiliates. The Company will not,
directly or indirectly, engage in any transaction with any Affiliate, including
the purchase, sale or exchange of assets or the rendering of any service, except
in the ordinary course of business or pursuant to the reasonable requirements of
its business and, in each case, upon terms that are no less favorable than those
which might be obtained in an arm's-length transaction at the time from
non-Affiliates.
SECTION 8.10 Funded Senior Debt to EBITDA Ratio. The Company will not,
as of the last day of any fiscal quarter specified in the table below, permit
the ratio of its total Funded Senior Debt on such day to EBITDA for the four
consecutive fiscal quarters then ended to exceed the amounts set forth below:
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52
QUARTER ENDING
DATE(S) RATIO
-------------- -----
3/31/01 3.55 to 1.00
6/30/01 3.25 to 1.00
9/30/01 3.00 to 1.00
all quarters ending
after 9/30/01 2.50 to 1.00
For purposes of calculating the ratio in this Section 8.10, the calculation of
Funded Senior Debt after the acquisition of assets or entities permitted under
this Agreement shall include adjustments to account for the total Funded Senior
Debt of or applicable to such acquired assets or entities during the relevant
period.
SECTION 8.11 Total Funded Debt to EBITDA Ratio. The Company will not,
as of the last day of any fiscal quarter specified in the table below, permit
the ratio of (i) its Total Funded Debt on such day to (ii) EBITDA for the four
consecutive fiscal quarters then ended to exceed the amounts set forth below:
FISCAL QUARTER
DATE(S) RATIO
-------------- -----
3/31/01 4.40 to 1.00
6/30/01 4.00 to 1.00
9/30/01 3.50 to 1.00
all quarters ending
after 9/30/01 3.00 to 1.00
For purposes of calculating the ratio in this Section 8.11, the calculation of
Total Funded Debt after the acquisition of assets or entities permitted under
this Agreement shall include adjustments to account for the Total Funded Debt of
or applicable to such acquired assets or entities during the relevant period.
SECTION 8.12 Minimum Net Worth. The Company will not permit, as of the
Effective Date, its Consolidated Net Worth to be less than $360,419,000.00. The
Company will not permit, as of the last day of any fiscal quarter commencing
with fiscal quarter ending March 31, 2001, its Consolidated Net Worth to be less
than the sum of (i) $360,419,000 plus (ii) seventy-five percent (75%) of the
cumulative quarterly consolidated net income of the Company for each such fiscal
quarter during which the Company has positive consolidated net income plus (iii)
one hundred percent (100%) of the net proceeds received by the Company from any
sale or issuance of any equity securities of, or any other additions to capital
by, the Company or its Subsidiaries.
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SECTION 8.13 Capital Expenditures. The Company will not permit total
consolidated capital expenditures (including Capitalized Lease Obligations but
exclusive of (x) Investments permitted under Section 8.5(d) and (y) consolidated
capital expenditures with respect to casualty loss replacements) to be greater
than the lesser of (i) $22,000,000.00 or (ii) two percent (2.00%) of gross
revenues (pro forma gross revenues with respect to permitted acquisitions) for
any fiscal year during the term hereof.
SECTION 8.14 Interest Coverage Ratio. The Company will not, as of the
last day of any fiscal quarter specified in the table below, permit the ratio of
EBITDA for the four consecutive fiscal quarters then ended to cash Interest
Expense for such period to be less than the amounts set forth below:
QUARTER ENDING
DATE(S) RATIO
-------------- -----
3/31/01 2.15 to 1.00
6/30/01 2.25 to 1.00
9/30/01 2.50 to 1.00
12/31/01 2.80 to 1.00
quarters ending
after 12/31/01 3.00 to 1.00
SECTION 8.15 Minimum EBITDA. The Company will not, as of the last day
of any fiscal quarter specified in the table below, permit its EBITDA for the
three (3) months then ended to be less than the amounts set forth below:
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54
QUARTER ENDING QUARTERLY
DATE(S) EBITDA
-------------- ---------
03/31/01 $13,000,000.00
06/30/01 $18,500,000.00
09/30/01 $23,000,000.00
12/31/01 $21,500,000.00
03/31/02 $13,700,000.00
06/30/02 $20,000,000.00
09/30/02 $24,800,000.00
12/31/02 and quarters
ending thereafter $23,200,000.00
SECTION 8.16 No Prepayment or Amendments to Subordinated Debt. The
Company will not, and will not permit any of its Subsidiaries to:
(a) amend any material term (including, without limitation,
interest, payment or subordination terms) of any promissory note,
intercreditor agreement, restructuring agreement or any other document
amending, evidencing or relating to payment of the Subordinated Debt
without the prior written consent of the Administrative Agent and the
Banks, except such amendments which do not make any material term less
favorable to the Company or the Banks; and
(b) make any voluntary prepayments or defeasements of
principal or interest on any Subordinated Debt that has been
restructured as referenced in Section 5.1(l) other than as set forth
immediately below in this Section 8.16(b). In the event that for two
consecutive fiscal quarters (i) the ratio described in Section 8.10
does not exceed 2.00 to 1.00, and (ii) the ratio described in Section
8.11 does not exceed 3.00 to 1.00, and provided that such payment will
not result in an Event of Default, the Company may pay Subordinated
Debt that has been restructured as referenced in Section 5.1(l) as
follows:
(i) During the first fiscal quarter after the
above-referenced ratios have been so maintained, the Company
may pay all principal due and payable during the period from
October 1, 2000 through and including March 31, 2001 (x) on
Subordinated Debt not payable to the Required Subordinated
Debt Holders, and (y) which would have been due and payable on
Subordinated Debt during such period to the Required
Subordinated Debt Holders, but for the restructuring of the
Subordinated Debt to such holders referenced in Section
5.1(l); and
(ii) During all fiscal quarters following the fiscal
quarter referenced in Section 8.16(b)(i) above, and provided
that the Company has continued to
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55
maintain the ratios referred to in Section 8.16(b) above, the
Company may pay the principal described in Section
8.16(b)(i)(x) and Section 8.16(b)(i)(y) attributable to the
fiscal quarter in which such principal has remained unpaid for
the greatest amount of time.
ARTICLE IX
GUARANTY
SECTION 9.1 Guaranty. In consideration of, and in order to induce the
Banks to make the Loans and the Issuing Bank to issue Letters of Credit
hereunder, the Guarantors hereby absolutely, unconditionally and irrevocably,
jointly and severally, guarantee the punctual payment and performance when due,
whether at stated maturity, by acceleration or otherwise, of the Obligations,
and all other obligations and covenants of the Company now or hereafter existing
under this Agreement, the Notes and the other Loan Documents whether for
principal, interest (including interest accruing or becoming owing both prior to
and subsequent to the commencement of any proceeding against or with respect to
the Company under any chapter of the Bankruptcy Code), Fees, commissions,
expenses (including reasonable attorneys' fees and expenses) or otherwise, and
all reasonable costs and expenses, if any, incurred by the Administrative Agent
or any Bank in connection with enforcing any rights under this Guaranty (all
such obligations being the "Guaranteed Obligations,") and agree to pay any and
all reasonable expenses incurred by each Bank and the Administrative Agent in
enforcing this Guaranty; provided that notwithstanding anything contained herein
or in any of the Loan Documents to the contrary, the maximum liability of each
Guarantor hereunder and under the other Loan Documents shall in no event exceed
such Guarantor's Maximum Guaranteed Amount, provided further, each Guarantor
shall be unconditionally required to pay all amounts demanded of it hereunder
prior to any determination of such Maximum Guaranteed Amount and the recipient
of such payment, if so required by a final non-appealable order of a court of
competent jurisdiction. shall then be liable for the refund of any excess
amounts. If any such rebate or refund is ever required, all other Guarantors
(and the Company) shall be fully liable for the repayment thereof to the maximum
extent allowed by applicable law. This Guaranty is an absolute, unconditional,
present and continuing guaranty of payment and not of collectibility and is in
no way conditioned upon any attempt to collect from the Company or any other
action, occurrence or circumstance whatsoever. Each Guarantor agrees that the
Guaranteed Obligations may at any time and from time to time exceed the Maximum
Guaranteed Amount of such Guarantor without impairing this Guaranty or affecting
the rights and remedies of the Banks hereunder.
SECTION 9.2 Continuing Guaranty. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement, the Notes and the other Loan Documents. Each Guarantor agrees
that the Guaranteed Obligations and Loan Documents may be extended or renewed,
and Loans repaid and reborrowed in whole or in part, without notice to or assent
by such Guarantor, and that it will remain bound upon this Guaranty
notwithstanding any extension, renewal or other alteration of any Guaranteed
Obligations or Loan Documents, or any repayment and reborrowing of Loans. To the
maximum extent permitted by applicable law, the obligations of each Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms hereof under any
circumstances whatsoever, including:
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(a) any extension, renewal, modification, settlement,
compromise, waiver or release in respect of any Guaranteed Obligations;
(b) any extension, renewal, amendment, modification,
rescission, waiver or release in respect of any Loan Documents;
(c) any release, exchange, substitution, non-perfection or
invalidity of, or failure to exercise rights or remedies with respect
to, any direct or indirect security for any Guaranteed Obligations,
including the release of any Guarantor or other Person liable on any
Guaranteed Obligations;
(d) any change in the corporate existence, structure or
ownership of the Company, any Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Company, such
Guarantor, any other Guarantor or any of their respective assets;
(e) the existence of any claim, defense, set-off or other
rights or remedies which such Guarantor at any time may have against
the Company, or the Company or such Guarantor may have at any time
against the Administrative Agent, any Bank, any other Guarantor or any
other Person, whether in connection with this Guaranty, the Loan
Documents, the transactions contemplated thereby or any other
transaction other than by the payment in full by the Company of the
Guaranteed Obligations after the termination of the Commitments of the
Banks;
(f) any invalidity or unenforceability for any reason of this
Agreement or other Loan Documents, or any provision of law purporting
to prohibit the payment or performance by the Company, such Guarantor
or any other Guarantor of the Guaranteed Obligations or Loan Documents,
or of any other obligation to the Administrative Agent or any Bank; or
(g) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing.
SECTION 9.3 Effect of Debtor Relief Laws. If after receipt of any
payment of, or proceeds of any security applied (or intended to be applied) to
the payment of all or any part of the Guaranteed Obligations, the Administrative
Agent or any Bank is for any reason compelled to surrender or voluntarily
surrenders such payment or proceeds to any Person (a) because such payment or
application of proceeds is or may be avoided, invalidated, declared fraudulent,
set aside, determined to be void or voidable as a preference, fraudulent
conveyance, fraudulent transfer, impermissible set-off or a diversion of trust
funds or (b) for any other similar reason, including (i) any judgment, decree or
order of any court or administrative body having jurisdiction over the
Administrative Agent, any Bank or any of their respective properties or (ii) any
settlement or compromise of any such claim effected by the Administrative Agent
or any Bank with any such claimant (including the Company), then the Guaranteed
Obligations or part thereof intended to be satisfied shall be reinstated and
continue, and this Guaranty shall continue in full force as if such payment or
proceeds have not been received, notwithstanding any revocation thereof or the
cancellation of any Note or any other instrument evidencing any
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Guaranteed Obligations or otherwise; and the Guarantors, jointly and severally,
shall be liable to pay the Administrative Agent and the Banks, and hereby do
indemnify the Administrative Agent and the Banks and hold them harmless for the
amount of such payment or proceeds so surrendered and all expenses (including
reasonable attorneys' fees, court costs and expenses attributable thereto)
incurred by the Administrative Agent or any Bank in the defense of any claim
made against it that any payment or proceeds received by the Administrative
Agent or any Bank in respect of all or part of the Guaranteed Obligations must
be surrendered. The provisions of this paragraph shall survive the termination
of this Guaranty, and any satisfaction and discharge of the Company by virtue of
any payment, court order or any federal or state law.
SECTION 9.4 Waiver of Subrogation. Notwithstanding any payment or
payments made by any Guarantor hereunder, or any set-off or application by the
Administrative Agent or any Bank of any security or of any credits or claims, no
Guarantor will assert or exercise any rights of the Administrative Agent or any
Bank or of such Guarantor against the Company to recover the amount of any
payment made by such Guarantor to the Administrative Agent or any Bank hereunder
by way of any claim, remedy or subrogation, reimbursement, exoneration,
contribution, indemnity, participation or otherwise arising by contract, by
statute, under common law or otherwise, and such Guarantor shall not have any
right of recourse to or any claim against assets or property of the Company, in
each case unless and until the Obligations of the Company guaranteed hereby have
been fully and finally satisfied. Until such time, each Guarantor hereby
expressly waives any right to exercise any claim, right or remedy which such
Guarantor may now have or hereafter acquire against the Company that arises
under this Agreement or any other Loan Document or from the performance by any
Guarantor of the Guaranty hereunder including any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution, indemnification or
participation in any claim, right or remedy of the Administrative Agent or any
Bank against the Company, or any security that the Administrative Agent or any
Bank now has or hereafter acquires, whether or not such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise. If
any amount shall be paid to a Guarantor by the Company or another Guarantor
after payment in full of the Obligations, and the Obligations shall thereafter
be reinstated in whole or in part and the Administrative Agent or any Bank
forced to repay and sums received by any of them in payment of the Obligations,
this Guaranty shall be automatically reinstated and such amount shall be held in
trust for the benefit of the Administrative Agent and the Banks and shall
forthwith be paid to the Administrative Agent to be credited and applied to the
Guaranteed Obligations, whether matured or unmatured. The provisions of this
paragraph shall survive the termination of this Guaranty, and any satisfaction
and discharge of the Company by virtue of any payment, court order or any
federal or state law.
SECTION 9.5 Subordination. If any Guarantor becomes the holder of any
indebtedness payable by the Company or another Guarantor, each Guarantor hereby
subordinates all indebtedness owing to it from the Company to all indebtedness
of the Company to the Administrative Agent and the Banks, and agrees that during
the continuance of any Event of Default it shall not accept any payment on the
same until payment in full of the Obligations of the Company under this
Agreement and the other Loan Documents after the termination of the Commitments
of the Banks and shall in no circumstance whatsoever attempt to set-off or
reduce any obligations hereunder because of such indebtedness. If any amount
shall nevertheless be paid in violation of the foregoing to a Guarantor by the
Company or another Guarantor prior to payment in full of the Guaranteed
Obligations, such amount shall be held in trust for the benefit
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of the Administrative Agent and the Banks and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured.
SECTION 9.6 Waiver. Each Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and waives presentment, demand of payment, notice
of intent to accelerate, notice of dishonor or nonpayment and any requirement
that the Administrative Agent or any Bank institute suit, collection proceedings
or take any other action to collect the Guaranteed Obligations, including any
requirement that the Administrative Agent or any Bank protect, secure, perfect
or insure any Lien against any property subject thereto or exhaust any right or
take any action against the Company or any other Person or any collateral (it
being the intention of the Administrative Agent, the Banks and each Guarantor
that this Guaranty is to be a guaranty of payment and not of collection). It
shall not be necessary for the Administrative Agent or any Bank, in order to
enforce any payment by any Guarantor hereunder, to institute suit or exhaust its
rights and remedies against the Company, any other Guarantor or any other
Person, including others liable to pay any Guaranteed Obligations, or to enforce
its rights against any security ever given to secure payment thereof. Each
Guarantor hereby expressly waives to the maximum extent permitted by applicable
law each and every right to which it may be entitled by virtue of the suretyship
laws of the State of Texas, including any and all rights it may have pursuant to
Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil
Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce
Code. Each Guarantor hereby waives marshaling of assets and liabilities, notice
by the Administrative Agent or any Bank of any indebtedness or liability to
which such Bank applies or may apply any amounts received by such Bank, and of
the creation, advancement, increase, existence, extension, renewal,
rearrangement or modification of the Guaranteed Obligations. Each Guarantor
expressly waives, to the extent permitted by applicable law, the benefit of any
and all laws providing for exemption of property from execution or for valuation
and appraisal upon foreclosure.
SECTION 9.7 Full Force and Effect. This Guaranty is a continuing
guaranty and shall remain in full force and effect until all of the Obligations
of the Company under this Agreement and the other Loan Documents and all other
amounts payable under this Guaranty have been paid in full (after the
termination of the Commitments of the Banks). All rights, remedies and powers
provided in this Guaranty may be exercised, and all waivers contained in this
Guaranty may be enforced, only to the extent that the exercise or enforcement
thereof does not violate any provisions of applicable law which may not be
waived.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1 Events of Default. The following events shall constitute
Events of Default ("Events of Default") hereunder:
(a) any installment of principal is not paid when due; or any
payment of interest or Fees is not paid on the date on which such
payment is due and such failure continues for a period of five (5)
days; or
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(b) any representation or warranty made or deemed made by the
Company or any Subsidiary herein or in any of the Loan Documents or
other document, certificate or financial statement delivered in
connection with this Agreement or any other Loan Document shall prove
to have been incorrect in any material respect when made or deemed made
or reaffirmed, as the case may be; or
(c) the Company shall fail to perform, comply or observe or
cause any Subsidiary, to fail to perform, comply or observe (i) any
term, duty or covenant contained in Article VIII of this Agreement; or
(ii) any other term, duty or covenant contained elsewhere in this
Agreement or in any of the Loan Documents and such failure continues
for a period of thirty (30) days after receipt by the Company and such
Guarantor of notice from the Administrative Agent or any Bank of such
default; or
(d) the Company or any Subsidiary shall (i) fail to make
(whether as primary obligor or as guarantor or other surety) any
principal payment of or interest or premium, if any, on any instruments
of Indebtedness in excess of $2,500,000 in the aggregate allowed
hereunder outstanding beyond any period of grace provided with respect
thereto or (ii) shall fail to duly observe, perform or comply with any
agreement with any Person or any term or condition of any instrument of
Indebtedness in excess of $2,500,000 in the aggregate, if the effect of
such failure is to cause, or to permit the holder or holders to cause,
such obligations to become due prior to any stated maturity; provided
that, the failure of the Company to make the Restricted Subordinated
Debt Payments because it is not in Financial Compliance, as proscribed
by Section 10.1(j) shall not constitute an Event of Default; or
(e) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Company or any
Subsidiary, or of a substantial part of the property or assets of the
Company or any Subsidiary, under Title 11 of the United States Code, as
now or hereafter in effect, or any successor thereto (the "Bankruptcy
Code"), or any other federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
the Company or any Subsidiary or for a substantial part of the property
or assets of the Company or any Subsidiary or (iii) the winding-up or
liquidation of the Company or any Subsidiary; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered; or
(f) the Company or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under the
Bankruptcy Code or any other federal or state bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or
the filing of any petition described in clause (e) above, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any
Subsidiary or for a substantial part of the property or assets of the
Company or any Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become
unable, or admit in writing its inability or fail generally
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to pay is debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing; or
(g) a judgment or order (including any prejudgment orders),
which with other outstanding judgments and orders against the Company
and its Subsidiaries equal or exceed (i) with respect to matters other
than Subordinated Debt, $1,000,000.00 in the aggregate (to the extent
not covered by insurance as to which the respective insurer has
acknowledged coverage), and (ii) with respect to Subordinated Debt,
$200,000.00, shall be entered against the Company or any Subsidiary
and, in each case, (A) within 30 days after entry thereof such judgment
or order shall not have been paid or discharged or execution thereof
stayed pending appeal or, within 30 days after the expiration of any
such stay, such judgment shall not have been paid or discharged or (B)
any enforcement proceeding or remedy of any kind for the nonpayment of
Indebtedness shall have been commenced (and not stayed) by any creditor
or upon such judgment; or
(h) a Change of Control shall occur; or
(i) at any time after the execution and delivery thereof, (i)
the Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void,
(ii) any Collateral Document shall cease to be in full force and effect
(other than by reason of a release of Collateral thereunder in
accordance with the terms hereof or thereof, the satisfaction in full
of the Obligations or any other termination of such Collateral Document
in accordance with the terms hereof or thereof) or shall be declared
null and void, or the Administrative Agent shall not have or shall
cease to have a valid and perfected First Priority Lien in any material
amount of Collateral purported to be covered thereby, in each case for
any reason other than the failure of the Administrative Agent or any
Bank to take any action within its control, or (iii) the Company or any
Guarantor shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further
liability, including with respect to future Advances by the Banks,
under any Loan Document to which it is a party; or
(j) The Company or any Subsidiary shall make any Restricted
Subordinated Debt Payments (i) other than as permitted by Section 8.16,
or (ii) unless such payment is made at a time when the Company is in
Financial Compliance; provided that if the Company is in Financial
Compliance by reason of complying solely with subsection (i) of the
definition thereof, such payments may not be greater in the aggregate
than the amount of Subordinated Debt (or other capital) incurred.
SECTION 10.2 Primary Remedies. In any such event, and at any time after
the occurrence of any of the above described events, the Administrative Agent,
if directed by the Majority Banks, shall by written notice to the Company (a
"Notice of Default") take any or all of the following actions; provided, that if
an Event of Default specified in Section 10.1(e) or Section 10.1(f) shall occur,
the following shall occur automatically without the giving of any Notice of
Default: (a) declare the Commitments terminated, whereupon the Commitments shall
forthwith terminate immediately and any Commitment Fee and any other owing and
unpaid Fee shall forthwith become due and payable without any other notice of
any kind; (b) declare (i) the
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principal of and any accrued and unpaid interest in respect of all Advances,
(ii) an amount equal to the maximum amount that may at any time be drawn under
all Letters of Credit then outstanding (whether or not any beneficiary under any
such Letter of Credit shall have presented, or shall be entitled at such time to
present, the drafts or other documents or certificates required to draw under
such Letter of Credit), and (iii) all other Obligations owing hereunder, to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, notice of demand or of dishonor and non-payment, protest, notice of
protest, notice of intent to accelerate, declaration or notice of acceleration
or any other notice of any kind (except as herein expressly provided), all of
which are hereby waived by the Company; (c) set off any assets or money of the
Company or any Guarantor in its or any Banks' possession against the
Obligations; and (d) exercise any rights or remedies under any document securing
any of the Loan Documents or under any applicable state or federal law. Any
amounts described in clause (b)(ii) above, when received by the Administrative
Agent, shall be held by the Administrative Agent pursuant to the terms of the
Collateral Account Agreement and shall be applied as therein provided.
SECTION 10.3 Other Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent may proceed to
protect and enforce its and the Banks' rights, either by suit in equity or by
action at law or both, whether for the specific performance of any covenant or
agreement contained in this Agreement or in any other Loan Document or in aid of
the exercise of any power granted in this Agreement or in any other Loan
Document; or may proceed to enforce the payment of all amounts owing to the
Banks under the Loan Documents and any accrued and unpaid interest thereon in
the manner set forth herein or therein; it being intended that no remedy
conferred herein or in any of the other Loan Documents is to be exclusive of any
other remedy, and each and every remedy contained herein or in any other Loan
Document shall be cumulative and shall be in addition to every other remedy
given hereunder and under the other Loan Documents or now or hereafter existing
at law or in equity or by statute or otherwise.
ARTICLE XI
THE AGENTS
SECTION 11.1 Authorization and Action. Each Bank hereby irrevocably
appoints and authorizes each Agent to act on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are specifically
delegated to or required of such Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. Each Agent may perform any of its
duties hereunder by or through its agents and employees. The duties of each
Agent shall be mechanical and administrative in nature; no Agent shall have by
reason of this Agreement or any other Loan Documents a fiduciary relationship in
respect of any Bank; and nothing in this Agreement or any other Loan Document,
expressed or implied is intended to, or shall be so construed as to, impose upon
any Agent any obligations in respect of this Agreement or any other Loan
Document except as expressly set forth herein or therein. As to any matters not
expressly provided for by this Agreement, the Notes or the other Loan Documents
(including enforcement or collection of the Notes), no Agent shall 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 Majority Banks, and such instructions
shall be binding upon the Banks and all holders of Notes and the Obligations;
provided, that no Agent shall be required to take any action which exposes such
Agent to
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personal liability and shall not be required or entitled to take any action
which is contrary to any of the Loan Documents or applicable law.
SECTION 11.2 Agents' Reliance.
(a) None of the Agents nor any of its directors, officers,
agents or employees shall be liable to the Banks for any action taken
or omitted to be taken by it or them under or in connection with this
Agreement, the Notes or any of the other Loan Documents (i) with the
consent or at the request of the Majority Banks or (ii) in the absence
of its or their own gross negligence or willful misconduct, IT BEING
THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH AGENT AND ITS
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES SHALL HAVE NO LIABILITY TO
THE BANKS FOR ACTIONS AND OMISSIONS UNDER THIS SECTION RESULTING FROM
THEIR SOLE ORDINARY OR CONTRIBUTORY NEGLIGENCE.
(b) Without limitation of the generality of the foregoing,
each Agent: (i) may treat the payee of each Note and the Obligations as
the holder thereof until the Administrative Agent receives written
notice of the assignment or transfer thereof signed by such payee and
in form satisfactory to the Agents; (ii) may consult with legal counsel
(including counsel for the Company), independent public accountants and
other experts selected by it and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty
or representation to any Bank and shall not be responsible to any Bank
for any statements, warranties or representations made in or in
connection with this Agreement, any Note or any other Loan Document;
(iv) except as otherwise expressly provided herein, shall not have any
duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement, any Note
or any other Loan Document or to inspect the property (including the
books and records) of the Company; (v) shall not be responsible to any
Bank for the due execution, legality, validity, enforceability,
collectibility, genuineness, sufficiency or value of this Agreement,
any Note, any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto; (vi) shall not be responsible to
any Bank for the perfection or priority of any Lien securing the
Obligations; and (vii) shall incur no liability under or in respect of
this Agreement, any Note or any other Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may
be by telegram, telecopier or cable) reasonably believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 11.3 Agent and Affiliates. Without limiting the right of any
other Bank to engage in any business transactions with the Company or any of its
Affiliates, with respect to their Commitments, the Loans made by them and the
Notes issued to them, Bank One, BTCo and BofA and each other Bank who may become
the Administrative Agent, Syndication Agent or Documentation Agent, as the case
may be, shall have the same rights and powers under this Agreement and its Notes
as any other Bank and may exercise the same as though it was not an Agent; and
the term "Bank" or "Banks" shall, unless otherwise expressly indicated, include
Bank One, BTCo and BofA and any such other Bank, in their individual capacities.
Bank One, BTCo and BofA, each other Person who becomes the Administrative Agent,
the Syndication Agent or the Documentation Agent, as the case may be, and their
respective Affiliates may be engaged in,
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or may hereafter engage in, one or more loan, letter of credit. leasing or other
financing activity not the subject of this Agreement (collectively, the "Other
Financings") with the Company, any Subsidiary or any of its Affiliates, or may
act as trustee on behalf of, or depositary for, or otherwise engage in other
business transactions with the Company, any Subsidiary or any of its Affiliates
(all Other Financings and other such business transactions being collectively,
the "Other Activities") with no responsibility to account therefor to the Banks.
Without limiting the rights and remedies of the Banks specifically set forth
herein, no other Bank by virtue of being a Bank hereunder shall have any
interest in (a) any Other Activities, (b) any present or future guaranty by or
for the account of the Company not contemplated or included herein, (c) any
present or future offset exercised by an Agent in respect of any such Other
Activities, (d) any present or future property taken as security for any such
Other Activities or (e) any property now or hereafter in the possession or
control of any Agent which may be or become security for the Obligations of the
Company hereunder and under the Notes by reason of the general description of
indebtedness secured, or of property contained in any other agreements,
documents or instruments related to such Other Activities; provided, however,
that if any payment in respect of such guaranties or such property or the
proceeds thereof shall be applied to reduction of the Obligations evidenced
hereunder and by the Notes, then each Bank shall be entitled to share in such
application according to its pro rata portion of such Obligations.
SECTION 11.4 Bank Credit Decision. Each Bank acknowledges and agrees
that it has, independently and without reliance upon any Agent or any other Bank
and based on the financial statements referred to in Section 7.1 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
and agrees that it will, independently and without reliance upon any Agent or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents.
SECTION 11.5 Agents' Indemnity.
(a) No Agent shall be required to take any action hereunder or
to prosecute or defend any suit in respect of this Agreement, the Notes
or any other Loan Document unless indemnified to Agents' satisfaction
by the Banks against loss, cost, liability and expense. If any
indemnity furnished to the Agents shall become impaired, it may call
for additional indemnity and cease to do the acts indemnified against
until such additional indemnity is given. In addition, the Banks agree
to indemnify the Agents (to the extent not reimbursed by the Company),
ratably according to the respective aggregate principal amounts of the
Notes then held by each of them (or if no Notes are at the time
outstanding, ratably according to the respective amounts of the
Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against any Agent in any way relating to
or arising out of this Agreement or any action taken or omitted by any
Agent under this Agreement, the Notes and the other Loan Documents.
Without limitation of the foregoing, each Bank agrees to reimburse each
Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by such Agent in
connection with the preparation, execution, administration, or
enforcement of, or legal
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advice in respect of rights or responsibilities under, this Agreement,
the Notes and the other Loan Documents to the extent that such Agent is
not reimbursed for such expenses by the Company. The provisions of this
Section shall survive the termination of this Agreement, the payment of
the Obligations and/or the assignment of any of the Notes.
(b) Notwithstanding the foregoing, no Bank shall be liable
under this Section to any Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements due to any Agent resulting from such
Agent's gross negligence or willful misconduct. Each Bank agrees,
however, that it expressly intends, under this Section, to indemnify
each Agent ratably as aforesaid for all such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
and disbursements arising out of or resulting from such Agent's sole
ordinary or contributory negligence.
SECTION 11.6 Successor Agents. Each Agent may resign at any time by
giving written notice thereof to the Banks and the Company and may be removed as
an Agent under this Agreement, the Notes and the other Loan Documents at any
time with or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor Agent
with, so long as no Event of Default exists, the consent of the Company, which
will not be unreasonably withheld. If no successor Agent shall have been so
appointed by the Majority Banks, and shall have accepted such appointment,
within 30 calendar days after the retiring Agent's giving of notice of
resignation or the Majority Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be an Eligible Assignee. Upon the acceptance of any appointment as an
Agent hereunder and under the Notes and the other Loan Documents by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement, the Notes and the other Loan Documents. After any retiring Agent's
resignation or removal as an Agent hereunder and under the Notes and the other
Loan Documents, the provisions of this Article XI shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was an Agent under
this Agreement, the Notes and the other Loan Documents.
SECTION 11.7 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Bank or the
Company referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a "notice of default." If an Agent receives such
notice, such Agent shall give notice thereof to the Banks; provided however, if
such notice is received from a Bank, such Agent also shall give notice thereof
to the Company. Each Agent shall be entitled to take action or refrain from
taking action with respect to such Default or Event of Default as provided in
Section 10.1 and Section 10.2.
SECTION 11.8 Collateral Documents and Guaranties. Each Bank hereby
further authorizes the Administrative Agent, on behalf of and for the benefit of
the Banks, to enter into each Collateral Document as secured party and to be the
agent for and representative of the Banks under the Guaranty, and each Bank
agrees to be bound by the terms of each Collateral Document and the Guaranty;
provided that the Administrative Agent shall not (i) enter into or
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consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or the Guaranty or (ii) release
any Collateral (except as otherwise expressly permitted or required pursuant to
the terms of this Agreement or the applicable Collateral Document), in each case
without the prior consent of Majority Banks (or, if required pursuant to Section
12.1, all Banks); provided further, however, that, without further written
consent or authorization from the Banks, the Administrative Agent may execute
any documents or instruments necessary to (a) release any Lien encumbering any
item of Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or to which Majority Banks have otherwise consented
or (b) release any Guarantor from the Guaranty if all of the capital stock of
such Guarantor is sold to any Person (other than an Affiliate of the Company)
pursuant to a sale or other disposition permitted hereunder or to which Majority
Banks have otherwise consented. Anything contained in any of the Loan Documents
to the contrary notwithstanding, the Company, the Agents and each Bank hereby
agree that (X) no Bank shall have any right individually to realize upon any of
the Collateral under any Collateral Document or to enforce the Guaranty, it
being understood and agreed that all powers, rights and remedies under the
Collateral Documents and the Guaranty may be exercised solely by the
Administrative Agent for the benefit of the Banks in accordance with the terms
thereof, and (Y) in the event of a foreclosure by the Administrative Agent on
any of the Collateral pursuant to a public or private sale, any Agent or any
Bank may be the purchaser of any or all of such Collateral at any such sale and
the Administrative Agent, as agent for and representative of Banks (but not any
Bank or Banks in its or their respective individual capacities unless Majority
Banks shall otherwise agree in writing) shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any Collateral
payable by the Administrative Agent at such sale.
SECTION 11.9 Co-Agents. None of the Banks identified on the facing
page, preamble or signature pages of this Agreement as a "Co-Agent" shall have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Banks as such. Each Bank
acknowledges that it has not relied, and will not rely, on any of the Banks so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Amendments. No amendment, modification, termination or
waiver of any provision of this Agreement or of the Notes, or consent to any
departure by the Company therefrom, shall in any event be effective without the
written concurrence of Majority Banks; provided that no such amendment,
modification, termination, waiver or consent shall, without the consent of each
Bank (with Obligations directly affected in the case of the following clause
(i)): (i) extend the scheduled final maturity of any Loan or Note, or extend the
stated expiration date of any Letter of Credit beyond the Maturity Date, or
reduce the rate of interest (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to the Default Rate) or
fees thereon, or extend the time of payment of interest, principal or fees
thereon, or reduce the principal amount thereof, (ii) release all or
substantially all of the Collateral, release all or substantially all of the
Subsidiaries that are party to the Guaranty from the Guaranty
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except as expressly provided in the Loan Documents, (iii) amend, modify,
terminate or waive any provision of this Section 12.1, (iv) reduce the
percentage specified in the definition of Majority Banks or Eighty Percent Banks
(or amend, modify, terminate or waive any provision requiring consent of the
Eighty Percent Banks without the consent of the Eighty Percent Banks), (v)
consent to the assignment or transfer by the Company of any of its respective
rights and obligations under this Agreement, or (vi) amend, modify, terminate or
waive the requirement under Section 7.10(a) and Section 7.10(b) that the
Company's business practices be reviewed by an outside consultant; provided
further that no such amendment, modification, termination or waiver shall (1)
increase the Commitments of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that amendments,
modifications or waivers of conditions precedent, covenants, Events of Default
or of a mandatory reduction of the Commitments shall not constitute an increase
of the Commitment of any Bank, and that an increase in the available portion of
any Commitment of any Bank shall not constitute an increase in the Commitment of
such Bank), (2) no amendment, modification, termination or waiver relating to
the obligations of Banks relating to the purchase or participation in Letters of
Credit shall be effective without the written concurrence of each Issuing Bank
having a Letter of Credit then outstanding or which has not been reimbursed for
a drawing under a Letter of Credit issued by it and of the Administrative Agent,
and (3) no amendment, modification, termination or waiver of any provision of
Article XI or of any provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of any Agent shall be effective without the
written concurrence of such Agent. The Administrative Agent may, but shall have
no obligation to, with the concurrence of any Bank, execute amendments,
modifications, waivers or consents on behalf of that Bank. Any waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given. No notice to or demand on the Company in any case shall
entitle the Company to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 12.1 shall be binding upon each Bank at
the time outstanding, each future Bank and, if signed by the Company, on the
Company.
SECTION 12.2 Notices. Except with respect to telephone notifications
specifically permitted pursuant to Article II, all notices, consents, requests,
approvals, demands and other communications provided for herein shall be in
writing (including telecopy communications) and mailed, telecopied, sent by
overnight courier or delivered:
(a) If to the Company and the Guarantors:
Comfort Systems USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
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(b) If to the Administrative Agent:
Bank One, NA
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
or, in the case of any party hereto, such other address or telecopy
number as such party may hereafter specify for such purpose by notice
to the other parties.
(c) If to any Bank, to the address shown on the signature page
hereof or specified by such Bank (or the Administrative Agent on behalf
of any Bank) to the Company.
All communications shall, when mailed, telecopied or delivered, be
effective when mailed by certified mail, return receipt requested to any party
at its address specified above, or telecopied to any party to the telecopy
number set forth above, or delivered personally to any party at its address
specified above; provided, that communications to the Administrative Agent
pursuant to Article II shall not be effective until actually received by the
Administrative Agent, and provided further that communications sent by telecopy
after 5:00 p.m., Houston, Texas time, shall be effective on the next succeeding
Business Day.
SECTION 12.3 No Waiver; Remedies. No failure on the part of any Bank or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder, under any Note or under any other Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right, or
any abandonment or discontinuance of any steps to enforce such right, preclude
any other or further exercise thereof or the exercise of any other right. No
notice to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances. The
remedies herein are cumulative and not exclusive of any other remedies provided
by law, at equity or in any other agreement.
SECTION 12.4 Costs, Expenses and Taxes. The Company agrees to pay on
demand: (a) all reasonable out-of-pocket costs and expenses of the Syndication
Agent in connection with the preparation, execution and delivery of this
Agreement, the Notes, the other Loan Documents and the other documents to be
delivered hereunder, including the reasonable fees and out-of-pocket expenses of
counsel for the Syndication Agent with respect thereto and with respect to
advising the Syndication Agent as to its rights and responsibilities under this
Agreement, the Notes and the other Loan Documents, and any modification,
supplement or waiver of any of the terms of this Agreement or any other Loan
Document, (b) all reasonable costs and expenses of any Bank and any other holder
of an interest in the Notes, and the Obligations of the Company hereunder and
under the Loan Documents, including reasonable legal fees and expenses, in
connection with the enforcement of this Agreement, the Notes and the other Loan
Documents and (c) reasonable costs and expenses incurred in connection with
third party professional services required by the Syndication Agent, such as
appraisers, environmental consultants, accountants or similar Persons; provided
that prior to any Event of Default
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hereunder, such Agent will first obtain the consent of the Company to such
expense, which consent shall not be unreasonably withheld. Without prejudice to
the survival of any other obligations of the Company hereunder and under the
Notes, the obligations of the Company under this Section shall survive the
termination of this Agreement or the replacement of any Agent and each
assignment of the Notes.
SECTION 12.5 Indemnity.
(a) The Company shall and hereby does indemnify each Agent and
each Bank and each Affiliate thereof and their respective directors,
officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims or damages (including
reasonable legal fees and expenses) to which any of them may become
subject, insofar as such losses, liabilities, claims or damages arise
out of or result from any actual or proposed use by the Company of the
proceeds of any extension of credit hereunder or any investigation,
litigation or other proceeding (including any threatened investigation
or proceeding) relating to the foregoing or any of the other Loan
Documents, including, without limitation, any of the foregoing relating
to the violations of, noncompliance with or liability under any
Environmental Law applicable to the operations of the Company, any of
its Subsidiaries or any of their respective Property, and the Company
shall reimburse each Agent, each Bank and each Affiliate thereof and
their respective directors, officers, employees and agents, upon demand
for any expenses (including legal fees) reasonably incurred in
connection with any such investigation or proceeding; but excluding any
such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to
be indemnified (the "Indemnified Obligations").
(b) WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS
THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE
INDEMNIFIED HEREUNDER SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST
ANY AND ALL INDEMNIFIED OBLIGATIONS: (i) ARISING OUT OF OR RESULTING
FROM THE ORDINARY SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON OR
(ii) IMPOSED UPON SAID PARTY UNDER ANY THEORY OF STRICT LIABILITY.
Without prejudice to the survival of any other obligations of the
Company hereunder and under the other Loan Documents, the obligations
of the Company under this Section shall survive the termination of this
Agreement and the other Loan Documents and the payment of the
Obligations or the assignment of the Notes.
SECTION 12.6 Right of Setoff. Without limiting the remedies provided
for in Article X, each Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits held and other indebtedness owing by such Bank, or any branch,
subsidiary or Affiliate, to or for the credit or the account of the Company
against any and all the Obligations of the Company now or hereafter existing
under this Agreement and the other Loan Documents and other obligations of the
Company held by such Bank, irrespective of whether or not such Bank shall have
made any demand under this Agreement, its Note or the Obligations and although
the Obligations may be unmatured. The rights of each Bank under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Bank may have.
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SECTION 12.7 Governing Law. This Agreement, all Notes, the other Loan
Documents and all other documents executed in connection herewith shall be
deemed to be contracts and agreements executed by the Company and each Bank
under the laws of the State of New York and of the United States of America and
for all purposes shall be construed in accordance with, and governed by, the
laws of said state and of the United States of America. Without limitation of
the foregoing, nothing in this Agreement, or in the Notes or in any other Loan
Document shall be deemed to constitute a waiver of any rights which any Bank may
have under applicable federal legislation relating to the amount of interest
which such Bank may contract for, take, receive or charge in respect of the Loan
and the Loan Documents, including any right to take, receive, reserve and charge
interest at the rate allowed by the law of the state where any Bank is located.
Each Agent, each Bank and the Company further agree that insofar as the
provisions of V.T.C.A., Finance Code, Chapter 303, as amended, are applicable to
the determination of the Highest Lawful Rate with respect to the Notes and the
Obligations hereunder and under the other Loan Documents, the indicated rate
ceiling of such Article shall be applicable; provided, however, that to the
extent permitted by such Article, the Administrative Agent may from time to time
by notice to the Company revise the election of such interest rate ceiling as
such ceiling affects the then current or future balances of the Loans. The
provisions of V.T.C.A., Finance Code, Chapter 346, do not apply to this
Agreement, any Note issued hereunder or the other Loan Documents.
SECTION 12.8 Interest. Each provision in this Agreement and each other
Loan Document is expressly limited so that in no event whatsoever shall the
amount paid, or otherwise agreed to be paid, to the Administrative Agent or any
Bank, or charged, contracted for, reserved, taken or received by the
Administrative Agent or any Bank, for the use, forbearance or detention of the
money to be loaned under this Agreement or any Loan Document or otherwise
(including any sums paid as required by any covenant or obligation contained
herein or in any other Loan Document which is for the use, forbearance or
detention of such money), exceed that amount of money which would cause the
effective rate of interest to exceed the Highest Lawful Rate, and all amounts
owed under this Agreement and each other Loan Document shall be held to be
subject to reduction to the effect that such amounts so paid or agreed to be
paid, charged, contracted for, reserved, taken or received which are for the
use, forbearance or detention of money under this Agreement or such Loan
Document shall in no event exceed that amount of money which would cause the
effective rate of interest to exceed the Highest Lawful Rate. Anything in any
Note or any other Loan Document to the contrary notwithstanding, the Company
shall not be required to pay unearned interest on any Note and the Company shall
not be required to pay interest on the Obligations at a rate in excess of the
Highest Lawful Rate, and if the effective rate of interest which would otherwise
be payable under such Note and such Loan Documents would exceed the Highest
Lawful Rate, or if the holder of such Note shall receive any unearned interest
or shall receive monies that are deemed to constitute interest which would
increase the effective rate of interest payable by the Company under such Note
and the other Loan Documents to a rate in excess of the Highest Lawful Rate,
then (a) the amount of interest which would otherwise be payable by the Company
shall be reduced to the amount allowed under applicable law and (b) any unearned
interest paid by the Company or any interest paid by the Company in excess of
the Highest Lawful Rate shall in the first instance be credited on the principal
of the Obligations of the Company (or if all such Obligations shall have been
paid in full, refunded to the Company). It is further agreed that, without
limitation of the foregoing, all calculations of the rate of interest contracted
for, reserved, taken, charged or received by any
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Bank under the Notes and the Obligations and under the other Loan Documents are
made for the purpose of determining whether such rate exceeds the Highest Lawful
Rate, and shall be made, to the extent permitted by usury laws applicable to
such Bank, by amortizing, prorating and spreading in equal parts during the
period of the full stated term of the Notes and this Agreement all interest at
any time contracted for, charged or received by such Bank in connection
therewith. Furthermore, in the event that the maturity of any Note or other
obligation is accelerated or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under applicable
law may never include more than the maximum amount allowed by applicable law and
excess interest, if any, provided for in this Agreement, any Note or otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be refunded to the Company.
SECTION 12.9 Survival of Representations and Warranties. All
representations, warranties and covenants contained herein or made in writing by
the Company in connection herewith and the other Loan Documents shall survive
the execution and delivery of this Agreement, the Notes and the other Loan
Documents, the termination of the Commitments of the Banks and will bind and
inure to the benefit of the respective successors and assigns of the parties
hereto, whether so expressed or not, provided, that the Commitments of the Banks
shall not inure to the benefit of any successor or assign of the Company.
SECTION 12.10 Successors and Assigns; Participations.
(a) All covenants, promises and agreements by or on behalf of
the Company or the Banks that are contained in this Agreement shall
bind and inure to the benefit of their respective permitted successors
and assigns. Neither the Company nor any Guarantor may assign or
transfer any of its rights or obligations hereunder.
(b) Any of the Banks may assign to or sell participations to
one or more banks of all or a portion of its rights and obligations
under this Agreement and the other Loan Documents (including all or a
portion of its Commitment, the Advances and the Obligations of the
Company owing to it and the Notes); provided, that the participating
banks or other entities shall be entitled to the cost protection
provisions contained in Article II and Section 12.4 and the Company
shall continue to deal solely and directly with the Administrative
Agent in connection with its rights and obligations under this
Agreement and the other Loan Documents. Except with respect to cost
protections provided to a participant pursuant to this paragraph and
the items listed in Section 12.1 hereof, no participant shall be a
third party beneficiary of this Agreement nor shall it be entitled to
enforce any rights provided to the Banks against the Company under this
Agreement. Notwithstanding the foregoing, no Bank shall transfer or
grant any participation under which the participant shall have rights
to approve any amendment to or waiver of this Agreement or any other
Loan Document except to the extent such amendment or waiver would (i)
extend the final scheduled maturity of any Loan, Note or Letter of
Credit (unless such Letter of Credit is not extended beyond the
Maturity Date) in which such participant is participating, or reduce
the rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over
the amount thereof then in
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effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment, shall not
constitute a change in the terms of such participation, and that an
increase in Commitment or any Loan shall be permitted without the
consent of any participant if the participant's participation is not
increased as a result thereof).
(c) A Bank may assign to any other Bank or Banks or to any
Affiliate of a Bank and, with the prior written consent of the Company
(so long as no Event of Default exists) and the Administrative Agent
(which consent shall not be unreasonably withheld), a Bank may assign
to one or more other Eligible Assignees all or a portion of its
interests, rights, and obligations under this Agreement and the other
Loan Documents (including all or a portion of its Commitment and the
same portion of the Loans and other Obligations of the Company at the
time owing to it and the Note held by it); provided, however, that (i)
each such assignment shall be in a minimum principal amount of not less
than $5,000,000.00, or 100% of such Bank's outstanding Loans, all Types
of Loans and shall be of a constant, and not a varying, percentage of
all the assigning Bank's Commitment, rights and obligations under this
Agreement, (ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance, an Assignment
and Acceptance, substantially in the form of Exhibit 12.10(c) hereto,
in form and substance satisfactory to the Administrative Agent (an
"Assignment and Acceptance") and any Note subject to such assignment
and (iii) no assignment shall be effective until receipt by the
Administrative Agent of a reasonable service fee from the assignee in
respect of said assignment equal to $2,000.00. Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date
(unless otherwise agreed to by the assigning Bank, the Eligible
Assignee thereunder and the Administrative Agent) shall be at least
five Business Days after the execution thereof, (x) the Eligible
Assignee thereunder shall be a party hereto and to the other Loan
Documents and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and
under the other Loan Documents and (y) the assignor Bank thereunder
shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement and the other Loan
Documents (and, in the case of an Assignment and Acceptance covering
all of the remaining portion of an assigning Bank's rights and
obligations under this Agreement and the other Loan Documents, such
Bank shall cease to be a party hereto).
(d) Notwithstanding any other provision herein, any Bank may,
in connection with any assignment or participation or proposed
assignment or participation pursuant to this section, disclose to the
assignee or participant or proposed assignee or participant, any
information relating to the Company furnished to such Bank by or on
behalf of the Company.
SECTION 12.11 Confidentiality. Each Bank agrees to exercise its best
efforts to keep any information delivered or made available by the Company to it
which is clearly indicated to be confidential information, confidential from
anyone other than Persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Bank
from
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disclosing such information (a) to any other Bank, (b) pursuant to subpoena or
upon the order of any court or administrative agency, (c) upon the request or
demand of any regulatory agency or authority having jurisdiction over such Bank,
(d) which has been publicly disclosed, (e) to the extent reasonably required in
connection with any litigation to which the Administrative Agent, any Bank, the
Company or its respective Affiliates may be a party, (f) to the extent
reasonably required in connection with the exercise of any remedy hereunder, (g)
to such Bank's legal counsel and independent auditors and (h) to any actual or
proposed participant or assignee of all or part of its rights hereunder which
has agreed in writing to be bound by the provisions of this Section. Each Bank
will promptly notify the Company of any information that it is required or
requested to deliver pursuant to clause (b) or (c) of this Section and, if the
Company is a party to any such litigation, clause (e) of this Section.
SECTION 12.12 Pro Rata Treatment.
(a) Except as otherwise specifically permitted hereunder, each
payment or prepayment of principal, if permitted under this Agreement,
and each payment of interest with respect to an Advance shall be made
pro rata among the Banks.
(b) Each Bank agrees that if, through the exercise of a right
of banker's Lien, setoff or claim of any kind against the Company as a
result of which the unpaid principal portion of the Notes and the
Obligations held by it shall be proportionately less than the unpaid
principal portion of the Notes and Obligations held by any other Bank,
it shall be deemed to have simultaneously purchased from such other
Bank a participation in the Notes and Obligations held by such other
Bank, in the amount required to render such amounts proportional;
provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section and the payment
giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustments restored
without interest. Each Bank purchasing participations pursuant to this
clause may exercise all rights of collection, set-off and banker's
liens with respect to such participations as if such Bank were a holder
of a direct Loan to the Company.
SECTION 12.13 Separability. Should any clause, sentence, paragraph or
Section of this Agreement be judicially declared to be invalid, unenforceable or
void, such decision will not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or parts
of this Agreement so held to be invalid, unenforceable or void will be deemed to
have been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein.
SECTION 12.14 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement. Any
Subsidiary of the Company that executes this Agreement after the date of this
Agreement shall, upon such execution, become a party hereto as a Guarantor.
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SECTION 12.15 Interpretation.
(a) In this Agreement, unless a clear contrary intention
appears:
(i) the singular number includes the plural number
and vice versa;
(ii) reference to any gender includes each other
gender;
(iii) the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other
subdivision;
(iv) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such
successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such
Person in any other capacity or individually, provided at
nothing in this clause is intended to authorize any assignment
not otherwise permitted by this Agreement;
(v) except as expressly provided to the contrary
herein, reference to any agreement, document or instrument
(including this Agreement) means such agreement, document or
instrument as amended, supplemented or modified and in effect
from time to time in accordance with the terms thereof and, if
applicable, the terms hereof, and reference to any Note or
other note includes any Note issued pursuant hereto in
extension or renewal thereof and in substitution or
replacement therefor;
(vi) unless the context indicates otherwise,
reference to any Article, Section, Schedule or Exhibit means
such Article or Section hereof or such Schedule or Exhibit
hereto;
(vii) the words "including" (and with correlative
meaning "include") means including, without limiting the
generality of any description preceding such term;
(viii) with respect to the determination of any
period of time, except as expressly provided to the contrary,
the word "from" means "from and including" and the word "to"
means "to but excluding"; and
(ix) reference to any law, rule or regulation means
such as amended, modified, codified or reenacted, in whole or
in part, and in effect from time to time.
(b) The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
(c) No provision of this Agreement shall be interpreted or
construed against any Person solely because that Person or its legal
representative drafted such provision.
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(d) In the event of any conflict between the specific
provisions of this Agreement and the provisions of any application
pertaining to any Letter of Credit, the terms of this Agreement shall
control.
SECTION 12.16 SUBMISSION TO JURISDICTION.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK, IN ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ FOR
THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE COMPANY AND EACH GUARANTOR HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT
TO ANY SUCH ACTION OR PROCEEDING. THE COMPANY AND EACH GUARANTOR
FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
IT AT ITS ADDRESS PROVIDED IN Section 12.2 AND WITH RESPECT TO ANY
GUARANTOR, AT THE ADDRESS PROVIDED ON SCHEDULE 6.16 HERETO, SUCH
SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR
ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN
ANY OTHER JURISDICTION. THE SUBMISSION TO JURISDICTION CONTAINED IN
THIS SECTION IS NON-EXCLUSIVE.
(b) EACH OF THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO
IN Section 12.16(A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 12.17 WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND EACH
GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM OR RELATING TO ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREES, TO THE
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75
EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 12.18 Acknowledgment and Consent. The Company is a party to
certain Collateral Documents pursuant to which the Company has created Liens in
favor of the Agents on certain Collateral to secure the Obligations. Each of the
Guarantors party hereto is a party to certain Collateral Documents and the
Guaranty, pursuant to which each such Guarantor has (i) guaranteed the
Obligations and (ii) created Liens in favor of the Administrative Agent on
certain Collateral to secure the Guaranteed Obligations of such Guarantor under
the Guaranty. The Guarantors party hereto are collectively referred to herein as
the "Credit Support Parties," and the Collateral Documents and the Guaranty are
collectively referred to herein as the "Credit Support Documents."
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of this Agreement, the Collateral Documents and the
Guaranty, and consents to the amendment and restatement of the Existing Credit
Agreement effected pursuant to this Agreement. Each Credit Support Party and the
Company hereby confirms that each of the Credit Support Documents to which it is
a party or otherwise bound and all Collateral encumbered thereby will continue
to guaranty or secure, as the case may be, to the fullest extent possible the
payment and performance of all "Obligations," "Guaranteed Obligations" and
"Secured Obligations," as the case may be (in each case as such terms are
defined in the applicable Credit Support Document), including without limitation
the payment and performance of all such "Obligations," "Guaranteed Obligations"
or "Secured Obligations," as the case may be, in respect of the Obligations of
the Company now or hereafter existing under or in respect of this Agreement, the
Notes and the other Loan Documents.
Each Credit Support Party and the Company acknowledges and agrees that
any of the Credit Support Documents to which it is a party or otherwise bound
shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of this Agreement. Each Credit Support Party
and the Company represents and warrants that all representations and warranties
contained in this Agreement and the other Credit Support Documents to which it
is a party or otherwise bound are true, correct and complete in all material
respects on and as of the Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Agreement,
such Credit Support Party is not required by the terms of this Agreement or any
other Loan Document to consent to the amendments to the Existing Credit
Agreement effected pursuant to this Agreement, and (ii) nothing in this
Agreement or any other Loan Document shall be deemed to require the consent of
such Credit Support Party to any future amendments to this Agreement.
SECTION 12.19 FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT (INCLUDING
THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND THE OTHER LOAN DOCUMENTS
CONSTITUTE A "LOAN AGREEMENT" AS
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76
DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER
HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Remainder of page intentionally left blank]
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77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
COMPANY:
COMFORT SYSTEMS USA, INC.
By:
-----------------------------------------
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
CREDIT SUPPORT PARTIES AND GUARANTORS:
▇▇▇▇▇ MECHANICAL, INC.
ACI MECHANICAL, INC.
A.C.I. MECHANICAL USA, INC.
ACCU-TEMP GP, INC.
ACCU-TEMP LP, INC.
ACCU-TEMP, LLC, by Accu-Temp LP, Inc.,
managing member
AIR SOLUTIONS USA, INC.
AMERICAN MECHANICAL INC.
AMERICAN REFRIGERATION CONTRACTORS, INC.
▇▇▇▇▇▇▇▇▇'▇ MECHANICAL CONTRACTORS, INC.
BCM CONTROLS CORPORATION
CARSON BROTHERS, INC.
CEL, INC. (▇▇▇▇▇ Electric)
CENTRAL MECHANICAL CONSTRUCTION CO., INC.
CENTRAL MECHANICAL, INC.
CLIMATE CONTROL, INC.
COMFORT SYSTEMS USA G.P., INC.
COMFORT SYSTEMS USA (ARKANSAS), INC.
(fka River City Mechanical, Incorporated)
COMFORT SYSTEMS USA (BRISTOL), INC.
(fka ▇▇▇▇ ▇▇▇▇▇ Mechanical Contractors, Inc.)
COMFORT SYSTEMS USA (CLEVELAND), INC.
(fka Tech Heating and Air Conditioning, Inc.)
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78
COMFORT SYSTEMS USA (HARTFORD), INC.
(fka The ▇▇▇▇▇▇ ▇▇▇▇▇▇ Company)
COMFORT SYSTEMS USA (PHILADELPHIA), INC.
(fka Lower Bucks Cooling and Heating
Corporation)
COMFORT SYSTEMS USA (SYRACUSE), INC.
(fka Armani Plumbing & Mechanical, Inc.)
COMFORT SYSTEMS USA (TEXAS), L.P., by
Comfort Systems USA G.P., Inc., sole
general partner
Comfort Systems USA (Intermountain), Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ CORP. (▇▇▇▇▇▇▇/Service
Refrigeration)
DESIGN MECHANICAL INCORPORATED
EASTERN HEATING & COOLING, INC.
EASTERN REFRIGERATION CO., INC.
EDS, INC. (Energy Development Services)
E.L. ▇▇▇▇▇▇ COMPANY
ESS ENGINEERING, INC.
F&G MECHANICAL CORPORATION
GOTHAM AIR CONDITIONING SERVICE, INC.
GULFSIDE MECHANICAL, INC.
H & H PLUMBING & HEATING, INC.
H & M MECHANICAL, INC.
HELM CORPORATION
HELM CORPORATION SAN ▇▇▇▇▇
▇▇▇▇ MECHANICAL CORPORATION
HILLCREST SHEET METAL, INC.
INDUSTRIAL COOLING INC.
J & J MECHANICAL, INC.
▇▇▇▇▇ AIR CONDITIONING ENTERPRISE INC.
KILGUST MECHANICAL, INC.
▇▇▇▇▇▇▇ SERVICE, INC.
▇▇▇▇▇▇ ELECTRIC COMPANY, INC.
▇▇▇▇▇▇▇ MECHANICAL CORPORATION
▇▇▇▇▇▇ HEATING, INC.
MAXIMUM REFRIGERATION & AIR CONDITIONING
CORP.
MEADOWLANDS FIRE PROTECTION CORP.
MECHANICAL SERVICE GROUP, INC. (Page)
MJ MECHANICAL SERVICES, INC.
▇▇▇▇ MECHANICAL CONTRACTORS, INC.
▇▇▇▇▇ & BLACK MECHANICAL, INC.
NORTH AMERICAN MECHANICAL, INC.
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79
NORTH JERSEY MECHANICAL CONTRACTORS, INC.
OK SHEET METAL AND AIR CONDITIONING, INC.
PLANT SERVICES INCORPORATED
QUALITY AIR HEATING & COOLING, INC.
RIVER CITY MECHANICAL, INC.
▇▇▇▇ & ASSOCIATES, INC.
S&K AIR CONDITIONING CO., INC.
S.I. ▇▇▇▇▇▇▇ COMPANY, INC.
▇.▇. ▇▇▇▇▇▇▇▇ COMPANY, INC.
SA ASSOCIATES, INC. (formerly Salmon &
Alder, Inc.)
SALMON & ALDER, LLC, by SA Associates, Inc.,
sole member
SEASONAIR, INC.
SOUTHERN BLUEGRASS MECHANICAL, INC.
STANDARD HEATING & AIR CONDITIONING COMPANY
SUPERIOR MECHANICAL SYSTEMS
TARGET CONSTRUCTION, INC.
TEMP-RIGHT SERVICE, INC.
TEMPRITE AIR CONDITIONING AND
REFRIGERATION, INC.
THE CAPITAL REFRIGERATION COMPANY
THE ▇▇▇▇▇ COMPANY
TRI-CITY MECHANICAL, INC.
▇▇▇▇▇▇ SERVICE CO.
▇▇▇▇▇▇-J-▇▇▇▇▇▇, INC.
WEATHER ENGINEERING, INC.
WESTERN BUILDING SERVICES, INC.
By:
-----------------------------------------
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, Vice President
ATLAS-ACCURATE HOLDINGS, L.L.C.
ATLAS-ACCURATE HOLDINGS, L.L.C., as the sole
general partner of
Accurate Air Systems, L.P. (restructure of
Accurate Air Systems, Inc.)
Atlas Air Conditioning Company, L.P.
(restructure of Atlas Air
Conditioning Company and Atlas Comfort
Services USA, Inc.)
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80
Border Electric, L.P.
Border Mechanical, L.P.
Mechanical Technical, ▇.▇.
▇▇▇▇▇▇▇▇▇ & Son, L.P. (restructure of
▇▇▇▇▇▇▇▇▇ & Son,
Inc./▇▇▇▇▇▇▇▇▇ & Son Conversion
Corporation )
United Environmental Services, L.P.
(restructure of United
Environmental Services, Inc./UES Conversion
Corporation)
By: CS48 ACQUISITION CORP., sole member
By:
-----------------------------------------
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, Vice President
ADMINISTRATIVE AGENT/BANK:
Amount of Commitment BANK ONE, NA,
on the Effective as Administrative Agent and Individually
Date: $40,500,000.00 as a Bank
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SYNDICATION AGENT/BANK:
Amount of Commitment BANKERS TRUST COMPANY,
on the Effective as Syndication Agent and Individually as a Bank
Date: $31,500,000.00
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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81
DOCUMENTATION AGENT/BANK:
Amount of Commitment BANK OF AMERICA, N.A. (formerly known as
on the Effective NationsBank, N.A.), as Documentation Agent
Date: $38,250,000.00 and Individually, as a Bank
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
CO-AGENT/BANK:
Amount of Commitment CREDIT LYONNAIS NEW YORK BRANCH,
on the Effective as Co-Agent and Individually, as a Bank
Date: $22,500,000.00
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
CO-AGENT/BANK:
Amount of Commitment NATIONAL CITY BANK,
on the Effective as Co-Agent and Individually, as a Bank
Date: $22,500,000.00
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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82
CO-AGENT/BANK:
Amount of Commitment THE BANK OF NOVA SCOTIA, as Co-Agent and
on the Effective Individually, as a Bank
Date: $22,500,000.00
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
BANK:
Amount of Commitment UNION BANK OF CALIFORNIA, N.A.
on the Effective
Date: $18,000,000.00
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
BANK:
Amount of Commitment COMERICA BANK
on the Effective
Date: $13,500,000.00
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
BANK:
Amount of Commitment BANK POLSKA, KASA OPIEKI S.A., PEKOA
on the Effective S.A. GROUP, New York Branch
Date: $4,500,000.00
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
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83
BANK:
Amount of Commitment FIRSTAR BANK, NATIONAL ASSOCIATION
on the Effective
Date: $27,000,000.00
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
BANK:
Amount of Commitment LASALLE BANK NATIONAL ASSOCIATION
on the Effective
Date: $18,000,000.00
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
BANK:
Amount of Commitment GENERAL ELECTRIC CAPITAL
on the Effective CORPORATION
Date: $11,249,999.00
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
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