Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Integrated Electrical Services, Inc. 104 511K
2: EX-3.2 Amended Bylaws 15 76K
3: EX-4.3 Form of Ies 9-3/8% Senior Subordinated Note 123 538K
4: EX-4.7 Exchange & Registration Rights Agreement 31 132K
5: EX-5.1 Opinion of Vinson & Elkins L.L.P. 2 38K
6: EX-10.12 Credit Agreement 79 329K
7: EX-12 Ratio of Earnings to Fixed Charges 2± 36K
8: EX-23.1 Consent of Arthur Andersen LLP 1 32K
9: EX-25.1 Statement of Elegibility on Form T-1 6 50K
10: EX-99.1 Form of Letter of Transmittal 15 91K
11: EX-99.2 Form of Letter to Clients 3 38K
12: EX-99.3 Form of Letter to Registered Holders 2 35K
13: EX-99.4 Form of Notice of Guaranteed Delivery 3 39K
EXHIBIT 10.12
CREDIT AGREEMENT
Among
INTEGRATED ELECTRICAL SERVICES, INC.,
as Borrower,
THE FINANCIAL INSTITUTIONS
NAMED IN THIS CREDIT AGREEMENT,
as Banks,
CREDIT LYONNAIS and THE BANK OF NOVA SCOTIA,
as Syndication Agents,
TORONTO DOMINION (TEXAS), INC.,
as Documentation Agent,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of May 22, 2001
Joint Bookrunners and Co-Lead Arrangers:
J.P. Morgan Securities Inc.
and Credit Lyonnais Securities
TABLE OF CONTENTS
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PAGE
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS..................................1
1.1. Certain Defined Terms..............................................1
1.2. Computation of Time Periods.......................................18
1.3. Accounting Terms; Preparation of Financials.......................18
1.4. Types.............................................................19
1.5. Interpretation....................................................20
ARTICLE 2. CREDIT FACILITIES................................................20
2.1. Term Loan Facility................................................20
2.2. Revolving Loan Facility...........................................23
2.3. Letter of Credit Facility.........................................26
2.4. Swing Line Facility...............................................30
2.5. Fees..............................................................32
2.6. Interest..........................................................33
2.7. Breakage Costs....................................................35
2.8. Increased Costs...................................................36
2.9. Illegality........................................................36
2.10. Market Failure...................................................37
2.11. Payment Procedures and Computations..............................37
2.12. Taxes............................................................39
2.13. Change of Lending Office.........................................40
2.14. Conversion of the Term Loan......................................41
ARTICLE 3. CONDITIONS PRECEDENT.............................................41
3.1. Conditions Precedent to Initial Extension of Credit...............41
3.2. Conditions Precedent to Each Extension of Credit..................42
ARTICLE 4. REPRESENTATIONS AND WARRANTIES...................................42
4.1. Organization......................................................43
4.2. Authorization.....................................................43
4.3. Enforceability....................................................43
4.4. Absence of Conflicts and Approvals................................43
4.5. Investment Companies..............................................43
4.6. Public Utilities..................................................43
4.7. Financial Condition...............................................44
4.8. Condition of Assets...............................................44
4.9. Litigation........................................................44
4.10. Subsidiaries.....................................................44
4.11. Laws and Regulations.............................................45
4.12. Environmental Compliance.........................................45
4.13. ERISA............................................................45
4.14. Taxes............................................................45
4.15. True and Complete Disclosure.....................................46
4.16. Senior Indebtedness..............................................46
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4.17. Certain Documents................................................46
4.18. Shell Subsidiaries...............................................46
ARTICLE 5. COVENANTS........................................................46
5.1. Organization......................................................46
5.2. Reporting.........................................................46
5.3. Inspection........................................................49
5.4. Use of Proceeds...................................................49
5.5. Financial Covenants...............................................49
5.6. Debt..............................................................50
5.7. Liens.............................................................50
5.8. Other Obligations.................................................50
5.9. Corporate Transactions............................................51
5.10. Distributions....................................................51
5.11. Transactions with Affiliates.....................................52
5.12. Insurance........................................................52
5.13. Investments......................................................53
5.14. Lines of Business................................................53
5.15. Compliance with Laws.............................................53
5.16. Environmental Compliance.........................................53
5.17. ERISA Compliance.................................................53
5.18. Payment of Certain Claims........................................53
5.19. Subsidiaries.....................................................54
5.20. Changes in Fiscal Periods........................................54
5.21. Negative Pledge Clauses..........................................54
5.22. Shell Subsidiaries...............................................54
ARTICLE 6. DEFAULT AND REMEDIES.............................................54
6.1. Events of Default.................................................54
6.2. Termination of Commitments........................................56
6.3. Acceleration of Credit Obligations................................56
6.4. Cash Collateralization of Letters of Credit.......................56
6.5. Default Interest..................................................57
6.6. Right of Setoff...................................................57
6.7. Actions Under Credit Documents....................................57
6.8. Remedies Cumulative...............................................57
6.9. Application of Payments...........................................58
ARTICLE 7. THE ADMINISTRATIVE AGENT AND THE ISSUING BANK....................58
7.1. Authorization and Action..........................................58
7.2. Reliance, Etc.....................................................59
7.3. Affiliates........................................................59
7.4. Bank Credit Decision..............................................59
7.5. Expenses..........................................................60
7.6. Indemnification...................................................60
7.7. Successor Administrative Agent and Issuing Bank...................60
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ARTICLE 8. MISCELLANEOUS....................................................61
8.1. Expenses..........................................................61
8.2. Indemnification...................................................61
8.3. Modifications, Waivers, and Consents..............................62
8.4. Survival of Agreements............................................62
8.5. Assignment and Participation......................................62
8.6. Notice........................................................... 65
8.7. CHOICE OF LAW.....................................................65
8.8. Submission To Jurisdiction; Waivers...............................65
8.9. WAIVER OF JURY TRIAL..............................................66
8.10. Counterparts.....................................................66
8.11. No Further Agreements............................................66
EXHIBITS
Exhibit A - Form of Compliance Certificate
Exhibit B-1 - Form of Revolving Loan Borrowing Request
Exhibit B-2 - Form of Term Loan Borrowing Request
Exhibit C - Form of Continuation/Conversion Request
Exhibit D-1 - Form of Revolving Loan Note
Exhibit D-2 - Form of Term Loan Note
Exhibit D-3 - Form of Swing Line Note
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Closing Documents List
Exhibit G - Form of Joinder Agreement
Exhibit H - Form of Acquisition Certificate
Exhibit I - Joinder Deliveries
Exhibit J - Form of Borrowing Base Certificate
SCHEDULES
Schedule I-A - Commitments
Schedule I-B - Administrative Information (Borrower; Administrative Agent;
Banks)
Schedule II - Disclosures (Existing Subsidiaries)
Schedule III - Restricted Payment Terms (Qualified Preferred Stock)
Schedule IV - Good Standing Exceptions
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CREDIT AGREEMENT
This Credit Agreement dated as of May 22, 2001, is among Integrated
Electrical Services, Inc., a Delaware corporation, as Borrower, the financial
institutions named herein, as Banks, Credit Lyonnais and The Bank of Nova
Scotia, as syndication agents, Toronto Dominion (Texas), Inc., as documentation
agent, and The Chase Manhattan Bank, as administrative agent.
The parties hereto agree as follows:
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS
1.1. Certain Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (unless otherwise indicated, such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Acquisition" means the direct or indirect purchase or acquisition,
whether in one or more related transactions, of any Person or group of Persons
or any related group of assets, liabilities, or securities of any Person or
group of Persons.
"Acquisition Certificate" means an acquisition certificate executed by
a Responsible Officer of the Borrower in substantially the form of Exhibit H.
"Additional Senior Subordinated Notes" has the meaning set forth in the
definition of "Senior Subordinated Notes".
"Administrative Agent" means The Chase Manhattan Bank, together with
its affiliates, as the arranger of the Commitments and as the administrative
agent for the Banks under this Agreement and the other Credit Documents,
together with any of its successors.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership, by contract, or otherwise.
"Agreement" means this Credit Agreement.
"Annual Aggregate Acquisition Limit" means (i) $40,000,000 for the
fiscal year ending September 30, 2001, (ii) $60,000,000 for the fiscal year
ending September 30, 2002, (iii) $60,000,000 for the fiscal year ending
September 30, 2003, and (iv) $60,000,000 for the fiscal year ending September
30, 2004.
"Applicable Lending Office" means, with respect to each Bank and for
any particular type of transaction, the office of such Bank set forth in
Schedule I-B to this Agreement (or in the applicable Assignment and Acceptance
by which such Bank joined this Agreement) as its applicable lending office for
such type of transaction or such other office of such Bank as such Bank may from
time to time specify in writing to the Borrower and the Administrative Agent for
such particular type of transaction.
"Applicable Margin" means, with respect to interest rates and letter of
credit fees and as of any date of its determination, an amount equal to the
percentage amount set forth in the table below opposite the applicable ratio of
(a) the consolidated Total Debt of the Borrower as of the end of the fiscal
quarter then most recently ended to (b) the consolidated EBITDA of the Borrower
for the four fiscal quarters then most recently ended:
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Applicable Margin
Total Debt LIBOR Tranches and Applicable Margin
to EBITDA Letter of Credit Fee Prime Rate Tranche
--------- -------------------- ------------------
Less than or equal to 1.50 1.75% 0.25%
Greater than 1.50 but less
than or equal to 2.00 2.00% 0.50%
Greater than 2.00 but less
than or equal to 2.50 2.25% 0.75%
Greater than 2.50 but less
than or equal to 3.00 2.50% 1.00%
Greater than 3.00 2.75% 1.25%
The foregoing ratio and resulting Applicable Margin shall be based upon Schedule
C of the most recent Compliance Certificate delivered to the Administrative
Agent pursuant to Section 5.2(a) or Section 5.2(b) (provided that for the period
from the date of this Agreement until the date when the Applicable Margin is
reset based upon the Compliance Certificate for the period ending June 30, 2001,
the ratio shall be deemed to be 2.01:1.00 and the Applicable Margin shall be set
accordingly).
Any adjustments to the Applicable Margin shall become effective on the 45th day
following the last day of each fiscal quarter or on the 90th day following the
last day of each fiscal year as applicable; provided, however, that if any such
Compliance Certificate is not delivered when required hereunder, the Applicable
Margin shall be deemed to be the maximum percentage amount in each table from
such 45th or 90th day until such Compliance Certificate is received by the
Administrative Agent.
Upon any change in the Applicable Margin, the Administrative Agent shall
promptly notify the Borrower and the Banks of the new Applicable Margin.
"Assignment and Acceptance" means an Assignment and Acceptance in
substantially the form of Exhibit E executed by an assignor Bank, an assignee
Bank, and the Administrative Agent, in accordance with Section 8.5.
"Available Revolving Loan Commitments" means an amount equal to the
excess, if any, of (a) the Revolving Loan Commitments then in effect over (b)
the aggregate outstanding
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principal amount of the Revolving Loan Borrowings plus the aggregate outstanding
principal amount of the Swing Line Loans plus the Letter of Credit Exposure.
"Bankruptcy Event of Default" has the meaning set forth in Section
6.1(h).
"Banks" means the lenders listed as Banks on the signature pages of
this Agreement and each Eligible Assignee that shall become a party to this
Agreement pursuant to Section 8.5(b).
"Base Rate" means, for any day, the fluctuating rate per annum of
interest equal to the greater of (a) the Prime Rate in effect on such day or (b)
the Federal Funds Rate in effect on such day plus 0.50%.
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Borrower" means Integrated Electrical Services, Inc., a Delaware
corporation.
"Borrowing Base" means, on any date of determination thereof, an amount
equal to 66 2/3% of the amount that would be set forth in a consolidated balance
sheet of the Borrower and its Subsidiaries for trade accounts receivable, net of
allowance for doubtful accounts (determined under United States generally
accepted accounting principles), excluding any portion of such accounts
receivable retained by a third party, at the date of, and as shown on, the most
recent Borrowing Base Certificate delivered to the Administrative Agent pursuant
to Section 3.2(c) or 5.2(l). In the absence of the applicable 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
the applicable Borrowing Base Certificate is furnished to the Administrative
Agent.
"Borrowing Base Certificate" means a certificate, substantially in the
form of Exhibit J, or in such other form as the Administrative Agent shall from
time to time request.
"Borrowings" means the collective reference to the Term Loan Borrowings
and the Revolving Loan Borrowings.
"Business Day" means any Monday through Friday during which commercial
banks are open for business in New York, New York, and, if the applicable
Business Day relates to any LIBOR Tranche, on which dealings are carried on in
the London interbank market.
"Capital Expenditures" means, with respect to any Person and any period
of its determination, the consolidated expenditures of such Person during such
period that are required to be included in or are reflected by the consolidated
property, plant, or equipment accounts of such Person, or any similar fixed
asset or long term capitalized asset accounts of such Person, on the
consolidated balance sheet of such Person in conformity with generally accepted
accounting principles.
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"Capital Leases" means, with respect to any Person, any lease of any
property by such Person which would, in accordance with generally accepted
accounting principles, be required to be classified and accounted for as a
capital lease on the balance sheet of such Person.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under any Capital Lease.
"Change of Control" means, with respect to the Borrower, (a) the direct
or indirect acquisition after the date hereof by any Person or related Persons
constituting a group of (i) beneficial ownership of issued and outstanding
shares of Voting Securities of the Borrower, the result of which acquisition is
that such Person or such group possesses 35% or more of the combined voting
power of all then-issued and outstanding Voting Securities of the Borrower or
(ii) the power to elect, appoint, or cause the election or appointment of at
least a majority of the members of the board of directors of the Borrower, or
(b) the individuals who, at the beginning of any period of 12 consecutive
months, constitute the Borrower's board of directors (together with any new
director whose election by the Borrower's board of directors or whose nomination
for election by the Borrower's stockholders entitled to vote thereon was
approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason (other
than death or disability) to constitute a majority of the Borrower's board of
directors then in office.
"Closing Date" means the date on which the conditions precedent set
forth in Section 3.1 shall have been satisfied, which date is May 22, 2001.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Commitment" means, as to any Bank, the sum of the Term Loan Commitment
and the Revolving Loan Commitment of such Bank.
"Commonly Controlled Entity" means, with respect to any Person, any
other Person which is under common control with such Person within the meaning
of Section 414 of the Code.
"Compliance Certificate" means a compliance certificate executed by a
Responsible Officer of the Borrower in substantially the form of Exhibit A,
including the following attached Schedules:
Schedule A: The applicable financial reports provided under Section
5.2(a) or 5.2(b) ending on the date of the computation of the financial
covenants.
Schedule B: A schedule of any adjustments to the financial reports in
Schedule A to the Compliance Certificate, listed on a
company-by-company basis, that are requested by the Borrower to reflect
the financial results of Acquisitions made prior to the end of the
applicable period, together with the supporting financial reports of
the Acquisitions from which the Borrower prepared such adjustments,
prepared in accordance with Section 1.3(c) and otherwise in a form
acceptable to the Administrative Agent.
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Schedule C: The computation of the financial covenants under this
Agreement that are based upon the financial reports in Schedule A or
Schedule B, as applicable, to the Compliance Certificate, in a form
acceptable to the Administrative Agent.
"Continuation/Conversion Request" means a Continuation/Conversion
Request in substantially the form of Exhibit C executed by a Responsible Officer
of the Borrower and delivered to the Administrative Agent.
"Contract Status Report" means a report, in form and substance
acceptable to the Administrative Agent, detailing the status of each contract of
any Restricted Entity which contract has a value equal to or greater than
$7,500,000.
"Credit Documents" means this Agreement, the Term Loan Notes, the
Revolving Loan Notes, the Swing Line Note, the Letter of Credit Documents, the
Guaranty, the Security Documents, the Interest Hedge Agreements, and each other
agreement, instrument, or document executed at any time in connection with this
Agreement.
"Credit Obligations" means all principal and interest (including
interest accruing after the maturity of the loans made hereunder and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) and fees, reimbursements, indemnifications, and other amounts
now or hereafter owed by the Borrower to the Administrative Agent and the Banks
(or with respect to the Interest Hedge Agreements, any Affiliates of the Banks)
under this Agreement, the Term Loan Notes, the Revolving Loan Notes, the Swing
Line Note, the Letter of Credit Documents, and the other Credit Documents and
any increases, extensions, and rearrangements of those obligations under any
amendments, supplements, and other modifications of the documents and agreements
creating those obligations.
"Credit Parties" means the Borrower and the Guarantors.
"Debt" means, with respect to any Person, without duplication, (a)
indebtedness of such Person for borrowed money, (b) obligations of such Person
evidenced by bonds, debentures, notes, or other similar instruments, (c)
obligations of such Person to pay the deferred purchase price of property or
services (other than trade debt and normal operating liabilities incurred in the
ordinary course of business), (d) obligations of such Person as lessee under
Capital Leases, (e) obligations of such Person under or relating to letters of
credit, guaranties, purchase agreements, or other creditor assurances, in each
case, assuring a creditor against loss in respect of indebtedness or obligations
of others of the kinds referred to in clauses (a) through (d) of this
definition, (f) nonrecourse indebtedness or obligations of others of the kinds
referred to in clauses (a) through (e) of this definition secured by any Lien on
or in respect of any property of such Person, and (g) obligations of such Person
evidenced by preferred stock or other equity interests in such Person which
provide for mandatory redemption, mandatory payment of dividends, or similar
rights to the payment of money. For the purposes of determining the amount of
any Debt, the amount of any Debt described in clause (e) of the definition of
Debt shall be valued at the maximum amount of the contingent liability
thereunder, the amount of any Debt described in clause (f) that is not covered
by clause (e) shall be valued at the lesser of the
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amount of the Debt secured or the book value of the property securing such Debt,
and the amount of any Debt described in clause (g) shall be valued at the stated
redemption value of such Debt as of the date of determination.
"Default" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived, become
an Event of Default.
"Default Rate" means, with respect to any amount due hereunder, a per
annum interest rate equal to (a) if such amount is either outstanding principal
accruing interest based upon a rate established elsewhere in this Agreement or
accrued but unpaid interest thereon, the sum of (i) the interest rate
established elsewhere in this Agreement from time to time for such principal
amount, including any Applicable Margin, plus (ii) 2.00% per annum or (b) in all
other cases, the Base Rate in effect from time to time plus the Applicable
Margin for the Prime Rate Tranche in effect from time to time plus 2.00% per
annum.
"Derivatives" means any swap, hedge, cap, collar, or similar
arrangement providing for the exchange of risks related to price changes in any
commodity, including money.
"Dollars or $" means lawful money of the United States of America.
"EBIT" means, with respect to any Person and for any period of its
determination, the consolidated net income (excluding any extraordinary gains or
losses) of such Person for such period, plus the consolidated interest expense
and income taxes of such Person for such period.
"EBITDA" means, with respect to any Person and for any period of its
determination, the consolidated net income (excluding any extraordinary gains or
losses) of such Person for such period, plus the consolidated interest expense
and income taxes of such Person for such period, plus the consolidated
depreciation and amortization of such Person for such period.
"Eligible Assignee" means, with respect to any assignment hereunder, at
the time of such assignment, any commercial bank organized under the laws of the
United States or any of the countries parties to the Organization for Economic
Cooperation and Development or any political subdivision of any thereof which
has primary capital (or its equivalent) of not less than $250,000,000, is
approved by the Administrative Agent, the Swing Line Lender and the Issuing
Bank, and, so long as no Default or Event of Default exists, is approved by the
Borrower, in each case, such approval not to be unreasonably withheld.
"Environmental Law" means all federal, state, and local laws, rules,
regulations, ordinances, orders, decisions, agreements, and other requirements
now or hereafter in effect relating to the pollution, destruction, loss, or
injury of the environment, the presence of any contaminant in the environment,
the protection, cleanup, remediation, or restoration of the environment, the
creation, handling, transportation, use, or disposal of any waste product in the
environment, exposure of persons to any contaminant, waste, or hazardous
substance in the environment, and the health and safety of employees in relation
to their environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"Eurocurrency Reserve Requirements" means for any day as applied to a
LIBOR Tranche, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other governmental authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate" means, for any LIBOR Tranche for any Interest
Period therefor, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" shall
be determined by reference to such other comparable publicly available service
for displaying eurodollar rates as may be selected by the Administrative Agent
or, in the absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Event of Default" has the meaning specified in Section 6.1.
"Existing Credit Agreement" means the Credit Agreement dated as of
January 30, 1998, among the Borrower, the financial institutions named therein
and NationsBank of Texas, N.A., as agent, as amended, supplemented or otherwise
modified from time to time.
"Facilities" means each of (a) the Term Loan Commitments and the Term
Loan made thereunder and (b) the Revolving Loan Commitments and the extensions
of credit made thereunder.
"Federal Funds Rate" means, for any period, a fluctuating per annum
interest rate equal for each day during such period to 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 any such day on
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any of its successors.
"Financial Statements" means the audited annual final statements of the
Borrower for the period ending September 30, 2000, including the consolidated
balance sheets of the Borrower as of the end of such fiscal year and the
consolidated statements of income, stockholders' equity,
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and cash flows for such fiscal year, as contained in the Form 10-K filed by the
Borrower with the Securities and Exchange Commission for the period ending on
such date.
"Guaranty" means the Guaranty dated as of May 22, 2001, made by the
Subsidiaries of the Borrower in favor of the Administrative Agent guaranteeing
the Credit Obligations.
"Guarantors" means (a) the Subsidiaries of the Borrower that have
executed the Guaranty in connection with the execution of this Agreement and (b)
any future Subsidiaries of the Borrower that join the Guaranty pursuant to
Section 5.19.
"Hazardous Materials" means any substance or material identified as a
hazardous substance pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended and as now or hereafter in
effect; any substance or material regulated as a hazardous waste pursuant to the
Resource Conservation and Recovery Act of 1976, as amended and as now or
hereafter in effect; and any substance or material designated as a hazardous
substance or hazardous waste pursuant to any other Environmental Law.
"Highest Lawful Rate" means the maximum lawful interest rate, if any,
that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to the relevant Bank which are presently in
effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
"Interest Expense" means, with respect to any Person and for any period
of its determination, the consolidated interest expense of such Person during
such period.
"Interest Hedge Agreements" means any swap, hedge, cap, collar, or
similar arrangement between the Borrower and any Bank (or any Affiliate of any
Bank) providing for the exchange of risks related to price changes in the
interest rate on the Loan Advances under this Agreement.
"Interest Period" means, with respect to each LIBOR Tranche, the period
commencing on the date of such LIBOR Tranche and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be one, two, three, or six months, in each
case as the Borrower may select in the applicable Term Loan Borrowing Request,
Revolving Loan Borrowing Request or Continuation/Conversion Request (unless
there shall exist any Default or Event of Default, in which case the Borrower
may only select one month Interest Periods); provided, however, that:
(a) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day; provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day;
(b) any Interest Period which begins on the last Business Day
of the calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the
8
calendar month in which it would have ended if there were a numerically
corresponding day in such calendar month; and
(c) the Borrower may not select an Interest Period for any
LIBOR Tranche which ends after the Revolving Loan Maturity Date or
after the date final payment is due on the Term Loan, as the case may
be.
"Interim Financial Statements" means the consolidated financial
statements of the Borrower dated as of March 31, 2001, including the
consolidated balance sheets of the Borrower as of the end of such fiscal quarter
and the consolidated statements of income and cash flows for such fiscal quarter
and for the fiscal year to date period ending on the last day of such fiscal
quarter.
"Issuing Bank" means The Chase Manhattan Bank and any successor issuing
bank pursuant to Section 7.7.
"Joinder Agreement" has the meaning set forth in Section 5.19.
"Letter of Credit" means any commercial or standby letter of credit
issued by the Issuing Bank for the account of the Borrower pursuant to the terms
of this Agreement.
"Letter of Credit Application" means the Issuing Bank's standard form
letter of credit application for either a commercial or standby letter of
credit, as the case may be, which has been executed by the Borrower and accepted
by the Issuing Bank in connection with the issuance of a Letter of Credit.
"Letter of Credit Application Amendment" means the Issuing Bank's
standard form application to amend a letter of credit for either a commercial or
standby letter of credit, as the case may be, which has been executed by the
Borrower and accepted by the Issuing Bank in connection with the increase or
extension of a Letter of Credit.
"Letter of Credit Collateral Account" means a special cash collateral
account pledged to the Administrative Agent containing cash deposited pursuant
to Section 2.2(f), 2.3(d) or 6.4 to be maintained with the Administrative Agent
in accordance with Section 2.3(g).
"Letter of Credit Documents" means all Letters of Credit, Letter of
Credit Applications, Letter of Credit Application Amendments, and agreements,
documents, and instruments entered into in connection with or relating thereto.
"Letter of Credit Exposure" means, as of any date of its determination,
the aggregate outstanding undrawn amount of all then outstanding Letters of
Credit plus the aggregate then outstanding amount of the reimbursement
obligations of the Borrower under the Letter of Credit Applications and this
Agreement.
"Letter of Credit Sublimit" means $25,000,000.
9
"LIBOR" means, for any LIBOR Tranche for any Interest Period therefor,
a rate per annum determined in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"LIBOR Tranche" means any Tranche which bears interest based upon the
LIBOR, as determined in accordance with Section 2.6.
"Lien" means any mortgage, lien, pledge, charge, deed of trust,
security interest, encumbrance, or other type of preferential arrangement to
secure or provide for the payment of any obligation of any Person, whether
arising by contract, operation of law, or otherwise (including any title
retention for such purposes under any conditional sale agreement, any Capital
Lease, or any other title transfer or retention agreement).
"Loan Advances" means the collective reference to the Term Loan
Advances and the Revolving Loan Advances.
"Majority Banks" means, at any time, Banks holding more than 50% of the
sum of (a) the then aggregate unpaid principal amount of the Term Loan Notes
held by the Banks (or, if no such principal amount is then outstanding, the
aggregate amount of the Term Loan Commitments at such time) and (b) the
aggregate amount of the Revolving Loan Commitments at such time (or, if the
Revolving Loan Commitments have been terminated, the then aggregate unpaid
principal amount of the Revolving Loan Notes held by the Banks and the Letter of
Credit Exposure of the Banks at such time).
"Material Adverse Change" means any material adverse change in the
business, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries on a consolidated
basis.
"Net Worth" means, with respect to any Person and as of any date of its
determination, the excess of (a) the assets of such Person over (b) the
liabilities of such Person, provided that, notwithstanding anything herein to
the contrary, for the purposes of calculating Net Worth, adjustments to goodwill
in accordance with the February 14, 2001 FASB Exposure Draft relating to
Business Combinations and Intangible Assets - Accounting for Goodwill, as
adopted, shall be disregarded.
"Other Taxes" has the meaning set forth in Section 2.12(b).
"Partnership Pledge Agreement" means the Pledge Agreement dated as of
May 22, 2001, made by the respective limited and general partners of each
limited partnership Subsidiary of the Borrower, in favor of the Administrative
Agent granting the Administrative Agent a security interest in the partnership
interests of such partners in such limited partnerships, to secure the Credit
Obligations.
"PBGC" means Pension Benefit Guaranty Corporation or its successor.
10
"Permitted Debt" means all of the following Debt:
(a) Debt in the form of the Credit Obligations;
(b) Debt in the form of indebtedness for borrowed money and
letters of credit owed by any Subsidiary of the Borrower prior to the
acquisition of such Subsidiary by the Borrower in an Acquisition
transaction, or owed by any Person that is the subject of any
Acquisition assumed by the Borrower or any Subsidiary of the Borrower
in connection with such Acquisition, provided that with respect to any
such indebtedness, arrangements satisfactory to the Administrative
Agent for the repayment of such indebtedness within 90 days following
the closing of the Acquisition are made prior to the closing of the
Acquisition and such arrangements are executed;
(c) Debt in the form of (i) purchase money indebtedness and
Capital Leases, (ii) indebtedness for borrowed money and letters of
credit owed by any Subsidiary of the Borrower prior to the acquisition
of such Subsidiary by the Borrower in an Acquisition transaction, or
owed by any Person that is the subject of any Acquisition assumed by
the Borrower or any Subsidiary of the Borrower in connection with such
Acquisition, and (iii) other Debt, which Debt under clauses (i), (ii),
and (iii) together are in an aggregate outstanding amount not to exceed
$20,000,000;
(d) Debt in the form of Subordinated Debt and the Senior
Subordinated Notes;
(e) Debt in the form of Qualified Preferred Stock; and
(f) Debt in the form of reimbursement obligations for
performance bonds issued in the ordinary course of business.
"Permitted Investments" means all of the following investments:
(a) investments (including investments in the form of loans)
in wholly owned Subsidiaries of the Borrower;
(b) investments in the form of loans, guaranties, open
accounts, and other extensions of trade credit in the ordinary course
of business;
(c) investments in commercial paper, bankers' acceptances,
loan participation agreements, and other similar investments, in each
case, maturing in twelve months or less from the date of issuance and
which, at the time of acquisition are rated A-2 or better by Standard &
Poor's Ratings Services and P-2 or better by Moody's Investors Service,
Inc;
(d) investments in direct obligations of the United States, or
investments in any Person which investments are guaranteed by the full
faith and credit of the United States, in either case maturing in
twelve months or less from the date of acquisition thereof and
repurchase agreements having a term of less than one year and fully
collateralized by such obligations which are entered into with banks or
trust companies described in clause (e) below or brokerage companies
having net worth in excess of $250,000,000;
11
(e) investments in time deposits or certificates of deposit
maturing within one year from the date such investment is made, issued
by a bank or trust company organized under the laws of the United
States or any state thereof having capital, surplus, and undivided
profits aggregating at least $250,000,000 or a foreign branch thereof
and whose long-term certificates of deposit are, at the time of
acquisition thereof, rated A-2 by Standard & Poor's Ratings Services or
Prime-2 by Moody's Investors Service, Inc.;
(f) investments in money market funds which invest solely in
the types of investments described in paragraphs (c) through (e) above;
(g) loans and advances to directors, officers, and employees
of the Credit Parties made in the ordinary course of business in an
aggregate outstanding amount not to exceed $1,000,000; and
(h) other investments (including loans and advances) during
any fiscal year of the Borrower not to exceed 5% of the consolidated
Net Worth of the Borrower as of the last day of the immediately
preceding fiscal year.
In valuing any investments for the purpose of applying the limitations
set forth in this Agreement, such investments shall be taken at the original
cost thereof (but without reduction for any subsequent appreciation or
depreciation thereof) less any amount actually repaid or recovered on account of
capital or principal (but without reduction for any offsetting investments made
by the investee in the investor).
"Permitted Liens" means all of the following Liens:
(a) Liens securing the Credit Obligations;
(b) Liens securing purchase money debt, Capital Leases, and
assumed or acquired indebtedness for borrowed money and letters of
credit permitted under clause (b) of the definition of Permitted Debt
provided that no such Lien is spread to cover any property not (i)
purchased in connection with the incurrence of such Debt, in the case
of purchase money debt, or (ii) covered by such Lien at the time of the
assumption or acquisition of the indebtedness secured thereby, in the
case of assumed or acquired indebtedness for borrowed money and letters
of credit; and
(c) Liens arising in the ordinary course of business which are
not incurred in connection with the borrowing of money, the obtaining
of advances or credit, or payment of legal judgments and which do not
materially detract from the value of any Restricted Entity's assets or
materially interfere with any Restricted Entity's business, including
such (i) Liens for taxes, assessments, or other governmental charges or
levies not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its
Subsidiaries; (ii) Liens in connection with worker's compensation,
unemployment insurance, or other social security, old age pension, or
public liability obligations not yet due or that are being contested in
good faith by appropriate proceedings; (iii) Liens in the form of legal
or equitable encumbrances deemed to exist by reason of negative pledge
covenants and other covenants or undertakings of like nature; (iv)
Liens in the form of
12
vendors', carriers', warehousemen's, repairmen's, mechanics',
workmen's, materialmen's, construction, or other like Liens arising by
operation of law in the ordinary course of business or incident to the
construction or improvement of any property, including liens on such
property securing reimbursement obligations for performance bonds
issued in the ordinary course of business; and (v) Liens in the form of
zoning restrictions, easements, licenses, and other restrictions on the
use of real property or minor irregularities in title thereto which do
not materially impair the use of such property in the operation of the
business of the applicable Restricted Entity or the value of such
property.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, or other entity, or a government or any political subdivision or agency
thereof, or any trustee, receiver, custodian, or similar official.
"Plan" means any (a) employee welfare benefit plan under Section 3(1)
of ERISA, (b) employee pension benefit plan under Section 3(2) of ERISA, (c)
multiemployer plan under Section 4001(a)(3) of ERISA, and (d) employee
individual account benefit plan under Section 3(2) of ERISA, in each case, in
which each Restricted Entity or any of their respective Commonly Controlled
Entities is or would be deemed to be an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreements" means, collectively (i) the Stock Pledge Agreement,
(ii) the Partnership Pledge Agreement, and (iii) any future agreements granting
the Administrative Agent a security interest in capital stock, partnership
interests, or other membership interests of any Subsidiary (direct or indirect)
of the Borrower, in each case, to secure the Credit Obligations.
"Prime Rate" means, for any day, the fluctuating per annum interest
rate in effect on such day equal to the rate of interest publicly announced by
the Administrative Agent as its prime rate, whether or not the Borrower has
notice thereof.
"Prime Rate Borrowing" shall mean that portion of any Borrowing which
bears interest based upon the Base Rate as determined in accordance with Section
2.6.
"Prime Rate Tranche" shall mean the Tranche which bears interest based
upon the Base Rate, as determined in accordance with Section 2.6.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Projections" has the meaning set forth in Section 5.2(f).
"Qualified Preferred Stock" means, with respect to the Borrower and as
of any date of its issuance, any shares of preferred stock of the Borrower that
(a) are issued after the date of this Agreement, (b) provide for their mandatory
redemption on a date, if at all, that is on or after the first anniversary of
the latest maturity of any of the Credit Obligations at the time issued, and (c)
provide in the applicable certificate of designation for the redemption of such
shares and for the blockage of Restricted Payments in respect of such shares
during the existence of a Default or an
13
Event of Default (i) on the terms and conditions set forth on Schedule III, or
(ii) on terms approved by the Administrative Agent and the Majority Banks in
their sole discretion, all such provisions to be in form and content
satisfactory to the Administrative Agent and the Majority Banks in their sole
discretion.
"ratable share" or "pro rata share" means, with respect to any Bank and
as of any date of its determination, either (a) until the Closing Date, the
ratio of such Bank's Commitment at such time to the aggregate Commitments at
such time or (b) thereafter, the ratio of such Bank's aggregate outstanding Term
Loan Advance and/or such Bank's Revolving Loan Commitment at such time (or, if
the Revolving Loan Commitments have been terminated, Revolving Loan Advances and
share of the Letter of Credit Exposure at such time) to the aggregate
outstanding Term Loan Advances and/or Revolving Loan Commitments at such time
(or, if the Revolving Loan Commitments have been terminated, Revolving Loan
Advances and Letter of Credit Exposure at such time), in each case as the
context may require.
"Refunded Swing Line Loans" has the meaning set forth in Section
2.4(c)(i).
"Refunding Date" has the meaning set forth in Section 2.4(c)(ii).
"Related Parties" means, with respect to any Person, such Person's
stockholders, directors, officers, employees, agents, Affiliates, successors,
and assigns, and their respective stockholders, directors, officers, employees,
and agents, and, with respect to any Person that is an individual, such Person's
family relations and heirs.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Responsible Officer" means, with respect to any Person, such Person's
Chief Executive Officer, President, Chief Financial Officer, Secretary, Chief
Accounting Officer, or any other officer of such Person designated by any of the
foregoing in writing from time to time.
"Restricted Entities" means the Borrower and each Subsidiary of the
Borrower.
"Restricted Payment" means the declaration or making by any Person of
any (a) dividends; (b) purchase, redemption, retirement, or other acquisition
for value any of its capital stock now or hereafter outstanding, or any
distribution of assets to its stockholders as such, whether in cash, assets, or
in obligations of it; (c) allocation or other setting apart of any sum for the
payment of any dividend or distribution on, or for the purchase, redemption, or
retirement of, any shares of its capital stock; or (d) making of any other
distribution by reduction of capital or otherwise in respect of any shares of
its capital stock; in each case, other than any such dividends, distributions,
and payments payable solely in such Person's common stock.
"Revolving Loan" means the aggregate outstanding principal amount of
the Revolving Loan Borrowings.
"Revolving Loan Advance" means the outstanding principal from a Bank
which represents such Bank's ratable share of a Revolving Loan Borrowing.
14
"Revolving Loan Borrowing" means any aggregate amount of principal
advanced on the same day and pursuant to the same Revolving Loan Borrowing
Request under the revolving loan facility created in Section 2.2.
"Revolving Loan Borrowing Request" means a Revolving Loan Borrowing
Request in substantially the form of Exhibit B-1 executed by a Responsible
Officer of the Borrower and delivered to the Administrative Agent.
"Revolving Loan Commitment" means, for any Bank, the amount set forth
opposite such Bank's name on Schedule I-A as its Revolving Loan Commitment, or
if such Bank has entered into any Assignment and Acceptance since the date of
this Agreement, as set forth for such Bank as its Revolving Loan Commitment in
the Register maintained by the Administrative Agent pursuant to Section 8.5(c),
in each case as such amount may be increased pursuant to Section 2.14 or
terminated pursuant to Section 6.2.
"Revolving Loan Maturity Date" means May 22, 2004.
"Revolving Loan Note" means a promissory note of the Borrower payable
to the order of a Bank, in substantially the form of Exhibit D-1, evidencing the
indebtedness of the Borrower to such Bank resulting from Revolving Loan Advances
made by such Bank to the Borrower.
"Revolving Loan Percentage" means, as to any Bank at any time, the
percentage which such Bank's Revolving Loan Commitment then constitutes of the
aggregate Revolving Loan Commitments or, at any time after the Revolving Loan
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Loan Advances then outstanding
constitutes of the aggregate principal amount of the Revolving Loan Advances
then outstanding.
"Security Agreement" means the Security Agreement dated as of May 22,
2001, made by the Borrower and the Subsidiaries of the Borrower in favor of the
Administrative Agent granting the Administrative Agent a security interest in
the receivables of each such Credit Party to secure the Credit Obligations.
"Security Documents" means the Security Agreement, the Pledge
Agreements, and any other document creating or consenting to Liens in favor of
the Administrative Agent securing Credit Obligations.
"Senior Debt" means all Debt of the Borrower and the Subsidiaries of
the Borrower other than Debt in the form of Subordinated Debt and the Senior
Subordinated Notes.
"Senior Subordinated Note Indentures" means: (i) the Indenture, dated
as of January 28, 1999, among the Borrower, certain of its Subsidiaries and
State Street Bank and Trust Company, as trustee, together with all instruments
and other agreements entered into by the Borrower or such Subsidiaries in
connection therewith, and (ii) the indenture to be entered into by the Borrower
and/or any of its Subsidiaries in connection with the issuance of the Additional
Senior Subordinated Notes, together with all instruments and other agreements
entered into by the Borrower and/or such Subsidiaries in connection therewith.
15
"Senior Subordinated Notes" means: (i) the outstanding $150,000,000 9
3/8% Senior Subordinated Notes due 2009, Series B, issued by the Borrower,
(together with the subsidiary guarantees thereof), and (ii) any additional
Senior Subordinated Notes (the "Additional Senior Subordinated Notes"), in an
aggregate principal amount not to exceed $125,000,000, which may hereafter be
issued by the Borrower (together with any subsidiary guarantees thereof);
provided however that such Additional Senior Subordinated Notes have terms,
maturities, covenants, and subordination substantially identical to the terms,
maturities, covenants, and subordination of the Senior Subordinated Notes
described in part (i) above, together with such changes thereto as the
Administrative Agent shall approve.
"Shell Subsidiary" means any Subsidiary of the Borrower that is listed
as a "Shell Subsidiary" on Schedule II.
"Stock Pledge Agreement" means the Pledge Agreement dated as of May 22,
2001, made by Borrower and certain Subsidiaries of Borrower in favor of the
Administrative Agent granting the Administrative Agent a security interest in
the capital stock or membership interests, as applicable, of each Subsidiary
(whether direct or indirect) of Borrower, to secure the Credit Obligations.
"Subordinated Debt" means, with respect to the Borrower and as of any
date of its issuance, any unsecured indebtedness for borrowed money, other than
the Senior Subordinated Notes, for which the Borrower is directly and primarily
obligated that (a) arises after the date of this Agreement, (b) does not have
any stated maturity before the date six months following the latest maturity of
any of the Credit Obligations at the time incurred, (c) has terms that are no
more restrictive than the terms of the Credit Documents, which terms shall in
any event (i) prohibit the acceleration of such indebtedness without 5 days'
prior written notice to the Administrative Agent, (ii) not include a
cross-default provision to other indebtedness (other than to a principal payment
default of such other indebtedness), (iii) not include any financial covenants
other than the type described in Section 5.5 and (iv) with respect any such
financial covenants, be at least 20% less restrictive on the Borrower and its
Subsidiaries than those contained herein, and (d) is expressly subordinated to
the Credit Obligations (i) on the terms and conditions no less restrictive on
the holders thereof than the subordination terms applicable to the Senior
Subordinated Notes, or (ii) on terms approved by the Administrative Agent and
the Majority Banks in their sole discretion, including payment subordination,
remedy subordination, and related terms satisfactory to the Administrative Agent
and the Majority Banks in their sole discretion.
"Subordinated Debt Event" means the date on which the Borrower issues
Additional Senior Subordinated Notes or Subordinated Debt in an aggregate
principal amount of at least $75,000,000.
"Subordinated Debt Indenture" means any indenture or like agreement
entered into by the Borrower in connection with the issuance of Subordinated
Debt, together with all instruments and other agreements entered into by the
Borrower in connection therewith.
16
"Subsidiary" means, with respect to any Person, any other Person, a
majority of whose outstanding Voting Securities (other than directors'
qualifying shares) shall at any time be owned by such Person or one or more
Subsidiaries of such person.
"Swing Line Borrowing" means any aggregate amount of principal advanced
on the same day and pursuant to the same notice under the swing line facility
created in Section 2.4.
"Swing Line Commitment" means the obligation of the Swing Line Lender
to make Swing Line Loans pursuant to Section 2.4 in an aggregate principal
amount at any one time outstanding not to exceed $20,000,000.
"Swing Line Lender" means The Chase Manhattan Bank.
"Swing Line Loan" has the meaning set forth in Section 2.4(a).
"Swing Line Note" means the promissory note of the Borrower payable to
the order of the Swing Line Lender, in substantially the form of Exhibit D-3,
evidencing the indebtedness of the Borrower to the Swing Line Lender resulting
from Swing Line Loans made by the Swing Line Lender to the Borrower.
"Swing Line Participation Amount" has the meaning set forth in Section
2.4(c)(ii).
"Term Loan" means the aggregate outstanding principal amount of the
Term Loan Borrowing.
"Term Loan Advance" means the outstanding principal from a Bank which
represents such Bank's ratable share of the Term Loan Borrowing.
"Term Loan Borrowing" means the aggregate amount of principal advanced
pursuant to the Term Loan Borrowing Request under the term loan facility created
in Section 2.1.
"Term Loan Borrowing Request" means the Term Loan Borrowing Request in
substantially the form of Exhibit B-2 executed by a Responsible Officer of the
Borrower and delivered to the Administrative Agent.
"Term Loan Commitment" means, for any Bank, the amount set forth
opposite such Bank's name on Schedule I-A as its Term Loan Commitment, or if
such Bank has entered into any Assignment and Acceptance since the date of this
Agreement, as set forth for such Bank as its Term Loan Commitment in the
Register maintained by the Agent pursuant to Section 8.5(c), in each case as
such amount may be terminated pursuant to Section 6.2.
"Term Loan Note" means a promissory note of the Borrower payable to the
order of a Bank, in substantially the form of Exhibit D-2, evidencing the
indebtedness of the Borrower to such Bank resulting from the Term Loan Advance
made by such Bank to the Borrower.
"Term Loan Percentage" means, as to any Bank at any time, the
percentage which such Bank's Term Loan Commitment then constitutes of the
aggregate Term Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such
17
Bank's Term Loan Advance then outstanding constitutes of the aggregate principal
amount of the Term Loan Advances then outstanding).
"Total Debt" means all Debt of the Borrower and the Subsidiaries of the
Borrower.
"Tranche" means any tranche of principal outstanding under the Term
Loan or the Revolving Loan accruing interest on the same basis whether created
in connection with new advances of principal under the Revolving Loan pursuant
to Section 2.6(a)(i) or by the continuation or conversion of existing tranches
of principal under the Term Loan or the Revolving Loan pursuant to Section
2.6(a)(ii) and shall include the Prime Rate Tranche or any LIBOR Tranche.
"Type" has the meaning set forth in Section 1.4.
"Voting Securities" means (a) with respect to any corporation, any
capital stock of the corporation having general voting power under ordinary
circumstances to elect directors of such corporation, (b) with respect to any
partnership, any partnership interest having general voting power under ordinary
circumstances to elect the general partner or other management of the
partnership, and (c) with respect to any other Person, such ownership interests
in such Person having general voting power under ordinary circumstances to elect
the management of such Person, in each case irrespective of whether at the time
any other class of stock, partnership interests, or other ownership interest
might have special voting power or rights by reason of the happening of any
contingency.
1.2. Computation of Time Periods. In this Agreement in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each means "to but
excluding."
1.3. Accounting Terms; Preparation of Financials.
(a) All accounting terms, definitions, ratios, and other tests
described herein shall be construed in accordance with United States generally
accepted accounting principles applied on a consistent basis with those applied
in the preparation of the Financial Statements, except as expressly set forth in
this Agreement.
(b) The Restricted Entities shall prepare their financial statements in
accordance with United States generally accepted accounting principles applied
on a consistent basis with those applied in the preparation of the Financial
Statements, unless otherwise approved in writing by the Administrative Agent. In
accordance with the foregoing, (i) any Acquisition which is permitted to be
treated as a pooling transaction shall be treated as a pooling transaction, and
following such an Acquisition the consolidated financial statements of the
Borrower shall be adjusted to reflect the results of such Acquisition during the
periods prior to such Acquisition in accordance with generally accepted
accounting principles and (ii) any Acquisition which is not permitted to be
treated as a pooling transaction shall be treated as an asset purchase, without
adjustment for prior periods.
(c) The Borrower shall calculate the Applicable Margin and compliance
with the financial covenants under this Agreement in Schedule C of the
Compliance Certificate. Where
18
expressly permitted in this Agreement, the Borrower may elect to base such
calculations upon the financial reports in Schedule B of such Compliance
Certificate. In such case the accounting terms, definitions, ratios, and other
tests used in making such calculation shall be construed as required by
paragraph (a) above except that the consolidated financial results of the
Borrower shall be deemed to be the adjusted consolidated financial results of
the Borrower set forth in Schedule B of the Compliance Certificate. Unless
otherwise expressly permitted in this Agreement, the Borrower shall calculate
the Applicable Margin or compliance with a financial covenant under this
Agreement based upon the financial reports in Schedule A of a Compliance
Certificate. In such case the accounting terms, definitions, ratios, and other
tests used in making such calculation shall be construed as required by
paragraph (a) above. When calculating the Applicable Margin or compliance with a
financial covenant under this Agreement based upon the financial reports in
Schedule B of the Compliance Certificate, the Borrower shall prepare such
calculations in accordance with the following provisions:
(i) The Borrower may select one or more Acquisitions for
inclusion in the adjustments permitted in Schedule B or C of the
Compliance Certificate; provided that if the inclusion of any
Acquisition results in an increase in the consolidated EBITDA of the
Borrower over the consolidated EBITDA of the Borrower required to be
reported in Schedule A of the Compliance Certificate, then the Borrower
must include all Acquisitions which would cause a decrease in the
consolidated EBITDA of the Borrower in Schedule B and C of the
Compliance Certificate.
(ii) If the Acquisition is treated as a pooling transaction,
the Borrower shall adjust the pooling accounting treatment of the
Acquisition to reflect nonrecurring items (both positive and negative)
that are permitted to be adjusted in accordance with the pro forma
financial statement guidelines established by the Securities and
Exchange Commission for acquisition accounting for reported
acquisitions by public companies or as approved by the Majority Banks.
(iii) If the Acquisition is not treated as a pooling
transaction, the financial results of the acquired Person or assets
shall be added to the applicable financial results of the Borrower in
the same manner as if such transaction were a pooling transaction with
such adjustments thereto as are required to reflect nonrecurring items
(both positive and negative) that are permitted to be adjusted in
accordance with the pro forma financial statement guidelines
established by the Securities and Exchange Commission for acquisition
accounting for reported acquisitions by public companies or as approved
by the Majority Banks.
(iv) No Acquisition may be included in Schedule B or C of the
Compliance Certificate at the request of the Borrower unless the
financial reports of the acquired Person or assets from which Schedule
B and C are prepared are (A) audited financial reports prepared by an
independent certified public accounting firm, or (B) with respect to
unaudited financial reports, are otherwise approved by the Majority
Banks.
1.4. Types. The "Type" of a Tranche refers to the determination whether such
tranche is a LIBOR Tranche or the Prime Rate Tranche.
19
1.5. Interpretation. Article, Section, Schedule, and Exhibit references are to
this Agreement, unless otherwise specified. All references to instruments,
documents, contracts, and agreements are references to such instruments,
documents, contracts, and agreements as the same may be amended, supplemented,
and otherwise modified from time to time, unless otherwise specified. The word
"including" shall mean "including but not limited to." The word "or" shall mean
"and/or" wherever necessary to prevent interpretation of any provision against
the Administrative Agent or the Banks. Whenever the Borrower has an obligation
under this Agreement and the other Credit Documents the expense of complying
with that obligation shall be an expense of the Borrower unless otherwise
specified. Whenever any determination is to be made by the Administrative Agent
or any Bank, such determination shall be in such Person's sole discretion unless
otherwise specified in this Agreement. If any provision in this Agreement or the
other Credit Documents is held to be illegal, invalid, not binding, or
unenforceable, such provision shall be fully severable and this Agreement and
the other Credit Documents shall be construed and enforced as if such illegal,
invalid, not binding, or unenforceable provision had never comprised a part of
this Agreement or the other Credit Documents, and the remaining provisions shall
remain in full force and effect. This Agreement and the other Credit Documents
have been reviewed and negotiated by sophisticated parties with access to legal
counsel and shall not be construed against the drafter. In the event of a
conflict between this Agreement and any other Credit Documents, this Agreement
shall control.
ARTICLE 2. CREDIT FACILITIES
2.1. Term Loan Facility.
(a) Term Loan Commitments. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement and for the purposes set forth in Section
5.4, to make a Term Loan Advance to the Borrower as such Bank's ratable share of
the Term Loan Borrowing requested by the Borrower on the Closing Date provided
that the aggregate outstanding principal amount of the Term Loan Advance made by
such Bank shall not exceed such Bank's Term Loan Commitment. The Term Loan
Borrowing made on the Closing Date shall initially be a Prime Rate Borrowing,
but may be immediately converted to a LIBOR Tranche in accordance with Section
2.6(a). The indebtedness of the Borrower to the Banks resulting from the Term
Loan Advances made by the Banks shall be evidenced by Term Loan Notes made by
the Borrower.
(b) Method of Advancing.
(i) The Term Loan Borrowing shall be made pursuant to a Term
Loan Borrowing Request given by the Borrower to the Administrative
Agent in writing or by telecopy not later than 11:00 a.m. (local time
at the Applicable Lending Office of the Administrative Agent) on the
anticipated Closing Date. The Term Loan Borrowing Request shall be
fully completed and shall specify the information required therein, and
shall be irrevocable and binding on the Borrower. Upon receipt of the
Term Loan Borrowing Request by the Administrative Agent, the
Administrative Agent shall promptly forward notice of the Term Loan
Borrowing to the Banks. Each Bank shall, before 1:00 p.m. (local time
at the Applicable Lending Office of the Administrative
20
Agent) on the anticipated Closing Date, make available from its
Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Applicable Lending Office, in immediately
available funds, such Bank's ratable share of the Term Loan Borrowing.
Subject to the satisfaction of all applicable conditions precedent,
after receipt by the Administrative Agent of such funds, the
Administrative Agent shall, by 4:00 p.m. (local time at the Applicable
Lending Office of the Administrative Agent), on the Closing Date make
the Term Loan Borrowing available to the Borrower in immediately
available funds at any account of Borrower which is designated in
writing by the Borrower to the Administrative Agent.
(ii) Unless the Administrative Agent shall have received
notice from a Bank before the anticipated Closing Date that such Bank
shall not make available to the Administrative Agent such Bank's
ratable share of the Term Loan Borrowing, the Administrative Agent may
assume that such Bank has made its ratable share of the Term Loan
Borrowing available to the Administrative Agent on the Closing Date in
accordance with paragraph (i) above, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Bank
shall not have so made its ratable share of the Term Loan Borrowing
available to the Administrative Agent, such Bank agrees that it shall
pay interest on such amount for each day from the date such amount is
made available to the Borrower by the Administrative Agent until the
date such amount is paid to the Administrative Agent by such Bank at
the Federal Funds Rate in effect from time to time, provided that with
respect to such Bank if such amount is not paid by such Bank by the end
of the second day after the Administrative Agent makes such amount
available to the Borrower, the interest rates specified above shall be
increased by a per annum amount equal to 2.00% on the third day and
shall remain at such increased rate thereafter. Interest on such amount
shall be due and payable by such Bank upon demand by the Administrative
Agent. If such Bank shall pay to the Administrative Agent such amount
and interest as provided above, such amount so paid shall constitute
such Bank's Term Loan Advance as part of the Term Loan Borrowing for
all purposes of this Agreement even though not made on the same day as
the other Term Loan Advances comprising the Term Loan Borrowing. In the
event that such Bank has not repaid such amount by the end of the fifth
day after such amount was made available to the Borrower, the Borrower
agrees to repay to the Administrative Agent on demand such amount,
together with interest on such amount for each day from the date such
amount was made available to the Borrower until the date such amount is
repaid to the Administrative Agent at the interest rate charged to the
Borrower for the Term Loan Borrowing under the terms of this Agreement.
(iii) The failure of any Bank to make available its ratable
share of the Term Loan Borrowing shall not relieve any other Bank of
its obligation, if any, to make available its ratable share of the Term
Loan Borrowing. No Bank shall be responsible for the failure of any
other Bank to honor such other Bank's obligations hereunder, including
any failure to make available any funds as part of the Term Loan
Borrowing.
(c) Prepayment.
21
(i) The Borrower may prepay the outstanding principal amount
of the Term Loan pursuant to written notice given by the Borrower to
the Administrative Agent in writing or by telecopy not later than (A)
1:00 p.m. (local time at the Applicable Lending Office of the
Administrative Agent) on the third Business Day before the date of the
proposed prepayment, in the case of the prepayment of any portion of
the Term Loan which is comprised of LIBOR Tranches, or (B) 11:00 a.m.
(local time at the Applicable Lending Office of the Administrative
Agent) on the same Business Day of the proposed prepayment, in the case
of the prepayment of any portion of the Term Loan comprised solely of
the Prime Rate Tranche. Each such notice shall specify the principal
amount and Tranche or Tranches of the Term Loan which shall be prepaid,
the date of the prepayment, and shall be irrevocable and binding on the
Borrower. Prepayments of the Term Loan shall be made in integral
multiples of $500,000, in the case of prepayments of any LIBOR
Tranches, or $100,000 in the case of prepayments of the Prime Rate
Tranche. If the prepayment would cause the aggregate outstanding
principal amount of any LIBOR Tranche comprising all or any part of the
Term Loan or the aggregate outstanding principal amount of the Prime
Rate Tranche comprising all or any part of the Term Loan, to be less
than $1,000,000, in the case of any such LIBOR Tranche, or $1,000,000,
in the case of the Prime Rate Tranche, the prepayment must be in an
amount equal to the entire outstanding principal amount of such LIBOR
Tranche under the Term Loan or the entire outstanding principal amount
of the Prime Rate Tranche under the Term Loan, as the case may be. Upon
receipt of any notice of prepayment, the Administrative Agent shall
give prompt notice of the intended prepayment to the Banks. For each
such notice given by the Borrower, the Borrower shall prepay the Term
Loan in the specified amount on the specified date as set forth in such
notice. The Borrower shall have no right to prepay any principal amount
of the Term Loan except as provided in this Section 2.1(c)(i).
(ii) Each prepayment of principal under the Term Loan pursuant
to Section 2.1(c)(i) shall be accompanied by payment of all accrued but
unpaid interest on the principal amount prepaid and any amounts
required to be paid pursuant to Section 2.7 as a result of such
prepayment. The amount of each principal prepayment under the Term Loan
pursuant to Section 2.1(c)(i) shall be applied to reduce the then
remaining installments of the Term Loan pro rata based upon the then
remaining principal amount thereof. Amounts prepaid on account of the
Term Loan may not be reborrowed.
(d) Repayment. The Term Loan Advance of each Bank shall mature in 12
quarterly installments, each of which shall be in an amount equal to such Bank's
Term Loan Percentage multiplied by the amount set forth below opposite such
installment:
[Download Table]
Installment Principal Amount
----------- ----------------
September 30, 2001 $ 3,750,000
December 31, 2001 3,750,000
March 31, 2002 3,750,000
June 30, 2002 3,750,000
September 30, 2002 3,750,000
December 31, 2002 3,750,000
March 31, 2003 3,750,000
June 30, 2003 3,750,000
September 30, 2003 5,000,000
December 31, 2003 5,000,000
March 31, 2004 5,000,000
May 22, 2004 5,000,000
22
2.2. Revolving Loan Facility.
(a) Revolving Loan Commitments. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement and for the purposes set forth
in Section 5.4, to make Revolving Loan Advances to the Borrower as such Bank's
ratable share of Revolving Loan Borrowings requested by the Borrower from time
to time on any Business Day during the period from the date of this Agreement
until the Revolving Loan Maturity Date provided that the aggregate outstanding
principal amount of Revolving Loan Advances made by such Bank plus such Bank's
ratable share of the aggregate outstanding principal amount of the Swing Line
Loans plus such Bank's ratable share of the Letter of Credit Exposure shall not
exceed the lesser of (i) such Bank's Revolving Loan Commitment and (ii) such
Bank's Revolving Loan Percentage of the Borrowing Base then in effect. Revolving
Loan Borrowings must be made in an amount equal to or greater than $1,000,000,
in the case of any Revolving Loan Borrowing comprised of a LIBOR Tranche, or
$1,000,000, in the case of any Prime Rate Borrowing, and be made in multiples of
$500,000, in the case of any Revolving Loan Borrowing comprised of a LIBOR
Tranche, or $100,000, in the case of any Prime Rate Borrowing. Any Revolving
Loan Borrowing made on the Closing Date shall initially be a Prime Rate
Borrowing, but may be immediately converted to a LIBOR Tranche in accordance
with Section 2.6(a). Within the limits expressed in this Agreement, the Borrower
may from time to time borrow, prepay, and reborrow Revolving Loan Borrowings.
The indebtedness of the Borrower to the Banks resulting from the Revolving Loan
Advances made by the Banks shall be evidenced by Revolving Loan Notes made by
the Borrower.
(b) Method of Advancing.
(i) Each Revolving Loan Borrowing shall be made pursuant to a
Revolving Loan Borrowing Request given by the Borrower to the
Administrative Agent in writing or by telecopy not later than the time
required pursuant to Section 2.6(a)(i) to select the interest rate
basis for the Revolving Loan Borrowing. Each Revolving Loan Borrowing
Request shall be fully completed and shall specify the information
required therein, and shall be irrevocable and binding on the Borrower.
Upon receipt of the Revolving Loan Borrowing Request by the
Administrative Agent, the Administrative Agent shall promptly forward
notice of the Revolving Loan Borrowing to the Banks. Each Bank shall,
before 1:00 p.m. (local time at the Applicable Lending Office of the
Administrative Agent) on the date of the requested Revolving Loan
Borrowing, make available from its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Applicable Lending
Office, in immediately available funds, such Bank's ratable share of
such Revolving Loan Borrowing. Subject to the satisfaction of all
applicable conditions precedent, after receipt by the Administrative
Agent of such funds, the Administrative Agent shall, by 4:00 p.m.
(local time at the Applicable Lending Office of the
23
Administrative Agent), on the date requested for such Revolving Loan
Borrowing make such Revolving Loan Borrowing available to the Borrower
in immediately available funds at any account of Borrower which is
designated in writing by the Borrower to the Administrative Agent.
(ii) Unless the Administrative Agent shall have received
notice from a Bank before the date of any Revolving Loan Borrowing that
such Bank shall not make available to the Administrative Agent such
Bank's ratable share of such Revolving Loan Borrowing, the
Administrative Agent may assume that such Bank has made its ratable
share of such Revolving Loan Borrowing available to the Administrative
Agent on the date of such Revolving Loan Borrowing in accordance with
paragraph (i) above and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not
have so made its ratable share of such Revolving Loan Borrowing
available to the Administrative Agent, such Bank agrees that it shall
pay interest on such amount for each day from the date such amount is
made available to the Borrower by the Administrative Agent until the
date such amount is paid to the Administrative Agent by such Bank at
the Federal Funds Rate in effect from time to time, provided that with
respect to such Bank if such amount is not paid by such Bank by the end
of the second day after the Administrative Agent makes such amount
available to the Borrower, the interest rates specified above shall be
increased by a per annum amount equal to 2.00% on the third day and
shall remain at such increased rate thereafter. Interest on such amount
shall be due and payable by such Bank upon demand by the Administrative
Agent. If such Bank shall pay to the Administrative Agent such amount
and interest as provided above, such amount so paid shall constitute
such Bank's Revolving Loan Advance as part of such Revolving Loan
Borrowing for all purposes of this Agreement even though not made on
the same day as the other Revolving Loan Advances comprising such
Revolving Loan Borrowing. In the event that such Bank has not repaid
such amount by the end of the fifth day after such amount was made
available to the Borrower, the Borrower agrees to repay to the
Administrative Agent on demand such amount, together with interest on
such amount for each day from the date such amount was made available
to the Borrower until the date such amount is repaid to the
Administrative Agent at the interest rate charged to the Borrower for
such Revolving Loan Borrowing under the terms of this Agreement.
(iii) The failure of any Bank to make available its ratable
share of any Revolving Loan Borrowing shall not relieve any other Bank
of its obligation, if any, to make available its ratable share of such
Revolving Loan Borrowing. No Bank shall be responsible for the failure
of any other Bank to honor such other Bank's obligations hereunder,
including any failure to make available any funds as part of any
Revolving Loan Borrowing.
(c) Prepayment.
(i) The Borrower may prepay the outstanding principal amount
of the Revolving Loan pursuant to written notice given by the Borrower
to the Administrative Agent in writing or by telecopy not later than
(A) 1:00 p.m. (local time at the Applicable Lending Office of the
Administrative Agent) on the third Business Day before the date of
24
the proposed prepayment, in the case of the prepayment of any portion
of the Revolving Loan which is comprised of LIBOR Tranches, or (B)
11:00 a.m. (local time at the Applicable Lending Office of the
Administrative Agent) on the same Business Day of the proposed
prepayment, in the case of the prepayment of any portion of the
Revolving Loan comprised solely of the Prime Rate Tranche. Each such
notice shall specify the principal amount and Tranche or Tranches of
the Revolving Loan which shall be prepaid, the date of the prepayment,
and shall be irrevocable and binding on the Borrower. Prepayments of
the Revolving Loan shall be made in integral multiples of $500,000, in
the case of prepayments of any LIBOR Tranches, or $100,000 in the case
of prepayments of the Prime Rate Tranche. If the prepayment would cause
the aggregate outstanding principal amount of any LIBOR Tranche
comprising all or any part of the Revolving Loan or the aggregate
outstanding principal amount of the Prime Rate Tranche comprising all
or any part of the Revolving Loan, to be less than $1,000,000, in the
case of any such LIBOR Tranche, or $1,000,000, in the case of the Prime
Rate Tranche, the prepayment must be in an amount equal to the entire
outstanding principal amount of such LIBOR Tranche under the Revolving
Loan or the entire outstanding principal amount of the Prime Rate
Tranche under the Revolving Loan, as the case may be. Upon receipt of
any notice of prepayment, the Administrative Agent shall give prompt
notice of the intended prepayment to the Banks. For each such notice
given by the Borrower, the Borrower shall prepay the Revolving Loan in
the specified amount on the specified date as set forth in such notice.
The Borrower shall have no right to prepay any principal amount of the
Revolving Loan except as provided in this Section 2.2(c)(i).
(ii) Each prepayment of principal of any LIBOR Tranche under
the Revolving Loan pursuant to this Section 2.2(c) shall be accompanied
by payment of all accrued but unpaid interest on the principal amount
prepaid and any amounts required to be paid pursuant to Section 2.7 as
a result of such prepayment.
(d) Repayment. The Borrower shall pay to the Administrative Agent for
the ratable benefit of the Banks the aggregate outstanding principal amount of
the Revolving Loan on the Revolving Loan Maturity Date.
(e) Reduction of Commitments. The Borrower shall have the right, upon
at least three Business Days' irrevocable notice to the Administrative Agent, to
terminate in whole or reduce ratably in part the Available Revolving Loan
Commitments; provided that each partial reduction shall be in the aggregate
amount of $5,000,000 or in integral multiples of $5,000,000 in excess thereof.
Any reduction or termination of the Revolving Loan Commitments pursuant to this
Section 2.2(e) shall be permanent, with no obligation of the Banks to reinstate
such Revolving Loan Commitments, and the commitment fees provided for in Section
2.5(a) shall thereafter be computed on the basis of the Revolving Loan
Commitments, as so reduced.
(f) Borrowing Base. If, at any time from the date of this Agreement
until the Revolving Loan Maturity Date, the aggregate outstanding principal
amount of the Revolving Loan Borrowings plus the aggregate outstanding principal
amount of the Swing Line Loans plus the Letter of Credit Exposure exceeds the
Borrowing Base then in effect, the Borrower shall, without notice or demand,
immediately prepay the Revolving Loan and/or the Swing Line Loans in an
aggregate principal amount equal to such excess, together with interest accrued
to the date of
25
such payment or prepayment to the Administrative Agent. If, at any time from the
date of this Agreement until the Revolving Loan Maturity Date, after giving
effect to any prepayment pursuant to the preceding sentence, the Letter of
Credit Exposure exceeds the Borrowing Base then in effect, the Borrower shall,
without notice or demand, immediately pay to the Administrative Agent an amount
equal to such excess to be held in the Letter of Credit Collateral Account for
disposition in accordance with Section 2.3(g), provided that the Administrative
Agent shall release to the Borrower from time to time such portion of the amount
on deposit in the Letter of Credit Collateral Account which is equal to the
amount by which the Borrowing Base at such time plus the amount on deposit in
the Letter of Credit Collateral Account exceeds the Letter of Credit Exposure at
such time.
2.3. Letter of Credit Facility.
(a) Commitment for Letters of Credit. The Issuing Bank shall, on the
terms and conditions set forth in this Agreement and for the purposes set forth
in Section 5.4, issue, increase, and extend Letters of Credit at the request of
the Borrower from time to time on any Business Day during the period from the
date of this Agreement until the Revolving Loan Maturity Date provided that (i)
the Letter of Credit Exposure shall not exceed the Letter of Credit Sublimit and
(ii) the aggregate outstanding principal amount of Revolving Loan Borrowings
plus the aggregate outstanding principal amount of the Swing Line Loans plus the
Letter of Credit Exposure shall not exceed the lesser of (a) the aggregate
amount of the Revolving Loan Commitments and (b) the Borrowing Base then in
effect. No Letter of Credit may have an expiration date later than 12 months
after its issuance date, and each Letter of Credit which is self-extending
beyond its expiration date must be cancelable upon no more than 30 days notice
prior to each extension period given by the Issuing Bank to the beneficiary of
such Letter of Credit. No Letter of Credit may have an expiration date later
than 12 months after the Revolving Loan Maturity Date unless approved by the
Issuing Bank, the Administrative Agent, and the Banks. Each Letter of Credit
must be in form and substance acceptable to the Issuing Bank. The indebtedness
of the Borrower to the Issuing Bank resulting from Letters of Credit requested
by the Borrower shall be evidenced by the Letter of Credit Applications made by
the Borrower.
(b) Requesting Letters of Credit. Each Letter of Credit shall be
issued, increased, or extended pursuant to a Letter of Credit Application or
Letter of Credit Application Amendment, as applicable, given by the Borrower to
the Issuing Bank in writing or by telecopy promptly confirmed in writing, such
Letter of Credit Application or Letter of Credit Application Amendment being
given not later than 1:00 p.m. (local time at the Applicable Lending Office of
the Administrative Agent) on the third Business Day before the date of the
proposed issuance, increase, or extension of the Letter of Credit. Each Letter
of Credit Application or Letter of Credit Application Amendment shall be fully
completed and shall specify the information required therein (including the
proposed form of the Letter of Credit or change thereto), and shall be
irrevocable and binding on the Borrower. Upon receipt by the Issuing Bank of the
Letter of Credit Application or Letter of Credit Application Amendment, the
Issuing Bank shall give prompt notice thereof to the Administrative Agent, and
the Administrative Agent shall promptly inform the Banks of the proposed Letter
of Credit or change thereto. Subject to the satisfaction of all applicable
conditions precedent, the Issuing Bank shall, by 4:00 p.m. (local time at the
Applicable Lending Office of the Administrative Agent), on the date requested by
the Borrower for the issuance, increase, or extension of such Letter of Credit
issue, increase, or extend such
26
Letter of Credit to the specified beneficiary. Upon the date of the issuance,
increase, or extension of a Letter of Credit, the Issuing Bank shall be deemed
to have sold to each other Bank and each other Bank shall be deemed to have
purchased from the Issuing Bank a ratable participation in the related Letter of
Credit or change thereto. The Issuing Bank shall notify the Administrative Agent
of each Letter of Credit issued, increased, or extended and the date and amount
of each Bank's participation in such Letter of Credit, and the Administrative
Agent shall in turn notify the Banks.
(c) Reimbursements for Letters of Credit.
(i) With respect to any Letter of Credit and in accordance
with the related Letter of Credit Application, the Borrower agrees to
pay to the Issuing Bank on demand fees due with respect to such Letter
of Credit as specified in Section 2.5(b). If the Borrower does not pay
upon demand of the Issuing Bank any amount due to the Issuing Bank
under any Letter of Credit Application, in addition to any rights the
Issuing Bank may have under such Letter of Credit Application, the
Issuing Bank may upon written notice to the Administrative Agent
request the satisfaction of such obligation by the making of a
Revolving Loan Borrowing. Concurrently with such notice to the
Administrative Agent, the Issuing Bank will use reasonable efforts
provide like notice to the Borrower, provided that failure to provide
such notice to the Borrower at such time shall not invalidate the
effectiveness of such request for a Revolving Loan Borrowing. Upon such
request, the Borrower shall be deemed to have requested the making of a
Revolving Loan Borrowing in the amount of such obligation and the
transfer of the proceeds thereof to the Issuing Bank. Such Revolving
Loan Borrowing shall be a Prime Rate Borrowing. The Administrative
Agent shall promptly forward notice of such Revolving Loan Borrowing to
the Borrower and the Banks, and each Bank shall, in accordance with the
procedures of Section 2.2(b), other than limitations on the size of
Revolving Loan Borrowings, and notwithstanding the failure of any
conditions precedent, make available such Bank's ratable share of such
Revolving Loan Borrowing to the Administrative Agent, and the
Administrative Agent shall promptly deliver the proceeds thereof to the
Issuing Bank for application to such Bank's ratable share of the
obligations under such Letter of Credit. The Borrower hereby
unconditionally and irrevocably authorizes, empowers, and directs the
Issuing Bank to make such requests for Revolving Loan Borrowings on
behalf of the Borrower, and the Banks to make Revolving Loan Advances
to the Administrative Agent for the benefit of the Issuing Bank in
satisfaction of such obligations. The Administrative Agent and each
Bank may record and otherwise treat the making of such Revolving Loan
Borrowings as the making of Revolving Loan Borrowings to the Borrower
under this Agreement as if requested by the Borrower. Nothing herein is
intended to release the Borrower's obligations under any Letter of
Credit Application, but only to provide an additional method of payment
therefor. The making of any Revolving Loan Borrowing under this Section
2.3(c) shall not constitute a cure or waiver of any Default or Event of
Default, other than the payment Default or Event of Default which is
satisfied by the application of the amounts deemed advanced hereunder,
caused by the Borrower's failure to comply with the provisions of this
Agreement or any Letter of Credit Application.
27
(ii) If prior to the time a Revolving Loan Advance would have
otherwise been made pursuant to Section 2.3(c)(i), a Bankruptcy Event
of Default shall have occurred and be continuing with respect to the
Borrower or if for any other reason, as determined by the Issuing Bank
in its sole discretion, Revolving Loan Advances may not be made as
contemplated by Section 2.3(c)(i), each Bank shall, on the date such
Revolving Loan Advance was to have been made pursuant to the notice
referred to in Section 2.3(c)(i), pay to the Issuing Bank such Bank's
ratable share of the obligations under such Letter of Credit.
(iii) Whenever, at any time after the Issuing Bank has made
payment under any Letter of Credit and has received from any Bank its
ratable share of such payment in accordance with this Section 2.3(c),
the Issuing Bank receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Bank), or any payment of
interest on account thereof, the Issuing Bank will distribute to such
Bank its ratable share thereof; provided, however, that in the event
that any such payment received by the Issuing Bank shall be required to
be returned by the Issuing Bank, such Bank shall return to the Issuing
Bank the portion thereof previously distributed by the Issuing Bank to
it.
(iv) Each Bank's obligation to make the Revolving Loan
Advances referred to in Section 2.3(c)(i) and to purchase participating
interests pursuant to Section 2.3(b) shall be absolute and
unconditional and shall not be affected by any circumstance, including
(a) any setoff, counterclaim, recoupment, defense or other right that
such Bank or the Borrower may have against the Issuing Bank, the
Borrower or any other Person for any reason whatsoever; (b) the
occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 3;
(c) any adverse change in the condition (financial or otherwise) of the
Borrower; (d) any breach of this Agreement or any other Credit Document
by the Borrower, any other Credit Party or any other Bank; or (e) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
(d) Prepayments of Letters of Credit. In the event that any Letters of
Credit shall be outstanding according to their terms after the Revolving Loan
Maturity Date, the Borrower shall pay to the Administrative Agent an amount
equal to the Letter of Credit Exposure allocable to such Letters of Credit to be
held in the Letter of Credit Collateral Account and applied in accordance with
paragraph (g) below.
(e) Obligations Unconditional. The obligations of the Borrower and each
Bank under this Agreement and the Letter of Credit Applications to make payments
as required to reimburse the Issuing Bank for draws under Letters of Credit and
to make other payments due in respect of Letters of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement and the Letter of Credit Applications under all
circumstances, including: (i) any lack of validity or enforceability of any
Letter of Credit Document; (ii) any amendment, waiver, or consent to departure
from any Letter of Credit Document; (iii) the existence of any claim, set-off,
defense, or other right which the Borrower or any Bank may have at any time
against any beneficiary or transferee of any Letter of Credit (or any Persons
for whom any such beneficiary or any such transferee may be acting), the Issuing
Bank, or any other
28
person or entity, whether in connection with the transactions contemplated in
this Agreement or any unrelated transaction; (iv) any statement or any other
document presented under such 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; or (v) payment by the Issuing Bank under any Letter
of Credit against presentation of a draft or certificate which does not comply
with the terms of such Letter of Credit; provided, however, that nothing
contained in this paragraph (e) shall be deemed to constitute a waiver of any
remedies of the Borrower or any Bank in connection with the Letters of Credit or
the Borrower's or such Bank's rights under paragraph (f) below.
(f) Liability of Issuing Bank. The Issuing Bank shall not be liable or
responsible for: (i) the use which may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (ii)
the validity, sufficiency, or genuineness of documents related to Letters of
Credit, or of any endorsement thereon, even if such documents should prove to be
in any or all respects invalid, insufficient, fraudulent, or forged; (iii)
payment by the Issuing Bank against presentation of documents which do not
strictly comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the relevant Letter of
Credit; or (iv) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit (INCLUDING THE ISSUING BANK'S OWN
NEGLIGENCE); except that the Issuing Bank shall be liable to the Borrower or any
Bank to the extent of any direct, as opposed to consequential, damages suffered
by the Borrower or such Bank which the Borrower or such Bank proves were caused
by (A) the Issuing Bank's gross negligence or willful misconduct in determining
whether documents presented under a Letter of Credit comply with the terms of
such Letter of Credit, (B) the Issuing Bank's willful failure to make or delay
in making lawful payment under any Letter of Credit after the presentation to it
of documentation strictly complying with the terms and conditions of such Letter
of Credit or the Issuing Bank's payment of greater than the maximum amount
permitted under any Letter of Credit, or (C) the Issuing Bank's negligence in
the handling of money.
(g) Letter of Credit Collateral Account.
(i) If the Borrower is required to deposit funds in the Letter
of Credit Collateral Account pursuant to Section 2.2(f), 2.3(d) or 6.4,
then the Borrower and the Administrative Agent shall establish the
Letter of Credit Collateral Account, and the Borrower shall execute any
documents and agreements, including the Administrative Agent's standard
form assignment of deposit accounts, that the Administrative Agent
reasonably requests in connection therewith to establish the Letter of
Credit Collateral Account and grant the Administrative Agent a first
priority security interest in such account and the funds therein. The
Borrower hereby pledges to the Administrative Agent and grants the
Administrative Agent a security interest in the Letter of Credit
Collateral Account, whenever established, all funds held in the Letter
of Credit Collateral Account from time to time, and all proceeds
thereof as security for the payment of the Credit Obligations.
(ii) Funds held in the Letter of Credit Collateral Account
shall be held as cash collateral for obligations with respect to
Letters of Credit and promptly applied by the Administrative Agent at
the request of the Issuing Bank to any reimbursement or other
29
obligations under Letters of Credit that exist or occur. To the extent
that any surplus funds are held in the Letter of Credit Collateral
Account above the Letter of Credit Exposure, during the existence of an
Event of Default the Administrative Agent may (A) hold such surplus
funds in the Letter of Credit Collateral Account as cash collateral for
the Credit Obligations or (B) apply such surplus funds to any Credit
Obligations in accordance with Section 6.9. If no Default exists, the
Administrative Agent shall release to the Borrower at the Borrower's
written request any funds held in the Letter of Credit Collateral
Account above the amounts required by Section 2.3(d).
(iii) Funds held in the Letter of Credit Collateral Account
shall be invested in money market funds of the Administrative Agent or
in another investment if mutually agreed upon by the Borrower and the
Administrative Agent, but the Administrative Agent shall have no other
obligation to make any other investment of the funds therein. The
Administrative Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Letter of Credit Collateral
Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the
Administrative Agent accords its own property, it being understood that
the Administrative Agent shall not have any responsibility for taking
any necessary steps to preserve rights against any parties with respect
to any such funds.
2.4. Swing Line Facility.
(a) Commitment.
(i) Subject to the terms and conditions hereof, the Swing Line
Lender agrees to make a portion of the credit otherwise available to
the Borrower under the Revolving Loan Commitments from time to time
during the period from the date of this Agreement until the Revolving
Loan Maturity Date by making swing line loans ("Swing Line Loans") to
the Borrower; provided that (i) the aggregate principal amount of Swing
Line Loans outstanding at any time shall not exceed the Swing Line
Commitment then in effect (notwithstanding that the Swing Line Loans
outstanding at any time, when aggregated with the Swing Line Lender's
other outstanding Revolving Loan Advances, may exceed the Swing Line
Commitment then in effect), (ii) the Borrower shall not request, and
the Swing Line Lender shall not make, any Swing Line Loan if, after
giving effect to the making of such Swing Line Loan, the aggregate
amount of the Available Revolving Loan Commitments would be less than
zero and (iii) at no time may the then outstanding Swing Line Loans
plus the aggregate outstanding principal amount of Revolving Loan
Borrowings plus the Letter of Credit Exposure exceed the Borrowing Base
then in effect. Within the limits expressed in this Agreement, the
Borrower may use the Swing Line Commitment by borrowing, repaying and
reborrowing, all in accordance with the terms and conditions hereof.
Each Swing Line Loan shall be a Prime Rate Borrowing. The indebtedness
of the Borrower to the Swing Line Lender resulting from the Swing Line
Loans made by the Swing Line Lender shall be evidenced by the Swing
Line Note made by the Borrower.
(ii) The Borrower shall repay all outstanding Swing Line Loans
on the Revolving Loan Maturity Date.
30
(b) Procedure for Swing Line Borrowing. Whenever the Borrower desires
that the Swing Line Lender make Swing Line Loans it shall give the Swing Line
Lender irrevocable telephonic notice confirmed promptly in writing (which
telephonic notice must be received by the Swing Line Lender not later than 1:00
p.m. (local time at the Applicable Lending Office of the Administrative Agent)
on the proposed date of the Swing Line Borrowing), specifying (i) the amount to
be borrowed and (ii) the requested date of the Swing Line Borrowing (which shall
be a Business Day during the period from the date of this Agreement until the
Revolving Loan Maturity Date). Each borrowing under the Swing Line Commitment
shall be in an amount equal to $500,000 or a whole multiple of $100,000 in
excess thereof. Not later than 3:00 p.m. (local time at the Applicable Lending
Office of the Administrative Agent) on the date requested for a Swing Line
Borrowing specified in a notice in respect of Swing Line Loans, the Swing Line
Lender shall make available to the Administrative Agent at the Applicable
Lending Office an amount in immediately available funds equal to the amount of
the Swing Line Loan to be made by the Swing Line Lender. The Administrative
Agent shall make the proceeds of such Swing Line Loan available to the Borrower
on such date in immediately available funds at any account of Borrower which is
designated in writing by the Borrower to the Administrative Agent.
(c) Reimbursements for Swing Line Loan Obligations.
(i) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower
(which hereby irrevocably directs the Swing Line Lender to act on its
behalf), on one Business Day's notice given by the Swing Line Lender no
later than 12:00 noon (local time at the Applicable Lending Office of
the Administrative Agent) request each Bank to make, and each Bank
hereby agrees to make, a Revolving Loan Advance, in an amount equal to
such Bank's Revolving Loan Percentage of the aggregate amount of the
Swing Line Loans (the "Refunded Swing Line Loans") outstanding on the
date of such notice, to repay the Swing Line Lender. Upon such request,
the Borrower shall be deemed to have requested the making of a
Revolving Loan Borrowing in the amount of such request. Such Revolving
Loan Borrowing shall be a Prime Rate Borrowing. Each Bank shall make
the amount of its Revolving Loan Advance available to the
Administrative Agent at the Administrative Agent's Applicable Lending
Office in immediately available funds, not later than 10:00 a.m. (local
time at the Applicable Lending Office of the Administrative Agent) one
Business Day after the date of such notice. The proceeds of such
Revolving Loan Borrowing shall be immediately made available by the
Administrative Agent to the Swing Line Lender for application by the
Swing Line Lender to the repayment of the Refunded Swing Line Loans.
The Borrower irrevocably authorizes the Swing Line Lender to charge the
Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount
of such Refunded Swing Line Loans to the extent amounts received from
the Banks are not sufficient to repay in full such Refunded Swing Line
Loans.
(ii) If prior to the time a Revolving Loan Advance would have
otherwise been made pursuant to Section 2.4(c)(i), a Bankruptcy Event
of Default shall have occurred and be continuing with respect to the
Borrower or if for any other reason, as determined by the Swing Line
Lender in its sole discretion, Revolving Loan Advances may not be made
as contemplated by Section 2.4(c)(i), each Bank shall, on the date such
Revolving
31
Loan Advance was to have been made pursuant to the notice referred to
in Section 2.4(c)(i) (the "Refunding Date"), purchase for cash an
undivided participating interest in the then outstanding Swing Line
Loans by paying to the Swing Line Lender an amount (the "Swing Line
Participation Amount") equal to (a) such Bank's Revolving Percentage
times (b) the sum of the aggregate principal amount of Swing Line Loans
then outstanding that were to have been repaid with such Revolving Loan
Borrowing.
(iii) Whenever, at any time after the Swing Line Lender has
received from any Bank such Bank's Swing Line Participation Amount, the
Swing Line Lender receives any payment on account of the Swing Line
Loans, the Swing Line Lender will distribute to such Bank its Swing
Line Participation Amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such
Bank's participating interest was outstanding and funded and, in the
case of principal and interest payments, to reflect such Bank's pro
rata portion of such payment if such payment is not sufficient to pay
the principal of and interest on all Swing Line Loans then due);
provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Bank will return to
the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(iv) Each Bank's obligation to make the Revolving Loan
Advances referred to in Section 2.4(c)(i) and to purchase participating
interests pursuant to Section 2.4(c)(ii) shall be absolute and
unconditional and shall not be affected by any circumstance, including
(a) any setoff, counterclaim, recoupment, defense or other right that
such Bank or the Borrower may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever; (b) the
occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 3;
(c) any adverse change in the condition (financial or otherwise) of the
Borrower; (d) any breach of this Agreement or any other Credit Document
by the Borrower, any other Credit Party or any other Bank; or (e) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
2.5. Fees.
(a) Commitment Fees. The Borrower shall pay to the Administrative Agent
for the ratable benefit of the Banks an unused commitment fee of 0.50% per annum
on the average daily amount by which (i) the aggregate amount of the Revolving
Loan Commitments exceeds (ii) the aggregate outstanding principal amount of the
Revolving Loan plus the Letter of Credit Exposure. The unused commitment fee
shall accrue from the date of this Agreement and be due and payable in arrears
on the last day of each calendar quarter and on the Revolving Loan Maturity
Date.
(b) Fees for Letters of Credit. For each Letter of Credit issued by the
Issuing Bank, the Borrower shall pay to the Administrative Agent for the ratable
benefit of the Banks a letter of credit fee equal to the Applicable Margin for
letter of credit fees per annum on the face amount of such Letter of Credit for
the stated term of such Letter of Credit, with a minimum fee of $500. In
addition, for each Letter of Credit issued by the Issuing Bank, the Borrower
shall pay to the Administrative Agent for the benefit of the Issuing Bank a
fronting fee of 0.125% per annum on
32
the face amount of such Letter of Credit for the stated term of such Letter of
Credit, with a minimum fee of $500. The Borrower shall pay each such letter of
credit fee for each Letter of Credit quarterly in arrears within ten days after
when billed therefor by the Issuing Bank.
2.6. Interest.
(a) Election of Interest Rate Basis. The Borrower may select the
interest rate basis for the Term Loan and the Revolving Loan in accordance with
the terms of this Section 2.6(a):
(i) Under the Revolving Loan Borrowing Request provided to the
Administrative Agent in connection with the making of each Revolving
Loan Borrowing, the Borrower shall select the amount and the Type of
the Tranches, and for each LIBOR Tranche selected, any permitted
Interest Period for each such LIBOR Tranche, which will comprise such
Revolving Loan Borrowing, provided that (A) at no time shall there be
more than ten separate LIBOR Tranches outstanding and (B) each LIBOR
Tranche must be in a principal amount equal to or greater than
$1,000,000 and be made in multiples of $500,000, and the Prime Rate
Tranche must be in a principal amount equal to or greater than
$1,000,000 and be made in multiples of $100,000. Such interest rate
elections must be provided to the Administrative Agent in writing or by
telecopy not later than 1:00 p.m. (local time at the Applicable Lending
Office of the Administrative Agent) on the third Business Day before
the date of any proposed Revolving Loan Borrowing comprised of a LIBOR
Tranche or 11:00 a.m. (local time at the Applicable Lending Office of
the Administrative Agent) on the same day of any proposed Revolving
Loan Borrowing which is a Prime Rate Borrowing. The Administrative
Agent shall promptly forward copies of such interest rate elections to
the Banks. In the case of any Revolving Loan Borrowing comprised of a
LIBOR Tranche, upon determination by the Administrative Agent, the
Administrative Agent shall promptly notify the Borrower and the Banks
of the applicable interest rate for such Tranche.
(ii) With respect to any Tranche, the Borrower may continue or
convert any portion of any LIBOR Tranche or the Prime Rate Tranche to
form new LIBOR Tranches or increase or decrease the amount of the Prime
Rate Tranche in accordance with this paragraph. Each such continuation
or conversion shall be deemed to create a new LIBOR Tranche or increase
or decrease the amount of the Prime Rate Tranche, as applicable, for
all purposes of this Agreement. Each such continuation or conversion
shall be made pursuant to a Continuation/Conversion Request given by
the Borrower to the Administrative Agent in writing or by telecopy not
later than 1:00 p.m. (local time at the Applicable Lending Office of
the Administrative Agent) on the third Business Day before the date of
the proposed continuation or conversion. Each Continuation/Conversion
Request shall be fully completed and shall specify the information
required therein, and shall be irrevocable and binding on the Borrower.
The Administrative Agent shall promptly forward notice of the
continuation or conversion to the Banks. In the case of any
continuation or conversion into LIBOR Tranches, upon determination by
the Administrative Agent, the Administrative Agent shall notify the
Borrower and the Banks of the applicable interest rate. Continuations
and conversions of LIBOR Tranches shall be made in integral multiples
of $500,000, and continuations and conversions of the Prime Rate
Tranche shall be made in integral multiples of $100,000.
33
No continuation or conversion shall be permitted if such continuation
or conversion would cause the aggregate outstanding principal amount of
any LIBOR Tranche which would remain outstanding to be less than
$1,000,000, or the aggregate outstanding principal amount of the Prime
Rate Tranche which would remain outstanding to be less than $1,000,000.
At no time shall there be more than ten separate LIBOR Tranches
outstanding. Any conversion of an existing LIBOR Tranche is subject to
Section 2.7. Subject to the satisfaction of all applicable conditions
precedent, the Administrative Agent and the Banks shall before close of
business on the date requested by the Borrower for the continuation or
conversion, make such continuation or conversion.
(iii) At the end of the Interest Period for any LIBOR Tranche
if the Borrower has not continued or converted such LIBOR Tranche into
new Tranches as provided for in paragraph (ii) above, the Borrower
shall be deemed to have continued such LIBOR Tranche as a new LIBOR
Tranche with an Interest Period of one month. All of the Prime Rate
Tranche shall continue as the Prime Rate Tranche unless the Borrower
converts such Prime Rate Tranche as provided for in paragraph (ii)
above.
(b) LIBOR Tranches. Each LIBOR Tranche shall bear interest during its
Interest Period at a per annum interest rate equal to the sum of the LIBOR for
such Tranche plus the Applicable Margin for LIBOR Tranches in effect from time
to time. The Borrower shall pay to the Administrative Agent for the ratable
benefit of the Banks all accrued but unpaid interest on each LIBOR Tranche on
the last day of the applicable Interest Period for such LIBOR Tranche (and with
respect to LIBOR Tranches with Interest Periods of greater than three months, on
the date which is three months after the first date of the Interest Period for
such LIBOR Tranche), when required upon prepayment as specified elsewhere in
this Agreement, on any date when such LIBOR Tranche is prepaid or repaid in
full, and on the Revolving Loan Maturity Date.
(c) Prime Rate Tranche. The Prime Rate Tranche shall bear interest at a
per annum interest rate equal to the Base Rate in effect from time to time plus
the Applicable Margin for the Prime Rate Tranche in effect from time to time.
The Borrower shall pay to the Administrative Agent for the ratable benefit of
the Banks all accrued but unpaid interest on the aggregate outstanding principal
amount of the Prime Rate Tranche on the last day of each calendar quarter, when
required upon prepayment as specified elsewhere in this Agreement, on any date
the Prime Rate Tranche is prepaid or repaid in full, and on the Revolving Loan
Maturity Date.
(d) Usury Protection.
(i) If, with respect to any Bank and the Borrower, the
effective rate of interest contracted for by such Bank with the
Borrower under the Credit Documents, including the stated rates of
interest contracted for hereunder and any other amounts contracted for
under the Credit Documents which are deemed to be interest, at any time
exceeds the Highest Lawful Rate, then the outstanding principal amount
of the loans made by such Bank to the Borrower hereunder shall bear
interest at a rate which would make the effective rate of interest on
the loans made by such Bank to the Borrower under the Credit Documents
equal the Highest Lawful Rate until the difference between the amounts
which would have been due by the Borrower to such Bank at the stated
rates and the amounts which were due by the Borrower to such Bank at
the Highest Lawful Rate
34
(the "Lost Interest") has been recaptured by such Bank. If, when the
loans made hereunder are repaid in full, the Lost Interest has not been
fully recaptured by such Bank pursuant to the preceding paragraph,
then, to the extent permitted by law, the interest rates charged by
such Bank to the Borrower hereunder shall be retroactively increased
such that the effective rate of interest on the loans made by such Bank
to the Borrower under the Credit Documents was at the Highest Lawful
Rate since the effectiveness of this Agreement to the extent necessary
to recapture the Lost Interest not recaptured pursuant to the preceding
sentence and, to the extent allowed by law, the Borrower shall pay to
such Bank the amount of the Lost Interest remaining to be recaptured by
such Bank.
(ii) In calculating all sums paid or agreed to be paid to any
Bank by the Borrower for the use, forbearance, or detention of money
under the Credit Documents, such amounts shall, to the extent permitted
by applicable law, be amortized, prorated, allocated, and spread in
equal parts throughout the term of the Credit Documents.
(iii) NOTWITHSTANDING THE FOREGOING OR ANY OTHER TERM IN THIS
AGREEMENT AND THE CREDIT DOCUMENTS TO THE CONTRARY, it is the intention
of each Bank and the Borrower to conform strictly to any applicable
usury laws. Accordingly, if any Bank contracts for, charges, or
receives any consideration from the Borrower which constitutes interest
in excess of the Highest Lawful Rate, then any such excess shall be
canceled automatically and, if previously paid, shall at such Bank's
option be applied to the outstanding amount of the loans made hereunder
by such Bank to the Borrower or be refunded to the Borrower.
2.7. Breakage Costs. If (i) any payment of principal on or any conversion of any
LIBOR Tranche is made on any date other than the last day of the Interest Period
for such LIBOR Tranche, whether as a result of any voluntary or mandatory
prepayment (other than a prepayment upon the occurrence of any event subject to
Section 2.9 or 2.10), any acceleration of maturity, or any other cause, (ii) any
payment of principal on any LIBOR Tranche is not made when due, or (iii) any
LIBOR Tranche is not borrowed, converted, or prepaid in accordance with the
respective notice thereof provided by the Borrower to the Administrative Agent,
whether as a result of any failure to meet any applicable conditions precedent
for borrowing, conversion, or prepayment, the permitted cancellation of any
request for borrowing, conversion, or prepayment, the failure of the Borrower to
provide the respective notice of borrowing, conversion, or prepayment, or any
other cause not specified above which is created by the Borrower, then the
Borrower shall pay to each Bank upon demand any amounts required to compensate
such Bank for any losses, costs, or expenses, including lost profits and
administrative expenses, which are reasonably allocable to such action,
including losses, costs, and expenses related to the liquidation or redeployment
of funds acquired or designated by such Bank to fund or maintain such Bank's
ratable share of such LIBOR Tranche or related to the reacquisition or
redesignation of funds by such Bank to fund or maintain such Bank's ratable
share of such LIBOR Tranche following any liquidation or redeployment of such
funds caused by such action. Such Bank need not prove matched funding of any
particular funds, and a certificate as to the amount of such loss, cost, or
expense detailing the calculation thereof and certifying that such Bank
customarily charges such amounts to its other customers in similar circumstances
submitted by such Bank to the Borrower shall be conclusive and binding for all
purposes, absent manifest error.
35
Notwithstanding anything herein to the contrary, until the date 180 days after
the Closing Date, the Borrower shall reimburse each Bank for all losses, costs
and expenses of the type described in this Section 2.7 incurred by such Bank in
connection with the syndication of the Facilities by the Administrative Agent in
its sole discretion and the addition of new lenders.
2.8. Increased Costs.
(a) Cost of Funds. If due to either (i) any introduction of, change in,
or change in the interpretation of, any law or regulation, in each case, after
the date of this Agreement or (ii) compliance with any guideline or request from
any central bank or other governmental authority having appropriate jurisdiction
(whether or not having the force of law) given after the date of this Agreement,
there shall be any increase in the costs of any Bank attributable to (x)
committing to make any Term Loan Advance or Revolving Loan Advance or obtaining
funds for the making, funding, or maintaining of such Bank's ratable share of
any LIBOR Tranche in the relevant interbank market or (y) committing to make
Letters of Credit or issuing, funding, or maintaining Letters of Credit
(including any increase in any applicable reserve requirement specified by the
Federal Reserve Board, including those for emergency, marginal, supplemental, or
other reserves), then the Borrower shall pay to such Bank upon demand any
amounts required to compensate such Bank for such increased costs, such amounts
being due and payable upon demand by such Bank. A certificate as to the cause
and amount of such increased cost detailing the calculation of such cost and
certifying that such Bank customarily charges such amounts to its other
customers in similar circumstances submitted by such Bank to the Borrower shall
be conclusive and binding for all purposes, absent manifest error. No Bank may
make any claim for compensation under this Section 2.8(a) for increased costs
incurred more than 90 days prior to the delivery of any such certificate.
(b) Capital Adequacy. If, due to either (i) any introduction of, change
in, or change in the interpretation of, any law or regulation, in each case,
after the date of this Agreement or (ii) compliance with any guideline or
request from any central bank or other governmental authority having appropriate
jurisdiction (whether or not having the force of law) given after the date of
this Agreement, there shall be any increase in the capital requirements of any
Bank or its parent or holding company attributable to (x) committing to make
Term Loan Advances or Revolving Loan Advances or making, funding, or maintaining
Term Loan Advances or Revolving Loan Advances or (y) committing to make Letters
of Credit or issuing, funding, or maintaining Letters of Credit, as such capital
requirements are allocated by such Bank, then the Borrower shall pay to such
Bank upon demand any amounts required to compensate such Bank or its parent or
holding company for such increase in costs (including an amount equal to any
reduction in the rate of return on assets or equity of such Bank or its parent
or holding company), such amounts being due and payable upon demand by such
Bank. A certificate as to the cause and amounts detailing the calculation of
such amounts and certifying that such Bank customarily charges such amounts to
its other customers in similar circumstances submitted by such Bank to the
Borrower shall be conclusive and binding for all purposes, absent manifest
error. No Bank may make any claim for compensation under this Section 2.8(b) for
increased costs incurred more than 90 days prior to the delivery of any such
certificate.
2.9. Illegality. Notwithstanding any other provision in this Agreement, if it
becomes unlawful for any Bank to obtain deposits or other funds for making or
funding such Bank's ratable share
36
of any LIBOR Tranche in the relevant interbank market, such Bank shall so notify
the Borrower and the Administrative Agent, such Bank's commitment to create
LIBOR Tranches shall be suspended until such condition has passed, all LIBOR
Tranches applicable to such Bank shall be converted to the Prime Rate Tranche as
of the end of each applicable Interest Period or earlier if necessary, and all
subsequent requests for LIBOR Tranches shall be deemed to be requests for Prime
Rate Borrowings or continuations and conversions of the Prime Rate Tranche, as
applicable, with respect to such Bank.
2.10. Market Failure. Notwithstanding any other provision in this Agreement, if
the Administrative Agent determines that: (a) quotations of interest rates for
the relevant deposits referred to in the definition of "LIBOR" are not being
provided in the relevant amounts, or maturities for purposes of determining the
rate of interest referred to in the definition of "LIBOR" or (b) the relevant
rates of interest referred to in the definition of "LIBOR" which are used as the
basis to determine the rate of interest for LIBOR Tranches will not adequately
cover the cost to any Bank of making or maintaining such Bank's ratable share of
any LIBOR Tranche, then if the Administrative Agent so notifies the Borrower,
the Banks' commitments to create LIBOR Tranches shall be suspended until such
condition has passed, all LIBOR Tranches shall be converted to the Prime Rate
Tranche as of the end of each applicable Interest Period or earlier if
necessary, and all subsequent requests for LIBOR Tranches shall be deemed to be
requests for Prime Rate Borrowings or continuations and conversions of the Prime
Rate Tranche, as applicable, with respect to such Bank.
2.11. Payment Procedures and Computations.
(a) Payment Procedures. Time is of the essence in this Agreement and
the Credit Documents. All payments hereunder shall be made in Dollars. The
Borrower shall make each payment under this Agreement and under the Term Loan
Notes and the Revolving Loan Notes not later than 12:00 noon (local time at the
Applicable Lending Office of the Administrative Agent) on the day when due to
the Administrative Agent at the Administrative Agent's Applicable Lending Office
in immediately available funds. All payments by the Borrower hereunder shall be
made without any offset, abatement, withholding, deduction, counterclaim, or
reduction. Upon receipt of payment from the Borrower of any principal, interest,
or fees due to the Banks, the Administrative Agent shall promptly after receipt
thereof distribute to the Banks their ratable share of such payments for the
account of their respective Applicable Lending Offices. If and to the extent
that the Administrative Agent shall not have so distributed to any Bank its
ratable share of such payments, the Administrative Agent agrees that it shall
pay interest on such amount for each day after the day when such amount is made
available to the Administrative Agent by the Borrower until the date such amount
is paid to such Bank by the Administrative Agent at the Federal Funds Rate in
effect from time to time, provided that if such amount is not paid by the
Administrative Agent by the end of the third day after the Borrower makes such
amount available to the Administrative Agent, the interest rates specified above
shall be increased by a per annum amount equal to 2.00% on the fourth day and
shall remain at such increased rate thereafter. Interest on such amount shall be
due and payable by the Administrative Agent upon demand by such Bank. Upon
receipt of other amounts due solely to the Administrative Agent, the Issuing
Bank, the Swing Line Lender, or a specific Bank, the Administrative Agent shall
distribute such amounts to the appropriate party to be applied in accordance
with the terms of this Agreement.
37
(b) Administrative Agent Reliance. Unless the Administrative Agent shall
have received written notice from the Borrower prior to any date on which any
payment is due to the Banks that the Borrower shall not make such payment in
full, the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date, and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such date an amount equal to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Bank shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Bank, together with interest
thereon from the date such amount is distributed to such Bank until the date
such Bank repays such amount to the Administrative Agent, at an interest rate
equal to, the Federal Funds Rate in effect from time to time, provided that with
respect to such Bank, if such amount is not repaid by such Bank by the end of
the second day after the date of the Administrative Agent's demand, the interest
rates specified above shall be increased by a per annum amount equal to 2.00% on
the third day after the date of the Administrative Agent's demand and shall
remain at such increased rate thereafter.
(c) Sharing of Payments. Each Bank agrees that if it should receive any
payment (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) in respect of any obligation of the Borrower to pay principal,
interest, fees, or any other obligation incurred under the Credit Documents in a
proportion greater than the total amount of such principal, interest, fees, or
other obligation then owed and due by the Borrower to such Bank bears to the
total amount of principal, interest, fees, or other obligation then owed and due
by the Borrower to all of the Banks immediately prior to such receipt, then such
Bank receiving such excess payment shall purchase for cash without recourse from
the other Banks an interest in the obligations of the Borrower to such Banks in
such amount as shall result in a participation by all of the Banks, in
proportion with the Banks' respective pro rata shares, in the aggregate unpaid
amount of principal, interest, fees, or any such other obligation, as the case
may be, owed by the Borrower to all of the Banks; provided that if all or any
portion of such excess payment is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, in proportion with the Banks' respective pro rata shares, but
without interest.
(d) Authority to Charge Accounts. The Administrative Agent, if and to the
extent payment owed to the Administrative Agent or any Bank is not made when
due, may charge from time to time against any account of the Borrower with the
Administrative Agent any amount so due. The Administrative Agent agrees promptly
to notify the Borrower after any such charge and application made by the
Administrative Agent provided that the failure to give such notice shall not
affect the validity of such charge and application.
(e) Interest and Fees. Unless expressly provided for in this Agreement, (i)
all computations of interest based on the Prime Rate (including the Base Rate,
when applicable) shall be made on the basis of a 365/366 day year, as the case
may be, (ii) all computations of interest based on the Federal Funds Rate
(including the Base Rate, when applicable) shall be made on the basis of a 360
day year, (iii) all computations of interest based upon the LIBOR shall be made
on the basis of a 360 day year, and (iv) all computations of fees shall be made
on the basis of a 360 day year, in each case for the actual number of days
(including the first day,
38
but excluding the last day) occurring in the period for which such interest or
fees are payable. Each determination by the Administrative Agent of an interest
rate or fee shall be conclusive and binding for all purposes, absent manifest
error.
(f) Payment Dates. Whenever any payment shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be. If the time for
payment for an amount payable is not specified in this Agreement or in any other
Credit Document, the payment shall be due and payable on demand by the
Administrative Agent or the applicable Bank.
2.12. Taxes.
(a) No Deduction for Certain Taxes. Any and all payments by the Borrower
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, other than taxes imposed on the income of, and
franchise taxes imposed in lieu of net income taxes on, the Administrative
Agent, any Bank, or the Applicable Lending Office thereof by any jurisdiction in
which any such entity is a present or former citizen or resident or any
political subdivision of such jurisdiction (other than any such connection
arising solely from the Administrative Agent, such Bank, or the Applicable
Lending Office having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Letter of
Credit Document) (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes or Other
Taxes from or in respect of any sum payable to the Administrative Agent, any
Bank, or the Applicable Lending Office thereof, (i) the sum payable shall be
increased as may be necessary so that, after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12), such Person receives an amount equal to the sum it would have received
had no such deductions been made; (ii) the Borrower shall make such deductions;
and (iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) Other Taxes. The Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies ("Other Taxes") which arise from any payment made or from the execution,
delivery, or registration of, or otherwise with respect to, this Agreement or
the other Credit Documents (other than those which become due as a result of any
Bank joining this Agreement as a result of any Assignment and Acceptance, which
shall be paid by the Bank which becomes a Bank hereunder as a result of such
Assignment and Acceptance).
(c) Foreign Bank Withholding Exemption. Each Bank and Issuing Bank that is
not a "US Person" as defined in Section 7701(a)(30) of the Code (a "Non-US
Bank") agrees that it shall deliver to the Borrower and the Administrative Agent
(i) two duly completed copies of United States Internal Revenue Service Form
W-8BEN, W-8ECI or other applicable form, as the case may be, certifying in each
case that such Bank is entitled to receive payments under this Agreement, the
Term Loan Notes and the Revolving Loan Notes payable to it, without deduction or
withholding of any United States federal income taxes, (ii) if applicable, a
statement
39
indicating that such Bank is entitled to the "portfolio interest" exception
under Section 871(h) or 881(c)(3) of the Code, and (iii) any other governmental
forms which are necessary or required under an applicable tax treaty or
otherwise by law to reduce or eliminate any withholding tax, which have been
reasonably requested by the Borrower. Each Bank which delivers to the Borrower
and the Administrative Agent a Form W-8BEN or W-8ECI pursuant to the next
preceding sentence further undertakes to deliver to the Borrower and the
Administrative Agent two further copies of Form W-8BEN or W-8ECI, or other
applicable forms, or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower and the Administrative Agent, and such
extensions or renewals thereof as may reasonably be requested by the Borrower
and the Administrative Agent certifying in the case of a Form W-8BEN or W-8ECI
that such Bank is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. If an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any delivery required by the preceding
sentence would otherwise be required which renders all such forms inapplicable
or which would prevent any Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Borrower and the
Administrative Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax, such Bank shall
not be required to deliver such forms. The Borrower shall withhold tax at the
rate and in the manner required by the laws of the United States with respect to
payments made to a Bank failing to provide the requisite Internal Revenue
Service forms in a timely manner. Each Bank which fails to provide to the
Borrower in a timely manner such forms shall reimburse the Borrower upon demand
for any penalties paid by the Borrower as a result of any failure of the
Borrower to withhold the required amounts that are caused by such Bank's failure
to provide the required forms in a timely manner. Notwithstanding any other
provision of this paragraph, a Non-U.S. Bank shall not be required to deliver
any form pursuant to this paragraph that such Non-U.S. Bank is not legally able
to deliver.
2.13. Change of Lending Office.
(a) Each Bank agrees that if it makes any demand for payment under Section
2.8 or is required to pay additional amounts pursuant to Section 2.12(a), or if
any adoption or change of the type described in Section 2.9 shall occur with
respect to it, it will if requested by the Borrower use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to designate a different lending office for any loan made
hereunder affected if the making of such a designation would reduce or obviate
the need for the Borrower to make payments under Section 2.8 or 2.12(a), or
would eliminate or reduce the effect of any adoption or change described in
Section 2.9.
(b) If any Bank (including any participant Bank under Section 8.5) shall
assert that any adoption or change of the type described in Section 2.9 hereof
has occurred with respect to it, or if any Bank (including any participant Bank
under Section 8.5) requests compensation under Section 2.8, or if the Borrower
is required to pay any additional amount to any Bank or any authority for the
account of any Bank pursuant to Section 2.12, then the Borrower may, at its
expense and effort, upon notice to such Bank and the Administrative Agent,
require such Bank
40
to, and such Bank promptly shall, assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 8.5
(provided that the Borrower shall be obligated to pay the administrative fee
referred to therein) and subject to Section 2.7 (as if such assignment were a
prepayment by the Borrower)), all its interests, rights, and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Bank, if a Bank accepts such assignment); provided that (i) if
such assignee is not a Bank or an Affiliate thereof, the Borrower shall have
received the prior written consent of the Administrative Agent, the Swing Line
Lender and the Issuing Bank (which consents shall not unreasonably be withheld
or delayed), (ii) such Bank shall have received payment of an amount equal to
the aggregate outstanding principal of such Bank's Term Loan Advances and
Revolving Loan Advances and its participations in Letters of Credit, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (at least to the extent of such outstanding principal) and the
Borrower (in the case of all other amounts), (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.8 or payment
required to be made pursuant to Section 2.12, such assignment will result in a
reduction in such compensation or payments compared to the compensation or
payments payable to the assigning Bank, (iv) such assignment does not conflict
with any requirement of law, (v) no Event of Default shall have occurred and be
continuing at the time of such assignment, (vi) prior to any such assignment,
such Bank shall have taken no action under Section 2.13(a) so as to eliminate
the continued need for payment of amounts owing pursuant to Section 2.8 or
2.12(a), (vii) until such time as such assignment shall be consummated, the
Borrower shall pay all additional amounts (if any) required pursuant to Section
2.8 or 2.12(a), as the case may be, and (viii) any such assignment shall not be
deemed to be a waiver of any rights that the Borrower, the Administrative Agent
or any other Bank shall have against the replaced Bank. A Bank shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Bank or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation no longer exist or cease to
apply.
2.14. Conversion of the Term Loan. Upon the Subordinated Debt Event, the
aggregate outstanding principal amount of the Term Loan Borrowing (the
"Converted Term Loan Amount") and all Tranches thereunder shall be automatically
converted into a Revolving Loan Borrowing of the same principal amount and with
the same Tranches. Notwithstanding anything herein to the contrary, upon such
conversion, the Term Loan shall be deemed to have been repaid in full, and the
Revolving Loan Commitment of each Bank shall be automatically increased by an
amount equal to such Bank's ratable share of the Converted Term Loan Amount. The
Administrative Agent shall promptly notify each Bank of the increase in its
Revolving Loan Commitment.
ARTICLE 3. CONDITIONS PRECEDENT
3.1. Conditions Precedent to Initial Extension of Credit. The obligation of each
Bank to make the initial extension of credit under this Agreement, including the
making of any Term Loan Advance or Revolving Loan Advance and the issuance of
any Letter of Credit, and the obligation of the Swing Line Lender to make any
Swing Line Loan shall be subject to the following conditions precedent:
41
(a) Documents. The Borrower shall have delivered or shall have caused to be
delivered the documents and other items listed on Exhibit F, together with any
other documents requested by the Administrative Agent to document the agreements
and intent of the Credit Documents, each in form and with substance satisfactory
to the Administrative Agent;
(b) Material Adverse Change. No Material Adverse Change shall have occurred
since December 31, 2000; and
(c) Existing Credit Agreement. (i) The Administrative Agent shall have
received satisfactory evidence that the Existing Credit Agreement shall have
been terminated and all amounts thereunder shall have been paid in full and (ii)
satisfactory arrangements shall have been made for the termination of all Liens
granted in connection therewith.
3.2. Conditions Precedent to Each Extension of Credit. The obligation of each
Bank to make any extension of credit under this Agreement, including the making
of any Term Loan Advance or Revolving Loan Advance and the issuance, increase,
or extension of any Letter of Credit, and the obligation of the Swing Line
Lender to make any Swing Line Loan shall be subject to the further conditions
precedent that on the date of such extension of credit:
(a) Representations and Warranties. As of the date of the making of any
extension of credit hereunder, the representations and warranties contained in
each Credit Document shall be (i) if qualified as to materiality, true and
correct or (ii) if not so qualified, true and correct in all material respects,
on and as of such date as if made on and as of such date;
(b) Default. As of the date of the making of any extension of credit
hereunder, there shall exist no Default or Event of Default, and the making of
the extension of credit would not cause a Default or Event of Default; and
(c) Borrowing Base. After giving effect to the extensions of credit
requested to be made on such date, the aggregate outstanding principal amount of
the Revolving Loan Borrowings plus the aggregate outstanding principal amount of
the Swing Line Loans plus the Letter of Credit Exposure shall not exceed the
Borrowing Base then in effect. In addition, in the case of (i) a Revolving Loan
Borrowing or a borrowing of Swing Line Loans and (ii) an issuance of a Letter of
Credit, the Borrower shall have delivered a Borrowing Base Certificate as of the
date of such extension of credit.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 3.2 have been satisfied.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Administrative Agent and each
Bank, and with each request for any extension of credit hereunder, including the
making of any Term Loan Advance or Revolving Loan Advance, and the issuance,
increase, or extension of any Letter of
42
Credit, and the making of any Swing Line Loan, again represents and warrants to
the Administrative Agent and each Bank, as follows:
4.1. Organization. As of the date of this Agreement, each Restricted Entity (a)
is duly organized, validly existing, and in good standing (or, with respect to
any entity listed on Schedule IV, shall be in good standing within 30 days after
the date of this Agreement) under the laws of such Person's respective
jurisdiction of organization and (b) is duly licensed, qualified to do business,
and in good standing in each jurisdiction in which such Person is organized,
owns property, or conducts operations to the extent that any failure to be so
licensed, qualified, or in good standing in accordance with this clause (b)
could reasonably be expected to cause a Material Adverse Change.
4.2. Authorization. The execution, delivery, and performance by each Credit
Party of the Credit Documents to which such Credit Party is a party and the
consummation of the transactions contemplated thereby (a) do not contravene the
organizational documents of such Credit Party, (b) have been duly authorized by
all necessary corporate action of each Credit Party, and (c) are within each
Credit Party's corporate powers.
4.3. Enforceability. Each Credit Document to which any Credit Party is a party
has been duly executed and delivered by each Credit Party which is a party to
such Credit Document and constitutes the legal, valid, and binding obligation of
each such Credit Party, enforceable against each such Credit Party in accordance
with such Credit Document's terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws at the time in effect
affecting the rights of creditors generally and subject to the availability of
equitable remedies.
4.4. Absence of Conflicts and Approvals. The execution, delivery, and
performance by each Credit Party of the Credit Documents to which such Credit
Party is a party and the consummation of the transactions contemplated thereby,
(a) do not result in any violation or breach of any provisions of, or constitute
a default under, any note, indenture, credit agreement, security agreement,
credit support agreement, or other similar agreement to which such Credit Party
is a party or any other material contract or agreement to which such Credit
Party is a party, (b) do not violate any law or regulation binding on or
affecting such Credit Party, (c) do not require any authorization, approval, or
other action by, or any notice to or filing with, any governmental authority or
any other Person, and (d) do not result in or require the creation or imposition
of any Lien prohibited by this Agreement.
4.5. Investment Companies. No Restricted Entity or Affiliate thereof is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4.6. Public Utilities. No Restricted Entity or Affiliate thereof is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended. No
Restricted Entity or Affiliate thereof is a regulated public utility.
43
4.7. Financial Condition.
(a) The Borrower has delivered to the Administrative Agent the Financial
Statements, including therein the consolidated balance sheet of the Borrower and
consolidated statement of income for the periods shown therein, which accurately
and completely, in all material respects, present fairly the financial condition
of Borrower as of such date and for such periods. The Borrower has further
delivered to the Administrative Agent the Interim Financial Statements, and the
Interim Financial Statements are accurate and complete in all material respects
and present fairly the financial condition of Borrower as of their date and for
their period in accordance with generally accepted accounting principles, as
applicable to interim financial reports.
(b) As of the date of the Financial Statements, there were no material
contingent obligations, liabilities for taxes, unusual forward or long-term
commitments, or unrealized or anticipated losses of the Borrower or any of the
Borrower's Subsidiaries, except as disclosed in the Financial Statements and the
Interim Financial Statements, and adequate reserves for such items have been
made in accordance with generally accepted accounting principles. No Material
Adverse Change has occurred since the date of the Financial Statements. No
Default exists.
4.8. Condition of Assets. Each Restricted Entity has good and indefeasible title
to substantially all of its owned property and valid leasehold rights in all of
its leased property, as reflected in the financial statements most recently
provided to the Administrative Agent free and clear of all Liens except
Permitted Liens. Each Restricted Entity possesses and has properly approved,
recorded, and filed, where applicable, all permits, licenses, patents, patent
rights or licenses, trademarks, trademark rights, trade names rights, and
copyrights which are useful in the conduct of its business and which the failure
to possess could reasonably be expected to cause a Material Adverse Change. The
material properties used in the operations of each Restricted Entity are in good
repair, working order, and condition, normal wear and tear excepted. The
properties of each Restricted Entity have not been adversely affected as a
result of any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits, or concessions by a governmental authority,
riot, activities of armed forces, or acts of God or of any public enemy in any
manner which (after giving effect to any insurance proceeds) could reasonably be
expected to cause a Material Adverse Change.
4.9. Litigation. There are no actions, suits, or proceedings pending or, to the
knowledge of the Borrower, threatened against any Restricted Entity at law, in
equity, or in admiralty, or by or before any governmental department,
commission, board, bureau, agency, instrumentality, domestic or foreign, or any
arbitrator which could reasonably be expected to cause a Material Adverse
Change.
4.10. Subsidiaries. As of the date of this Agreement, (a) the Borrower has no
Subsidiaries except as disclosed in Schedule II, which sets forth the name and
jurisdiction of incorporation of each Subsidiary and, as to each such
Subsidiary, the number of shares and percentage of each class of capital stock
owned by any Credit Party, (b) the Borrower has no Subsidiaries which have not
been disclosed in writing to the Administrative Agent and (c) there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than
44
stock options granted to employees or directors and directors' qualifying
shares) of any nature relating to any capital stock of the Borrower or any
Subsidiary, except as created by the Credit Documents.
4.11. Laws and Regulations. Each Restricted Entity is in compliance with all
federal, state, and local laws and regulations which are applicable to the
operations and property of such Person where the failure to comply with the same
could reasonably be expected to cause a Material Adverse Change. No part of the
proceeds of any Loan Advances, and no other extensions of credit hereunder, will
be used for "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board.
4.12. Environmental Compliance. Each Restricted Entity has been and is in
compliance with all Environmental Laws and has obtained and is in compliance
with all related permits necessary for the ownership and operation of any such
Person's properties, in each case, where the failure to be in compliance with
the same could reasonably be expected to cause a Material Adverse Change. Each
Restricted Entity has not received notice of and has not been investigated for
any violation or alleged violation of any Environmental Law in connection with
any such Person's presently or previously owned properties which currently
threaten action or suggest liabilities which could reasonably be expected to
cause a Material Adverse Change. Each Restricted Entity does not and has not
created, handled, transported, used, or disposed of any Hazardous Materials on
or about any such Person's properties (nor has any such Person's properties been
used for those purposes); has never been responsible for the release of any
Hazardous Materials into the environment in connection with any such Person's
operations and has not contaminated any properties with Hazardous Materials; and
does not and has not owned any properties contaminated by any Hazardous
Materials, in each case in any manner which could reasonably be expected to
cause a Material Adverse Change.
4.13. ERISA. Each Restricted Entity and each of their respective Commonly
Controlled Entities are in compliance with all provisions of ERISA, the Code and
other federal, state or local law with respect to any Plan to the extent that
the failure to be in compliance could reasonably be expected to cause a Material
Adverse Change. No Restricted Entity nor any of their respective Commonly
Controlled Entities participates in or during the past five years has
participated in any employee pension benefit plan covered by Title IV of ERISA
or any multiemployer plan under Section 4001(a)(3) of ERISA. No Restricted
Entity nor any of their respective Commonly Controlled Entities has any
liability with respect to any Plan. With respect to the Plans of the Restricted
Entities, no Reportable Event or Prohibited Transaction has occurred and exists
that could reasonably be expected to cause a Material Adverse Change.
4.14. Taxes. Each Restricted Entity has filed all United States federal, state,
and local income tax returns and all other domestic and foreign tax returns
which are required to be filed by such Person and has paid, or provided for the
payment before the same became delinquent of, all taxes due pursuant to such
returns or pursuant to any assessment received by such Person except for tax
payments being contested in good faith, for which adequate reserves have been
established and reported in accordance with generally accepted accounting
principals, and which could not reasonably be expected to cause a Material
Adverse Change. The charges, accruals, and reserves
45
on the books of the Restricted Entities in respect of taxes are adequate in
accordance with generally accepted accounting principles.
4.15. True and Complete Disclosure. All factual information furnished by or on
behalf of any Credit Party in writing to the Administrative Agent or any Bank in
connection with the Credit Documents and the transactions contemplated thereby
is true and accurate in all material respects on the date as of which such
information was dated or certified and does not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements contained therein not misleading. All projections, estimates, and pro
forma financial information furnished by any Credit Party were prepared on the
basis of assumptions, data, information, tests, or conditions believed to be
reasonable at the time such projections, estimates, and pro forma financial
information were furnished.
4.16. Senior Indebtedness. The Credit Obligations constitute "Senior
Indebtedness" (or any other defined term having a similar purpose) of the
Borrower under and as defined in the Senior Subordinated Note Indentures and any
Subordinated Debt Indenture. The obligations of each Guarantor under the
Guaranty constitute "Guarantor Senior Indebtedness" (or any other defined term
having a similar purpose) of such Guarantor under and as defined in the Senior
Subordinated Note Indentures and any Subordinated Debt Indenture.
4.17. Certain Documents. The Borrower has delivered to the Administrative Agent
a complete and correct copy of the Senior Subordinated Note Indentures and any
Subordinated Debt Indenture, in each case including any amendments, supplements
or modifications with respect to any of the foregoing.
4.18. Shell Subsidiaries. Each Shell Subsidiary is a "shell" company having (a)
no assets (other than equity interests in a Subsidiary or other assets with an
aggregate value not exceeding $10,000) and (b) no operations.
ARTICLE 5. COVENANTS
Until the Administrative Agent and the Banks receive irrevocable payment of
the Credit Obligations and have terminated this Agreement and each other Credit
Document, the Borrower shall comply with and cause compliance with the following
covenants:
5.1. Organization. The Borrower shall cause each Restricted Entity to (a)
maintain itself as an entity duly organized, validly existing, and in good
standing under the laws of such Person's respective jurisdiction of organization
and (b) be duly licensed, qualified to do business, and in good standing in each
jurisdiction in which such Person is organized, owns property, or conducts
operations and which requires such licensing or qualification where failure to
be so licensed, qualified, or in good standing as required by this clause (b)
could reasonably be expected to cause a Material Adverse Change; provided,
however, that nothing in this Section 5.1 shall be interpreted to be violated as
a result of a transaction permitted by Section 5.9.
5.2. Reporting. The Borrower shall furnish to the Administrative Agent all of
the following:
46
(a) Annual Reports. As soon as available and in any event not later than 90
days after the end of each fiscal year of the Borrower, (i) a copy of the annual
audit report for such fiscal year for the Borrower, including therein the
consolidated balance sheets of the Borrower as of the end of such fiscal year
and the consolidated statements of income, stockholders' equity, and cash flows
for the Borrower for such fiscal year, setting forth the consolidated financial
position and results of the Borrower for such fiscal year and certified, without
any qualification or limit of the scope of the examination of matters relevant
to the financial statements, by a nationally recognized certified public
accounting firm, (ii) a completed Compliance Certificate duly certified by a
Responsible Officer of the Borrower, and (iii) a completed Contract Status
Report duly certified by a Responsible Officer of the Borrower;
(b) Quarterly Reports. As soon as available and in any event not later than
45 days after the end of each of the first three fiscal quarters of the Borrower
of each year, and in each case in form and substance acceptable to the
Administrative Agent, (i) a copy of the internally prepared consolidated
financial statements of the Borrower for such fiscal quarter and for the fiscal
year to date period ending on the last day of such fiscal quarter, including
therein the consolidated balance sheets of the Borrower as of the end of such
fiscal quarter and the consolidated statements of income, and cash flows for
such fiscal quarter and for such fiscal year to date period, setting forth the
consolidated financial position and results of the Borrower for such fiscal
quarter and fiscal year to date period, all in reasonable detail and duly
certified by a Responsible Officer of the Borrower as having been prepared in
accordance with generally accepted accounting principles, including those
applicable to interim financial reports which permit normal year end adjustments
and do not require complete financial notes, (ii) a completed Compliance
Certificate duly certified by a Responsible Officer of the Borrower, and (iii) a
completed Contract Status Report duly certified by a Responsible Officer of the
Borrower;
(c) Semi-annual Subsidiary Update. As soon as available and in any event
not later than 45 days after the end of the second fiscal quarter of the
Borrower of each year and 90 days after the end of the fourth fiscal quarter of
the Borrower of each year, an update of the information included in Schedule II,
including all Subsidiaries acquired by the Borrower since the previous update of
such scheduled information.
(d) Acquisition Information. As soon as available prior to the closing of
any Acquisition requiring approval of the Majority Banks, and on or prior to the
closing of any Acquisition not requiring such approval, a completed Acquisition
Certificate duly certified by a Responsible Officer of the Borrower, which the
Administrative Agent shall forward to the Banks for any Acquisition requiring
approval of the Majority Banks (and prior to the consummation of the
Acquisition, the Borrower shall, upon request by the Administrative Agent, make
available to the Administrative Agent at the Borrower's offices in Houston,
Texas, the acquisition documents regarding the acquired assets, including
schedules reflecting litigation liabilities, environmental liabilities, and
other assumed liabilities, and any other information regarding the acquired
assets as the Administrative Agent may reasonably request);
(e) SEC Filings. As soon as available and in any event not later than 30
days after the filing or delivery thereof, copies of all financial statements,
reports, and proxy statements which the Borrower shall have sent to its
stockholders generally and copies of all regular and periodic
47
reports, if any, which any Restricted Entity shall have filed with the
Securities and Exchange Commission;
(f) Consolidated Budget and Projections. As soon as available, and in any
event no later than 45 days after the end of each fiscal year of the Borrower, a
detailed consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income and a description of the underlying assumptions applicable thereto), and,
within 5 days after the availability thereof, significant revisions, if any, of
such budget and projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer of the Borrower stating that such
Projections are based on reasonable estimates, information and assumptions and
made in good faith;
(g) Defaults. Promptly, but in any event within 5 Business Days after the
discovery thereof, a notice of any facts known to a Responsible Officer of the
Borrower which constitute a Default, together with a statement of a Responsible
Officer of the Borrower setting forth the details of such facts and the actions
which the Borrower has taken and proposes to take with respect thereto (and the
Administrative Agent shall, promptly upon receipt from the Borrower of a notice
pursuant to this Section 5.2(g), forward a copy of such notice to each Bank);
(h) Litigation. Promptly, but in any event within 10 Business Days after
notice of commencement thereof, notice of all actions, suits, and proceedings
before or brought by any court or governmental department, commission, board,
bureau, agency, or instrumentality, domestic or foreign, affecting any
Restricted Entity which, if determined adversely, could reasonably be expected
to cause a Material Adverse Change;
(i) Material Agreement Default. Promptly, but in any event within 10
Business Days after a Responsible Officer of the Borrower obtains knowledge
thereof, notice of any breach by any Restricted Entity of any contract or
agreement which breach could reasonably be expected to cause a Material Adverse
Change;
(j) Material Changes. Prompt written notice of any other condition or event
of which a Responsible Officer of the Borrower has knowledge, which condition or
event has resulted in or could reasonably be expected to cause a Material
Adverse Change;
(k) Indentures; Senior Subordinated Notes. (i) As soon as available, a
complete and correct copy of each of the Senior Subordinated Note Indentures and
any Subordinated Debt Indenture; and (ii) no later than 5 Business Days prior to
the effectiveness thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the Senior
Subordinated Note Indentures or any Subordinated Debt Indenture.
(l) Borrowing Base Certificate. Within 25 days after the last day of each
calendar month, a Borrowing Base Certificate setting forth the Borrowing Base as
of such last day; and
48
(m) Other Information. Such other information respecting the business
operations or property of any Restricted Entity, financial or otherwise, as the
Administrative Agent or the Majority Banks may from time to time reasonably
request.
5.3. Inspection. The Borrower shall cause each Restricted Entity to permit the
Administrative Agent and the Banks to visit and inspect any of the properties of
such Restricted Entity, to examine all of such Person's books of account,
records, reports, and other papers, to make copies and extracts therefrom, and
to discuss their respective affairs, finances, and accounts with their
respective officers, employees, and independent public accountants all at such
reasonable times and as often as may be reasonably requested, provided that the
Borrower is given at least 3 Business Days' advance notice thereof and
reasonable opportunity to be present when independent public accountants or
other third parties are contacted, and provided further that so long as no
Default or Event of Default exists, the Administrative Agent and the Banks shall
not exercise the foregoing inspection right more often than once in any calendar
year.
5.4. Use of Proceeds. The proceeds of the Term Loan Borrowing and the Revolving
Loan Borrowings shall be used by the Borrower for Acquisitions, working capital
needs, Capital Expenditures, and for other lawful corporate purposes.
5.5. Financial Covenants. The Administrative Agent shall determine compliance
with the following financial covenants based upon the applicable Schedule of the
most recent Compliance Certificate delivered to the Administrative Agent
pursuant to Section 5.2(a) or 5.2(b).
(a) Net Worth. The Borrower shall not permit the consolidated Net Worth of
the Borrower as of the last day of each fiscal quarter to be less than the sum
of (i) $456,974,000; plus (ii) 75% of the cumulative quarterly consolidated net
income of the Borrower after September 30, 2000, for each fiscal quarter of the
Borrower during which the Borrower has positive consolidated net earnings; plus
(iii) 100% of the net proceeds received by Borrower after September 30, 2000,
from any sale or issuance of any equity securities of, or any other additions to
capital by, the Borrower or its Subsidiaries; plus (iv) to the extent that the
required consolidated Net Worth under this Section 5.5(a) was not increased in
clauses (i) through (iii) above as a result of any Acquisition, 100% of any
increase in the consolidated Net Worth of the Borrower resulting from any
Acquisition. Compliance with this paragraph (a) shall be determined in the
applicable Compliance Certificate based upon the adjusted financial reports
contained in Schedule A of such Compliance Certificate.
(b) Maximum Leverage Ratios.
(i) Maximum Senior Debt to EBITDA Ratio. As of the last day of each fiscal
quarter of the Borrower, the Borrower shall not permit the ratio of (a) the
consolidated Senior Debt of the Borrower as of end of such fiscal quarter to (b)
the consolidated EBITDA of the Borrower for the preceding four fiscal quarters
then ended, to be greater than 2.00 to 1.00.
(ii) Maximum Total Debt to EBITDA Ratio. As of the last day of each fiscal
quarter of the Borrower, the Borrower shall not permit the ratio of (a) the
consolidated Total Debt of the Borrower as of end of such fiscal quarter to (b)
the consolidated EBITDA of the Borrower for the preceding four fiscal quarters
then ended, to be greater than 3.25 to 1.00.
49
Compliance with this paragraph (b) shall be determined in the applicable
Compliance Certificate based upon the adjusted financial reports contained in
Schedule B of such Compliance Certificate.
(c) Minimum Interest Coverage Ratio. As of the last day of each fiscal
quarter, the Borrower shall not permit the ratio of (i) the consolidated EBIT of
the Borrower for the preceding four fiscal quarters then ended to (ii) the
consolidated Interest Expense of the Borrower for the preceding four fiscal
quarters then ended to be less than 2.50 to 1.00. Compliance with this paragraph
(c) shall be determined in the applicable Compliance Certificate based upon the
adjusted financial reports contained in Schedule A of such Compliance
Certificate.
(d) Capital Expenditures. The Borrower shall not permit the consolidated
Capital Expenditures (other than Capital Expenditures that are deemed to occur
because of the making of an Acquisition) of the Borrower during any fiscal year
to exceed an amount equal to 10% of the consolidated Net Worth of the Borrower
as of the last day of the immediately preceding fiscal year of the Borrower;
provided, that with respect to a determination including any fiscal quarter
which involves Persons which were not Restricted Entities for the entire
applicable period of determination, the Capital Expenditures of each such Person
for each such quarterly period shall be deemed to be equal to the quotient
obtained by dividing (i) the consolidated Capital Expenditures of such Person
for the fiscal year then most recently ended, by (ii) 4. Compliance with this
paragraph (d) shall be determined in the applicable Compliance Certificate based
upon the adjusted financial reports contained in Schedule B of such Compliance
Certificate.
5.6. Debt.
(a) The Borrower shall not permit any Restricted Entity to create, assume,
incur, suffer to exist, or in any manner become liable, directly, indirectly, or
contingently in respect of, any Debt other than Permitted Debt.
(b) The Borrower shall, as soon as available but in any event not less than
10 Business Days prior to the issuance of any preferred stock or subordinated
indebtedness, deliver to the Administrative Agent a copy of the certificate of
designation or subordinated debt documents, as applicable, together with a
certificate, signed by a Responsible Officer of the Borrower, certifying that
such preferred stock or subordinated indebtedness constitutes Qualified
Preferred Stock or Subordinated Debt pursuant to the terms of this Agreement.
5.7. Liens. The Borrower shall not permit any Restricted Entity to create,
assume, incur, or suffer to exist any Lien on any of its real or personal
property whether now owned or hereafter acquired, or assign any right to receive
its income, except for Permitted Liens.
5.8. Other Obligations.
(a) The Borrower shall not permit any Restricted Entity to create, incur,
assume, or suffer to exist any obligations in respect of unfunded vested
benefits under any pension Plan or deferred compensation agreement in an
aggregate outstanding amount in excess of $5,000,000.
50
(b) The Borrower shall not permit any Restricted Entity to create, incur,
assume, or suffer to exist any obligations in respect of Derivatives, other than
Derivatives used by any Restricted Entity in such Restricted Entity's respective
business operations in aggregate notional quantities not to exceed the
reasonably anticipated consumption of such Restricted Entity of the underlying
commodity for the relevant period, but no Derivatives which are speculative in
nature.
5.9. Corporate Transactions. The Borrower shall not, without the Majority Banks'
consent, permit any Restricted Entity to (a) merge, consolidate, or amalgamate
with another Person, or liquidate, wind up, or dissolve itself (or take any
action towards any of the foregoing), (b) convey, sell, lease, assign, transfer,
or otherwise dispose of any of its property, businesses, or other assets outside
of the ordinary course of business, or (c) make any Acquisition except that:
(i) Any Subsidiary of the Borrower may merge, consolidate, or amalgamate
into the Borrower or any wholly owned Subsidiary of the Borrower, or convey,
sell, lease, assign, transfer, or otherwise dispose of any of its assets to the
Borrower or any wholly owned Subsidiary of the Borrower (and if such disposition
transfers all or substantially all of the assets of the transferring Subsidiary,
such Subsidiary may then liquidate, wind up, or dissolve itself); provided that
the Borrower or the wholly owned Subsidiary, as applicable, is the surviving or
acquiring entity;
(ii) At any time after the Subordinated Debt Event, the Borrower or any
Subsidiary of the Borrower may make any Acquisition (by purchase or merger)
provided that (A) the Borrower or such Subsidiary of the Borrower is the
acquiring or surviving entity, (B) the aggregate of all consideration (other
than common stock of the Borrower) paid by the Restricted Entities in connection
with any Acquisition does not exceed $30,000,000 without the prior consent of
the Majority Banks, (C) the aggregate of all consideration (other than common
stock of the Borrower) paid by the Restricted Entities in connection with all
Acquisitions during any fiscal year does not exceed the Annual Aggregate
Acquisition Limit for the applicable year without the prior consent of the
Majority Banks, (D) no Default or Event of Default exists and the Acquisition
would not reasonably be expected to cause a Default or Event of Default after
giving pro forma effect thereto (including any default under Section 5.5 with
respect to historical and future pro forma financial status and results), and
(E) the acquired assets are in substantially the same business as the Borrower;
(iii) The Borrower or any Subsidiary of the Borrower may sell, lease,
assign, transfer, or otherwise dispose of any of its property, businesses, or
other assets outside of the ordinary course of business in an amount not to
exceed, in the aggregate, $5,000,000 in any fiscal year of the Borrower.
5.10. Distributions. The Borrower shall not (a) declare or pay any dividends;
(b) purchase, redeem, retire, or otherwise acquire for value any of its capital
stock now or hereafter outstanding; (c) make any distribution of assets to its
stockholders as such, whether in cash, assets, or in obligations of it; (d)
allocate or otherwise set apart any sum for the payment of any dividend or
distribution on, or for the purchase, redemption, or retirement of, any shares
of its capital stock; or (e) make any other distribution by reduction of capital
or otherwise in respect of any shares of its capital stock, except that the
Borrower may make payments of dividends on Qualified Preferred Stock; provided,
however, that at any time after the Subordinated Debt Event
51
and so long as no Default is continuing or would result therefrom, the Borrower
may repurchase from the holders thereof capital stock of the Borrower in an
aggregate amount during the term of this Agreement not to exceed an amount equal
to the lesser of (i) the sum of (a) $10,000,000 and (b) 50% of the cumulative
quarterly consolidated net income (less 100% of the cumulative quarterly
consolidated net loss) of the Borrower for each fiscal quarter of the Borrower
commencing on the first day of the fiscal quarter in which the Subordinated Debt
Event occurs and ending on the last day of the fiscal quarter then most recently
ended prior to the date of any such repurchase for which financial statements
have been delivered to the Banks pursuant to Section 5.2 and (ii) $30,000,000.
5.11. Transactions with Affiliates. The Borrower shall not permit any Restricted
Entity to enter into any transaction directly or indirectly with or for the
benefit of an Affiliate except transactions with an Affiliate for the leasing of
property, the rendering or receipt of services, or the purchase or sale of
inventory or other assets in the ordinary course of business if the monetary or
business consideration arising from such a transaction would be substantially as
advantageous to such Restricted Entity as the monetary or business consideration
which such Restricted Entity would obtain in a comparable arm's length
transaction; provided that the Restricted Entities may make the investments
described in item (g) of the definition of "Permitted Investments".
5.12. Insurance.
(a) The Borrower shall cause each Restricted Entity to maintain insurance
with responsible and reputable insurance companies or associations reasonably
acceptable to the Administrative Agent in such amounts and covering such risks
as are usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which such Persons operate. The
Borrower shall deliver to the Administrative Agent certificates evidencing such
policies or copies of such policies at the Administrative Agent's request
following a reasonable period to obtain such certificates taking into account
the jurisdiction where the insurance is maintained.
(b) All policies representing liability insurance of the Restricted
Entities shall name the Administrative Agent and the Banks as additional named
insureds in a form satisfactory to the Administrative Agent. With respect to any
insured liability suffered by the Administrative Agent or any Bank, all proceeds
of such liability insurance coverage for the Administrative Agent and the Banks
shall be paid as directed by the Administrative Agent to indemnify the
Administrative Agent or the applicable Bank for the liability covered. In the
event that proceeds of property or liability insurance are paid to any
Restricted Entity in violation of the foregoing, the Restricted Entity shall
hold the proceeds in trust for the Administrative Agent, segregate the proceeds
from the other funds of such Restricted Entity, and promptly pay the proceeds to
the Administrative Agent with any necessary endorsement. The Administrative
Agent shall have the right, but not the obligation, during the existence of an
Event of Default, to make proof of loss under, settle and adjust any claim
under, and receive the proceeds under the insurance, and the reasonable expenses
incurred by the Administrative Agent in the adjustment and collection of such
proceeds shall be paid by the Borrower. The Borrower irrevocably appoints the
Administrative Agent as its attorney in fact to take such actions in its name.
If the Administrative Agent does not take such actions, the Borrower may take
such actions subject to the approval of any final action by
52
the Administrative Agent. The Administrative Agent shall not be liable or
responsible for failure to collect or exercise diligence in the collection of
any proceeds.
5.13. Investments. The Borrower shall not permit any Restricted Entity to make
or hold any direct or indirect investment in any Person, including capital
contributions to the Person, investments in the debt or equity securities of the
Person, and loans, guaranties, trade credit, or other extensions of credit to
the Person, except for Permitted Investments.
5.14. Lines of Business. The Borrower shall not permit the Restricted Entities
to change the character of their business as conducted on the date of this
Agreement, or engage in any type of business not reasonably related to such
business as presently and normally conducted. The parties agree that business
entailing the construction, operation, or ownership of electrical
infrastructure, electrical generation, electrical distribution, distributed
generation, communications contracting, communications servicing, e-commerce
ventures and other related ventures are reasonably related to the character of
the Restricted Entities' business as conducted on the date hereof.
5.15. Compliance with Laws. The Borrower shall cause each Restricted Entity to
comply with all federal, state, and local laws and regulations which are
applicable to the operations and property of such Persons, in each case, where
the failure to comply could reasonably be expected to cause a Material Adverse
Change.
5.16. Environmental Compliance. The Borrower shall cause each Restricted Entity
to comply with all Environmental Laws and obtain and comply with all related
permits necessary for the ownership and operation of any such Person's
properties, in each case, where the failure to comply could reasonably be
expected to cause a Material Adverse Change. The Borrower shall cause each
Restricted Entity to disclose promptly to the Administrative Agent any notice to
or investigation of such Persons for any violation or alleged violation of any
Environmental Law in connection with any such Person's presently or previously
owned properties which represent liabilities which, if determined adversely to
such Restricted Entity, could reasonably be expected to cause a Material Adverse
Change. The Borrower shall not permit any Restricted Entity to create, handle,
transport, use, or dispose of any Hazardous Materials on or about any such
Person's properties; release any Hazardous Materials into the environment in
connection with any such Person's operations or contaminate any properties with
Hazardous Materials; or own properties contaminated by any Hazardous Materials,
in each case in any manner that could reasonably be expected to cause a Material
Adverse Change.
5.17. ERISA Compliance. The Borrower shall cause each Restricted Entity to (i)
comply in all material respects with all applicable provisions of ERISA, the
Code and other federal, state or local laws and prevent the occurrence of any
Reportable Event or Prohibited Transaction with respect to, or the termination
of, any of their respective Plans, in each case, where the failure to do so
could reasonably be expected to cause a Material Adverse Change and (ii) not
create or participate in any employee pension benefit plan covered by Title IV
of ERISA or any multiemployer plan under Section 4001(a)(3) of ERISA.
5.18. Payment of Certain Claims. The Borrower shall cause each Restricted Entity
to pay and discharge, before the same shall become delinquent, (a) all taxes,
assessments, levies, and like
53
charges imposed upon any such Person or upon any such Person's income, profits,
or property by authorities having competent jurisdiction prior to the date on
which penalties attach thereto except for tax payments being contested in good
faith for which adequate reserves have been established and reported in
accordance with generally accepted accounting principals which could not
reasonably be expected to cause a Material Adverse Change and (b) all trade
payables and current operating liabilities, unless the same are less than 90
days past due or are being contested in good faith, have adequate reserves
established and reported in accordance with generally accepted accounting
principals, and could not reasonably be expected to cause a Material Adverse
Change.
5.19. Subsidiaries. Upon the formation or acquisition of any new Subsidiary, the
Borrower shall and shall cause such Subsidiary to promptly, but in any event
within 30 days after the formation or acquisition of such new Subsidiary (a)
execute and deliver to the Administrative Agent a Joinder Agreement (each, a
"Joinder Agreement") in substantially the form of Exhibit G for the purpose of
joining such Subsidiary as a party to the Guaranty, the Security Agreement, and,
if applicable, the Stock Pledge Agreement or the Partnership Pledge Agreement,
and (b) provide to the Administrative Agent the other certificates, documents,
and items listed on Exhibit I.
5.20. Changes in Fiscal Periods. The Borrower shall not permit the fiscal year
of the Borrower to end on a day other than September 30 or change the Borrower's
method of determining fiscal quarters.
5.21. Negative Pledge Clauses. The Borrower shall not enter into or suffer to
exist or become effective any agreement that prohibits or limits the ability of
any Restricted Entity to create, incur, assume or suffer to exist any Lien upon
any of its property or revenues, whether now owned or hereafter acquired, to
secure its obligations under the Credit Documents to which it is a party other
than (a) this Agreement and the other Credit Documents and (b) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby).
5.22. Shell Subsidiaries. The Borrower shall not permit any Shell Subsidiary to
have (a) assets (other than equity interests in a Subsidiary or other assets
with an aggregate value not exceeding $10,000) or (b) operations.
ARTICLE 6. DEFAULT AND REMEDIES
6.1. Events of Default. Each of the following shall be an "Event of Default" for
the purposes of this Agreement and for each of the Credit Documents:
(a) Payment Failure. The Borrower (i) fails to pay when due any principal
amounts due under this Agreement or any other Credit Document or (ii) fails to
pay when due any interest, fees, reimbursements, indemnifications, or other
amounts due under this Agreement or any other Credit Document and such failure
has not been cured within five Business Days;
54
(b) False Representation. Any written representation or warranty made by
any Credit Party or any Responsible Officer thereof in this Agreement or in any
other Credit Document proves to have been false or erroneous in any material
respect at the time it was made or deemed made;
(c) Breach of Covenant. (i) Any breach by the Borrower of any of the
covenants contained in Sections 5.1(a) (with respect to the Borrower), 5.2, 5.3,
5.4, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10, 5.13 or 5.19 or (ii) any breach by any
Credit Party of any other covenants contained in this Agreement, or any other
Credit Document and such breach is not cured within 30 days following the
earlier of knowledge of such breach by a Responsible Officer of such Credit
Party or the receipt of written notice thereof from the Administrative Agent;
(d) Security and Support Documents. Any Security Document shall at any time
and for any reason (other than one within the reasonable control of any Bank)
cease to create the Lien on the property purported to be subject to such
agreement in accordance with the terms of such agreement, or cease to be in full
force and effect, or shall be contested by any party thereto;
(e) Guaranty. (i) The Guaranty shall at any time and for any reason cease
to be in full force and effect with respect to any Guarantor (except as
permitted under Section 5.9 hereof) or shall be contested by any Guarantor, or
any Guarantor shall deny it has any further liability or obligation thereunder,
or (ii) any breach by any Guarantor of any of the covenants contained in Section
1 of the Guaranty;
(f) Material Debt Default. (i) Any principal, interest, fees, or other
amounts due on any Debt of any Restricted Entity (other than the Credit
Obligations) is not paid when due, whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise, and such failure is not cured
within the applicable grace period, if any, and the aggregate amount of all Debt
of such Persons so in default exceeds $2,000,000; (ii) any other event shall
occur or condition shall exist under any agreement or instrument relating to any
Debt of any such Person (other than the Credit Obligations) the effect of which
is to accelerate or to permit the acceleration of the maturity of any such Debt,
whether or not any such Debt is actually accelerated, and such event or
condition shall not be cured within the applicable grace period, if any, and the
aggregate amount of all Debt of such Persons so in default exceeds $2,000,000;
or (iii) any Debt of any such Person shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled prepayment) prior to
the stated maturity thereof, and the aggregate amount of all Debt of such
Persons so accelerated exceeds $2,000,000;
(g) Material Agreement Default; Material Plan Event. (i) There shall occur
any breach by any Restricted Entity of any contract or agreement which breach
could reasonably be expected to cause a Material Adverse Change and such breach
is not cured within the applicable grace period, if any; or (ii) there shall
occur or exist an event with respect to any Plan which could in the sole
judgment of the Administrative Agent reasonably be expected to have a Material
Adverse Change;
(h) Bankruptcy and Insolvency. (i) There shall have been filed against any
Restricted Entity or any such Person's properties, without such Person's
consent, any petition or other request for relief seeking an arrangement,
receivership, reorganization, liquidation, or similar
55
relief under bankruptcy or other laws for the relief of debtors, and such
request for relief (A) remains in effect for 60 or more days, whether or not
consecutive, or (B) is approved by a final nonappealable order, or (ii) any such
Person consents to or files any petition or other request for relief of the type
described in clause (i) above seeking relief from creditors, makes any
assignment for the benefit of creditors or other arrangement with creditors, or
admits in writing such Person's inability to pay such Person's debts as they
become due (the occurrence of any Event of Default under clause (i) or (ii) of
this paragraph being a "Bankruptcy Event of Default");
(i) Adverse Judgment. The aggregate outstanding amount of judgments against
the Restricted Parties not discharged or stayed pending appeal or other court
action within 30 days following entry is greater than $2,000,000;
(j) Change of Control. There shall occur any Change of Control; or
(k) Senior Subordinated Notes Default. (i) There shall occur any default or
event of default (and such event or condition is not cured within the applicable
grace period, if any), however denominated, under the Senior Subordinated Notes
or either Senior Subordinated Note Indenture or any Subordinated Debt or any
Subordinated Debt Indenture; (ii) any modification shall be made to the
subordination provisions or economic terms of the Senior Subordinated Notes or
either Senior Subordinated Note Indenture or any Subordinated Debt or any
Subordinated Debt Indenture without the prior written consent of the Majority
Banks; or (iii) any "Change of Control Offer" (or any other defined term having
a similar purpose) as defined in either Senior Subordinated Note Indenture or
any Subordinated Debt Indenture shall occur.
6.2. Termination of Commitments. Upon the occurrence of any Bankruptcy Event of
Default, all of the Commitments of the Administrative Agent and the Banks
hereunder shall terminate. During the existence of any Event of Default other
than a Bankruptcy Event of Default, the Administrative Agent shall at the
request of the Majority Banks declare by written notice to the Borrower all of
the Commitments of the Administrative Agent and the Banks hereunder terminated,
whereupon the same shall immediately terminate.
6.3. Acceleration of Credit Obligations. Upon the occurrence of any Bankruptcy
Event of Default, the aggregate outstanding principal amount of all loans made
hereunder, all accrued interest thereon, and all other Credit Obligations shall
immediately and automatically become due and payable. During the existence of
any Event of Default other than a Bankruptcy Event of Default, the
Administrative Agent shall at the request of the Majority Banks declare by
written notice to the Borrower the aggregate outstanding principal amount of all
loans made hereunder, all accrued interest thereon, and all other Credit
Obligations to be immediately due and payable, whereupon the same shall
immediately become due and payable. In connection with the foregoing, except for
the notice provided for above in this Article VI, the Borrower waives notice of
any Default or Event of Default, grace, notice of intent to accelerate, notice
of acceleration, presentment, demand, notice of nonpayment, protest, and all
other notices.
6.4. Cash Collateralization of Letters of Credit. Upon the occurrence of any
Bankruptcy Event of Default, the Borrower shall pay to the Administrative Agent
an amount equal to the Letter of Credit Exposure to be held in the Letter of
Credit Collateral Account for disposition in
56
accordance with Section 2.3(g). During the existence of any Event of Default
other than a Bankruptcy Event of Default, the Administrative Agent shall at the
request of the Majority Banks require by written notice to the Borrower that the
Borrower pay to the Administrative Agent an amount equal to the Letter of Credit
Exposure to be held in the Letter of Credit Collateral Account for disposition
in accordance with Section 2.3(g), whereupon the Borrower shall pay to the
Administrative Agent such amount for such purpose.
6.5. Default Interest. If any Event of Default exists based upon a default in
the payment of any amounts owing hereunder, the Administrative Agent shall at
the request of the Majority Banks declare by written notice to the Borrower that
the Credit Obligations specified in such notice shall bear interest beginning on
the date specified in such notice until paid in full at the applicable Default
Rate for such Credit Obligations, whereupon the Borrower shall pay such interest
to the Administrative Agent for the benefit of the Administrative Agent and the
Banks, as applicable, upon demand by the Administrative Agent. If any other
Event of Default exists, the Administrative Agent shall at the request of the
Majority Banks declare by written notice to the Borrower that, unless such Event
of Default is cured to the satisfaction of the Administrative Agent and the
Majority Banks on or before the 30th day following the occurrence of such Event
of Default, the Credit Obligations specified in such notice shall bear interest
beginning on such 30th day until paid in full at the applicable Default Rate for
such Credit Obligations, whereupon the Borrower shall, if such Event of Default
is not cured by such date, pay such interest to the Administrative Agent for the
benefit of the Administrative Agent and the Banks, as applicable, upon demand by
the Administrative Agent after such date.
6.6. Right of Setoff. During the existence of an Event of Default, each of the
Administrative Agent and the Banks is hereby authorized at any time, to the
fullest extent permitted by law, to set off and apply any indebtedness owed by
the Administrative Agent or such Bank to the Borrower against any and all of the
obligations of the Borrower under this Agreement and the other Credit Documents,
irrespective of whether or not the Administrative Agent or such Bank shall have
made any demand under this Agreement or the other Credit Documents and although
such obligations may be contingent and unmatured. Each of the Administrative
Agent and the Banks agrees promptly to notify the Borrower after any such setoff
and application made by such party provided that the failure to give such notice
shall not affect the validity of such setoff and application.
6.7. Actions Under Credit Documents. Following an Event of Default, the
Administrative Agent shall at the request of the Majority Banks take any and all
actions permitted under the other Credit Documents, including the Guaranty and
the Security Documents.
6.8. Remedies Cumulative. No right, power, or remedy conferred to the
Administrative Agent or the Banks in this Agreement and the other Credit
Documents, or now or hereafter existing at law, in equity, by statute, or
otherwise, shall be exclusive, and each such right, power, or remedy shall to
the full extent permitted by law be cumulative and in addition to every other
such right, power, or remedy. No course of dealing and no delay in exercising
any right, power, or remedy conferred to the Administrative Agent or the Banks
in this Agreement and the other Credit Documents, or now or hereafter existing
at law, in equity, by statute, or otherwise, shall operate as a waiver of or
otherwise prejudice any such right, power, or remedy.
57
6.9. Application of Payments. Prior to the Revolving Loan Maturity Date or any
acceleration of the Credit Obligations, all payments made hereunder shall be
applied to the Credit Obligations as directed by the Borrower, subject to the
rules regarding the application of payments to certain Credit Obligations
provided for hereunder and in the other Credit Documents. Following the
Revolving Loan Maturity Date or any acceleration of the Credit Obligations, all
payments and collections shall be applied to the Credit Obligations in the
following order:
First, to the payment of the costs, expenses, reimbursements (other than
reimbursement obligations with respect to draws under Letters of Credit), and
indemnifications of the Administrative Agent that are due and payable under the
Credit Documents;
Then, ratably to the payment of the costs, expenses, reimbursements (other
than reimbursement obligations with respect to draws under Letters of Credit),
and indemnifications of the Banks that are due and payable under the Credit
Documents;
Then, ratably to the payment of all outstanding principal of all loans made
hereunder, all reimbursement obligations for draws under Letters of Credit, all
accrued but unpaid interest and fees under this Agreement and all obligations
then due and payable under Interest Hedge Agreements;
Then, ratably to the payment of any other amounts due and owing with
respect to the Credit Obligations; and
Finally, any surplus held by the Administrative Agent and remaining after
payment in full of all the Credit Obligations and reserve for Credit Obligations
not yet due and payable shall be promptly paid over to the Borrower or to
whomever may be lawfully entitled to receive such surplus. All applications
shall be distributed in accordance with Section 2.11(a).
ARTICLE 7. THE ADMINISTRATIVE AGENT AND THE ISSUING BANK
7.1. Authorization and Action. Each Bank hereby appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Administrative Agent by
the terms hereof and of the other Credit Documents, together with such powers as
are reasonably incidental thereto. Statements under the Credit Documents that
the Administrative Agent may take certain actions, without further
qualification, means that the Administrative Agent may take such actions with or
without the consent of the Banks or the Majority Banks, but where the Credit
Documents expressly require the determination of the Banks or the Majority
Banks, the Administrative Agent shall not take any such action without the prior
written consent thereof. As to any matters not expressly provided for by this
Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Term Loan Notes or the Revolving Loan Notes),
the Administrative Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
written instructions of the Majority Banks, and such instructions shall be
binding upon all Banks and all holders of Term Loan Notes and Revolving Loan
Notes; provided, however, that the Administrative Agent shall not be required to
take any action which
58
exposes the Administrative Agent to personal liability or which is contrary to
this Agreement, any other Credit Document, or applicable law.
7.2. Reliance, Etc. Neither the Administrative Agent, the Issuing Bank, nor any
of their respective Related Parties (for the purposes of this Section 7.2,
collectively, the "Indemnified Parties") shall be liable for any action taken or
omitted to be taken by any Indemnified Party under or in connection with this
Agreement or the other Credit Documents, INCLUDING ANY INDEMNIFIED PARTY'S OWN
NEGLIGENCE, except for any Indemnified Party's gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent and the Issuing Bank: (a) may treat the payee of any Term
Loan Note or Revolving Loan Note 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 Administrative Agent; (b) may consult
with legal counsel (including counsel for the Borrower), 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; (c) 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 or the other Credit Documents; (d) 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 or any other Credit Document on the
part of the Credit Parties or to inspect the property (including the books and
records) of the Credit Parties; (e) shall not be responsible to any Bank for the
due execution, legality, validity, enforceability, genuineness, sufficiency, or
value of this Agreement or any other Credit Document; and (f) shall incur no
liability under or in respect of this Agreement or any other Credit Document by
acting upon any notice, consent, certificate, or other instrument or writing
(which may be by telecopier or telex) reasonably believed by it to be genuine
and signed or sent by the proper party or parties.
7.3. Affiliates. With respect to its Commitments, the Loan Advances made by it,
its interests in the Letters of Credit, and the Term Loan Notes and the
Revolving Loan Notes issued to it, the Administrative Agent and the Issuing Bank
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Administrative Agent. The term
"Bank" or "Banks" shall, unless otherwise expressly indicated, include the
Administrative Agent and the Issuing Bank in their individual capacity. The
Administrative Agent, the Issuing Bank, and their respective Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, any Credit Party, and any Person
who may do business with or own securities of any Credit Party, all as if the
Administrative Agent were not an agent hereunder and the Issuing Bank were not
the issuer of Letters of Credit hereunder and without any duty to account
therefor to the Banks.
7.4. Bank Credit Decision. Each Bank acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Bank and based on
the Financial Statements, the Interim Financial Statements, 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
that it shall, independently and without reliance upon the Administrative Agent
or any other Bank and based on such documents and information as it shall
59
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement.
7.5. Expenses. To the extent not paid by the Borrower, each Bank severally
agrees to pay to the Administrative Agent and the Issuing Bank on demand such
Bank's ratable share of the following: (a) all reasonable out-of-pocket costs
and expenses of the Administrative Agent and the Issuing Bank in connection with
the preparation, execution, delivery, administration, modification, and
amendment of this Agreement and the other Credit Documents, including the
reasonable fees and expenses of outside counsel for the Administrative Agent and
the Issuing Bank with respect to advising the Administrative Agent and the
Issuing Bank as to their respective rights and responsibilities under this
Agreement and the other Credit Documents, and (b) all out-of-pocket costs and
expenses of the Administrative Agent and the Issuing Bank in connection with the
preservation or enforcement of the rights of the Administrative Agent, the
Issuing Bank, and the Banks under this Agreement and the other Credit Documents,
whether through negotiations, legal proceedings, or otherwise, including fees
and expenses of counsel for the Administrative Agent and the Issuing Bank. The
provisions of this paragraph shall survive the repayment and termination of the
credit provided for under this Agreement and any purported termination of this
Agreement which does not expressly refer to this paragraph.
7.6. Indemnification. To the extent not reimbursed by the Borrower, each Bank
severally agrees to protect, defend, indemnify, and hold harmless the
Administrative Agent, the Issuing Bank, and each of their respective Related
Parties (for the purposes of this Section 7.6, collectively, the "Indemnified
Parties"), from and against all demands, claims, actions, suits, damages,
judgments, fines, penalties, liabilities, and out-of-pocket costs and expenses,
including reasonable costs of attorneys and related costs of experts such as
accountants (collectively, the "Indemnified Liabilities"), actually incurred by
any Indemnified Party which are related to any litigation or proceeding relating
to this Agreement, the other Credit Documents, or the transactions contemplated
thereunder, INCLUDING ANY INDEMNIFIED LIABILITIES CAUSED BY ANY INDEMNIFIED
PARTY'S OWN NEGLIGENCE, but not Indemnified Liabilities which are a result of
any Indemnified Party's gross negligence or willful misconduct. The provisions
of this paragraph shall survive the repayment and termination of the credit
provided for under this Agreement and any purported termination of this
Agreement which does not expressly refer to this paragraph.
7.7. Successor Administrative Agent and Issuing Bank. The Administrative Agent
or the Issuing Bank may resign at any time by giving written notice thereof to
the Banks and the Borrower and may be removed at any time with or without cause
by the Majority Banks upon receipt of written notice from the Majority Banks to
such effect. Upon receipt of notice of any such resignation or removal, the
Majority Banks shall have the right to appoint a successor Administrative Agent
or Issuing Bank with the consent of the Borrower, which consent shall not be
unreasonably withheld. If no successor Administrative Agent or Issuing Bank
shall have been so appointed by the Majority Banks with the consent of the
Borrower, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's or Issuing Bank's giving of notice of
resignation or the Majority Banks' removal of the retiring Administrative Agent
or Issuing Bank, then the retiring Administrative Agent or Issuing Bank may, on
behalf of the Banks and the Borrower, appoint a successor Administrative Agent
or Issuing Bank, which shall be, in the case of a successor agent, a commercial
bank organized under the laws of the
60
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000 and, in the case of the Issuing Bank, a
Bank. Upon the acceptance of any appointment as Administrative Agent or Issuing
Bank by a successor Administrative Agent or Issuing Bank, such successor
Administrative Agent or Issuing Bank shall thereupon succeed to and become
vested with all the rights, powers, privileges, and duties of the retiring
Administrative Agent or Issuing Bank, and the retiring Administrative Agent or
Issuing Bank shall be discharged from any duties and obligations under this
Agreement and the other Credit Documents after such acceptance, except that the
retiring Issuing Bank shall remain the Issuing Bank with respect to any Letters
of Credit outstanding on the effective date of its resignation or removal and
the provisions affecting the Issuing Bank with respect to such Letters of Credit
shall inure to the benefit of the retiring Issuing Bank until the termination of
all such Letters of Credit. After any Administrative Agent's or Issuing Bank's
resignation or removal hereunder as Administrative Agent or Issuing Bank, the
provisions of this Article 7 shall inure to such Person's benefit as to any
actions taken or omitted to be taken by such Person while such Person was
Administrative Agent or Issuing Bank under this Agreement and the other Credit
Documents.
ARTICLE 8. MISCELLANEOUS
8.1. Expenses. The Borrower shall pay on demand of the applicable party
specified herein (a) all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Issuing Bank in connection with the preparation,
execution, delivery, administration, modification, and amendment of this
Agreement and the other Credit Documents, including the reasonable fees and
expenses of outside counsel for the Administrative Agent and the Issuing Bank,
and (b) all out-of-pocket costs and expenses of the Administrative Agent, the
Issuing Bank, and each Bank in connection with the preservation or enforcement
of their respective rights under this Agreement and the other Credit Documents,
whether through negotiations, legal proceedings, or otherwise, including fees
and expenses of counsel for the Administrative Agent, the Issuing Bank, and each
Bank. The provisions of this paragraph shall survive the repayment and
termination of the credit provided for under this Agreement and any purported
termination of this Agreement which does not expressly refer to this paragraph.
8.2. Indemnification. The Borrower agrees to protect, defend, indemnify, and
hold harmless the Administrative Agent, the Issuing Bank, each Bank, and each of
their respective Related Parties (for the purposes of this Section 8.2,
collectively, the "Indemnified Parties"), from and against all demands, claims,
actions, suits, damages, judgments, fines, penalties, liabilities, and
out-of-pocket costs and expenses, including reasonable costs of attorneys and
related costs of experts such as accountants (collectively, the "Indemnified
Liabilities"), actually incurred by any Indemnified Party which are related to
any litigation or proceeding relating to this Agreement, the other Credit
Documents, or the transactions contemplated thereunder, INCLUDING ANY
INDEMNIFIED LIABILITIES CAUSED BY ANY INDEMNIFIED PARTY'S OWN NEGLIGENCE, but
not Indemnified Liabilities which are a result of any Indemnified Party's gross
negligence or willful misconduct. The provisions of this paragraph shall survive
the repayment and termination of the credit provided for under this Agreement
and any purported termination of this Agreement which does not expressly refer
to this paragraph.
61
8.3. Modifications, Waivers, and Consents. No provision of this Agreement, the
Term Loan Notes or the Revolving Loan Notes may be waived, amended, or modified,
nor shall any consent required under this Agreement, the Term Loan Notes or the
Revolving Loan Notes be effective, except pursuant to an agreement or agreements
in writing entered into by the Borrower and the Majority Banks or by the
Borrower and the Administrative Agent with the consent of the Majority Banks;
provided that no such agreement shall (a) waive any of the conditions specified
in Section 3.1 or 3.2 without the written consent of the Administrative Agent,
all the Banks, and the Borrower, (b) increase the Commitment of any Bank without
the written consent of such Bank, (c) forgive or reduce the amount or rate of
any principal, interest, or fees payable under the Credit Documents, or postpone
or extend the time for payment thereof without the written consent of the
Administrative Agent, all the Banks, and the Borrower, (d) extend the scheduled
maturities or times of payment without the written consent of the Administrative
Agent, all the Banks, and the Borrower, (e) release any Guarantor or all or
substantially all of the collateral securing the Credit Obligations (except as
otherwise permitted or required herein) without the written consent of the
Administrative Agent, all the Banks, and the Borrower, or (f) change the
percentage of Banks required to take any action under this Agreement, the Term
Loan Notes, the Revolving Loan Notes, or the Security Documents, including any
amendment of the definition of "Majority Banks" or this Section 8.3 without the
written consent of the Administrative Agent, all the Banks, and the Borrower. No
modification, waiver, or consent shall, unless in writing and signed by the
Administrative Agent, the Issuing Bank or the Swing Line Lender affect the
rights or obligations of the Administrative Agent, the Issuing Bank or the Swing
Line Lender, as the case may be, under the Credit Documents. The Administrative
Agent shall not modify or waive or grant any consent under any other Credit
Document if such action would be prohibited under this Section 8.3 with respect
to the Credit Agreement, the Term Loan Notes or the Revolving Loan Notes.
8.4. Survival of Agreements. All representations, warranties, and covenants of
the Borrower in this Agreement and the other Credit Documents shall survive the
execution of this Agreement and the other Credit Documents and any other
document or agreement.
8.5. Assignment and Participation. This Agreement and the other Credit Documents
shall bind and inure to the benefit of the Borrower and their respective
successors and assigns and the Administrative Agent and the Banks and their
respective successors and assigns. The Borrower may not assign its rights or
delegate its duties under this Agreement or any other Credit Document.
(a) Assignments. Any Bank may assign to one or more banks or other entities
all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the Loan
Advances owing to it, the Term Loan Notes and the Revolving Loan Notes held by
it, and the participation interest in the Letters of Credit owned by it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all of such Bank's rights and obligations under this
Agreement, (ii) assignments of Commitments shall be made in minimum amounts of
$5,000,000 and be made in integral multiples of $1,000,000 and the assigning
Bank, if it retains any Commitments, shall maintain at least $5,000,000 in
Commitments, (iii) each such assignment shall be ratable as between the
Facilities, (iv) each such assignment shall be to an Eligible Assignee, (v) the
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and
62
recording in the Register, an Assignment and Acceptance, together with the Term
Loan Notes and the Revolving Loan Notes subject to such assignment, and (vi)
each Eligible Assignee (other than the Eligible Assignee of the Administrative
Agent) shall pay to the Administrative Agent a $3,500 administrative fee. Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, which effective date shall be
at least three Business Days after the execution thereof, (A) the assignee
thereunder shall be a party hereto for all purposes and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
and (B) such Bank thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of such Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(b) Term of Assignments. By executing and delivering an Assignment and
Acceptance, the Bank thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency of
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the Financial Statements, the Interim
Financial Statements, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee shall, independently and without
reliance upon the Administrative Agent, such Bank 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; (v) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and (vi)
such assignee agrees that it shall perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(c) The Register. The Administrative Agent shall maintain at its address
referred to in Section 8.6 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses
of the Banks and the Commitments of each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Administrative Agent, the
Issuing Bank, and the Banks may treat each Person whose name is recorded in the
Register as a Bank hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Bank at any reasonable
time and from time to time upon reasonable prior notice. Any assignment of any
loan made hereunder, whether or not evidenced by a note, shall be effective only
upon appropriate entries with respect thereto being made in the
63
Register (and each note shall expressly so provide). Any assignment or transfer
of all or part of a loan made hereunder evidenced by a note shall be registered
on the Register only upon surrender for registration of assignment or transfer
of the note evidencing such loan, and thereupon one or more new notes shall be
issued to the designated assignee.
(d) Procedures. Upon its receipt of an Assignment and Acceptance executed
by a Bank and an Eligible Assignee, together with the Term Loan Notes and the
Revolving Loan Notes subject to such assignment, the Administrative Agent shall,
if such Assignment and Acceptance has been completed in the appropriate form,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Term Loan Notes and Revolving Loan Notes a new Term Loan Note and Revolving Loan
Note to the order of such Eligible Assignee in an amount equal to the share of
the Term Loan and the Revolving Loan Commitment assumed by it pursuant to such
Assignment and Acceptance and, if such Bank has retained any share of the Term
Loan and Revolving Loan Commitment hereunder, a new Term Loan Note and Revolving
Loan Note to the order of such Bank in an amount equal to the share of the Term
Loan and the Revolving Loan Commitment retained by it hereunder. Such new Term
Loan Notes and Revolving Loan Notes shall be dated the effective date of such
Assignment and Acceptance and shall be in the appropriate form.
(e) Participation. Each Bank may sell participation to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitments, the Loan Advances owing to it, its participation interest in the
Letters of Credit, and the Term Loan Notes and the Revolving Loan Notes held by
it); provided, however, that (i) such Bank's obligations under this Agreement
(including, without limitation, its Commitments to the Borrower hereunder) shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Bank shall
remain the holder of any such Term Loan Notes and Revolving Loan Notes for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent, and the
Issuing Bank and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement, and (v) such Bank shall not require the participant's consent to any
matter under this Agreement, except that upon 10 days' written notice of such
participation to the Administrative Agent and the Borrower, such Bank may permit
the participant to possess consent rights with respect to changes in the
principal amount of the Term Loan Notes and the Revolving Loan Notes, reductions
in fees or interest, extensions of the applicable maturity date, or releases of
all or substantially all of the collateral or any guarantor (except to the
extent otherwise permitted herein or in any of the other Credit Documents). The
Borrower hereby agrees that participants shall have the same rights under
Sections 2.7, 2.8, 2.9, 2.10, 2.11, and 8.2 as a Bank to the extent of their
respective participation.
(f) Assignments or Pledges to Federal Reserve Banks. In addition to the
foregoing rights of assignment and participation, any Bank may assign or pledge
any portion of its rights under this Agreement (including the Term Loan Advances
and the Revolving Loan Advances owed to such Bank) to any Federal Reserve Bank
in accordance with applicable law without notice to or the consent of the
Borrower or the Administrative Agent, provided that (i) such Bank shall not be
relieved of its obligations under this Agreement as a result thereof and (ii) in
no event shall the
64
Federal Reserve Bank be entitled to direct the actions of the pledging or
assigning Bank under this Agreement.
8.6. Notice. All notices and other communications under this Agreement, the Term
Loan Notes and the Revolving Loan Notes shall be in writing and mailed by
certified mail (return receipt requested), telecopied, telexed, hand delivered,
or delivered by a nationally recognized overnight courier, to the address for
the appropriate party specified in Schedule I-B or at such other address as
shall be designated by such party in a written notice to the other parties.
Mailed notices shall be effective when received. Telecopied or telexed notices
shall be effective when transmission is completed or confirmed by telex
answerback. Delivered notices shall be effective when delivered by messenger or
courier. Notwithstanding the foregoing, notices and communications to the
Administrative Agent pursuant to Article 2 or 7 shall not be effective until
received by the Administrative Agent.
8.7. CHOICE OF LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.8. Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower, as the case may be at its address set forth in Schedule I-B or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
65
8.9. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE CREDIT DOCUMENTS
OR ANY TRANSACTIONS RELATING THERETO.
8.10. Counterparts. This Agreement may be executed in multiple counterparts
which together shall constitute one and the same instrument.
8.11. No Further Agreements. THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
66
EXECUTED as of the date first above written.
BORROWER:
INTEGRATED ELECTRICAL SERVICES, INC.
By: /s/ NEIL J. DePASCAL
-------------------------------
Name: Neil J. DePascal
Title: Chief Accounting Officer
ADMINISTRATIVE AGENT:
THE CHASE MANHATTAN BANK, as Administrative Agent
By: /s/ JAMES R. DOLPHIN
-------------------------------
Name: James R. Dolphin
Title: Senior Vice President
BANKS:
THE CHASE MANHATTAN BANK
By: /s/ JAMES R. DOLPHIN
-------------------------------
Name: James R. Dolphin
Title: Senior Vice President
67
CREDIT LYONNAIS, NEW YORK BRANCH,
as Syndication Agent and as a Bank
By: /s/ ATTILA KOC
-------------------------------
Name: Attila Koc
Title: Senior Vice President
68
THE BANK OF NOVA SCOTIA,
as Syndication Agent and as a Bank
By: /s/ M. D. SMITH
-------------------------------
Name: M. D. Smith
Title: Agent Operations
69
TORONTO DOMINION (TEXAS), INC.,
as Documentation Agent and as a Bank
By: /s/ ANN S. SLANIS
-------------------------------
Name: Ann S. Slanis
Title: Vice President
70
BANK OF SCOTLAND
By: /s/ ANNIE GLYNN
-------------------------------
Name: Annie Glynn
Title: Senior Vice President
71
FIRST BANK & TRUST
By: /s/ ALAN J. COTT
-------------------------------
Name: Alan J. Cott
Title: Senior Vice President
72
FIRSTAR BANK, N.A.
By: /s/ GREGORY L. DRYDEN
-------------------------------
Name: Gregory L. Dryden
Title: Vice President
73
MERRILL LYNCH CAPITAL CORPORATION
By: /s/ CAROL J.E. FEELEY
-------------------------------
Name: Carol J.E. Feeley
Title: Vice President
74
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ CARMEN DUMNIRE
-------------------------------
Name: Carmen Dumnire
Title: Vice President
75
Dates Referenced Herein and Documents Incorporated by Reference
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