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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) June 20, 1996
MICHAELS STORES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-11822 75-1943604
(State of (Commission (IRS Employer
incorporation) File Number) Identification No.)
8000 Bent Branch Drive
Irving, Texas 75063-6041
P.O. Box 619566
DFW, Texas 75261-9566
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (972) 409-1300
5931 Campus Circle Drive, Irving, Texas 75063
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(Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
In connection with its public offering of $125 million of Senior Notes
due 2006, Michaels Stores, Inc. (the "Company") amended its bank credit
agreement pursuant to the Second Amended and Restated Credit Agreement (the
"Second Amended Credit Agreement"), dated June 20, 1996 by and among the
Company, NationsBank of Texas, N.A., as administrative lender, Bank of
America, Illinois, as co-agent and the other lenders signatory thereto. A
copy of the Second Amended Credit Agreement is attached hereto as Exhibit 10
and incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a)-(b) Not applicable.
(c) Exhibits Required by Item 601 of Regulation S-K.
EXHIBIT NO. DESCRIPTION
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10 Second Amended Credit Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
MICHAELS STORES, INC.
By: /s/ R. DON MORRIS
------------------------------------
Name: R. Don Morris
Title: Executive Vice President and
Chief Financial Officer
Date: September 26, 1996
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
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10 Second Amended Credit Agreement
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EXHIBIT 10
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
$100,000,000
MICHAELS STORES, INC.
NATIONSBANK OF TEXAS, N.A., AS
ADMINISTRATIVE LENDER
AND
BANK OF AMERICA ILLINOIS, AS
CO-AGENT
JUNE 20, 1996
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$100,000,000
MICHAELS STORES, INC.
TABLE OF CONTENTS
ARTICLE I
DEFINITION OF TERMS
Section 1.01 CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 ACCOUNTING TERMS AND OTHER DETERMINATIONS. . . . . . . . . . 19
ARTICLE II
REVOLVING LOAN
Section 2.01 COMMITMENT FOR REVOLVING LOAN. . . . . . . . . . . . . . . . 20
Section 2.02 NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.03 EXPIRATION OF COMMITMENT TO LEND UNDER THE LOAN. . . . . . . 20
Section 2.04 REQUEST FOR ADVANCES . . . . . . . . . . . . . . . . . . . . 20
Section 2.05 USE OF PROCEEDS OF THE ADVANCES. . . . . . . . . . . . . . . 21
Section 2.06 BORROWING BASE AND BORROWING BASE REPORT . . . . . . . . . . 21
Section 2.07 COMMITMENT FEE . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.08 ADDITIONAL FEES. . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.09 REDUCTION/TERMINATION OF COMMITMENT. . . . . . . . . . . . . 22
Section 2.10 MANDATORY REPAYMENTS . . . . . . . . . . . . . . . . . . . . 23
Section 2.11 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.12 POST-DEFAULT RATE. . . . . . . . . . . . . . . . . . . . . . 23
Section 2.13 PAYMENTS ON NON-BUSINESS DAYS. . . . . . . . . . . . . . . . 23
Section 2.14 OPTIONAL PREPAYMENTS . . . . . . . . . . . . . . . . . . . . 24
Section 2.15 MANDATORY PREPAYMENT . . . . . . . . . . . . . . . . . . . . 24
Section 2.16 MANNER AND PLACE OF PAYMENTS AND PREPAYMENTS . . . . . . . . 24
Section 2.17 COMPUTATION OF INTEREST. . . . . . . . . . . . . . . . . . . 24
Section 2.18 INTEREST RECAPTURE . . . . . . . . . . . . . . . . . . . . . 25
Section 2.19 INDEMNITY PROVISIONS . . . . . . . . . . . . . . . . . . . . 25
Section 2.20 LIMITATION ON EURODOLLAR RATE BORROWINGS . . . . . . . . . . 25
Section 2.21 DETERMINATION OF INTEREST RATES. . . . . . . . . . . . . . . 26
Section 2.22 CONTINUATION/CONVERSION. . . . . . . . . . . . . . . . . . . 26
Section 2.23 EFFECT OF FAILURE TO GIVE NOTICE . . . . . . . . . . . . . . 27
Section 2.24 CAPITAL ADEQUACY . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.25 SHARING OF PAYMENTS. . . . . . . . . . . . . . . . . . . . . 27
Section 2.26 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE LENDER. . . . . . . . 28
Section 2.27 CALCULATION OF RATES . . . . . . . . . . . . . . . . . . . . 28
Section 2.28 BOOKING ADVANCES . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.29 QUOTATION OF RATES . . . . . . . . . . . . . . . . . . . . . 28
Section 2.30 REPLACEMENT BY COMPANY OF A LENDER . . . . . . . . . . . . . 29
ARTICLE III
LETTERS OF CREDIT
Section 3.01 LETTER OF CREDIT COMMITMENT. . . . . . . . . . . . . . . . . 30
Section 3.02 APPLICATION FOR AND ISSUANCE OF COMMERCIAL LETTERS OF
CREDIT AND STAND-BY LETTERS OF CREDIT. . . . . . . . . . . . 30
Section 3.03 COMMISSION; PAYMENT OF DRAFTS DRAWN UNDER LETTERS OF
CREDIT; INCORPORATION OF TERMS OF THE APPLICATIONS . . . . . 31
Section 3.04 REIMBURSEMENT OBLIGATION OF LENDERS. . . . . . . . . . . . . 32
Section 3.05 SHARING OF PAYMENTS. . . . . . . . . . . . . . . . . . . . . 33
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Section 3.06 DUTIES OF ADMINISTRATIVE LENDER. . . . . . . . . . . . . . . 33
Section 3.07 LENDERS, GENERALLY . . . . . . . . . . . . . . . . . . . . . 33
Section 3.08 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 CONDITIONS TO THE CLOSING DATE AND THE INITIAL ADVANCE . . . 34
Section 4.02 CONDITIONS PRECEDENT TO EACH ADVANCE . . . . . . . . . . . . 36
Section 4.03 CONDITIONS PRECEDENT TO EACH LETTER OF CREDIT. . . . . . . . 36
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01 ORGANIZATION, AUTHORITY, AND QUALIFICATION . . . . . . . . . 37
Section 5.02 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . 38
Section 5.03 DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.04 AUTHORIZATION AND COMPLIANCE WITH LAWS; MATERIAL
AGREEMENTS; ENFORCEABILITY . . . . . . . . . . . . . . . . . 38
Section 5.05 LITIGATION AND JUDGMENTS . . . . . . . . . . . . . . . . . . 39
Section 5.06 OWNERSHIP OF PROPERTIES; LIENS . . . . . . . . . . . . . . . 39
Section 5.07 USE OF PROCEEDS; MARGIN SECURITIES . . . . . . . . . . . . . 39
Section 5.08 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.09 NO APPROVALS REQUIRED, SEC FILINGS . . . . . . . . . . . . . 39
Section 5.10 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.11 LANDLORD'S LIENS . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.12 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.13 SUBORDINATED DEBT. . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
AFFIRMATIVE COVENANTS
Section 6.01 REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . 40
Section 6.02 PERFORMANCE OF OBLIGATIONS . . . . . . . . . . . . . . . . . 42
Section 6.03 PRESERVATION OF EXISTENCE AND FRANCHISES AND
CONDUCT OF BUSINESS. . . . . . . . . . . . . . . . . . . . . 43
Section 6.04 MAINTENANCE OF PROPERTIES. . . . . . . . . . . . . . . . . . 43
Section 6.05 PAYMENT OF TAXES AND OTHER CHARGES . . . . . . . . . . . . . 43
Section 6.06 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.07 MAINTENANCE OF BOOKS AND RECORDS . . . . . . . . . . . . . . 44
Section 6.08 INSPECTION OF PROPERTIES, BOOKS AND RECORDS. . . . . . . . . 44
Section 6.09 COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . . . 44
Section 6.10 EXPENSES AND LEGAL FEES. . . . . . . . . . . . . . . . . . . 44
Section 6.11 COMPLIANCE WITH ERISA. . . . . . . . . . . . . . . . . . . . 45
Section 6.12 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . 45
Section 6.13 SYNDICATION. . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.14 SUBORDINATED DEBT AND SENIOR NOTES . . . . . . . . . . . . . 45
Section 6.15 GUARANTIES OF THE SUBSIDIARIES . . . . . . . . . . . . . . . 46
ARTICLE VII
NEGATIVE COVENANTS
Section 7.01 FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . . . . 47
Section 7.02 ADDITIONAL DEBT. . . . . . . . . . . . . . . . . . . . . . . 48
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Section 7.03 PERMITTED LIENS. . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.04 CASH DIVIDENDS, REDEMPTION, AND RESTRICTED PAYMENTS. . . . . 50
Section 7.05 MERGERS, SALES OF ASSETS AND DISSOLUTIONS. . . . . . . . . . 50
Section 7.06 CHANGES IN BUSINESS. . . . . . . . . . . . . . . . . . . . . 52
Section 7.07 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.08 SUBORDINATED DEBT. . . . . . . . . . . . . . . . . . . . . . 53
Section 7.09 INVESTMENTS AND ACQUISITIONS . . . . . . . . . . . . . . . . 53
Section 7.10 BORROWING BASE . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.11 AMENDMENT TO MATERIAL AGREEMENTS . . . . . . . . . . . . . . 54
Section 7.12 SALE AND LEASEBACK . . . . . . . . . . . . . . . . . . . . . 55
Section 7.13 TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . 55
Section 7.14 FINANCIAL OR COVENANT COMPLIANCE . . . . . . . . . . . . . . 55
ARTICLE VIII
DEFAULT
Section 8.01 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 55
Section 8.02 REMEDIES UPON DEFAULT. . . . . . . . . . . . . . . . . . . . 59
Section 8.03 WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 8.04 PERFORMANCE BY ADMINISTRATIVE LENDER . . . . . . . . . . . . 60
Section 8.05 LENDERS NOT IN CONTROL . . . . . . . . . . . . . . . . . . . 60
Section 8.06 CUMULATIVE RIGHTS. . . . . . . . . . . . . . . . . . . . . . 61
Section 8.07 EXPENDITURES BY LENDERS. . . . . . . . . . . . . . . . . . . 61
ARTICLE IX
AGREEMENT AMONG LENDERS
Section 9.01 AGREEMENT AMONG LENDERS. . . . . . . . . . . . . . . . . . . 61
Section 9.02 LENDER CREDIT DECISION . . . . . . . . . . . . . . . . . . . 63
Section 9.03 BENEFITS OF ARTICLE. . . . . . . . . . . . . . . . . . . . . 64
ARTICLE X
MISCELLANEOUS
Section 10.01 NO ORAL MODIFICATIONS. . . . . . . . . . . . . . . . . . . . 64
Section 10.02 BENEFIT; ASSIGNMENTS AND PARTICIPATIONS. . . . . . . . . . . 64
Section 10.03 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . 66
Section 10.04 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 10.05 APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.06 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.07 NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE . . . . . 68
Section 10.08 EXCEPTIONS TO COVENANTS. . . . . . . . . . . . . . . . . . . 68
Section 10.09 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.10 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.11 WAIVER OF TRIAL BY JURY. . . . . . . . . . . . . . . . . . . 70
Section 10.12 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 10.13 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 70
Section 10.14 SURVIVAL AND APPLICATION OF REPRESENTATIONS AND WARRANTIES . 70
Section 10.15 RATE PROVISION . . . . . . . . . . . . . . . . . . . . . . . 71
Section 10.16 AMENDMENT, RESTATEMENT AND RENEWAL . . . . . . . . . . . . . 71
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SCHEDULES
Schedule 1.01 Stock Option Plans
Schedule 4.01 Offices Where UCC-11 Searches Were Conducted
Schedule 5.01 Subsidiaries and Capital Structure
Schedule 5.05 Litigation
Schedule 5.06 Liens
Schedule 5.11 Disclosure of Landlord Actions
Schedule 7.02 Existing Debt
Schedule 7.09(a) Limitations on Investments in Publicly Traded Debt
and Equities
EXHIBITS
Exhibit A Note Form
Exhibit B Notice of Borrowing/Conversion
Exhibit C Borrowing Base Report
Exhibit D Guaranties
Exhibit E Loan Compliance Certificate
Exhibit F Assignment and Acceptance Agreement
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MICHAELS STORES, INC.
$100,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is
entered into effective as of June 20, 1996 among MICHAELS STORES, INC., a
Delaware corporation ("Company"), NationsBank of Texas, N.A., as Administrative
Lender (as defined below), Bank of America Illinois, as Co-Agent and Lenders (as
defined below).
RECITALS
WHEREAS, Company requested a revolving credit facility of up to
$100,000,000, (including a letter of credit facility of up to $25,000,000);
WHEREAS, Company and Administrative Lender entered into that certain First
Amended and Restated Credit Agreement, dated as of June 18, 1994 (as amended,
the "Original Credit Agreement");
WHEREAS, Company and Administrative Lender desire to make certain changes
to the Original Credit Agreement and add certain financial institutions as
Lenders hereunder; and
WHEREAS, such financial institutions are willing to become a party to this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the terms of all
the Loan Papers (as hereinafter defined) Company, Lenders and Administrative
Lender agree as follows:
ARTICLE I
DEFINITION OF TERMS
Section 1.01 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the respective meanings indicated below (such
meanings to be applicable equally to both the singular and plural forms of such
terms):
"ACCOUNTS PAYABLE" means trade payables owed by Company and its
Subsidiaries in connection with the acquisition of inventory by Company and its
Subsidiaries.
"ACQUISITION" means any acquisition of all or substantially all the assets
of any Person, or all or a majority of the voting stock or Capital Stock of any
Person.
"ADMINISTRATIVE LENDER" means NationsBank of Texas, N.A. or such other
successor Administrative Lender determined in accordance with the provisions of
Section 9.01(b) hereof.
"ADVANCE" or "ADVANCES" means the disbursement or disbursements of a sum or
sums loaned by Lenders to Company pursuant to Article II of this Agreement.
<PAGE>
"AFFILIATE" means a Person that directly, or indirectly through one or more
intermediaries, Controls, or is Controlled By or is Under Common Control with
any other Person.
"APPLICABLE LAW" means (i) all provisions of constitutions, statutes,
rules, regulations and orders of governmental bodies or regulatory agencies
applicable to any such Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, including, without limitation, Applicable Environmental Laws, and (ii) in
respect of contracts made or performed in the State of Texas, "Applicable Law"
also means the laws of the United States of America, including, without limiting
the foregoing, 12 USC Sections 85 and 86(a), as amended to the date hereof and
as the same may be amended at any time and from time to time hereafter, and any
other statute of the United States of America now or at any time hereafter
prescribing the maximum rates of interest on loans and extensions of credit, and
the laws of the State of Texas, including, without limitation, Articles
5069-1.04 and 5069-1.07(a), Title 79, Revised Civil Statutes of Texas, 1925, as
amended ("Art. 1.04"), and any other statute of the State of Texas now or at any
time hereafter prescribing maximum rates of interest on loans and extensions of
credit, provided however, that pursuant to Article 5069-15.10(b), Title 79,
Revised Civil Statutes of Texas, 1925, as amended, Company agrees that the
provisions of Chapter 15, Title 79, Revised Civil Statutes of Texas, 1925, as
amended, shall not apply to the Loan hereunder.
"APPLICABLE MARGIN" means with respect to (a) Eurodollar Rate Borrowings
and Stand-By Letters of Credit, 1.25% per annum, (b) Commercial Letters of
Credit, 0.25% per annum, and (c) the Commitment Fee, 0.30% per annum.
Notwithstanding the foregoing, commencing on the date the Administrative Lender
receives the Company's financial statements required by Section 6.01(a) hereof
for the fiscal year ended February 2, 1997, every June 1, September 1, December
1 and March 1 of each year during the term hereof, effective on such date, the
Applicable Margin shall be adjusted to reflect the Applicable Margin prescribed
by the chart below for the Fixed Charges Coverage Ratio as demonstrated by the
most recently delivered Loan Compliance Certificate. The Applicable Margin for
each type of Advance, each Letter of Credit and the Commitment Fee shall mean
the respective amount set forth below opposite such relevant Fixed Charges
Coverage Ratio in Columns A, B and C below, until the first succeeding quarterly
date for which the most recently delivered Loan Compliance Certificate
demonstrates a change in the Fixed Charges Coverage Ratio to an amount so that
another Applicable Margin shall be applied. In order to obtain an adjustment to
a lower Applicable Margin, Company must demonstrate to the reasonable
satisfaction of Administrative Lender the required applicable Fixed Charges
Coverage Ratio.
COLUMN A COLUMN B COLUMN C
Per Annum Rate Per Annum Rate
Eurodollar Rate
Borrowings and Commercial
Fixed Charges Stand-By Letters Letters
Coverage Ratio of Credit of Credit Commitment Fee
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Less than
1.55 to 1.00 1.50% 0.38% 0.35%
Greater than or equal
to 1.55 to 1.00 but
less than
1.70 to 1.00 1.25% 0.25% 0.30%
Greater than or equal
to 1.70 to 1.00 but
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less than
1.85 to 1.00 1.00% 0.25% 0.25%
Greater than or equal to
1.85 to 1.00 0.75% 0.20% 0.20%
"APPLICATION" means any Application and Agreement for Commercial Letters of
Credit, or Letter of Credit Master Agreement, dictating the terms and conditions
for computerized requests for Commercial Letters of Credit, in favor of
Administrative Lender, in Administrative Lender's standard form for commercial
letters of credit, and any stand-by letter of credit application delivered to
Administrative Lender for or in connection with any Stand-By Letter of Credit
pursuant to Article III hereof, in Administrative Lender's standard form for
stand-by letters of credit.
"ASSET SALE" means any sale, disposition, liquidation, conveyance, swap,
lease, exchange or transfer (or any series of any thereof) by Company or any of
its Subsidiaries to any Person that is not the Company or one of its wholly-
owned Subsidiaries that is a Guarantor, of Capital Stock, an asset or any
interest in any thereof, except (a) sales of inventory, goods, products and
other assets (including real estate) in the ordinary course of business
(including sales of inventory and fixtures to Michaels of Canada, Inc.) and (b)
cash sales in connection with the replacement of obsolete equipment in the
ordinary course of business.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means any agreement substantially in
the form of EXHIBIT F hereto, pursuant to which any Lender assigns any interest
in its rights and obligations hereunder (including the Obligation) in accordance
with the terms and provisions of Section 10.02 hereof.
"AUDITOR" means Ernst & Young, or any other nationally recognized
accounting firm acceptable to Lenders.
"AUTHORIZED FINANCIAL OFFICER" means the president, chief financial
officer, vice president-finance and business planning, treasurer or assistant
treasurer of Company, or such other person from time to time designated in
writing by any of the foregoing.
"AVAILABLE ADVANCE AMOUNT" means, with respect to Company on any date of
determination, an amount equal to the lesser of (a) the Commitment minus the sum
of (i) the aggregate face amount of all outstanding Letters of Credit on such
date plus (ii) all outstanding Advances on such date and (b) the Borrowing Base
minus the sum of (i) the aggregate face amount of all outstanding Letters of
Credit on such date plus (ii) all outstanding Advances on such date, plus (iii)
the aggregate outstanding amount under the Senior Notes.
"BASE RATE" means a fluctuating rate per annum as shall be in effect from
time to time equal to the lesser of (a) the Highest Lawful Rate and (b) the
higher of (i) the rate of interest as then in effect announced publicly by
NationsBank of Texas, N.A. in Dallas, Texas from time to time as its U.S. dollar
prime commercial lending rate (which rate may or may not be the lowest rate of
interest charged by NationsBank of Texas, N.A. from time to time) and (ii) the
sum of (A) the Federal Funds Rate, plus (B) 0.50%. The Base Rate shall be
adjusted automatically as of the opening of business on the effective date of
each change in the prime commercial lending rate or Federal Funds Rate, as
applicable, to account for such change.
"BORROWING" means a borrowing consisting of one or more Advances made to
Company at the same time by Lenders under Article II of this Agreement. A
Borrowing is a "BASE RATE BORROWING" if it bears interest at the Base Rate. A
Borrowing is a "EURODOLLAR RATE BORROWING" if it bears interest at the
Eurodollar Rate.
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"BORROWING BASE" means, at the time of determination thereof, an amount
equal to 55% of Eligible Inventory.
"BORROWING BASE REPORT" means a report, required to be delivered monthly by
Company to each Lender pursuant to Section 2.06 hereof, in the form attached
hereto as EXHIBIT C.
"BORROWING DATE" means a date upon which an Advance is made hereunder.
"BUSINESS DAY" means (a) with respect to any Base Rate Borrowing, a day on
which national banks in Dallas, Texas are open for the conduct of commercial
banking business, and (b) with respect to any Eurodollar Rate Borrowing, a day
on which business is conducted in the interbank Eurodollar market and on which
national banks in Dallas, Texas are open for the conduct of commercial banking
business.
"CAPITAL EXPENDITURES" means capital expenditures, as defined in accordance
with GAAP.
"CAPITAL STOCK" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person that is a corporation and partnership interests (general and
limited) in any Person that is a partnership.
"CASH EQUIVALENTS" means
(a) money market funds that invest only in debt securities (including,
without limitation, bankers' acceptances, bearer deposit notes, loan
participations, promissory notes and medium-term notes) which have an average
maturity of not more than 365 days after the date of purchase and
(i) for any such investment issued by a financial institution, the
issuer (A) maintains a long-term debt rating of at least "BBB" (or its then
equivalent) according to Standard & Poor's Ratings Group, a Division of
McGraw-Hill, Inc. or a Thompson Bankwatch rating of at least "C" and (B)
has a combined capital and surplus and undivided profits of not less than
$1,000,000, or any other financial institution if the amount on deposit is
fully insured by the Federal Deposit Insurance Corporation, and
(ii) for any corporate issuer, such investment is rated "P-2" (or its
then equivalent) according to Moody's Investors Service, Inc., "A-2" (or
its then equivalent) according to Standard & Poor's Ratings Group, a
Division of McGraw-Hill, Inc., "F-2" (or its then equivalent) according to
Fitch's Investors Service, Inc. or "D-2" (or its then equivalent) according
to Duff & Phelps, or a better rating, or, which, if unrated, are determined
by the fund to be of comparable quality to debt securities which have such
ratings, and
(b) investments (directly or through a money market mutual fund) in
(i) certificates of deposit, repurchase agreements, and other
interest bearing deposits or accounts with United States commercial banks
having a combined capital and surplus of at least $100,000,000, whose debt
obligations have one of the three highest ratings obtainable from
Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc. or Moody's
Investors Service, Inc., which certificates, repurchase agreements,
deposits, and accounts mature within one year from the date of investment,
(ii) obligations issued or unconditionally guaranteed by the
United States government, or issued by any agency or instrumentality
thereof and backed by the full
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faith and credit of the United States government, which obligations
mature within one year from the date of investment,
(iii) direct obligations issued by any state or political
subdivision of the United States, which mature within one year from the
date of investment and have the highest rating obtainable from Standard &
Poor's Ratings Group, a Division of McGraw-Hill, Inc. or Moody's Investors
Service, Inc. on the date of investment, and
(iv) commercial paper which has one of the highest ratings obtainable
from Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc. or
Moody's Investors Service, Inc.
"CHANGE IN CONTROL" means (a)(i) the acquisition of all or substantially
all assets of Company by any Person or affiliated group of Persons, or (ii) the
acquisition by any person (as "person" is defined in section 13(d) of the
Securities Exchange Act of 1934, as amended), in a single transaction or series
of transactions, of the beneficial ownership of 50% or more of the outstanding
voting stock of Company (other than acquisitions by (A) any Persons or group of
Persons acting together, who hold beneficially or of record, in excess of 10% of
the outstanding voting stock of Company in the aggregate on the Closing Date, or
(B) any of Sam Wyly, Charles J. Wyly, Jr., any Person under the Control of Sam
Wyly or Charles J. Wyly, Jr., any trust established by or for the benefit of Sam
Wyly, Charles J. Wyly, Jr. or any of their lineal descendants or any family
member of Sam Wyly or Charles J. Wyly, Jr.), or (b) any "Change in Control" as
described and set forth in the Subordinated Debt documentation, or (c) any
"Change of Control" as defined in the Senior Notes Indenture or in any Senior
Note, provided that any acquisition of outstanding voting stock of Company by
any Person described in (B) above shall be deemed by the parties hereto to not
be included in the definition of "Change of Control" as defined in the Senior
Notes Indenture.
"CLOSING DATE" means the date hereof.
"CO-AGENT" means Bank of America Illinois.
"COMMERCIAL LETTERS OF CREDIT" means commercial letters of credit issued by
Administrative Lender on behalf of Lenders from time to time at the request of
and for the account of Company pursuant to Article III hereof, and all such
renewals and extensions thereof.
"COMMITMENT" means $100,000,000 as such amount may be terminated or reduced
in accordance with Section 2.09 hereof from time to time, which such amount
includes the Letter of Credit Commitment.
"COMMITMENT FEE" means that certain per annum fee on the Unused Commitment
payable to the Lenders in accordance with Section 2.07 hereof, such fee to be
equal to the product of (a) the Applicable Margin in effect (as specified for
the Commitment Fee in the definition of "Applicable Margin" herein) times (b)
the Unused Commitment.
"CONTROL" or "CONTROLLED BY" or "UNDER COMMON CONTROL" means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise); provided, however, that in any event any Person which beneficially
owns, directly or indirectly, 10% or more (in number or votes) of the securities
having ordinary voting power for the election of directors of a corporation
shall be conclusively presumed to control such corporation.
"CURRENCY AGREEMENT" means in respect of a Person, any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
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<PAGE>
"CURRENT ASSETS" means, as of the date of any determination thereof, such
assets of Company and its Subsidiaries as would be required by GAAP to be
included as current assets on the consolidated balance sheet of a corporation
conducting a business the same as or similar to that of Company.
"CURRENT LIABILITIES" means, as of the date of determination thereof, all
indebtedness which by its terms is payable on demand or matures not more than
one year from the date of determination thereof, fixed sinking fund payments or
other prepayments to be made with respect to any indebtedness within one year
after the date of determination thereof and all of the items which in accordance
with GAAP would be included as current liabilities on the consolidated balance
sheet of Company and its Subsidiaries.
"DEBT" means, with respect to Company and its Subsidiaries, (i) all
indebtedness, direct or indirect, whether or not represented by bonds,
debentures, notes or other securities, for the repayment of money borrowed, (ii)
all deferred indebtedness for the payment of the purchase price of property or
assets purchased, (iii) all indebtedness under any lease which, under GAAP, is
required to be capitalized for balance sheet purposes (other than Tax Retention
Leases), (iv) all guaranties, endorsements, assumptions or other contingent
obligations, in respect of, or to purchase or otherwise acquire, indebtedness of
others, (v) all contingent obligations (as defined in accordance with GAAP) of
any type whatsoever (excluding contingent obligations arising as a result of
litigation listed on SCHEDULE 5.05 or with respect to which Company's reasonable
expectation is that such litigation will result in a liability or other
obligation of less than $1,000,000 in the aggregate for Company or any such
Subsidiary), and (vi) all indebtedness secured by any mortgage, pledge, security
interest or lien existing on property owned by any of Company and its
Subsidiaries, whether or not the indebtedness secured thereby shall have been
assumed by any of Company and its Subsidiaries; provided that under no
circumstances shall trade payables of Company and its Subsidiaries incurred in
the ordinary course of business be included in this definition of "Debt".
"DEFAULT" means the occurrence of any event which, with the lapse of time
or notice or both, would become an Event of Default.
"DIVIDEND" means, as to any Person, (a) any declaration or payment of any
dividend (other than a dividend in stock or the right to acquire stock of the
Company) on, or the setting aside or the creation of a sinking fund with respect
to, or the making of any pro rata distribution, loan, advance or investment to
or in any holder (in its capacity as a shareholder) of, any Capital Stock of
such Person, or (b) any purchase, redemption, or other acquisition or retirement
for value of any Capital Stock of such Person, or the setting aside of funds or
the creation of a sinking fund with respect thereto.
"DOLLAR(S)" and the sign "$", means lawful money of the United States of
America, unless otherwise explicitly specified.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$1,000,000,000; (b) a savings and loan association or savings bank organized
under the laws of the United States, or any state thereof, having total assets
in excess of $500,000,000, and not in receivership or conservatorship; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is
described in this clause; and (d) the central bank of any country which is a
member of the Organization for Economic Cooperation and Development.
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<PAGE>
"ELIGIBLE INVENTORY" means at any date the lesser of the actual cost or the
current fair market value of inventory of Company and its Subsidiaries
determined in accordance with GAAP, provided that such inventory shall
constitute Eligible Inventory only if on the date as of which the determination
is being made it (i) shall not be damaged or obsolete, (ii) shall not have
exceeded its normal shelf life, and (iii) shall not be subject to any Lien,
except Permitted Liens. Eligible Inventory will include the face amount of
Commercial Letters of Credit outstanding in support of the purchase of Eligible
Inventory, but shall not include any inventory of Company or any Subsidiary
which is subject to a security interest securing any indebtedness of Company or
such Subsidiary.
"ENVIRONMENTAL LAWS" means any and all present and future Federal, state,
local and foreign laws, rules or regulations, and any orders or decrees, in each
case as now or hereafter in effect, relating to the regulation or protection of
human health, safety and the environment or to emissions, discharges, releases
or threatened releases of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes (as defined in such laws, rules or regulations)
into the indoor or outdoor environment, including, without limitation, ambient
air, soil, surface water, ground water, wetlands, land or subsurface strata, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, chemicals
or toxic or hazardous substances or wastes (as defined in such laws, rules or
regulations).
"ERISA" means the Employee Retirement Income Security Act of 1974, together
with all amendments from time to time thereto, including any rules or
regulations promulgated thereunder.
"EURODOLLAR RATE" means, at the time any determination thereof is to be
made by Reference Lenders and for any Interest Period during which the
Eurodollar Rate is applicable, the lesser of (a) the Highest Lawful Rate and (b)
the sum of (i) the Applicable Margin plus (ii) the average of the interest rates
per annum (rounded upwards, if necessary to the nearest one-sixteenth of one
percent) which is the quotient of (A) the rate per annum at which dollar
deposits in immediately available funds are offered to Reference Lenders two
Business Days before the first day of such applicable Interest Period by prime
banks in the interbank Eurodollar market as at or about 11:00 A.M., Dallas,
Texas time, for delivery on the first day of such applicable Interest Period,
for the number of days comprised therein and in an amount equal to the aggregate
amount bearing such interest rate to be outstanding for such applicable Interest
Period, divided by (B) the remainder of 1.00 MINUS the Eurodollar Reserve
Percentage applicable to such amounts.
"EURODOLLAR RESERVE PERCENTAGE" means, with respect to each Interest Period
during which the Eurodollar Rate is applicable, that percentage (expressed as a
decimal) determined by Administrative Lender to be the actual reserve
requirement in effect on the first day of such Interest Period for
Administrative Lender, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor), (including any basic, supplemental and
emergency reserves applicable to "eurocurrency liabilities") pursuant to
Regulation D or any other then applicable regulation of the Board of Governors
which prescribes reserve requirements applicable to "eurocurrency liabilities,"
as defined in Regulation D. The Eurodollar Reserve Percentage shall be a fixed
percentage calculated at, and effective from the first day of, such Interest
Period. Each determination by Administrative Lender of the Eurodollar Reserve
Percentage shall, in the absence of manifest error, be conclusive and binding.
"EVENT OF DEFAULT" means the occurrence of any such event set forth in
Article VIII hereof, which has not been waived by Lenders in writing in
accordance with the provisions of this Agreement.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight
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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 Dallas, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such date on such
transactions received by Administrative Lender from three federal funds
brokers of recognized standing selected by it.
"FEE LETTERS" means that certain fee letter described in Section 2.08 of
this Agreement, and any other fee letters executed by Company from time to time,
as any such letters may be amended, extended, modified, revised, replaced or
substituted from time to time.
"FISCAL MONTH" means one of the twelve four- or five-week accounting
periods comprising a fiscal year of Company.
"FIXED CHARGES" means for Company and its Subsidiaries as of any
determination date for the preceding 12-month period, the sum of (a) interest
expense for such period, plus (b) scheduled principal payments on Funded Debt
permitted to be incurred under Section 7.02(iv) hereof for such period, plus (c)
operating lease expense for such period, all as determined and consolidated in
accordance with GAAP.
"FIXED CHARGES COVERAGE RATIO" means for Company and its Subsidiaries as of
any determination date for the preceding 12-month period, the ratio of (a) the
sum of (i) consolidated income of Company and its Subsidiaries before income
taxes for such period (excluding extraordinary cash gains or losses for such
period), plus (ii) interest expense for such period plus (iii) operating lease
expense for such period plus (iv) depreciation and amortization for such period
to (b) Fixed Charges, all as determined and consolidated in accordance with
GAAP.
"FUNDED DEBT" means money borrowed and Debt represented by notes payable
and drafts accepted representing extensions of credit, all obligations evidenced
by bonds, debentures, notes or other similar instruments (including all
obligations secured by any Lien to which any property or asset owned by a Person
is subject, whether or not the obligation secured thereby shall have been
assumed), all Debt upon which interest charges are customarily paid by a Person
(excluding trade payables), all Debt evidenced in writing (including Capitalized
Lease Obligations) issued or assumed by such Person as full or partial payment
for property or services, whether or not any such notes, drafts, obligations or
Debt represent Debt for money borrowed, provided that, Funded Debt shall not
include any Debt among (a) the Company and (b) the Company's Subsidiaries.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board and/or their successors which are
applicable in the circumstances as of the date in question; and the requisite
that such principles be applied on a consistent basis means that the accounting
principles observed in a current period are comparable in all material respects
to those applied in a preceding period.
"GUARANTIES" means each of the Guaranty Agreements in substantially the
form of EXHIBIT D attached hereto executed by each of the Guarantors, and
"GUARANTY" means any of the Guaranties, as each may be amended, modified,
renewed, extended or replaced from time to time.
"GUARANTORS" means each Subsidiary and other Person that, from time to
time, executes a Guaranty under the terms of this Agreement, and "GUARANTOR"
means any one of the Guarantors.
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<PAGE>
"HAZARDOUS MATERIAL" means, collectively, (a) any petroleum or petroleum
products, flammable explosives, radioactive materials, asbestos in any form that
is or could become friable, insulation, transformers or other equipment that in
each case contains dielectric fluid containing polychlorinated biphenyls
(PCB's), (b) any chemicals or other material or substances which are now or
hereafter become defined as or included in the definition of "hazardous
substances", "hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (c) any other chemical or other
material or substance, exposure to which is now or hereafter prohibited, limited
or regulated under any Environmental Law.
"HIGHEST LAWFUL RATE" means at the particular time in question the maximum
rate of interest which, under Applicable Law, Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, Lenders are permitted to charge on the Obligations shall change
after the date hereof, the Highest Lawful Rate shall be automatically increased
or decreased, as the case may be, from time to time as of the effective time of
each change in the Highest Lawful Rate without notice to Company. For purposes
of determining the Highest Lawful Rate under the Applicable Law of the State of
Texas, the applicable rate ceiling shall be (i) the indicated rate ceiling
described in and computed in accordance with the provisions of Section (a)(1) of
Art. 1.04 or (ii) if the parties subsequently contract if allowed by Applicable
Law after notice, the quarterly ceiling or the annualized ceiling computed
pursuant to Section (d) of Art. 1.04; provided, however, that at any time the
indicated rate ceiling, the quarterly ceiling or the annualized ceiling shall be
less than 18% per annum or more than 24% per annum, the provisions of Sections
(b)(1) and (2) of said Art. 1.04 shall control for purposes of such
determination, as applicable.
"INTEREST PERIOD" means, (a) as to any portion of the Loan bearing interest
at the Base Rate, as described in subsection (i) below, (b) as to any portion of
the Loan bearing interest at the Eurodollar Rate, a period of one month, two
months, three months or six months, as Company may elect in the manner set forth
in Section 2.04 or Section 2.22 hereof, as the case may be, provided that:
(i) the Interest Period for Advances hereunder which are to bear
interest at the Base Rate shall commence on the date each such Advance is
made or converted to a Base Rate Borrowing and shall end on the earlier of
the Maturity Date or the first Payment Date after the Advance during the
term of this Agreement;
(ii) the initial Interest Period for Advances hereunder which are to
bear interest at the Eurodollar Rate shall commence on the date each such
Advance is made or converted to a Eurodollar Rate Borrowing, and each
Interest Period occurring thereafter for such Advance shall commence on the
day on which the next preceding Interest Period for such Advance expires;
and
(iii) no Interest Period shall extend beyond the Maturity Date.
"INTEREST RATE AGREEMENT" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is a party or a beneficiary.
"INVESTMENT" in any Person means any investment, whether by means of
securities purchase, loan, advance, extension of credit, capital contribution or
otherwise, in or to such Person or the subordination of any claim against such
Person to other indebtedness of such Person, excluding Acquisitions, provided
that, Company is permitted to subordinate any claim against any Person to other
indebtedness of such Person so long as (a) there exists no Default or Event of
Default before and immediately after such action and (b) such action is
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taken only in connection with the settlement of litigation involving Company
or any Subsidiary.
"LAW" means all statutes, laws, ordinances, regulations, orders, writs,
injunctions or decrees of the United States, any state or commonwealth, any
municipality, any foreign country, any territory or possession, or any Tribunal.
"LENDERS" means Administrative Lender and each other Lender signatory
hereto or from time to time a party hereto in accordance with the terms of
Section 10.02 hereof and pursuant to an Assignment and Acceptance Agreement
(such Lenders together with NationsBank of Texas, N.A. collectively referred to
herein as "Lenders" and individually, each a "Lender").
"LETTERS OF CREDIT" means the Stand-By Letters of Credit and Commercial
Letters of Credit, as each may be amended, modified, renewed or extended from
time to time.
"LETTER OF CREDIT COMMITMENT" means an amount equal to the lesser of (a)
$25,000,000 or (b) the difference between $100,000,000 minus the aggregate
outstanding Advances under the Loan or (c) the difference between the Commitment
minus the aggregate outstanding Advances under the Loan.
"LIEN" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, option, easement, preference, priority, hypothecation,
assignment, tax lien, mechanic's lien, materialmen's lien or charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code of Texas or comparable law of any
jurisdiction).
"LITIGATION" means any action, suit or proceeding, at law or in equity,
and/or any claim or investigation, conducted or threatened by or before any
Tribunal, including, but not limited to, proceedings, claims, lawsuits, and/or
investigations under or pursuant to any occupational safety and health,
antitrust, unfair competition, securities, tax, or other laws, or under or
pursuant to any contract, agreement, or other instrument.
"LOAN COMPLIANCE CERTIFICATE" means any and each certificate in the form of
EXHIBIT E hereto from time to time delivered by Company to Administrative Lender
pursuant to the terms of this Agreement.
"LOAN PAPERS" means this Agreement and all documents executed in connection
with or pursuant to or contemplated by this Agreement, whether executed prior to
or contemporaneously herewith, or subsequent to the execution hereof, including,
without limitation, each of the Notes, the Guaranties, all Applications, all
Letters of Credit, all Assignment and Acceptance Agreements, all Fee Letters,
each certificate or report relating to the Borrowing Base, each Loan Compliance
Certificate and all other security agreements, pledges, documents, certificates,
agreements, mortgages, deeds of trust, other fee letters, waiver letters, other
instruments or documents granting a security interest and/or lien in any assets
of any Person securing the Obligations, and other instruments contemplated
hereby, or executed or delivered by Company or its Subsidiaries pursuant hereto
or in connection herewith from time to time, as each may be amended, modified,
renewed, substituted or extended from time to time.
"LOAN" means the loan made or to be made by Lenders to Company pursuant to
Section 2.01 of this Agreement, the Letter of Credit facility pursuant to
Article III hereof, and any other extensions of credit made by Lenders to
Company pursuant to this Agreement and any amendment thereto or extension
thereof.
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"M/A ENTITY" has the meaning ascribed thereto in Section 7.05 hereof.
"MAJORITY LENDERS" means any combination of Lenders having at least 66.67%
of the aggregate amount of Advances outstanding hereunder; provided, however,
that if no Advances are outstanding, such term means any combination of Lenders
having aggregate Specified Percentages equal to at least 66.67%.
"MATERIAL ADVERSE CHANGE" means any circumstance or event that (a) can
reasonably be expected to cause a Default or Event of Default, (b) otherwise can
reasonably be expected to (i) be material and adverse to the continued operation
of Company and its Subsidiaries taken as a whole, or (ii) be material and
adverse to the financial condition, business operations, prospects or properties
of Company and its Subsidiaries taken as a whole, (c) could reasonably be
expected to adversely affect the performance by Company of its obligations under
the Loan Papers, or (d) in any manner whatsoever does or can reasonably be
expected to materially and adversely affect the validity or enforceability of
any of the Loan Papers.
"MATURITY DATE" means June 30, 1999 or such earlier date as the Loan
becomes due and payable, regardless of how such maturity is brought about,
whether at stated maturity, by acceleration, scheduled reduction or otherwise.
"MULTI-EMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which Company, any Subsidiary, or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding six plan years made or accrued an obligation to make contributions,
such plan being maintained pursuant to one or more collective bargaining
agreements.
"NCMI" means NationsBanc Capital Markets, Inc.
"NET WORTH" means the consolidated net worth of Company and its
Subsidiaries, determined in accordance with GAAP.
"NOTES" means each promissory note in substantially the form of EXHIBIT A
attached hereto, evidencing indebtedness of Company to each Lender under the
Loan, and any amendments, modifications, extensions, renewals or replacements
thereof.
"NOTICE OF BORROWING/CONVERSION" shall have the meaning given to such term
in Section 2.04 of this Agreement and shall be in substantially the form of
EXHIBIT B attached hereto.
"OBLIGATIONS" means all present and future obligations and indebtedness
(including, without limitation, the Reimbursement Obligations), and all
renewals, modifications and extensions thereof, or any part thereof, of Company
and all Subsidiaries to Lenders now existing or hereafter arising, pursuant to
or in connection with the Loan Papers, including all interest accruing thereon
and reasonable attorneys' fees and expenses of Administrative Lender incurred in
connection with this Agreement and the Loan Papers and reasonable attorneys'
fees and expenses of Lenders incurred in connection with the enforcement of Loan
Papers and collection of Debt hereunder, as provided in the Loan Papers,
regardless of whether such obligations and indebtedness are direct, indirect,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including, but not limited to, the indebtedness and obligations
evidenced by this Agreement, the Notes, the Applications, the Letters of Credit,
and any and all other Loan Papers.
"ORIGINAL CREDIT AGREEMENT" has the meaning ascribed thereto in the
preamble hereof.
"PAYMENT DATE" means the first Business Day of each February, May, August
and November during the term of this Agreement, commencing with the first such
date to occur after the Closing Date and ending after payment in full of all
Advances and Obligations.
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"PBGC" means the Pension Benefit Guaranty Corporation established under
ERISA.
"PERMITTED LIENS" means any one or more of the following:
(a) Liens for taxes or assessments either not yet delinquent or the
validity or amount of which is being contested in good faith by appropriate
proceedings diligently prosecuted and as to which adequate reserves shall
have been set aside in conformity with GAAP;
(b) Deposits or pledges to secure the payment of workers
compensation, unemployment insurance or other social security benefits or
obligations, or to secure the performance of bids, trade contracts, public
or statutory obligations, surety or appeal bonds and other obligations of a
like nature incurred in the ordinary course of business;
(c) Materialmen's, mechanics', workmen's, repairmen's, or other like
liens arising in the ordinary course of business or by operation of Law to
secure obligations not yet delinquent or which within ten days of any lien
filing by the lien claimant are being contested by Company or Subsidiary in
good faith and for which (a) adequate reserves shall have been set aside in
conformity with GAAP or (b) as to which adequate bonds shall have been
obtained;
(d) (i) Existing Liens as disclosed on SCHEDULE 5.06, (ii) other
Liens in existence on the Closing Date that do not constitute blanket Liens
on any of Company's or its Subsidiaries' equipment, inventory, accounts or
other receivables, and (iii) Liens on real property in existence on the
Closing Date, or renewals and extensions of any thereof, so long as such
Liens are not expanded to cover any additional property or assets of
Company or any of its Subsidiaries;
(e) Liens securing the Debt permitted under Section 7.02(ii) hereof,
which Liens are created at the time of, or substantially simultaneously
with, acquisition of such assets, provided that in any such case
(i) no such Lien shall extend to or cover any other property or assets
of Company or of any Subsidiary, as the case may be, and
(ii) the aggregate principal amount of the indebtedness secured by all
such Liens in respect of any such property or assets shall not exceed
the greater of (A) the fair market value of such property or assets at
the time of such acquisition, or (B) the good faith allocated purchase
price of such assets; and
(f) consensual landlord's Liens and landlord's Liens arising by
operation of law.
"PERSON" means an individual, partnership, joint venture, corporation,
trust, Tribunal, unincorporated organization, and government, or any department,
agency, or political subdivision thereof.
"PLAN" means any plan subject to Title VI of ERISA and maintained for
employees of Company or any Subsidiary, or of any member of a controlled group
of corporations, as the term "controlled group of corporations" is defined in
Section 1563 of the Internal Revenue Code of 1986, as amended, of which Company
or a Subsidiary is a part.
"PRO RATA" and "PRO RATA PART" as to each Lender means according to its
Specified Percentage of the aggregate amount of the Loan and Reimbursement
Obligations, PLUS its Specified Percentage of the stated amount of Letters of
Credit outstanding hereunder;
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provided, however, that if there are no Advances or Letters of Credit
outstanding hereunder, such terms means, as to each Lender, according to its
Specified Percentage of the aggregate Commitment hereunder.
"REFERENCE LENDERS" means NationsBank of Texas, N.A. and Bank of America
Illinois.
"REIMBURSEMENT NOTICE" has the meaning ascribed thereto in Section 2.24
hereof.
"REIMBURSEMENT OBLIGATION" means the obligation of Company to reimburse
Administrative Lender for the account of Lenders in their Specified Percentages
for draws under Letters of Credit, but only to the extent the Company has not
reimbursed the Administrative Lender for the full amount of such draw, either by
(a) payment of such amount, (b) the debiting of any account of the Company, or
(c) the deeming of such draw to be an Advance in accordance with the terms of
Section 3.03 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including, without limitation, the movement of Hazardous
Materials through ambient air, soil, surface water, ground water, wetlands, land
or subsurface strata.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
including any failure to meet the minimum funding standard of Section 412 of the
Code and of Section 302 of ERISA.
"RESTRICTED PAYMENT" means
(a) (i) the declaration or payment of Dividends by, or distribution (in
cash, property, obligations or other securities, Capital Stock or any
combination thereof) on account of, or
(ii) other payments or distributions (whether made by Company or any of
its Subsidiaries and whether by reduction of capital or otherwise) on account
of, or
(iii) the setting apart of money for a sinking or other analogous fund
(whether by Company or any of its Subsidiaries) for the purchase, redemption,
retirement or other acquisition of any shares of,
any class of Capital Stock of Company or any warrant, option or other right to
acquire such Capital Stock, but excluding Dividends or other distributions
payable solely in common stock or partnership interests of Company (having
identical rights as the then-outstanding partnership interests of Company) or
rights to acquire common stock or partnership interests of Company (having
identical rights as the then-outstanding partnership interests of Company) and
excluding Dividends or other distributions of shares of Capital Stock of Aaron
Brothers Holdings, Inc. (or its successor) or any of its wholly owned
subsidiaries)(or rights, options or warrants to purchase shares), or
(b) any prepayment of any amounts outstanding under the Senior Notes, or
other reduction in the outstanding amount under the Senior Notes.
"RIGHTS" means with respect to any Person, the rights, remedies (equitable
or legal), claims, causes of action, powers, and privileges granted to such
Person pursuant to any or all of this Agreement, the Notes, the other Loan
Papers or any other document, instrument or other agreement heretofore, now, or
hereafter executed in connection herewith, whether granted or arising pursuant
to the express provisions of any of the foregoing, or at law, or in equity, by
constitution, statute, case or otherwise.
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"SENIOR NOTES INDENTURE" means that certain Indenture, dated as of June 21,
1996, between Company and The Bank of New York, as Trustee, as the same shall be
amended, restated, modified, extended, renewed or replaced.
"SENIOR NOTES" means those certain 10 7/8% Senior Notes Due 2006, in a
maximum face amount of $125,000,000, issued pursuant to the Senior Notes
Indenture, as each shall be amended, restated, modified, extended, renewed or
replaced.
"SENIOR NOTES TRUSTEE" means the "Trustee" as defined in the Senior Notes
Indenture.
"SPECIAL COUNSEL" means the law firm of Donohoe, Jameson & Carroll, P.C. or
any other counsel selected from time to time by Administrative Lender.
"SPECIFIED PERCENTAGE" means, with respect to each Lender, the percentages
set forth under each Lender's name below; in each case, as adjusted pursuant to
Section 2.30(a) hereof or pursuant to, and as set forth therein, each Assignment
and Acceptance Agreement or any other amendment to this Agreement.
"STAND-BY LETTERS OF CREDIT" means those certain standby letters of credit
issued by Administrative Lender on behalf of Lenders for the account of Company
in accordance with Article III hereof, and all such letters of credit issued by
Administrative Lender on behalf of Lenders in renewal or extension thereof.
"STOCK OPTION PLANS" means those certain stock option plans, programs or
arrangements in effect on the Closing Date and described on SCHEDULE 1.01
hereto.
"SUBORDINATED DEBT" shall mean indebtedness of Company pursuant to those
certain 4 3/4% / 6 3/4% Step-up Convertible Subordinated Notes Due 2003, issued
as of January 22, 1993, under and pursuant to that certain Subordinated Debt
Indenture.
"SUBORDINATED DEBT INDENTURE" means that certain Indenture, dated as of
January 22, 1993 among Company as Issuer and The Bank of New York, as Trustee,
as the same shall be amended, restated, modified, extended, renewed or replaced.
"SUBORDINATED DEBT TRUSTEE" means the "Trustee" as defined in the
Subordinated Debt Indenture.
"SUBSIDIARY" means any Person, and "SUBSIDIARIES" means all such Persons
that meet either of the following criteria: (a) more than 50% of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by Company or by one or more Subsidiaries, or by Company and one or
more Subsidiaries, or any voluntary association, joint stock company, voting
trust or similar organization which is so owned or controlled or (b) (i) any of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by Company or by one or more Subsidiaries,
or by Company and one or more Subsidiaries, or any voluntary association, joint
stock company, voting trust or similar organization which is so owned or
controlled and (ii) such Subsidiary has received any advance or loan from
Company or any Subsidiary and such loan or advance is outstanding on such date.
"TANGIBLE ASSETS" means, for any Person, all assets of such Person,
excluding good will and other intangible assets.
"TAX RETENTION LEASES" means any lease of Company or any of its
Subsidiaries which, at the time entered into by Company and/or its Subsidiaries,
is or was treated as an operating lease for accounting purposes under GAAP and
as a capital lease for tax reporting purposes.
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"TERMINATION EVENT" means (a) a reportable event described in Section 4043
of ERISA and the regulations issued thereunder (other than a Reportable Event
not subject to the provision for 30-day notice to the PBGC under such
regulations), or (b) the withdrawal of Company or any Subsidiary from a Plan
during a Plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or (c) the filing of a notice of intent to terminate
a Plan or the treatment of Plan amendment as termination under Section 4041 of
ERISA or (d) the institution of proceedings to terminate a Plan by the PBGC or
(e) any other event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"TOTAL CAPITALIZATION" means, on any date of determination for the Company
and its Subsidiaries, on a consolidated basis, the sum of (a) Net Worth on such
date of determination plus (b) the aggregate outstanding amount of Funded Debt
for the Company and its Subsidiaries on such date of determination.
"TOTAL CONSOLIDATED ASSETS" means, as of any date, the Company's total
consolidated assets as of such date, as determined in accordance with GAAP.
"TOTAL TANGIBLE CONSOLIDATED ASSETS" means, on any date of determination
for the Company and its Subsidiaries, on a consolidated basis, the sum of
Tangible Assets on such date.
"TRIBUNAL" means any state, federal, foreign or other court, or
governmental department, board, bureau, agency, commission or instrumentality.
"UNUSED COMMITMENT" means the average daily amount of the Commitment minus
the sum of (a) the aggregate amount of all Advances outstanding, plus (b) the
aggregate face amount of all outstanding Letters of Credit.
Section 1.02 ACCOUNTING TERMS AND OTHER DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP.
References herein to one gender shall be deemed to include the other gender.
All other terms used herein shall have the meanings as otherwise stated herein.
ARTICLE II
REVOLVING LOAN
Section 2.01 COMMITMENT FOR REVOLVING LOAN. Subject to the terms and
conditions of this Agreement, and provided that there exists no Default or Event
of Default, Lenders agree to loan to Company in accordance with their Specified
Percentages, in several Advances from time to time during the term of this
Agreement until the Maturity Date, such amounts as Company may request up to an
amount equal to the Available Advance Amount. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, Company may
borrow, repay, and reborrow Advances under the Loan under this Section 2.01.
Each Eurodollar Rate Borrowing under the Loan shall be in the aggregate
principal amount of $1,000,000, or in integral multiples of $100,000 in excess
thereof. Each Base Rate Borrowing under the Loan shall be in the aggregate
principal amount of $500,000, or in integral multiples of $100,000 in excess
thereof.
Section 2.02 NOTES. The indebtedness arising by reason of Advances by
Lenders to Company pursuant to Section 2.01 hereof shall be evidenced by Notes,
duly authorized and executed by Company in substantially the form attached
hereto as EXHIBIT A, payable to the order of each Lender in the original
principal amount of each Lender's Specified Percentage
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of the Commitment. All principal evidenced by the Notes shall be due and
payable on the Maturity Date.
Section 2.03 EXPIRATION OF COMMITMENT TO LEND UNDER THE LOAN. Lenders
shall have no obligation to make additional Advances under Section 2.01
hereof after 1:00 P.M., Dallas, Texas time on the Maturity Date; provided,
however, that Company's Obligations and the Rights of Lenders under the Loan
Papers shall continue in full force and effect until Company has paid and
performed the Obligations in full.
Section 2.04 REQUEST FOR ADVANCES. Company shall give Administrative
Lender a telephonic or written notice ("Notice of Borrowing/Conversion") of
any proposed Borrowing under the Loan which, in the case of telephonic
notice, shall be promptly confirmed in writing and, in each case, shall be
irrevocable. All telephonic notices of borrowing shall be made to
NationsBank of Texas, N.A., attn.: Linda Brown, telephone (214) 508-3970, or
(800) 547-2005, facsimile (214) 508-2515, or such other person as
Administrative Lender may from time to time specify. Administrative Lender
shall promptly notify Lenders upon receipt of such notice, and each Lender
shall, on the date of any such Borrowing, deliver to Administrative Lender at
its principal office, such Lender's Specified Percentage of such Borrowing in
immediately available funds in accordance with Administrative Lender's
instructions. Each Notice of Borrowing/Conversion under the Loan shall be
given to Administrative Lender by an Authorized Financial Officer not later
than 12:00 noon, Dallas, Texas time on the date of any proposed Base Rate
Borrowing requested by Company, and not later than 12:00 noon, Dallas, Texas
time at least three Business Days prior to any proposed Eurodollar Rate
Borrowing requested by Company. Each such Notice of Borrowing/Conversion
shall specify: (i) the rate (Base Rate or Eurodollar Rate) which Company
desires; (ii) the principal amount proposed to be covered; (iii) the
Borrowing Date (which shall be a Business Day); (iv) a proposed Interest
Period for any Advance bearing interest at an Eurodollar Rate; and (v) and
certify as to satisfaction of the condition precedent set forth in Section
4.02(d) hereof. After Administrative Lender has notified Lenders of such
Borrowing and upon satisfaction of the conditions precedent set forth in
Article IV hereof, Administrative Lender will make such funds available to
Company on the date of such Borrowing by, at Company's option, (i) wiring the
funds to or for the account of Company or (ii) depositing such funds in
Company's account(s) with Administrative Lender at Administrative Lender's
banking house.
Section 2.05 USE OF PROCEEDS OF THE ADVANCES. The proceeds of the
Advances shall be used for working capital and other general corporate
purposes of Company.
Section 2.06 BORROWING BASE AND BORROWING BASE REPORT. Notwithstanding
anything to the contrary in this Agreement or in any of the other Loan
Papers, the sum of the (a) aggregate amount of all Advances outstanding at
any time under the Loan, plus (b) the aggregate face amount of all
outstanding Letters of Credit at any such time, shall not exceed the lesser
of (i) the Borrowing Base minus the aggregate amount outstanding at such time
under the Senior Notes, and (ii) the Commitment. The Borrowing Base shall be
computed on the Closing Date, and thereafter shall be recomputed as of the
last day of each Fiscal Month utilizing a Borrowing Base Report, with
appropriate completions, which shall be furnished to Administrative Lender
within 30 days after the end of each Fiscal Month and certified as to
correctness by an Authorized Financial Officer; provided that the correctness
of the Borrowing Base Report submitted for the 12th Fiscal Month of each
fiscal year shall be qualified to the extent of adjustments reflected in the
audited financial statements for such fiscal year. At the option of the
Company, the Borrowing Base may be redetermined at any time during the month
(but not more than twice in any one month) upon one Business Day's prior
notice from the Company to the Administrative Lender. Upon such a
recomputation the Company will furnish to Administrative Lender a new
Borrowing Base Report, with appropriate completions, certified as to
correctness by an Authorized Financial Officer. Each redetermination shall
be effective upon receipt by Administrative Lender of a new
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Borrowing Base Report, with appropriate completions, certified as to
correctness by an Authorized Financial Officer.
Section 2.07 COMMITMENT FEE. Subject to Section 10.15 hereof, Company
agrees to pay to Administrative Lender for the account of Lenders in their
Pro Rata Part the Commitment Fee on the Unused Commitment, from the Closing
Date to and including the Maturity Date, payable in arrears, computed and
payable quarterly on each Payment Date and on the Maturity Date.
Section 2.08 ADDITIONAL FEES. Subject to Section 10.15 hereof, Company
shall pay fees for the arranging of this facility and the underwriting of
this facility in an amount agreed to in that certain Fee Letter of even date
hereof, between Company, NCMI and Administrative Lender.
Section 2.09 REDUCTION/TERMINATION OF COMMITMENT.
(a) VOLUNTARY COMMITMENT REDUCTIONS.
(i) PARTIAL REDUCTION. Company shall have the right, upon not less
than 20 Business Days' notice to Administrative Lender, which shall
promptly notify Lenders, to reduce the Commitment in part; provided,
however, that (A) each partial termination shall be in an aggregate amount
which is not less than $5,000,000 and, if in excess thereof, an integral
multiple of $1,000,000, (B) no reduction in the Commitment shall cause any
Loan to be repaid prior to the last day of its Interest Period, and (C) in
no event may the Commitment be reduced to an amount less than the sum of
the aggregate amount of outstanding Advances under the Loan hereunder plus
the aggregate face amount of all outstanding Letters of Credit as of such
date.
(ii) TERMINATION. Company shall have the right, at any time, to
wholly terminate the Commitment of Lenders hereunder; provided that as of
the effective date of such termination, all principal and interest with
respect to the Loan shall have been paid in full and Company shall have
fully discharged all obligations to Lenders to the satisfaction of Lenders
with respect to the Letters of Credit. Company shall give Administrative
Lender written notice (which shall promptly notify Lenders) of its desire
to terminate Lenders' Commitment and obligations hereunder no later than 20
Business Days prior to the date termination is desired to be effective, and
the Maturity Date shall then occur.
(b) MANDATORY COMMITMENT REDUCTIONS.
(i) MATURITY DATE. The Commitment shall be automatically and
permanently reduced to zero on the Maturity Date.
(ii) CHANGE IN CONTROL. Immediately upon the occurrence of a Change
in Control, the Commitment shall be automatically and permanently reduced
to zero.
(c) GENERAL. Each reduction in any Commitment pursuant to this
Section 2.09 shall reduce such Commitment of each Lender according to its
Specified Percentage immediately prior to such reduction. Once reduced or
terminated, the Commitment of Lenders may not be increased or reinstated. Any
notice provided by Company under this Section 2.09 shall be irrevocable.
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Section 2.10 MANDATORY REPAYMENTS.
(a) ALL ADVANCES AND OTHER OBLIGATIONS. All outstanding Advances
under the Loan and all other outstanding Obligations shall be due and
payable to Administrative Lender on behalf of Lenders in full on the
Maturity Date.
(b) COMMITMENT REDUCTIONS. On any date of reduction in the
Commitment (whether voluntary or mandatory), the Company shall immediately
prepay the Obligations to the extent necessary so that the sum of (i) the
aggregate outstanding Advances plus (ii) the face amount of all outstanding
Letters of Credit on such date, does not exceed the Commitment (as so
reduced and in effect on such date).
(c) BORROWING BASE COMPLIANCE. On any date of the Company's
knowledge of any decrease in the Borrowing Base, the Company shall
immediately prepay the Obligations to the extent necessary so that the sum
of (i) the aggregate outstanding Obligations plus (ii) the face amount of
all outstanding Letters of Credit on such date, plus (iii) the aggregate
outstanding amount under the Senior Notes, does not exceed the Borrowing
Base (as decreased and in effect on such date).
(d) EURODOLLAR RATE BORROWINGS. Each Eurodollar Rate Borrowing shall
be due and payable on the last day of its Interest Period and on the
Maturity Date.
Section 2.11 INTEREST. Interest, computed on the outstanding principal
balance from day to day outstanding under the Notes, shall be due and payable
as it accrues on the last day of each Interest Period and on the Maturity
Date with respect to any Borrowing under the Loan; provided that, with
respect to any Eurodollar Rate Borrowing, to the extent any Interest Period
exceeds three months, interest shall also be payable on each Payment Date
occurring during such Interest Period. Subject to Section 2.12 below, the
outstanding principal balance of the Notes shall bear interest prior to the
Maturity Date at a varying rate per annum equal to the Base Rate or
Eurodollar Rate as selected by Company.
Section 2.12 POST-DEFAULT RATE. Subject to Section 10.15 hereof, upon
the occurrence of an Event of Default and during the continuance thereof,
after notice to Company by Administrative Lender, all Advances outstanding
under the Loan and outstanding Reimbursement Obligations shall bear interest
at a rate per annum equal to the lesser of the Highest Lawful Rate and the
Base Rate plus 5%.
Section 2.13 PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be payable at the applicable rate during such extension; except that as
to a Eurodollar Rate Borrowing, if the next succeeding Business Day is in the
next calendar month, then the due date shall be the immediately preceding
Business Day.
Section 2.14 OPTIONAL PREPAYMENTS. Except as required by Section 2.15
or Section 2.20(c) hereof, Company shall not make any prepayments on any
portion of any Eurodollar Rate Borrowing on a day which is not the last day
of the applicable Interest Period with respect thereto. Subject to the
provisions of the first sentence hereof, Company shall have the right, at its
option, to prepay the amounts outstanding under the Notes in part at any time
and from time to time, and in whole at any time, without premium or penalty.
Each optional prepayment shall be in an aggregate principal amount at least
equal to the lesser of (i) $100,000, or (ii) the remaining unpaid principal
amount of the Notes being prepaid. Upon the prepayment of the Notes in full,
accrued interest on the principal amount of such Notes shall become due and
payable on such prepayment date. Unless otherwise specified by Company at
the time of prepayment, each prepayment shall be applied first to payment of
the
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principal balance of the Notes, then to the payment of accrued interest owing
on the Notes, and thereafter to all other Obligations.
Section 2.15 MANDATORY PREPAYMENT.
(a) MONTHLY. Company shall make mandatory prepayments under the Loan
if, as of the last day of any Fiscal Month, the sum of the (i) total
principal amount of all outstanding Advances, plus (ii) the aggregate face
amount of all outstanding Letters of Credit, exceeds the lesser of (A) the
Borrowing Base minus the aggregate amount outstanding under the Senior Notes,
and (B) the Commitment. In such event, Company shall make a principal
prepayment on the Loan to Administrative Lender for the account of Lenders in
the amount of such excess within the earlier of (I) 5 Business Days after
Company's actual knowledge thereof, or (II) 30 days after the last day of any
Fiscal Month.
(b) ANNUAL. During each 12-month period any Obligations are outstanding
hereunder, Company shall, for one consecutive 30 day period during the period
commencing December 1 and ending the following February 28 of each such
12-month period, reduce the outstanding Advances under the Loan to zero.
Section 2.16 MANNER AND PLACE OF PAYMENTS AND PREPAYMENTS. All
payments and prepayments of principal and interest on the Notes shall be made
to Administrative Lender for the account of Lenders in their Pro Rata Parts,
at its office at 901 Main Street, Dallas, Texas 75202, in immediately
available funds.
Section 2.17 COMPUTATION OF INTEREST. Subject to Section 10.15 hereof,
interest on (a) Base Rate Borrowings shall be calculated on the basis of a
year of 365 or 366 days, as the case may be, for the actual number of the
days elapsed, and (b) interest on Eurodollar Rate Borrowings, fees and other
amounts owed hereunder shall be calculated on the basis of a year of 360
days, for the actual number of days elapsed. Any changes in the rate of
interest on the Notes resulting from changes in the Base Rate shall become
effective as of the opening of business on the day on which such change in
the Base Rate shall occur.
Section 2.18 INTEREST RECAPTURE. If at any time the interest rate
applicable to any Advance under the Loan or any other extension of credit
pursuant to this Agreement shall exceed the Highest Lawful Rate, thereby
causing the interest on such Advance or other extension of credit to be
limited to the Highest Lawful Rate, then any subsequent reduction in such
interest rate as provided hereunder shall not reduce the rate of interest
below the Highest Lawful Rate until the aggregate amount of interest accrued
on the Loan and other extensions of credit pursuant to this Agreement equals
the aggregate amount of interest which would have accrued on the Loan if the
interest rate had not been limited to the Highest Lawful Rate.
Section 2.19 INDEMNITY PROVISIONS. Company agrees to indemnify Lenders
against, and pay to Administrative Lender on behalf of any such Lender on
demand, amounts equal to: (i) the cost of any present and future reserve or
special deposit requirements or any taxes (other than federal, state, or
local taxes on or measured by the overall income of Lender or the portion
thereof allocable to the applicable jurisdiction), domestic or foreign, which
any Lender is required to keep or pay by reason of its funding any Eurodollar
Rate Borrowing (other than reserves which are already reflected in
determining the rate of interest in accordance with the terms hereof); (ii)
any costs or expenses incurred by any Lender as a result of Company's failure
to borrow a portion of an Advance to bear interest at a Eurodollar Rate once
requested and/or Company's payment or conversion for any reason (including
without limitation a payment under Section 2.15 hereof or a conversion under
Section 2.20(c) hereof) of all or a portion of any Eurodollar Rate Borrowings
prior to the end of the Interest Period and/or Company's failure to make any
payment hereunder when due, including, without limitation, any loss arising
from the reemployment of funds at rates lower than the cost to such Lender of
such funds. A certificate of such Lender, setting forth
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in reasonable detail the basis for the determination of such costs and
expenses, shall constitute PRIMA FACIE evidence of such costs and expenses,
absent manifest error.
Section 2.20 LIMITATION ON EURODOLLAR RATE BORROWINGS. If, at any time
during the term of this Agreement Administrative Lender or any Lender
reasonably determines that:
(a) eurodollar deposits in the appropriate amount and for the
appropriate period are not being offered in the interbank eurodollar
market, Administrative Lender shall promptly give notice thereof to Company
(and such determination shall be conclusive on Company), and thereafter no
new Eurodollar Rate Borrowings shall be permitted until such time as
eurodollar deposits for the appropriate amount and for the appropriate
period are again offered in the interbank eurodollar market; or
(b) as a result of changes in the Law, or the adoption or making of
any interpretations, directives, or regulations (whether or not having the
force of law) by any court, governmental authority, or reserve bank charged
with the interpretation or administration thereof, the Eurodollar Rate will
not adequately and fairly reflect the cost to Lenders of making,
maintaining, or funding a proposed Eurodollar Rate Borrowing that Company
has requested be made or continued, then Administrative Lender shall
promptly give notice to Company of such determination, and any such
requested Advance shall bear interest at the Base Rate; or
(c) as a result of changes in the Law, or the adoption or making of
any interpretations, directives, or regulations (whether or not having the
force of law) by any court, governmental authority, or reserve bank charged
with the interpretation or administration thereof, it shall be or become
unlawful or impossible to make, maintain, or fund any Eurodollar Rate
Borrowing, Lenders' obligations to make or continue the affected Eurodollar
Rate Borrowing shall be automatically canceled, and the affected Eurodollar
Rate Borrowing or Borrowings shall be automatically converted to an Advance
bearing interest at the Base Rate, and Company shall pay Administrative
Lender any additional cost or expense which any Lender incurs as a result
of any such conversion prior to the last day of the then current Interest
Period for such Eurodollar Rate Borrowings, in accordance with Section 2.19
hereof.
Section 2.21 DETERMINATION OF INTEREST RATES. Administrative Lender
shall determine each interest rate applicable to Eurodollar Rate Borrowings
hereunder, and its determination thereof shall be conclusive in the absence
of manifest error. Administrative Lender shall, at the request of Company,
furnish such information concerning the calculation of the interest rate on
any Eurodollar Rate Borrowing as Company may reasonably request.
Section 2.22 CONTINUATION/CONVERSION. Subject to the limitations and
provisions of this Agreement, Company shall have the option, at any time or
from time to time, of continuing or converting the applicable interest rate
to all or any portion of the outstanding Advances, by giving Administrative
Lender a Notice of Borrowing/Conversion of any proposed continuation or
conversion of such rate which, in the case of telephonic notice, shall be
promptly confirmed in writing and, in each case, shall be irrevocable. All
telephonic notices of continuation or conversion shall be made to NationsBank
of Texas, N.A., attn.: Linda Brown, telephone (214) 508-3970, or (800)
547-2005, facsimile (214) 508-2515, or such other person as Administrative
Lender may from time to time specify. Each Notice of Borrowing/Conversion
shall be given by an Authorized Financial Officer not later than 12:00 noon,
Dallas, Texas time on the date of any proposed continuation of or conversion
to a Base Rate Borrowing, and not later than 12:00 noon, Dallas, Texas time
at least three Business Days prior to any proposed continuation of or
conversion to a Eurodollar Rate Borrowing. Each Notice of
Borrowing/Conversion shall specify: (i) the rate (Base Rate or Eurodollar
Rate) which Company desires; (ii) the principal amount proposed to be
covered; (iii) the effective date of such continuation or conversion (which
shall be a Business Day); and (iv) a proposed Interest Period for any
Borrowing bearing interest at an Eurodollar
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Rate. Any continuation or conversion of any Advances to a Eurodollar Rate
shall be in the aggregate amount of $1,000,000. Any continuation or
conversion of any Advances to a Eurodollar Rate Borrowing shall be in the
aggregate amount of $1,000,000 and in integral multiples of $100,000 in
excess thereof.
Section 2.23 EFFECT OF FAILURE TO GIVE NOTICE. If Company fails to
give Administrative Lender a Notice of Borrowing/Conversion prior to the
expiration of any then-relevant Interest Period with respect to any
Eurodollar Rate Borrowing or the information provided in any Notice of
Borrowing/Conversion is incomplete, Company shall be deemed to have elected
to convert such Eurodollar Rate Borrowing, in whole, to a Base Rate Borrowing
at the end of the then-relevant Interest Period.
Section 2.24 CAPITAL ADEQUACY. If any Lender shall have determined
that the adoption of any Applicable Law or guideline regarding the amount of
capital required to be maintained by any Lender, or any change in such Law or
guideline, or any change in the interpretation or administration thereof by
any Tribunal, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance therewith by any such
Lender (or any lending office of such any Lender) with any directive
regarding capital adequacy (whether or not having the force of Law) of any
such Tribunal, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital as a direct
consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy), then, such Lender shall immediately notify Company and
Administrative Lender (such notice referred to herein as the "Reimbursement
Notice"), and, subject to Section 2.30 hereof, Company shall pay to such
Lender such additional amount or amounts as will compensate such Lender for
such reduction to the extent not compensated for in the Base Rate or
Eurodollar Rate, or in amounts paid by Company pursuant to Sections 2.19 or
2.20 hereof. Amounts payable to any such Lender under this Section and
comparable provisions in agreements with other borrowers of such Lender shall
be allocated among such Lender's borrowers in good faith and on an equitable
basis (which may include a consideration of relative credit risk). A
certificate of such Lender in reasonable detail setting forth the amount or
amounts as shall be necessary to compensate such Lender (or participating
banks or other entities pursuant to Section 10.02 hereof) as specified in
this Section 2.24 shall be delivered to Company and shall be conclusive
absent manifest error. Subject to Section 2.30 hereof, Company shall pay
such Lender the amount shown as due on any such certificate upon demand by
such Lender. Each Lender agrees that, as promptly as practicable after it
becomes aware of the occurrence of an event or the existence of a condition
that would cause it to be affected by any of the events described in this
Section 2.24, it will make, fund or maintain its portion of the Loan and
Advances through another lending office if (i) as a result thereof the
additional moneys which would otherwise be required to be paid pursuant to
this Section 2.24 would be reduced and (ii) as determined by such Lender in
its sole discretion, the making, funding or maintaining of the Loan and
Advances through such other lending office or the taking of such other
actions would not otherwise be disadvantageous to such Lender for any reason.
Section 2.25 SHARING OF PAYMENTS. Any Lender obtaining a payment
(whether voluntary or involuntary, due to the exercise of any right of
set-off, or otherwise) on account of Loan or Reimbursement Obligations in
excess of its Pro Rata Part shall purchase from each other Lender such
participation in the Loan and Reimbursement Obligations as shall be necessary
to cause such purchasing Lender to share the excess payment Pro Rata with
each other Lender; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest. Company agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.25,
to the fullest extent permitted by Law, may exercise all its Rights of
payment (including the Right of set-off) with respect to such participation
as fully as if such Lender were the direct creditor of Company in the amount
of such participation. A Lender shall not
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be required to share any such non-routine payment to the extent that it
exceeds the aggregate amount of all Loan and Reimbursement Obligations then
outstanding.
Section 2.26 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE LENDER. Unless
Administrative Lender shall have been notified by a Lender prior to the date
of any proposed Advance to be made by such Lender or payment of its Specified
Percentage to Administrative Lender under any provision of this Agreement
(which notice shall be effective upon receipt), that such Lender does not
intend to make the proceeds of any such Advance or reimbursement required
under any provision of this Agreement available to Administrative Lender,
Administrative Lender may assume that such Lender has made such proceeds
available to Administrative Lender on such date and Administrative Lender may
in reliance upon such assumption (but shall not be required to) make
available to Company a corresponding amount. If such corresponding amount is
not in fact made available to Administrative Lender by such Lender,
Administrative Lender shall be entitled to recover such amount on demand from
such Lender (or, if such Lender fails to pay such amount forthwith upon such
demand, from Company) together with interest thereon in respect of each day
during the period commencing on the date such amount was available to Company
and ending on (but excluding) the date Administrative Lender recovers such
amount at a per annum rate equal to the Federal Funds Rate.
Section 2.27 CALCULATION OF RATES. The provisions of this Agreement
relating to calculation of the Eurodollar Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate, it being understood that each Lender
shall be entitled to fund and maintain its funding of all or any part of a
Eurodollar Rate Borrowing as it sees fit. All such determinations hereunder,
however, shall be made as if each Lender had actually funded and maintained
funding of each Eurodollar Rate Borrowing through the purchase in the London
Interbank Market of one or more Eurodollar deposits in an amount equal to the
principal amount of such Advance and having a maturity corresponding to such
Interest Period.
Section 2.28 BOOKING ADVANCES. Any Lender may make, carry or transfer
Advances at, to or for the account of any of its branch offices or the office
of any affiliate.
Section 2.29 QUOTATION OF RATES. It is hereby acknowledged that the
Authorized Financial Officer on behalf of Company may call Administrative
Lender on or before the date on which notice of an elective interest rate is
to be delivered by the Authorized Financial Officer on behalf of Company in
order to receive an indication of the Eurodollar Rate then in effect, but
that such projection shall not be binding upon Administrative Lender or
Lenders nor affect the rate of interest which thereafter is actually in
effect when the election is made.
Section 2.30 REPLACEMENT BY COMPANY OF A LENDER.
(a) CAPITAL ADEQUACY. If any Lender has requested compensation in
accordance with the terms of Section 2.24 hereof and (i) such request is not
the result of any uniform changes in the statutes or regulations for capital
adequacy, (ii) there exists no Default or Event of Default hereunder, and
(iii) Company and such Lender are unable to reach a written agreement
regarding such request within 30 days following written notice by such Lender
to Company and Administrative Lender of such request, then after the
expiration of 30 days following the delivery of the Reimbursement Notice,
Company may (A) replace such Lender in whole with another Eligible Assignee
reasonably acceptable to Administrative Lender pursuant to an Assignment and
Acceptance Agreement, or (B) reduce the Commitment in the full amount of such
Lender's Specified Percentage of the Commitment and repay such Lender in
full. If Company accomplishes the replacement or repayment of such Lender
within 60 days following the delivery of the Reimbursement Notice, Company
shall only owe any such Lender amounts under Section 2.24 hereof through the
date of replacement or repayment. If Company does not accomplish either
replacement or repayment of such
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Lender within such 60 days, Company shall owe such Lender in accordance with
the terms of any written agreement reached between such Lender and Company,
and, if no such agreement has been reached, Company shall owe such Lender in
accordance with the terms and provisions of Section 2.24 hereof. If the
Commitment is reduced by Company pursuant to this Section 2.30(a), Company
and Lenders agree that the Specified Percentages of each Lender will be
automatically ratably adjusted to reflect such reduction of the Commitment.
Each Lender agrees to the automatic readjustment of each remaining Lender's
contingent liabilities under Section 3.04 hereof according to the new
(adjusted) Specified Percentages.
(b) ACQUIRED LENDER. If any Lender is acquired by or merges with any
other Person (including any other Lender) and (i) such Lender is not the
surviving Person, and (ii) there exists no Default or Event of Default
hereunder, Company may replace such Lender in whole with another Eligible
Assignee acceptable to Administrative Lender pursuant to an Assignment and
Acceptance Agreement within thirty days following the date of consummation of
any such Acquisition.
(c) CERTAIN CIRCUMSTANCES. If (a) there exists no Default or Event of
Default on any such date and no Default or Event of Default shall be caused
by the action permitted below and (b) any Lender refuses to consent to any
amendment, waiver or consent to any provision hereof or in any Loan Paper in
accordance with the terms of Section 10.10 hereof (other than an amendment to
increase the Commitment of such Lender), but to which each other Lender has
previously agreed, then, Company may, with the prior written consent of
Administrative Lender, within 90 days after the date of such consent,
amendment or waiver, replace such Lender in whole with another Eligible
Assignee, pursuant to an Assignment and Acceptance Agreement and otherwise in
accordance with the terms of Section 10.02 hereof.
ARTICLE III
LETTERS OF CREDIT
Section 3.01 LETTER OF CREDIT COMMITMENT. Subject to the terms and
conditions of this Agreement and each Application, each Lender agrees that
Administrative Lender shall, and Administrative Lender agrees on behalf of
Lenders in their Pro Rata Part to, issue Commercial Letters of Credit and
Stand-By Letters of Credit as requested by Company, provided that at no time
shall the aggregate face amount of all Letters of Credit exceed the Letter of
Credit Commitment. Upon the issuance of each Letter of Credit, each Lender
shall be deemed to have purchased a participating interest in such Letter of
Credit in an amount equal to its Pro Rata Part in the face amount of such Letter
of Credit. No Letter of Credit shall have an expiration date later than the
Maturity Date.
Section 3.02 APPLICATION FOR AND ISSUANCE OF COMMERCIAL LETTERS OF CREDIT
AND STAND-BY LETTERS OF CREDIT.
(a) COMMERCIAL LETTERS OF CREDIT. Commercial Letters of Credit
issued under this Article III (i) shall be in forms acceptable to
Administrative Lender, (ii) shall be issued upon at least one Business
Day's notice on such date as Company may designate, (iii) shall not be
issued in an aggregate face amount exceeding the difference between Letter
of Credit Commitment minus the aggregate face amount of all outstanding
Stand-By Letters of Credit, (iv) shall be dated the date of issuance and
(v) shall expire on such date as may be requested by Company, but in no
event later than the earlier of (a) 365 days after their respective
issuance dates or (b) the Maturity Date. Company's request for the
issuance of each Commercial Letter of Credit hereunder shall be via a duly
executed and completed Application. Notwithstanding anything herein or in
any other Loan Papers to the contrary, in no event shall Company be
entitled to request the issuance of a Commercial Letter of Credit if the
issuance of such Letter of Credit would cause the sum of (i) the
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aggregate face amount of all Letters of Credit, plus (ii) the aggregate
amount of all Advances outstanding, to exceed the lesser of (A) the
Borrowing Base minus the aggregate outstanding amount under the Senior
Notes, and (B) the Commitment.
(b) STAND-BY LETTERS OF CREDIT. Each Stand-By Letter of Credit
issued under this Article III (i) shall be in a form acceptable to
Administrative Lender, (ii) shall be issued upon at least one Business
Day's notice on such date as Company may designate, (iii) shall not be
issued in an aggregate face amount of all Stand-By Letters of Credit
outstanding at any one time exceeding the difference between Letter of
Credit Commitment minus the aggregate face amount of all outstanding
Commercial Letters of Credit, (iv) shall be dated the date of issuance and
(v) shall expire on such date as may be requested by Company, but in no
event later than the Maturity Date. Company's request for each issuance of
a Stand-By Letter of Credit hereunder shall be via a duly executed and
completed Application. Notwithstanding anything herein or in any other
Loan Papers to the contrary, in no event shall Company be entitled to
request the issuance of a Stand-By Letter of Credit if the issuance of such
Letter of Credit would cause the sum of (i) the aggregate face amount of
all Letters of Credit, plus (ii) the aggregate amount of all Advances
outstanding, to exceed the lesser of (A) the Borrowing Base minus the
aggregate outstanding amount under the Senior Notes, and (B) the
Commitment.
Section 3.03 COMMISSION; PAYMENT OF DRAFTS DRAWN UNDER LETTERS OF CREDIT;
INCORPORATION OF TERMS OF THE APPLICATIONS.
(a) Subject to Section 10.15 hereof, for the issuance of each Commercial
Letter of Credit, Company shall pay:
(i) to Administrative Lender for the account of Lenders in their Pro
Rata Part, the Applicable Margin on the face amount of each Commercial
Letter of Credit, payable by Company as it accrues upon receipt of an
invoice from Administrative Lender; and
(ii) to Administrative Lender for its own account an issuance fee
equal to $150 for each Commercial Letter of Credit, such issuance fee to be
payable by Company upon receipt of an invoice from Administrative Lender.
(b) Subject to Section 10.15 hereof, for the issuance of each Stand-By
Letter of Credit, Company shall pay:
(i) to Administrative Lender for the account of Lenders in their Pro
Rata Part, the product of the Applicable Margin for any Stand-By Letter of
Credit on such date of issuance, multiplied by the face amount of such
Stand-By Letter of Credit, such credit fee to be payable by Company upon
receipt by Company of an invoice from Administrative Lender; and
(ii) to Administrative Lender for its own account an issuance fee
equal to the greater of (A) one-tenth of one percent (1/10 of 1%) per annum
of the face amount of each Stand-By Letter of Credit and (B) $150, such
issuance fee to be payable by Company upon receipt by Company of an invoice
from Administrative Lender.
All the terms and provisions of any and all Applications under this Article
III are incorporated herein by reference; provided, however, that in the
event of a conflict between the provisions of this Agreement and any
Application, the provisions of this Agreement shall control. Company shall
pay to Administrative Lender for the account of Lenders in their Pro Rata
Part on demand an amount equal to the face amount of each draft drawn or
purporting to be drawn under a Letter of Credit in accordance with the terms
of the Application unless all conditions precedent under Article IV have been
satisfied and there
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exists no Default or Event of Default, at which such time Company may request
an Advance under the Loan. If for any reason Company may not or does not
request an Advance under the Loan, Administrative Lender may debit Company's
account(s) with Administrative Lender (up to the credit balance thereof) in
order to pay each such draft, but Administrative Lender shall not be required
to effect any such debit. If Company's account(s) have insufficient funds
with which to pay such draft and if payment thereof is not otherwise made or
provided for on the maturity date of the draft, the face amount of the
maturing draft shall automatically be deemed to be an Advance under the Loan
so long as there exists no Default or Event of Default, the conditions
precedent under Article IV have been met and satisfied, and the total
principal amount of all outstanding Advances (after treating the face amount
of the draft as an Advance) would not exceed the lesser of (a) the Commitment
minus the aggregate outstanding face amount of all Letters of Credit or (b)
the Borrowing Base minus the sum of (i) the aggregate outstanding face amount
of all Letters of Credit, plus (ii) the aggregate outstanding amount under
the Senior Notes. Such Advance shall be evidenced by a Notice of
Borrowing/Conversion to be received by Administrative Lender not more than
two Business Days following the date the draft matured. The failure of
Company to transmit such Notice of Borrowing/Conversion shall not affect
Company's obligation to repay such amount, and such amount shall be deemed to
be a Base Rate Borrowing.
Section 3.04 REIMBURSEMENT OBLIGATION OF LENDERS. Each Lender
(including NationsBank of Texas, N.A. in its capacity as a Lender) agrees
that it shall be unconditionally and irrevocably liable, without regard to
the occurrence of any Default or Event of Default, to reimburse
Administrative Lender on demand for such Lender's Specified Percentage of the
amount of each draft paid by Administrative Lender in respect of any Letter
of Credit, to the extent that such amount is not reimbursed to Administrative
Lender by Company. If Administrative Lender is required at any time (whether
before or after the expiration date of any Letter of Credit) to return to
Company or to a trustee, receiver, liquidator, custodian or other similar
official any portion of the payments made by or on behalf of Company to
Administrative Lender in reimbursement of payments made by Administrative
Lender under any Letter of Credit and interest thereon, each Lender shall,
upon demand by Administrative Lender, forthwith pay over to Administrative
Lender such Lender's Specified Percentage of such amount. All amounts
payable by any Lender under this Section 3.04 shall include interest thereon
from the day the applicable draw is made (or the date such Lender was to have
made such reimbursement payment, as appropriate), to but not including the
date such amount is paid by such Lender to Administrative Lender, at a per
annum rate equal to the Federal Funds Rate. The obligations of Lenders under
this Section 3.04 shall continue after the Maturity Date and survive any
termination of this Agreement.
Section 3.05 SHARING OF PAYMENTS. Each Lender shall share in any
interest which accrues and is paid by Company according to such Lender's
Specified Percentage. All amounts recovered by Administrative Lender or any
Lender hereunder or under any other Loan Papers and which are applied to the
Reimbursement Obligation shall be distributed to Lenders according to their
Specified Percentages.
Section 3.06 DUTIES OF ADMINISTRATIVE LENDER. Administrative Lender
agrees with each Lender that it will exercise and give the same care and
attention to each Letter of Credit as it gives to its other letters of credit
and Administrative Lender's sole liability to each Lender shall be to
distribute promptly to each Lender, as and when received by Administrative
Lender, each Lender's Specified Percentage of any payments made to
Administrative Lender by Company under this Article III. Each Lender and
Company agrees that, in paying any draft, Administrative Lender shall not
have any responsibility to obtain any document (other than the drafts,
certificates and other documents required by the Letter of Credit and/or this
Agreement) or to ascertain or inquire as to the validity or accuracy of any
such document or the authority of the person delivering any such document.
None of Administrative Lender and its representatives, directors, officers,
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employees, attorneys or agents shall be liable to any Lender or Company for
(i) any action taken or omitted in connection herewith at the request or with
the approval of any Lender in its capacity as Administrative Lender, (ii) any
action taken or omitted in the absence of gross negligence and the absence of
wilful misconduct, (iii) any recitals, statements, representations or
warranties contained in any document distributed to any Lender, (iv) the
creditworthiness of Company or (v) the execution, effectiveness, genuineness,
validity or enforceability of any Loan Papers or any other document
contemplated hereby or thereby. Administrative Lender and its officers,
directors, employees, attorneys and agents shall be entitled to rely and
shall be fully protected in relying on any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telex or
teletype message, statement, order, or other document or conversation
believed by it or them to be genuine and correct and to have been signed or
made by the proper person and, with respect to legal matters, upon opinions
of counsel selected by Administrative Lender.
Section 3.07 LENDERS, GENERALLY. No Lender shall be liable for the
performance or nonperformance of the obligations of any other Lender under this
Article III.
Section 3.08 GENERAL PROVISIONS.
(a) MAXIMUM AMOUNT AND TERM. At no time shall the aggregate
outstanding face amount of all Letters of Credit exceed the lesser of (i)
$25,000,000, (ii) the Commitment minus the aggregate outstanding Advances
under the Loan and (iii) the Borrowing Base minus the sum of (A) the
aggregate outstanding Advances under the Loan, plus (B) the aggregate
outstanding amount under the Senior Notes. No Letter of Credit shall have
an expiration date later than the Maturity Date.
(b) COMPUTATION OF APPLICABLE MARGIN FOR LETTERS OF CREDIT. Subject
to Section 10.15 hereof, the Applicable Margin on Commercial Letters of
Credit issued hereunder shall be calculated on the basis of a year of 365
or 366 days, as the case may be, for the actual number of days such
Commercial Letters of Credit remain outstanding.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 CONDITIONS TO THE CLOSING DATE AND THE INITIAL ADVANCE. The
obligation of each Lender to enter into this Agreement, to make the initial
Advance and issue the initial Letter of Credit hereunder is subject to the
accuracy, as of the date hereof, of the representations and warranties herein
contained, to the performance by Company of its obligations to be performed
hereunder on or before the date of such Advance, issuance or creation, and to
the satisfaction of the following further conditions:
(a) REPRESENTATIONS AND WARRANTIES; NO DEFAULT OR EVENT OF DEFAULT. The
representations and warranties contained in Article V hereof shall be true in
all material respects on and as of the date of the initial Advance and each
issuance of a Letter of Credit hereunder as if such representations and
warranties had been made on and as of such dates; and on each such date no
Default or Event of Default shall have occurred and be continuing.
(b) COMPANY'S RESOLUTIONS AND PROCEEDINGS. On the Closing Date, Company
shall have delivered to Administrative Lender, in form and substance
satisfactory to Administrative Lender and each Lender:
(i) resolutions of the Board of Directors of Company, certified by
its secretary or assistant secretary, which resolutions shall authorize the
execution,
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delivery and performance by Company of this Agreement, the Notes, and the
other Loan Papers to which Company is a party;
(ii) a certificate of incumbency certified by the secretary or
assistant secretary of Company with specimen signatures of the president or
vice president and secretary or other officers of Company who will sign
this Agreement, the Notes, and the other Loan Papers;
(iii) certificate of incorporation of Company certified as of a recent
date by the Secretary of State of the State of Delaware;
(iv) bylaws of Company certified by the secretary or assistant
secretary of Company;
(v) recent certificate of the appropriate government officials of the
State of Delaware as to the existence and good standing of Company;
(vi) recent certificates of the appropriate government officials of
each state in which Company conducts business evidencing the authority of
Company to do business in such state; and
(vii) copies of all Stock Option Plans.
(c) NOTES AND LOAN PAPERS. Company shall have executed and delivered to
each Lender its Note in the amount of each such Lender's Specified Percentage of
the Commitment, a Loan Compliance Certificate, a Borrowing Base Report and all
other Loan Papers required to be delivered on the Closing Date.
(d) OPINION OF COMPANY'S COUNSEL. On the Closing Date, Company shall have
delivered to Administrative Lender a favorable opinion of counsel to Company
satisfactory to Administrative Lender and Lenders, dated the Closing Date, in
form and substance acceptable to Administrative Lender and Special Counsel, but
specifically including, without limitation, opinions as to the organization,
good standing, etc. of the following Subsidiaries: Aaron Brothers Holdings,
Inc., Aaron Brothers, Inc., Aaron Brothers Art Marts, Inc., Leewards Creative
Crafts, Inc. and Treasure House Stores, Inc.
(e) INSURANCE. Company and each Subsidiary shall have delivered to
Administrative Lender certificates of insurance or other evidence reasonably
satisfactory to Administrative Lender reflecting compliance with Section 6.06 of
this Agreement, including, without limitation, detailed descriptions of all
self-insurance programs or proposed self-insurance programs in existence on the
Closing Date.
(f) LIEN SEARCH REPORT. On the Closing Date, Company shall have delivered
to Administrative Lender the results of Uniform Commercial Code searches showing
all financing statements and other documents or instruments on file against
Company in the office of the Secretary of State for the States listed on
SCHEDULE 4.01 hereto, and such Lien search reports shall show no Liens against
any properties of Company except Permitted Liens.
(g) LEGAL DETAILS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to Administrative Lender,
each Lender, Special Counsel and each Lender's counsel, and Administrative
Lender and each Lender shall have received copies of all documents which they
may reasonably request in connection with such transactions and all corporate
proceedings with respect thereto in form and substance satisfactory to
Administrative Lender, each Lender and Special Counsel.
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Section 4.02 CONDITIONS PRECEDENT TO EACH ADVANCE. The obligation of
each Lender to make each Advance shall be subject to the further conditions
precedent that on the date of such Advance the following statements shall be
true (and the delivery of each notice of borrowing under Section 2.04 hereof, or
notice of continuation or conversion under Section 2.22 hereof, or the
acceptance by Company of the proceeds of any Advance shall constitute a
representation that on the disbursement date they are true):
(a) The representations and warranties contained in Article V hereof
are true and correct on such date, as though made on and as of such date,
(b) No event has occurred and is continuing, or would result from
such Advance (including the intended application of the proceeds of such
Advance), that does or could reasonably be expected to constitute a Default
or Event of Default,
(c) No Material Adverse Change, as determined by Lenders shall have
occurred and be continuing since January 28, 1996,
(d) Upon giving effect to such Advance, the aggregate amount of the
sum of (i) all outstanding Advances under the Loan plus (ii) the aggregate
face amount of all outstanding Letters of Credit, will not exceed the
lesser of (A) the Commitment or (B) the Borrowing Base minus the aggregate
outstanding amount of the Senior Notes as of such date, and
(e) Each Lender shall have received, in form and substance acceptable
to it, such other approvals, documents, certificates, opinions and
information as it may have reasonably deemed necessary or appropriate and
requested in writing.
Section 4.03 CONDITIONS PRECEDENT TO EACH LETTER OF CREDIT. The
obligation of Administrative Lender to issue each Letter of Credit shall be
subject to the further conditions precedent that on the date of such Letter of
Credit issuance the following statements shall be true (and the delivery of each
notice of borrowing under Section 2.04 hereof, or notice of continuation or
conversion under Section 2.22 hereof, or the acceptance by Company of the
proceeds of any Advance shall constitute a representation that on the
disbursement date they are true):
(a) The representations and warranties contained in Article V hereof
are true and correct on such date, as though made on and as of such date,
(b) No event has occurred and is continuing, or would result from the
issuance of such Letter of Credit, that does or could constitute a Default
or Event of Default,
(c) No Material Adverse Change, as determined by Lenders, shall have
occurred and be continuing since January 28, 1996,
(d) A duly completed, executed and delivered Application (executed by
Company) with respect to such Letter of Credit shall have been received by
Administrative Lender,
(e) Upon giving effect to such Letter of Credit, the aggregate amount
of the sum of (i) the aggregate face amount of all outstanding Letters of
Credit, plus (ii) all outstanding Advances under the Loan will not exceed
the lesser of (A) the Commitment or (B) the Borrowing Base minus the
aggregate outstanding amount under the Senior Notes as of such date, and
(f) Administrative Lender shall have received, in form and substance
acceptable to it, such other approvals, documents, certificates, opinions
and
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information as it may have reasonably deemed necessary or appropriate
and requested in writing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Company represents and warrants to each Lender as follows:
Section 5.01 ORGANIZATION, AUTHORITY, AND QUALIFICATION. (a) Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (b) Company has the corporate power and authority
to execute, deliver and perform this Agreement, the Notes, and the other Loan
Papers to which it is a party, and to borrow hereunder, (c) each of Company and
its Subsidiaries is in all respects duly qualified and licensed under all
applicable laws or regulations to own its properties as now owned and to carry
on its business as now conducted, except where the failure to so qualify could
not reasonably be expected to cause a Material Adverse Change, (d) each of
Company and its Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction where the character of
its properties or nature of its activities make such qualification necessary,
except where the failure to so qualify could not reasonably be expected to cause
a Material Adverse Change, (e) Company presently has no Subsidiaries except
those listed on SCHEDULE 5.01 attached hereto, which schedule correctly reflects
the jurisdiction of organization, the percent ownership position of Company in
each such Subsidiary, the classes of Company's and each Subsidiary's Capital
Stock, and the numbers of shares or partnership interests authorized and
outstanding of Company and each Subsidiary, (f) each Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation, and (g) upon each delivery of a Guaranty in
accordance with the terms of Section 6.15 hereof, each Subsidiary executing a
Guaranty has the corporate power and authority to execute, deliver and perform
its respective Guaranty and any other Loan Papers to which it is a party.
Section 5.02 FINANCIAL STATEMENTS. Company has delivered to Lender
audited consolidated financial statements as at and for the fiscal year ended
January 28, 1996. Such financial statements fairly reflect the financial
condition of Company and its Subsidiaries as at such dates and fairly reflect
the results of the operations of Company and its Subsidiaries for the periods
then ended, all in conformity with GAAP. There has been no Material Adverse
Change since January 28, 1996.
Section 5.03 DEFAULT. Neither Company nor any Subsidiary is in default
in any material respect under the provisions of any document or instrument
evidencing any material obligation, indebtedness, or liability of Company or
such Subsidiary, or of any agreement relating thereto, or under any order, writ,
injunction, or decree of any court, and is not in default in any material
respect under or in violation of any order, regulation, or demand of any
Tribunal, which default or violation would have consequences which could cause a
Material Adverse Change.
Section 5.04 AUTHORIZATION AND COMPLIANCE WITH LAWS; MATERIAL AGREEMENTS;
ENFORCEABILITY. (a) The execution, delivery and performance of this Agreement,
the borrowing hereunder and the execution, delivery and performance of the Notes
and the other Loan Papers by Company have been duly authorized by all requisite
corporate action on the part of Company and will not violate the certificate of
incorporation or bylaws of Company and will not violate any material provision
of law or order of any Tribunal. The execution, delivery and performance of
this Agreement, the borrowing hereunder and the execution, delivery and
performance of the Notes and the other Loan Papers by Company will not conflict
with, result in a breach of the provisions of, constitute a default under (or
result in the imposition of any Lien, or encumbrance upon the assets of Company
or any
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Subsidiary pursuant to the provisions of, except Permitted Liens) any
indenture, mortgage, deed of trust, franchise, permit, license, note, or
other agreement or instrument to which Company or any Subsidiary is a party,
except to the extent any conflict, breach, or default could not reasonably be
expected to cause a Material Adverse Change; and (b) the execution, delivery
and performance of its respective Guaranty (if any) and any other Loan Papers
to which it is a party have been duly authorized by all requisite corporate
action on the part of each Subsidiary, will not violate the certificate of
incorporation or articles of incorporation, as the case may be, of such
Subsidiary or bylaws of such Subsidiary, and will not violate any material
provision of law or order of any Tribunal. The execution, delivery and
performance of its respective Guaranty (if any) and any other Loan Papers to
which it is a party will not conflict with, result in a breach of the
provisions of, constitute a default under (or result in the imposition of any
Lien, or encumbrance upon the assets of such Subsidiary pursuant to, except
Permitted Liens) the provisions of any material indenture, mortgage, deed of
trust, franchise, permit, license, note, or other agreement or instrument to
which any Subsidiary is a party. This Agreement, the Notes and each other
Loan Paper is the legal, valid and binding obligation of Company and each
Subsidiary executing and delivering the same, each enforceable in accordance
with its respective terms.
Section 5.05 LITIGATION AND JUDGMENTS. There is no Litigation by or
before any Tribunal pending, or, to the knowledge of Company, threatened against
or affecting Company or any Subsidiary or involving the validity or
enforceability of any of the Loan Papers, which, if adversely determined, could
reasonably be expected to cause a Material Adverse Change, or materially
adversely affect the ability of Company to perform its obligations as
contemplated by this Agreement, other than litigation disclosed on SCHEDULE 5.05
hereto. There are no outstanding judgments against Company or any Subsidiary in
excess of $1,000,000.
Section 5.06 OWNERSHIP OF PROPERTIES; LIENS. Company and each Subsidiary
has good and indefeasible title or valid leasehold interests in all its material
properties and assets, real and personal, and none of such property or assets or
leasehold interests is subject to any security interests or Liens of any kind,
except Liens described on SCHEDULE 5.06 hereof and Permitted Liens.
Section 5.07 USE OF PROCEEDS; MARGIN SECURITIES. The proceeds of the
Loan will be used for the purposes set forth in Section 2.05 of this Agreement
and for no other purposes. Neither Company nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, U, or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any extension of credit under
this Agreement will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock. Neither Company nor any Person acting on its behalf has taken or
will take any action which might cause this Agreement or the Notes to violate
any of said Regulations G, U, or X, or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, in each case as now in effect or as the same may hereafter be in
effect.
Section 5.08 TAXES. Company and each Subsidiary has filed all Federal
and state tax returns or reports required of them, including but not limited to
income, franchise, employment, and sales taxes, and have paid all tax liability
to the extent the same has become due and before it may have become delinquent
in accordance with such returns, and except for routine sales, use tax audits
and other audits, Company knows of no pending investigations of Company or any
Subsidiary by any taxing authority, or of any material pending but unassessed
tax liability.
Section 5.09 NO APPROVALS REQUIRED, SEC FILINGS. No registration with or
approval of any Tribunal is necessary for the execution or validity of this
Agreement, the Notes and
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the other Loan Papers. From January 29, 1996 until the Closing Date, no Form
8-K's were filed by the Company which disclosed new material agreements of
the Company other than as disclosed to the Administrative Lender in writing.
Section 5.10 ERISA. Company and each Subsidiary have complied with all
applicable minimum funding requirements and all other applicable and material
requirements of ERISA, and there are no existing conditions which would give
rise to any liability thereunder. No Reportable Event (as defined in Section
4043 of ERISA) has occurred in connection with any such plan which might
constitute grounds for the termination thereof by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such plan.
Section 5.11 LANDLORD'S LIENS. On the Closing Date, no landlord is
exercising any of its rights with respect to any statutory or contractual
landlord's liens covering the assets of Company or any Subsidiary at any
warehouse facility of Company or any of its Subsidiaries, except as set forth on
SCHEDULE 5.11 hereof. At all times after the Closing Date, no landlord is
exercising any of its rights with respect to any statutory or contractual
landlord's liens covering the assets of Company or any Subsidiary at any
warehouse facility of Company or any of its Subsidiaries, except where such
exercise could not reasonably be expected to cause a Material Adverse Change.
Section 5.12 SUBSIDIARIES. Company has no Subsidiaries, except as
described on SCHEDULE 5.01 hereto.
Section 5.13 SUBORDINATED DEBT AND SENIOR NOTES. The Obligations are
designated as, and constitute "Senior Indebtedness" as defined in the
Subordinated Debt Indenture (this facility being an amendment and restatement of
the "Bank Line of Credit" as defined in the Subordinated Debt Indenture and that
certain Promissory Note, dated August 3, 1992), and as such, the Obligations are
senior and superior in right of payment to the Subordinated Debt to the extent
described in the Subordinated Debt Indenture. The Obligations are designated
as, and constitute "Senior Indebtedness" as defined in, the Senior Notes
Indenture. The Company has delivered to the Administrative Lender executed,
complete and correct copies of the Senior Note Indenture and the Subordinated
Debt Indenture.
ARTICLE VI
AFFIRMATIVE COVENANTS
Company covenants and agrees that, as long as Company may borrow hereunder
and until payment in full of the Obligations:
Section 6.01 REPORTING REQUIREMENTS. Promptly as set forth below,
Company will deliver to Administrative Lender and each Lender:
(a) As soon as available, and in any event within 90 days after the
end of each fiscal year, Company will furnish to each Lender a copy of the
annual consolidated audit report of Company and its Subsidiaries for such
fiscal year containing balance sheets, statements of income, statements of
stockholders' equity, and statements of cash flow, and prepared in
accordance with GAAP, certified by the Auditor to Lenders to present fairly
the financial condition and results of the operations of Company and its
Subsidiaries at the date and for the periods indicated therein, such audit
report to be accompanied by a Loan Compliance Certificate (herein so
called) in substantially the form attached hereto as EXHIBIT E, with
appropriate completions, signed by an Authorized Financial Officer;
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(b) As soon as available, and in any event within 45 days after the
end of each of the first three fiscal quarters in each fiscal year, Company
will furnish to each Lender a copy of an unaudited consolidated financial
report of Company and its Subsidiaries as at the end of such fiscal quarter
and for both the quarterly period then ended and the then-elapsed portion
of the fiscal year, containing balance sheets and statements of income, and
prepared in accordance with GAAP (except for the absence of footnotes and
subject to changes resulting from audit and normal year-end adjustments),
certified by an Authorized Financial Officer to present fairly the
financial condition and results of the operations of Company and its
Subsidiaries at the date and for the periods indicated therein, each such
financial report to be accompanied by a Loan Compliance Certificate, with
appropriate completions, signed by an Authorized Financial Officer;
(c) Promptly upon the request of any Lender from time to time, copies
of all material reports or letters submitted to Company or any of its
Subsidiaries by the Auditor or any other accountants in connection with any
annual, interim or special audit, including without limitation the comment
letter submitted to management in connection with any such audit;
(d) (i) Together with each set of financial statements delivered
pursuant to subsection (a) and (b) above, a duly executed and completed
Loan Compliance Certificate for such period, and (ii) in accordance with
the terms of Section 2.06 hereof, a monthly Borrowing Base Report;
(e) Immediately upon knowledge by an Authorized Financial Officer of
Company of (i) the occurrence of any Default or Event of Default, or (ii)
any material change in any material fact or circumstance represented or
warranted in any Loan Papers, or (iii) the occurrence of any event or the
existence of any circumstance which could reasonably be expected to cause a
Material Adverse Change, or (iv) any default or any breach of any material
provision or term under any material agreement, including without
limitation, any such notice relating to any documentation related to the
Subordinated Debt or Senior Notes, a notice from an Authorized Financial
Officer, setting forth the details of such occurrence and the action being
taken or proposed to be taken with respect thereto;
(f) Immediately after knowledge thereof by an Authorized Financial
Officer of Company, notice of any Litigation pending or threatened against
Company or any Subsidiary which, if determined adversely, could reasonably
be expected to constitute a Material Adverse Change, together with a
statement of an Authorized Financial Officer, describing the allegations of
such Litigation, and the action being taken or proposed to be taken with
respect thereto;
(g) Immediately following notice or knowledge thereof by an
Authorized Financial Officer of Company, notice of any actual or threatened
loss or termination of or refusal to grant or renew any material
authorization or license, together with a statement of an Authorized
Financial Officer, describing the circumstances surrounding the same, and
the action being taken or proposed to be taken with respect thereto;
(h) Promptly after filing or receipt thereof by an Authorized
Financial Officer of Company, copies of all reports and notices that
Company or any of its Subsidiaries (i) files or receives in respect of any
Plan with or from the Internal Revenue Service, the PBGC or the United
States Department of Labor, or (ii) furnishes to or receives from any
holders of any Debt, if in the case of clauses (i) and (ii), any
information or dispute referred to therein could reasonably be expected to
result in a Default or an Event of Default or cause a Material Adverse
Change;
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(i) As soon as possible and in any event within 10 days after Company
knows that any Reportable Event has occurred with respect to any Plan of
Company or any Subsidiary, a statement of an Authorized Financial Officer,
describing such Reportable Event and the action being taken or proposed to
be taken with respect thereto;
(j) As soon as possible, and in any event within 10 days after
receipt by Company, a copy of (a) any notice or claim to the effect that
Company or any Subsidiary is or may be liable to any Person as a result of
the Release by Company, any of its Subsidiaries, or any other Person of any
hazardous substance or hazardous waste into the environment, and (b) any
notice alleging any violation of any Environmental Law by Company or any
Subsidiary, which could, in either case, reasonably be expected to cause a
Material Adverse Change; and
(k) Promptly upon request, such other information concerning the
condition or operations of any of Company, its Subsidiaries, any
Guarantors, and any of their Affiliates, financial or otherwise, as
Administrative Lender or any Lender may from time to time reasonably
request.
Section 6.02 PERFORMANCE OF OBLIGATIONS. Company will duly and
punctually cause to be paid and performed each of the Obligations, including,
without limitation, its obligations under this Agreement and each of the other
Loan Papers, as the same may be amended or modified from time to time.
Section 6.03 PRESERVATION OF EXISTENCE AND FRANCHISES AND CONDUCT OF
BUSINESS. Subject to the actions permitted by Section 7.05 hereof, Company
will, and will cause each Subsidiary to, do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights, leases, patents, and all other licenses or rights necessary to comply
with all laws, regulations, rules, statutes, or other provisions applicable to
Company or such Subsidiary in the operation of its business, and Company will,
and will cause each Subsidiary to, continue to conduct and operate its business
substantially as conducted and operated during the preceding calendar year
including without limitation the right to enforce all rights and remedies it may
have against franchisees, tenants and subtenants as specified in any franchise
agreement, lease or sublease.
Section 6.04 MAINTENANCE OF PROPERTIES. Company will, and will cause
each Subsidiary to, cause all of the material properties used or useful in the
conduct of the business of Company or such Subsidiary to be maintained and kept
in satisfactory condition, repair and working order, and supplied with all
necessary equipment, and cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as Company may
reasonably deem to be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
Section 6.05 PAYMENT OF TAXES AND OTHER CHARGES. Company will, and will
cause each Subsidiary to, promptly pay and discharge, or cause to be paid and
discharged, all lawful taxes, assessments, and governmental charges or services
imposed upon Company or such Subsidiary or upon the property, real, personal or
mixed, belonging to Company or such Subsidiary or upon any part thereof, before
the payment thereof shall be in default, as well as all lawful claims for labor,
materials and supplies which, if unpaid, might become a lien or charge upon such
property, or upon any part thereof; provided, however, that Company or such
Subsidiary shall not be required to pay and discharge, or cause to be paid and
discharged, any such tax, assessment, charge, levy or claim, (i) so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings diligently pursued, if appropriate reserves have been provided
therefor, or (ii) as to which adequate bonds have been obtained; and further
provided that, with respect to liens or charges
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securing an amount less than $500,000, Company shall have thirty days grace
to accomplish such discharge.
Section 6.06 INSURANCE. Company will, and will cause each Subsidiary to,
keep adequately insured either (a) by financially sound and reputable insurers
such assets, business, and property of Company and each Subsidiary as are
customarily insured by owners of similar property against loss or damage of the
kinds customarily insured against by owners of similar property, or (b) pursuant
to a plan of self-insurance established in accordance with sound and appropriate
practices and in accordance with Applicable Law. Company will promptly notify
Administrative Lender of any proposed cancellation or substantial modification
of any material insurance policies, and/or the implementation of any plan of
self-insurance.
Section 6.07 MAINTENANCE OF BOOKS AND RECORDS. Company will, and will
cause each Subsidiary to, maintain proper books of record and account in which
entries in accordance with GAAP will be made of all dealings and transactions in
relation to its business and activities.
Section 6.08 INSPECTION OF PROPERTIES, BOOKS AND RECORDS. Company will,
and will cause each Subsidiary to, permit any Lender and/or its representatives
to visit and inspect any of the properties of Company or such Subsidiary, to
examine all books, records, reports, accounts and other papers, including but
not limited to financial and accounting records and other contracts and records
of Company or such Subsidiary, to make copies and extracts therefrom, and to
discuss the affairs, finances and accounts of Company or such Subsidiary with
the officers, employees, directors and auditors of Company or such Subsidiary,
all at such reasonable times and with reasonable notice under the circumstances,
as any Lender may reasonably request. Company will, and will cause each
Subsidiary to, permit an inspection of the inventory of Company and its
Subsidiaries, at the request of Majority Lenders, but no more often than once
each fiscal year of Company.
Section 6.09 COMPLIANCE WITH LAW. Company will, and will cause each
Subsidiary to, comply with all Law applicable to its or their business, the
failure to comply with which could reasonably be expected to cause a Material
Adverse Change.
Section 6.10 EXPENSES AND LEGAL FEES. Company agrees to pay (a) all
reasonable out-of-pocket expenses of Administrative Lender, Special Counsel and
other counsel to Administrative Lender in connection with the negotiation,
preparation and interpretation of this Agreement and the Loan Papers, including
schedules, exhibits and amendments hereto and thereto, the making of the Loan
and Advances hereunder, the issuance of any Letters of Credit as issuing Lender
hereunder, the review of any documents, the negotiation and preparation of any
amendments, consents and waivers to this Agreement or any Loan Papers from time
to time requested or required, the release of any security for the Obligation,
the review and interpretation of any of the Loan Papers deemed advisable by
Administrative Lender from time to time, the negotiation, preparation and
interpretation of this Agreement and the Loan Papers (and any new Loan Papers)
in connection with a "work-out", the collection of the Obligation or enforcement
of any Loan Papers, and the reasonable fees and expenses of Special Counsel to
Administrative Lender and other counsel to Administrative Lender from time to
time in connection with any of the foregoing, including the consideration of
legal questions relevant thereto, and (b) all such out-of-pocket expenses, and
fees and expenses of counsel, incurred by each Lender in connection with the
collection of the Obligation or enforcement of any Loan Papers. The obligation
of Company under this Section 6.10 shall continue after the Maturity Date, and
survive any termination of this Agreement.
Section 6.11 COMPLIANCE WITH ERISA. Company will, and will cause each
Subsidiary to, comply with all applicable minimum funding requirements and all
other applicable and material requirements of ERISA so as not to give rise to
any liability
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thereunder. Promptly after the filing thereof Company shall furnish to each
Lender with regard to each employee benefit plan maintained by it or any of
its Subsidiaries a copy of each annual report required to be filed pursuant
to Section 103 of ERISA in connection with each such plan for each plan year.
Company will notify Administrative Lender immediately of any fact,
including, but not limited to, any Reportable Event arising in connection
with any such plan which might constitute grounds for the termination thereof
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such plan, and will furnish to any Lender
promptly upon its request therefor such additional information concerning any
such plan as may be reasonably requested.
Section 6.12 FURTHER ASSURANCES. Company will on request of any Lender
promptly correct any defect, error or omission which may be discovered in the
contents of any of the Loan Papers or in the execution or acknowledgment
thereof, and will execute, acknowledge and deliver such further instruments and
do such further acts as may be necessary or as may be reasonably requested by
any Lender to carry out more effectively the purposes of this Agreement and the
Loan Papers. Company will, promptly upon the request of Administrative Lender
on behalf of any Lender, furnish to Administrative Lender copies of all such
instruments, documents, and other information as Administrative Lender may
reasonably request from time to time.
Section 6.13 SYNDICATION. Company agrees to use its reasonable efforts
to assist Administrative Lender in its syndication efforts of this facility. In
such regard, Company agrees to make its senior management available at
reasonable times to meet with prospective lenders and to provide Administrative
Lender and any potential assignees or participants with all reasonable
information deemed necessary to complete the syndication. Company further
agrees to attend meetings and make presentations regarding the business and
prospects of Company with prospective assignees. Administrative Lender and
Lenders agree to cause any such prospective lender or participant to agree to
treat any such information delivered to them pursuant to this Section 6.13
(which is otherwise not publicly available) with the same degree of
confidentiality as it treats such information relating to its borrowers.
Section 6.14 SUBORDINATED DEBT AND SENIOR NOTES. Company agrees to
notify (a) the Subordinated Debt Trustee of the existence of the Obligations and
Company's designation of the Obligations and the Loan as Senior Indebtedness (as
defined in the Subordinated Debt Indenture), and agrees further to provide the
Subordinated Debt Trustee from time to time during the term of this Agreement
with all information regarding Lenders, this facility and the Obligations as is
required under the terms of the Subordinated Debt Indenture, and (b) the Senior
Notes Trustee of the existence of the Obligations and Company's designation of
the Obligations and the Loan as Senior Indebtedness (as defined in the Senior
Notes Indenture), and agrees further to provide the Senior Notes Trustee from
time to time during the term of this Agreement with all information regarding
Lenders, this facility and the Obligations as is required under the terms of the
Senior Notes Indenture. Company agrees to promptly deliver to Administrative
Lender copies of all material letters and notices, and other material
information received under or pursuant to the Subordinated Debt Indenture or the
Senior Notes Indenture or the Subordinated Debt or the Senior Notes.
Section 6.15 GUARANTIES OF THE SUBSIDIARIES. By February 2, 1997, each
Subsidiary shall have executed and delivered to Administrative Lender a duly
completed Guaranty in the form of EXHIBIT D, provided that, notwithstanding the
foregoing, Subsidiaries constituting in the aggregate less than 7% of Total
Tangible Consolidated Assets are not required to execute a Guaranty. On the
date that any such Subsidiary delivers any such Guaranty, such Subsidiary shall
deliver to the Administrative Lender together therewith:
(i) certificate or articles of incorporation of such Subsidiary
certified as of a recent date by the Secretary of State of the state of
such Subsidiary's incorporation;
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(ii) bylaws of such Subsidiary certified by the secretary or assistant
secretary of such Subsidiary;
(iii) recent certificates of the appropriate government officials of
the state of incorporation of such Subsidiary and any other state in which
such Subsidiary conducts business as to the existence and good standing of
such Subsidiary in such state;
(iv) resolutions of the Board of Directors of such Subsidiary
certified by its secretary or assistant secretary, which resolutions shall
authorize the execution, delivery and performance by such Subsidiary of
the Guaranty; and
(v) a certificate of incumbency certified by the secretary or
assistant secretary of such Subsidiary with specimen signatures of the
president or vice president and secretary or other officers of such
Subsidiary who will sign the Guaranty and any other Loan Papers to which
such Subsidiary is a party.
ARTICLE VII
NEGATIVE COVENANTS
Company covenants and agrees that as long as Company may borrow
hereunder and until payment in full of all the Obligations:
Section 7.01 FINANCIAL COVENANTS. Company will comply with the following
financial covenants and demonstrate such compliance as of the end of each
fiscal quarter of Company pursuant to a Loan Compliance Certificate delivered
to Lenders in accordance with the terms of Section 6.01(d)(i) hereof:
(a) RATIO OF FUNDED DEBT TO TOTAL CAPITALIZATION. Company will not
permit the ratio of Funded Debt to Total Capitalization at any time during
Company's (i) second and third fiscal quarters each year during the term
of this Agreement to be greater than 55%, and (ii) first and fourth fiscal
quarters each year during the term of this Agreement to be greater than
45%.
(b) FIXED CHARGES COVERAGE RATIO. Company will not permit the Fixed
Charges Coverage Ratio at any time during Company's fiscal quarters ending
(i) October 27, 1996, February 2, 1997, May 4, 1997 and August 3, 1997, to
be less than 1.35 to 1.00, and (ii) thereafter during the term of this
Agreement, to be less than 1.50 to 1.00.
(c) CURRENT RATIO. Company will not permit the ratio of (a) Current
Assets to (b) the sum of (i) Current Liabilities plus (ii) amounts
outstanding under this Agreement as Advances, at any time after July 28,
1996 to be less than 1.75 to 1.00.
(d) TANGIBLE ASSETS OF SUBSIDIARIES THAT ARE NOT GUARANTORS. At all
times after February 2, 1997, the aggregate amount of Tangible Assets of
Subsidiaries that are not Guarantors will constitute less than 7% of the
amount of Total Tangible Consolidated Assets.
(e) LIMITATION ON CAPITAL EXPENDITURES. Company shall not permit
aggregate consolidated Capital Expenditures (including the cash portion of
each acquisition) of the Company and its Subsidiaries, to exceed
$70,000,000 during any fiscal year during the term of this Agreement,
provided that, capital lease obligations of Company in connection with the
point-of-sale equipment and store systems and services and equipment
supporting such equipment and systems, commencing fiscal
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year 1996 and thereafter, up to a maximum aggregate amount of $32,000,000
throughout the term of this Agreement, shall be excluded from Capital
Expenditures for the purposes of determining compliance with this Section
7.01(e).
Section 7.02 ADDITIONAL DEBT. Company will not, and will not permit any
Subsidiary to, incur or otherwise become liable in respect of or permit to exist
any Debt or other indebtedness except
(a) Company and the Subsidiaries may permit to exist the existing Debt
shown on SCHEDULE 7.02, including Debt under the Senior Notes and the
Subordinated Debt,
(b) Company, Aaron Brothers Holdings, Inc. (and its subsidiaries and
successors), Michaels of Canada, Inc. and Michaels of Puerto Rico, Inc. may
incur or permit to exist accounts payable and accrued liabilities incurred in
the ordinary course of business, and each of the Subsidiaries may incur or
permit to exist accounts payable to the Company related to the Company's
transfer of inventory to each Subsidiary in the ordinary course of business
and
(c) (i) Company may incur Debt owing to and held by any Subsidiary that is
a Guarantor, or
(ii) any Subsidiary that is a Guarantor may incur Debt owed to a
Subsidiary that is a Guarantor or Company; provided however, that any
subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Subsidiary ceasing to be a Subsidiary or a
Guarantor, or any subsequent transfer of any such Debt (except to Company
or a Subsidiary that is a Guarantor) will be deemed, in each case, to
constitute the incurrence of such debt by the issuer thereof.
So long as there exists no Default or Event of Default in existence on any such
date and the incurrence of such Debt does not cause any Default or Event of
Default, Michaels of Canada, Inc. may incur unsecured Debt in an aggregate
amount not to exceed an amount equal to the Canadian Dollar equivalent of five
million Dollars outstanding at any one time, and, in addition to the foregoing,
(i) Company and any Subsidiary may incur or permit to exist, Debt
secured by Liens permitted under subsections (a), (b), (c), (d) and (f) of
the definition of "Permitted Liens" hereof;
(ii) Company and Aaron Brothers Holdings, Inc. (and Aaron Brothers
Holdings, Inc.'s subsidiaries and successors) may incur or permit to exist
Debt of the Company and Aaron Brothers Holdings, Inc. (and Aaron Brothers
Holdings, Inc.'s subsidiaries and successors) represented by capitalized
lease obligations, mortgage financings or purchase money obligations, in
each case incurred for the purpose of financing or refinancing all or any
part of the purchase price or costs of construction, repairs, renovation,
remodeling, expansion or other improvement of property, plant and
equipment, including services and equipment supporting such items used in
Company's business or any Subsidiary's business, in an aggregate principal
amount outstanding not to exceed the lesser of (A) $10,000,000 or (B) 10%
of Total Consolidated Assets, at the time of any incurrence of such Debt,
provided that Aaron Brothers Holdings, Inc. (together with its subsidiaries
and successors) may not incur more than $3,000,000 of such Debt;
(iii) Company and any Subsidiary may incur or permit to exist Debt in
the form of guaranties by Company or any Subsidiary of (A) indebtedness of
any Subsidiary which such Subsidiary is permitted to incur under subsection
(iv) below and (B) indebtedness of Michaels of Canada, Inc. up to the
Canadian Dollar equivalent of five million Dollars as permitted above;
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(iv) Company and any Subsidiary may incur or permit to exist Debt not
in excess of $10,000,000, in the aggregate at any one time outstanding for
the Company and all its Subsidiaries;
(v) Company may incur or permit to exist the capital lease obligations
incurred from time to time for point-of-sale equipment and store systems,
and services and equipment supporting this equipment and systems, the
obligations under which do not exceed $32,000,000 in the aggregate
throughout the term of this Agreement;
(vi) Company may incur or permit to exist, unsecured Debt consisting
of stand-by letters of credit with financial institutions that are not
Lenders in a maximum amount outstanding at any one time of $5,000,000 for
the benefit of any Person that is not an Affiliate of the Company;
(vii) Company and the Subsidiaries may incur or permit to exist
unsecured Debt consisting of performance bonds, bankers' acceptances,
surety or appeal bonds provided by the Company or any Subsidiary in the
ordinary course of its business and which do not secure other Debt;
(viii) Company may incur or permit to exist unsecured Debt consisting
of Currency Agreements and Interest Rate Agreements incurred in the
ordinary course of business, provided, however, such Currency Agreements
and Interest Rate Agreements do not increase the Debt of the Company
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities
and compensation payable thereunder;
(ix) Company may incur or permit to exist Debt consisting of purchase
money indebtedness in the aggregate outstanding at any one time of
$5,000,000; and
(x) any Subsidiary that is a Guarantor may guaranty the obligations of
the Company under the Senior Notes.
Section 7.03 PERMITTED LIENS. Company will not, and will not permit any
Subsidiary to, create, assume, or permit to exist any Lien of any kind against
any of the property of any character of Company or such Subsidiary, including
without limitation all fixed assets and leasehold improvements, whether owned as
of the date of this Agreement or hereafter acquired, except:
(a) Company and its Subsidiaries may create, assume or permit to exist:
(i) Permitted Liens,
(ii) Liens on real property acquired directly or indirectly by Company
in accordance with the terms and provisions of Section 7.09(b) hereof
securing Debt permitted to exist in accordance with the provisions of
Section 7.02(iv) and Section 7.02(ix) hereof that were previously existing,
so long as (A) such Liens are not securing Debt of Company in excess of the
fair market value of the real property and (B) such Liens are not incurred
in anticipation of such Acquisition,
(iii) Liens (other than blanket Liens on Company's or its Subsidiaries'
equipment, inventory, accounts or other receivables, provided that a
blanket Lien on an individual Subsidiary's assets is permitted) securing
Debt of Company and its Subsidiaries permitted under Sections 7.02(ii),
(iv) and (ix) hereof, and
(iv) Liens, if any, securing Debt permitted under Section 7.02(v)
hereof and created by capital lease obligations incurred from time to time
for point-of-sale
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equipment and store systems, and services and equipment supporting this
equipment and systems, the obligations under which do not exceed
$32,000,000 in the aggregate throughout the term of this Agreement; and
(b) any Subsidiary acquired by Company in accordance with the terms of
Section 7.09(b) hereof, may permit to exist Liens securing any indebtedness
of such Subsidiary existing in accordance with the terms of Section 7.02(iv)
and Section 7.02(ix) hereof (and, with respect to Aaron Brothers Holdings,
Inc. (and its subsidiaries and successors), Section 7.02(ii) hereof),
provided that (i) such Liens were not incurred in anticipation of such
Acquisition and (ii) no such Lien shall extend to or cover any other property
or assets of Company or of any other Subsidiary.
Section 7.04 CASH DIVIDENDS, REDEMPTION, AND RESTRICTED PAYMENTS.
Company will not, and will not permit any Subsidiary to, declare or pay, or
set aside funds to declare or pay, any Dividend with respect to any Capital
Stock of Company, or make any Restricted Payment, provided that (a) any
Subsidiary may declare and/or pay any Dividend to Company, (b) so long as
there exists no Default or Event of Default at any time of such payment and
immediately thereafter, Company may (i) declare or pay any Dividend so long
as Dividends paid in the aggregate during any 12-month period are not in
excess of 50% of the sum of (A) Company's net income for the most recently
completed 12-month period plus (B) Company's non-recurring charges for the
most recently completed 12-month period, (ii) make any Restricted Payment
pursuant to the terms of Company's Stock Option Plans, (iii) make a
prepayment on the Senior Notes that is permitted or required under the terms
of the Senior Notes and the Senior Notes Indenture, but only to the extent
there exists no Default or Event of Default both before and after giving
effect to such payment, and either (A) Company has received net proceeds of
one or more equity offerings (which such prepayment may not be in excess of
the amount of net proceeds received from equity offerings, and, in the
aggregate over the term of this Agreement, such prepayments may not exceed
$25,000,000), or (B) the prepayment is made out of proceeds Company has
received from an Asset Sale and Company has used such proceeds in accordance
with the terms of the Senior Note Indenture (which such prepayment may reduce
the outstanding Senior Notes in an amount not in excess of the amount of the
proceeds received), (iv) Company may purchase Senior Notes in the open market
from time to time, so long as (A) in the aggregate over the term of this
Agreement the purchase price for such Senior Notes may not exceed $5,000,000,
and (B) such purchase price reduces the permitted prepayment from equity
proceeds permitted pursuant to subsection (iii) above dollar for dollar, and
(v) Company may make any Dividend or Restricted Payment from time to time of
the Capital Stock (or rights, options or warrants related thereto) of Aaron
Brothers Holdings, Inc, or any subsidiary of, or successor to, Aaron Brothers
Holdings, Inc.
Section 7.05 MERGERS, SALES OF ASSETS AND DISSOLUTIONS. Company will
not, and will not permit any Subsidiary to, (a) dissolve or liquidate; (b)
consummate any Asset Sale or (c) become a party to any merger or
consolidation; provided that
(i) any Subsidiary may merge or consolidate with or into Company or
any other Subsidiary that is a Guarantor, provided that Aaron Brothers
Holdings, Inc. or any successor thereto may merge or consolidate with or
into any subsidiary of Aaron Brothers Holdings, Inc. or any successor to
any thereof, and any subsidiary of Aaron Brothers Holdings, Inc. may merge
or consolidate with or into Aaron Brothers Holdings, Inc. or any other
subsidiary of Aaron Brothers Holdings, Inc. or any successor to any
thereof, or
(ii) any Subsidiary may merge or consolidate with or into another
Person, provided that such merger or consolidation is part of an
Acquisition by Company permitted by Section 7.09 hereof or part of a
disposition by Company permitted by Section 7.05(v) below, or
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(iii) Company may merge or consolidate with another Person, provided
that
(A) Company is the surviving entity, and
(B) there shall have occurred no Default or Event of Default
prior to such action and, after giving effect to such transaction, no
Default or Event of Default shall have occurred, and a majority of the
Board of Directors of Company for a period of six months after the
effective date of such merger or consolidation consists of individuals
who were directors of Company three months prior to such effective
date; or
(iv) Company may merge or consolidate with another Person (the Person
formed by such consolidation or into which Company is merged, being the
"M/A Entity"), provided that
(A) the M/A Entity shall be a corporation organized and existing
under the laws of the United States of America or any State thereof or
the District of Columbia, and shall execute and deliver to the
Administrative Lender, concurrently with the consummation of any such
transaction, an agreement, in form and substance satisfactory to the
Administrative Lender, containing an assumption by the M/A Entity of
the due and punctual performance and observance of each obligation,
covenant and condition of Company under the Notes, this Agreement and
the Loan Papers, and
(B) there shall have occurred no Default or Event of Default
prior to such action and, after giving effect to such transaction, no
Default or Event of Default shall have occurred, and a majority of the
Board of Directors of the M/A Entity for a period of six months after
the effective date of such merger or consolidation consists of
individuals who were directors of Company three months prior to such
effective date; and
(C) Company shall have delivered to the Administrative Lender a
certificate signed by the President of Company, and an opinion of
Messrs. Jones Day Reavis & Pogue or other counsel satisfactory to the
Administrative Lender, each stating that such consolidation or merger,
and such assumption agreement comply with this Section, and that all
conditions precedent provided in this Section 7.05(iv) for relating to
such transaction have been complied with; PROVIDED, HOWEVER, that any
such opinion of counsel need not opine as to the matters set forth in
Section 7.05(iv)(B) above; and
(D) the holders of Company's voting securities immediately
before the merger or consolidation hold in excess of 50% of the voting
securities of the M/A Entity; and
(E) within 10 Business Days after the consummation of such
transaction, Administrative Lender shall have received, in the form
existing as executed by Company on the Closing Date, new Notes, a new
Credit Agreement and all other Loan Papers requested by the
Administrative Lender to be delivered, all duly completed and executed
by the M/A Entity; or
(v) the Company may consummate an Asset Sale (including, without
limitation, the sale of Capital Stock of one or more Subsidiaries, but not
all or substantially all of the Company's property or assets, provided
that, so long as (x) there exists no Default or Event of Default both
before and after giving effect to such sale, and (y) Company receives fair
value for such sale, the Company may sell all or any portion of the Capital
Stock (or rights, options or warrants related thereto) of Aaron Brothers
Holdings, Inc. (or any subsidiary of,
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or successor to, Aaron Brothers Holdings, Inc.) or Michaels of Canada, Inc.),
and any Subsidiary may consummate an Asset Sale, provided that, in either
case,
(A) no Default or Event of Default exists both before and after
giving effect to such Asset Sale, and
(B) in the case of any Asset Sale constituting the Capital Stock of
any Subsidiary, such Asset Sale shall be for all of the Capital Stock of
such Subsidiary owned by the Company and its Subsidiaries (except with
respect to Aaron Brothers Holdings, Inc. (and its subsidiaries and
sucessors) and Michaels of Canada, Inc. as permitted in (v) above), and
(C) Company shall have complied in all respects with the Subordinated
Debt Indenture and the Senior Debt Indenture.
Section 7.06 CHANGES IN BUSINESS. Company will not, and will not
permit any Subsidiary to, substantially change the nature of the business in
which each is presently engaged.
Section 7.07 SUBSIDIARIES. Company will not (directly or indirectly)
create or acquire, in any manner whatsoever, any new Subsidiaries; provided,
however, that Company or any Subsidiary may create Subsidiaries, so long as
(i) there exists no Default or Event of Default at the time of each creation
or after giving effect thereto; (ii) each new United States Subsidiary shall
execute a Guaranty of the Obligations hereunder to the extent such Guaranty
is necessary to remain in compliance at all times with Section 7.01(d)
hereof; (iii) Company and each new United States Subsidiary shall execute and
deliver such other certificates, agreements and documents as Administrative
Lender or any Lender may reasonably require; and (iv) no United States
Subsidiary shall issue any new stock, of any classification, without Lenders'
prior written consent, except issuance to Company or any Subsidiary.
Section 7.08 SUBORDINATED DEBT AND THE SENIOR NOTES.
(a) SUBORDINATED DEBT. Company will not make any payment of principal,
interest, premium, fee or otherwise with respect to Subordinated Debt except
in strict accordance with the terms of the Subordinated Debt Indenture and
other Subordinated Debt documentation. Company will not prepay or defease,
or set aside funds for the prepayment or defeasance of, and will not permit
any Subsidiary to prepay or defease, or set aside funds for the prepayment or
defeasance of all or any portion of the Subordinated Debt, provided however,
so long as there exists no Default or Event of Default immediately before and
after such prepayment, Company may prepay Subordinated Debt in a maximum
amount equal to 5% of the aggregate face amount of such Subordinated Debt,
but only if such prepayment is made pursuant to a call for redemption of such
Subordinated Debt which Company believes will result in the holders of
Subordinated Debt converting such indebtedness to Company's common stock.
Company will not make an election under Article 15 of the Subordinated Debt
Indenture to defease all or any portion of the Subordinated Debt.
(b) SENIOR NOTES. Company will not make any payment of principal,
interest, premium, fee or otherwise with respect to Senior Notes except in
strict accordance with the terms of the Senior Notes Indenture and other
Senior Notes documentation. Company will not prepay or defease, or set aside
funds for the prepayment or defeasance of, and will not permit any Subsidiary
to prepay or defease, or set aside funds for the prepayment or defeasance of
all or any portion of the Senior Notes, except in accordance with the
provisions of Section 7.04(b)(iii) hereof.
Section 7.09 INVESTMENTS AND ACQUISITIONS. Company will not, nor will
it permit any Subsidiary to,
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(a) make any Investment except investments in trade receivables
incurred by Company in the ordinary course of business, endorsements of
negotiable instruments for collection in the ordinary course of Company's
business; provided that, so long as there exists no Default or Event of
Default at the time of such Investment and none is caused thereby, Company
may (i) invest in Cash Equivalents, (ii) invest in publicly traded debt
and equity securities listed on national exchanges, provided that (A) any
such Investment shall not cause any representation or warranty under
Section 5.07 hereof to be untrue, (B) Company shall not violate any
Applicable Law, and (C) Company shall remain within the limits of
individual issuer concentration set forth on SCHEDULE 7.09(a) hereto, (iii)
invest up to $25,000,000 in Investments at any one time outstanding, (iv)
invest in any Canadian or United States Subsidiary that has executed a
Guaranty in the form of EXHIBIT D hereto, (v) invest in any foreign
organized Subsidiary that has executed a Guaranty in the form of EXHIBIT D
hereto in an amount not to exceed in the aggregate at any time $15,000,000,
provided, however, such limitation shall not apply to (I) Investments in
Canadian Subsidiaries that are Guarantors or (II) Investments in foreign
organized Subsidiaries that are Guarantors and otherwise approved by the
prior written consent of Majority Lenders, and (vi) invest in Subsidiaries
that are not Guarantors (A) in connection with the transfer of inventory to
such Subsidiary in the ordinary course of business and (B) in connection
with (I) invoices representing obligations incurred and (II) payments
required under operating leases, each in the ordinary course of business
and paid by Company to Persons on behalf of such Subsidiaries; or
(b) make any Acquisition, provided that, so long as there exists no
Default or Event of Default on such date before and after giving effect to
such transactions and Company complies with the terms and conditions of
Section 7.07 hereof if applicable, Company may make an Acquisition of (i)
any Person or Persons engaged in businesses similar to, related to, or
constituting a natural extension of, the business of Company, (ii) any
Person or Persons in which Company's aggregate cash consideration does not
cause the Company to breach its obligations under Section 7.01(e) hereof
and/or (iii) any Person or Persons if the consideration for such
Acquisition is common stock of Company.
Section 7.10 BORROWING BASE. Company will not permit the sum of (a) the
aggregate Advances outstanding under the Loan plus (b) the aggregate face amount
of Letters of Credit outstanding hereunder, plus (c) the aggregate outstanding
amount under the Senior Notes, to exceed the Borrowing Base for a period of five
consecutive Business Days after its knowledge thereof.
Section 7.11 AMENDMENT TO MATERIAL AGREEMENTS. Company shall not amend
or change (or take any action or fail to take any action the result of which is
an effective amendment or change) or accept any waiver or consent with respect
to, the Subordinated Debt Indenture or the Senior Notes Indenture, the
securities issued pursuant to either thereof, or any other document or
instrument in connection with either of them or the Subordinated Debt or the
Senior Notes that would result in (a) an increase in the outstanding principal
amount of the Subordinated Debt or Senior Notes, (b) a change in any principal,
interest, fees, or other amounts payable under the Subordinated Debt, the
Subordinated Debt Indenture, the Senior Notes Indenture or the Senior Notes
(including without limitation a waiver or action that results in the waiver of
any payment default under the Subordinated Debt, the Subordinated Debt
Indenture, the Senior Notes Indenture or the Senior Notes), (c) a change in any
date fixed for any payment of principal, interest, fees, or other amounts
payable under the Subordinated Debt, the Subordinated Debt Indenture, the Senior
Notes Indenture or the Senior Notes (including, without limitation, as a result
of any redemption, defeasance or otherwise), (d) a change in any percentage of
holders of the Subordinated Debt under (i) the Subordinated Debt Indenture and
the securities issued pursuant thereto or (ii) the Senior Notes Indenture or the
Senior Notes, in each case required under the terms of such documents to take
(or refrain from taking) any action, (e) a change in any financial
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covenant, (f) a change in any remedy or right of the holders of the
Subordinated Debt or the Senior Notes, (g) a change in the definition of
"Change in Control" in the Subordinated Debt Indenture and the securities
issued thereunder and in the Senior Notes Indenture and in any Senior Note,
(h) a change in any covenant, term or provision which would result in such
term or provision being more restrictive than the terms of this Agreement and
the Loan Papers, (i) a change that grants or permits the granting of any
security interest or Lien on any asset or property of Company or any
Subsidiary to secure the Subordinated Debt or the Senior Notes, or (j) a
change in any term or provision of the Subordinated Debt Indenture, the
securities issued pursuant thereto or other document or instrument in
connection with the Subordinated Debt or the Senior Notes Indenture or the
Senior Notes that could have, in any material respect, an adverse effect on
the interests of Lenders.
Section 7.12 SALE AND LEASEBACK. None of Company or any Subsidiary
shall enter into any arrangement whereby any of Company or any Subsidiary
shall sell or transfer all or any part of its assets then owned by it the
fair market value of which is in excess of ten percent of the book value of
Company's and its Subsidiaries' consolidated assets, to any Person other than
to Company or another wholly-owned Subsidiary, and thereafter rent or lease
such material assets sold or transferred.
Section 7.13 TRANSACTIONS WITH AFFILIATES. Notwithstanding any other
provision of this Agreement, neither Company nor any Subsidiary shall carry
on any transaction with an Affiliate (other than Company or any other
Subsidiary, or transactions with officers and directors of Company or any
Subsidiary in their capacity as such or in their capacity as a consultant,
including, without limitation, salary, bonuses, stock options, fees and other
forms of compensation) except (a) to the extent that all such transactions do
not exceed an amount equal to $1,000,000 per annum or (b) to the extent that
any such transaction is on terms no less favorable to Company or such
Subsidiary than otherwise obtainable in the marketplace generally.
Section 7.14 FINANCIAL OR COVENANT COMPLIANCE. Notwithstanding the
reporting requirements of GAAP, in no event will any Tax Retention Lease be
considered a capital lease for financial or other covenant compliance.
ARTICLE VIII
DEFAULT
Section 8.01 EVENTS OF DEFAULT. Each of the following shall be deemed
an "Event of Default," the occurrence of which shall, at the option of
Lenders, (i) terminate Lenders' obligation to make Advances or issue Letters
of Credit and/or (ii) if any Obligations are then outstanding, cause all
Obligations to become immediately due and payable on demand:
(a) PAYMENTS. Failure to pay (i) any installment of interest on any
of the Notes or any fees after the expiration of five days after the due
date thereof, or (ii) any installment of principal on any of the Notes or
any other portion of the Obligations (including payments of maturing drafts
in accordance with Article III hereof and any fees), or any renewals
thereof, as the same shall become due and payable, as therein or herein
expressed, whether at maturity, by declaration as authorized in the Notes
or by this Agreement, or otherwise;
(b) NEGATIVE COVENANTS. Company or any Subsidiary shall refuse or
fail to observe or perform any of the negative covenants contained in
Article VII of this Agreement or shall fail to comply with Section 6.01(e)
hereof;
(c) OTHER COVENANTS. Company or any Subsidiary shall refuse or fail
to observe or perform, or breach, any of the covenants, warranties,
representations,
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conditions and agreements contained in this Agreement, the Notes and the
Loan Papers (except those described in Section 8.01(b) above) and such
failure continues unremedied for a period of ten Business Days after the
earlier of (i) the giving of notice to Company by any Lender of such
failure, or (ii) Company's actual knowledge of such failure or breach;
(d) MISREPRESENTATION. Any representation or warranty made by
Company or any Subsidiary in any of the Loan Papers is untrue in any
material respect, or any schedule, statement, report, notice or writing
(other than financial projections prepared in good faith) furnished by
Company or any Subsidiary to any Lender is untrue in any material respect
on the date as of which the facts set forth are stated or certified, or
information is omitted from such schedules, statements, reports, notices,
or writings and the omission of such information would cause the
representations and warranties contained therein to be misleading in any
material respect;
(e) DEBTOR RELIEF. Company or any Subsidiary shall have had an order
for relief entered against it under the Bankruptcy Reform Act of 1978 (the
"Code"), or a trustee or receiver shall be appointed for Company or any
Subsidiary or of all or a substantial part of its property in any
involuntary proceeding under the Code or otherwise, or any court shall have
taken jurisdiction of all or a substantial part of the property of Company
or any Subsidiary in any involuntary proceeding for the reorganization,
dissolution, liquidation or winding up of Company or any Subsidiary, and
such trustee or receiver shall not be discharged or such jurisdiction
relinquished or vacated or stayed on appeal within 30 days; or an
involuntary petition for relief under the Code which is filed against
Company or any Subsidiary is not challenged by Company or such Subsidiary
or has not been dismissed within 30 days from the date of its filing; or
Company or any Subsidiary shall execute an assignment for the benefit of
creditors or voluntarily seek the benefit of, or become a party to any
proceeding under, any liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, insolvency, reorganization or similar debtor relief law; or
Company or any Subsidiary shall become insolvent or shall admit in writing
its inability to pay its debts generally as they become due, or shall
generally not be paying its debts as such debts become due, or shall
consent to the appointment of a receiver or trustee or liquidator of all of
its property or a substantial part thereof, or shall have failed within 30
days to pay or bond or otherwise discharge any attachment of a material
item of property which is unstayed on appeal;
(f) LOAN PAPERS. An event of default or breach of any term or
condition shall occur and be continuing under any of the Loan Papers, and
any applicable period allowed to cure such event of default or breach shall
have expired;
(g) OTHER DEBT.
(i) Company or Subsidiary shall fail to make any payment in
excess of $5,000,000 in respect of any obligation when due (whether by
scheduled maturity, mandatory prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such obligation; or Company or Subsidiary shall fail to make any
payment in respect of any Debt in excess of $5,000,000 when due
(whether by scheduled maturity, mandatory prepayment, acceleration,
demand or otherwise), which failure has caused or could cause an
acceleration of said Debt, and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other default shall occur
under any agreement or instrument relating to any Debt in excess of
$5,000,000, which default has caused or could cause or permit an
acceleration of such Debt and which default shall continue after the
applicable grace period, if any, specified in
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the agreement or instrument relating to such Debt; provided, however,
that any failure to make a payment on or any other breach of or
default under an obligation other than for borrowed money by Company
or Subsidiary described in the foregoing portion of this subsection
(g) shall not be an Event of Default if and so long as (a) Company's
or Subsidiary's failure to make such payment, or its action or
inaction giving rise to such breach or other default, is based upon
Company's or Subsidiary's good faith, reasonable opinion that the
creditor has failed to perform its obligations pursuant to the
contract or arrangement with Company or Subsidiary and such payment is
not justly due, (b) Company or Subsidiary has provided adequate
reserves therefore in accordance with GAAP and (c) Company or
Subsidiary is diligently contesting its obligation to make such
payment, or if, in lieu of (b) and (c), Company or Subsidiary has
adequately bonded such obligation; or
(ii) Company shall breach any covenant or condition under any
instrument or agreement governing Debt, and such breach shall cause
Debt in excess of $5,000,000 to be required to be prepaid;
(h) JUDGMENTS. Company and its Subsidiaries shall have rendered
against them final judgment(s) in an aggregate amount in excess of
$1,000,000, and such judgment(s) have been outstanding for more than 60
days from the date of entry and have not been bonded or discharged in full
or stayed;
(i) SUBORDINATED DEBT AND SENIOR NOTES. Either: (a) there shall
exist any "Event of Default" as defined in the Subordinated Debt Indenture;
or (b) there shall exist any "Event of Default" as defined in any Senior
Note or in Article 6 of the Senior Notes Indenture;
(j) ENFORCEABILITY OF LOAN PAPERS. Any provision of the Loan Papers
shall at any time for any reason (other than any act or inaction on the
part of Administrative Lender or any Lender or any representative thereof
with respect to a matter solely within the control of Administrative Lender
or any Lender or any representative thereof) cease to be valid and binding
upon Company, any Subsidiary or any Guarantor, or shall be declared to be
null and void, or the validity or enforceability thereof shall be contested
by Company, any Subsidiary or any Guarantor, or a proceeding shall be
commenced by or in any Tribunal having jurisdiction over Company, any
Subsidiary or any Guarantor seeking to establish the invalidity or
unenforceability thereof, and such proceeding shall remain undismissed or
unstayed for a period of 60 days, or Company, any Subsidiary or any
Guarantor shall deny that it has any or further liability or obligation
thereunder;
(k) ERISA.
(i) Any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to
Company by any Lender, (a) such Termination Event (if correctable)
shall not have been corrected and (b) the then-present value of such
Plan's vested benefits exceeds the then-current value of assets
accumulated in such Plan by more than the amount of $500,000 (or in
the case of a Termination Event involving the withdrawal of a
"substantial employer" as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall exceed
such amount; or
(ii) Company or any Subsidiary as employer under a Multi-Employer
Plan shall have made a complete or partial withdrawal from such
Multi-Employer Plan and the Plan's sponsor of such Multi-Employer Plan
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shall have notified such withdrawing employer that such employer has
incurred a withdrawal penalty in an annual amount exceeding $100,000;
(l) CHANGE IN CONTROL. There shall occur any Change in Control of
Company; or
(m) TANGIBLE ASSETS OF SUBSIDIARIES THAT ARE NOT GUARANTORS. After
February 2, 1997, there shall exist Subsidiaries that are not Guarantors
and with respect to which the aggregate amount of Tangible Assets exceed 7%
of the amount of Total Tangible Consolidated Assets.
Section 8.02 REMEDIES UPON DEFAULT. Upon the occurrence and during the
continuance of an Event of Default, Administrative Lender may, at its election
or shall, at the direction of all Lenders, do any one or more of the following
(and, with respect to (d) below, any Lender may):
(a) Declare the entire unpaid balance of the Obligations, or any part
thereof, immediately due and payable without prior notice of any kind
whatsoever including, without limitation, notice of intent to accelerate,
demand, presentment, notice of dishonor or protest, whereupon it shall be
due and payable and Administrative Lender shall notify Company of such
declaration;
(b) Terminate the Commitment and their obligation to make any
Advances thereunder in their entirety or as to any portion thereof, and
terminate their obligations to issue Letters of Credit hereunder to the
extent Administrative Lender or Lenders may deem appropriate;
(c) Reduce any claim to judgment;
(d) Exercise the rights of offset and/or banker's lien against the
interest of Company in and to every account and other property of Company
which are in the possession of any Lender to the extent of the full amount
of the Obligations (after each offset such Lender shall promptly notify
Administrative Lender and Company thereof; provided that the failure of
Administrative Lender or any Lender to furnish such notification shall in
no way impair, invalidate or prejudice Administrative Lender's or any
Lender's offset and application so made);
(e) Foreclose any and all liens in favor of Lenders and/or otherwise
realize upon any and all of the rights Lenders may have in and to any
assets of Company, or any part thereof;
(f) Demand immediate payment in cash of an amount equal to the sum of
(or any portion thereof) the aggregate outstanding amounts of all Letters
of Credit to retain as collateral against payment of such amounts by
Company; and/or retain, as collateral for the payment of all Obligations
with respect to the Letters of Credit, any amounts received upon
foreclosure, or in lieu of foreclosure, through offset, as proceeds of any
collateral or otherwise; and
(g) Exercise any and all other Rights afforded by any Applicable
Laws, or by the Loan Papers, at Law, in equity or otherwise, including, but
not limited to, the rights to bring Litigation before any Tribunal, either
for specific performance of any covenant or condition contained in the Loan
Papers or in aid of the exercise of any Right granted to Lenders in the
Loan Papers, all as Lenders shall deem appropriate in their sole
discretion.
Provided, however, that upon the occurrence of an Event of Default
described in Section 8.01(e) hereof, the obligation of Lenders to make Advances
or issue Letters of
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Credit hereunder shall automatically terminate, and the Obligations, without
any action by Administrative Lender or any Lender, shall become immediately
due and payable without diligence, notice, demand, presentment, notice of
dishonor, protest or notice of intent to accelerate, or notice of any other
kind, all of which are hereby expressly waived, and all outstanding
Borrowings shall, at the option of Administrative Lender or at the direction
of Lenders, be automatically converted to Base Rate Borrowings. Upon the
occurrence of any Event of Default, Lenders may exercise all Rights available
to them at law or in equity, under the Loan Papers and otherwise and all such
Rights shall be cumulative.
Section 8.03 WAIVERS. The acceptance by any Lender at any time and from
time to time of part payment on the Obligations shall not be deemed to be a
waiver of any Event of Default then existing. No waiver by any Lender of any
Event of Default shall be deemed to be a waiver of any other then-existing or
subsequent Event of Default. No delay or omission by any Lender in exercising
any Rights under the Loan Papers shall impair such Rights or be construed as a
waiver thereof of any acquiescence with respect thereto, nor shall any single or
partial exercise or any such Rights preclude other or further exercise thereof,
or the exercise of any other Rights or remedies under the Loan Papers or
otherwise.
Section 8.04 PERFORMANCE BY ADMINISTRATIVE LENDER. Should any covenant,
duty or agreement of Company fail to be performed in all material respects in
accordance with the terms of the Loan Papers, Administrative Lender may, at its
option, perform, or attempt to perform, such covenant, duty or agreement on
behalf of Company. In such event, Company agrees, at the request of
Administrative Lender, to pay promptly any amount expended by Administrative
Lender in such performance or attempted performance to Administrative Lender at
Administrative Lender's principal office, together with interest thereon at the
Highest Lawful Rate from the date of such expenditure by Administrative Lender
until paid. Notwithstanding the foregoing, it is expressly understood that
neither Administrative Lender nor any Lender assumes, or shall ever have, except
by express written consent of Administrative Lender or such Lender, any
liability or responsibility for the performance of any duties of Company
hereunder.
Section 8.05 LENDERS NOT IN CONTROL. None of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to, give
Lenders the Rights or power to exercise control over the affairs and/or
management of Company, the power of Lenders being limited to the Right to
exercise the remedies provided in the other subparagraphs and subsections of
this Article VIII; provided, however, that if any Lender becomes the owner of
any stock, or other equity interest in, any Person whether through foreclosure
or otherwise, such Lender shall be entitled (subject to requirements of Law) to
exercise such legal Rights as it may have by being an owner of such stock, or
other equity interest in, such Person.
Section 8.06 CUMULATIVE RIGHTS. All Rights available to Administrative
Lender and Lenders under the Loan Papers shall be cumulative of and in addition
to all other Rights granted to Administrative Lender and Lenders at Law or in
equity, whether or not the Obligations shall be due and payable and whether or
not Administrative Lender or any Lender shall have instituted any suit for
collection or other action in connection with the Loan Papers.
Section 8.07 EXPENDITURES BY LENDERS. Any sums spent by Administrative
Lender or any Lender pursuant to the exercise of any Right provided hereof shall
become part of the Obligations and shall bear interest at the Highest Lawful
Rate from the date spent until the date repaid by Company.
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ARTICLE IX
AGREEMENT AMONG LENDERS
Section 9.01 AGREEMENT AMONG LENDERS. Lenders agree among themselves
that:
(a) ADMINISTRATIVE LENDER. Each Lender hereby appoints NationsBank
of Texas, N.A. as its nominee in its name and on its behalf, to receive all
documents, monies and other items to be furnished hereunder; to act as
nominee for and on behalf of all Lenders under the Loan Papers; to take
such action as may be requested by any Lender, provided that, unless and
until Administrative Lender shall have received such requests,
Administrative Lender may take such action, or refrain from taking such
action, as it may deem advisable and in the best interests of Lenders; to
arrange the means whereby the proceeds of Advances of Lenders are to be
made available to Company; to distribute promptly to each Lender, at such
Lender's principal office, information, requests, documents and items
received from Company and others, and its Pro Rata Part of each payment
with respect to any Loan, Reimbursement Obligation, fee or other amount;
and to deliver to Company and others requests, demands, approvals and
consents received from Lenders.
(b) REPLACEMENT OF ADMINISTRATIVE LENDER. Should NationsBank of
Texas, N.A. or any successor Administrative Lender ever cease to be a
Lender hereunder, or should NationsBank of Texas, N.A. or any successor
Administrative Lender ever resign as Administrative Lender, or should
NationsBank of Texas, N.A. or any successor Administrative Lender ever be
removed by unanimous action of all Lenders (other than the Lender then
acting as Administrative Lender), then the Lender appointed by the other
Lenders (with the prior written consent of the Company so long as there
exists no Event of Default) shall forthwith become Administrative Lender,
and Company and Lenders shall execute such documents as any Lender may
reasonably request to reflect such change. Any resignation or removal of
NationsBank of Texas, N.A. or any successor Administrative Lender shall
become effective upon the appointment by Lenders of a successor
Administrative Lender; provided, however, that if Lenders fail for any
reason to appoint a successor within 60 days after such removal or
resignation, NationsBank of Texas, N.A. or any successor Administrative
Lender (as the case may be) shall thereafter have no obligation to act as
Administrative Lender hereunder.
(c) EXPENSES. Each Lender shall pay its Pro Rata Part of any
expenses incurred by Administrative Lender in connection with any of the
Loan Papers if Administrative Lender does not receive reimbursement
therefor from other sources within 60 days after the date incurred. Any
amount so paid by Lenders to Administrative Lender shall be returned by
Administrative Lender Pro Rata to each paying Lender to the extent later
paid by Company to Administrative Lender.
(d) DELEGATION OF DUTIES. Administrative Lender may execute any of
its duties hereunder by or through officers, directors, employees,
attorneys or agents, and shall be entitled to (and shall be protected in
relying upon) advice of counsel concerning all matters pertaining to its
duties hereunder.
(e) RELIANCE BY ADMINISTRATIVE LENDER. Administrative Lender and its
officers, directors, employees, attorneys and agents shall be entitled to
rely and shall be fully protected in relying on any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telex
or teletype message, statement, order, or other document or conversation
believed by it or them to be genuine and correct and to have been signed or
made by the proper person and, with respect to legal matters, upon opinions
of counsel selected by Administrative Lender. Administrative Lender
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may deem and treat the payee of any Note as the owner thereof for all
purposes hereof.
(f) LIMITATION OF ADMINISTRATIVE LENDER'S LIABILITY. Neither
Administrative Lender nor any of its officers, directors, employees,
attorneys or agents shall be liable for any action taken or omitted to be
taken by it or them hereunder in good faith and believed by it or them to
be within the discretion or power conferred by the Loan Papers or be
responsible for the consequences of any error of judgment. Except as
aforesaid, Administrative Lender shall be under no duty to enforce any
Rights with respect to the Loan, Advances, Reimbursement Obligations, other
Obligations or any collateral therefor. Administrative Lender shall not be
compelled to do any act hereunder or to take any action towards the
execution or enforcement of the powers hereby created or to prosecute or
defend any suit in respect hereof, unless indemnified to its satisfaction
against loss, cost, liability and expense. Administrative Lender makes no
warranty or representation to Lenders and shall not be responsible in any
manner to any Lender for the effectiveness, enforceability, genuineness,
validity or due execution of any of the Loan Papers or Letters of Credit or
for any representation, warranty, document, certificate, report or
statement made herein or furnished in connection with any Loan Papers, or
be under any obligation to any Lender to ascertain or to inquire as to the
performance or observation of any of the terms, covenants or conditions of
any Loan Papers on the part of Company. Each Lender agrees to indemnify
and hold harmless Administrative Lender, to the extent of such Lender's Pro
Rata Part, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and/or
disbursements of any kind or nature whatsoever which may be imposed on,
asserted against, or incurred by Administrative Lender in any way with
respect to or arising out of (i) any Loan Papers or any action taken or
omitted by Administrative Lender under the Loan Papers, except and only to
the extent the same result from gross negligence or wilful misconduct by
Administrative Lender, and (ii) in its capacity as issuing bank of a Letter
of Credit, any failure by any Lender to comply with Article III or IV
hereof.
(g) LIABILITY AMONG LENDERS. No Lender shall incur any liability to
any other Lender except for acts or omissions in bad faith, and, with
respect to the Administrative Lender only, except as provided in the last
sentence of subparagraph (f) of this Section 9.01.
(h) RIGHTS AS LENDER. With respect to its Commitment, Advances made
by it, Notes issued to it and Letters of Credit issued by it,
Administrative Lender shall have and enjoy the same Rights as a Lender and
may exercise the same as though it were not Administrative Lender, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include Administrative Lender in its individual capacity. Administrative
Lender may accept deposits from, act as trustee under indentures of, and
generally engage in any kind of business with, Company and any Person who
may do business with or own securities of Company all as if Administrative
Lender were not Administrative Lender hereunder and without any duty to
account therefor to Lenders.
(i) CO-AGENTS. None of the Lenders identified as a "Co-Agent" shall
have any right, power, obligation, liability, responsibility or duty under
this Agreement other than as applicable to all Lenders as such. Without
limiting the foregoing, the "Co-Agent" shall not be deemed to have any
fiduciary relationship with any Lender.
Section 9.02 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon Administrative Lender or any other
Lender and based upon the financial statements referred to in Section 5.02
hereof and such other documents and information as it has deemed appropriate,
made its own credit analysis and
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decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Administrative Lender or any
other Lender and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement.
Section 9.03 BENEFITS OF ARTICLE. None of the provisions of this Article
IX shall inure to the benefit of Company or any Person other than Lenders;
consequently, neither Company nor any other Person shall be entitled to rely
upon, or to raise as a defense, in any manner whatsoever, the failure of any
Lender to comply with such provisions.
ARTICLE X
MISCELLANEOUS
Section 10.01 NO ORAL MODIFICATIONS. Neither this Agreement nor any
provisions hereof may be changed, waived, discharged, or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought.
Section 10.02 BENEFIT; ASSIGNMENTS AND PARTICIPATIONS.
(a) Company may not transfer or assign its rights and obligations
hereunder, and, subject to such restriction, the provisions hereof shall
extend to and be binding upon Company's respective successors and assigns.
All covenants and agreements made by or on behalf of any of the parties
hereto shall bind and inure to the benefit of, and be enforceable by, the
respective successors and assigns of the parties hereto, whether so
expressed or not, and, in particular, shall inure to the benefit of, and be
enforceable by, the holder or holders of all or any portion of the Notes.
(b) Administrative Lender may assign any portion of its rights to any
Person with the prior written consent of Company, such consent not to be
unreasonably withheld; provided that, after the occurrence of a Default or
Event of Default which is continuing, Administrative Lender shall not be
required to obtain the consent of Company. Each Lender may assign its
Rights and obligations as a Lender under the Loan Papers to any Affiliate
of such Lender, and, with the prior written consent of Administrative
Lender (which consent shall not be unreasonably withheld) and pursuant to
an Assignment and Acceptance Agreement, to one or more Eligible Assignees,
so long as (i) each assignment shall be of a constant, and not a varying
percentage of all Rights and obligations thereunder, (ii) no such
assignment shall be in an amount less than $5,000,000 unless it is the
remaining amount of such Lender's total committed amount, (iii) no Lender
shall assign any amount which would result in such Lender holding an amount
less than $5,000,000 immediately after any such assignment, (iv) Company
has given its prior written consent, which consent shall not be
unreasonably withheld, provided that, after the occurrence of an Event of
Default and during the continuance thereof, no Lender shall be required to
obtain the prior written consent of Company.
(c) The assigning Lender (the "Assignor") shall give at least ten
Business Days notice to Administrative Lender and Company of such proposed
assignment, together with the date such assignment shall become effective,
the new Specified Percentage of the Assignor and the new assignee, and the
name, address and funding office of the assignee. On the effective date of
any assignment, the Assignor shall deliver to Administrative Lender and
Company a copy of the Assignment and Acceptance Agreement and all related
documents, together with, for Administrative
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Lender, the processing fee described in subsection (e) below. Within
five Business Days after notice of any such assignment, Company shall
execute and deliver to the Assignor, in exchange for the Notes issued to
the Assignor new Notes to the order of the Assignor and its assignee in
amounts equal to their respective Specified Percentages, dated as of the
effective date of the assignment. It is specifically acknowledged and
agreed that on and after the effective date of each assignment, the
assignee shall be a party hereto, included in the definition of "Lender"
and shall have the Rights and obligations of a Lender under the Loan
Papers.
(d) Each Lender may sell participations to one or more banks or other
entities in all or any of its Rights and obligations under the Loan Papers;
provided, however, that (i) such Lender's obligations under the Loan Papers
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of its Note for all purposes of
the Loan Papers, (iv) under the terms of any such participation, such
Lender's right to consent or agree to any amendment or waiver of any
provision of this Agreement or any other Loan Paper, or to consent to any
departure by any party therefrom, shall not be subject to or require any
consent or agreement of the participant, except in connection with matters
described in subsections (a) through (d) of Section 10.10 hereof to the
extent it is affected thereby, and (v) Company, Administrative Lender, and
other Lenders shall continue to deal solely and directly with such Lender
in connection with its Rights and obligations under the Loan Papers.
(e) Administrative Lender may maintain at its address set forth
herein a copy of each assignment agreement received by it from each
Assignor and a register (the "Register") for the recordation of the names
and addresses of Lenders and the commitments of, and principal amount of
Advances owing to, each Lender from time to time. The entries in the
Register shall be conclusive absent demonstrable error, and Company,
Administrative Lender and Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement. Upon Administrative Lender's receipt of an
executed Assignment and Acceptance Agreement, together with a payment to
Administrative Lender of a registration and processing fee of $3500,
Administrative Lender shall (i) promptly accept such assignment and (ii) on
the effective date thereof, record the information contained therein in the
Register.
(f) Any Lender may, in connection with any assignment or
participation, or proposed assignment or participation, disclose to the
assignee or participant, or proposed assignee or participant, any
information relating to Company or any of its Subsidiaries furnished to
such Lender by or on behalf of Company or its Subsidiaries.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion
of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
Section 10.03 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or in any other instrument
contemplated hereby shall survive the execution and delivery of this Agreement,
the Notes and all other Loan Papers, and no investigation by any Lender nor any
closing shall affect the representations and warranties or the right of
Administrative Lender and each Lender to rely on and enforce them.
Section 10.04 NOTICES. Except as otherwise expressly provided herein, any
and all notices or demands which must or may be given hereunder or under any
other instrument
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contemplated hereby shall be given by delivery in person or by registered or
certified mail, return receipt requested, postage prepaid, as follows:
To Administrative Lender:
NationsBank of Texas, N.A.
Corporate Banking Group
901 Main Street
67th Floor
Dallas, Texas 75202
Attention: Delaney A. Burgdoerfer
Vice President
With a copy to:
Donohoe Jameson & Carroll, P.C.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Melissa Ruman Stewart
To Company, before August 1, 1996:
Michaels Stores, Inc.
5931 Campus Circle Drive
Las Colinas Business Park
Irving, Texas 75063
Attention: Kristen L. Magnuson
Vice President - Finance and Business Planning
To Company, from and after August 1, 1996:
Michaels Stores, Inc.
8000 Bent Branch Drive
Irving, Texas 75063
Attention: Kristen L. Magnuson
Vice President - Finance and Business Planning
With a copy, before August 1, 1996, to:
Michaels Stores, Inc.
5931 Campus Circle Drive
Las Colinas Business Park
Irving, Texas 75063
Attention: Mark Beasley, Esq.
With a copy, from and after August 1, 1996, to:
Michaels Stores, Inc.
8000 Bent Branch Drive
Irving, Texas 75063
Attention: Mark Beasley, Esq.
All such communications, notices, or presentations and demands provided for
herein shall be deemed to have been delivered when actually delivered in person
to the respective parties, or if mailed, then three days after the date of
mailing, provided that such mailing is by registered or certified mail, return
receipt requested, with postage prepaid. Either party
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may change its address hereunder upon 30 days' notice to the other party in
compliance with this Section 10.04.
SECTION 10.05 APPLICABLE LAW. THIS AGREEMENT, EACH NOTE AND THE OTHER
LOAN PAPERS TO WHICH EACH LENDER IS A PARTY SHALL BE DEEMED TO HAVE BEEN MADE
AND TO BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS, AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA; PROVIDED THAT, IF ANY LAW
APPLICABLE TO ANY LENDER PERMITS SUCH LENDER TO CHARGE A HIGHER MAXIMUM RATE OF
INTEREST THAN THAT PERMITTED BY THE LAWS OF THE STATE OF TEXAS, THAT RIGHT OF
SUCH LENDER TO CHARGE, TAKE OR RECEIVE INTEREST WITH RESPECT TO ADVANCES AND
OTHER OBLIGATIONS DUE AND OWING UNDER THIS AGREEMENT SHALL BE GOVERNED BY SUCH
LAWS APPLICABLE TO SUCH LENDER.
Section 10.06 SEVERABILITY. Any Section, clause, Subsection, sentence,
paragraph, or provision of this Agreement held by a court of competent
jurisdiction to be invalid, illegal, or ineffective shall not impair, invalidate
or nullify the remainder of this Agreement, but the effect thereof shall be
confined to the Section, clause, Subsection, sentence, paragraph or provision so
held to be invalid, illegal or ineffective.
Section 10.07 NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The
provisions of Chapter 15 of the Texas Credit Code (Texas Revised Civil Statutes,
Article 5069-15) are specifically declared by the parties hereto not to be
applicable to this Agreement or any of the Loan Papers or to the transactions
contemplated hereby.
Section 10.08 EXCEPTIONS TO COVENANTS. Company shall not be deemed to be
permitted to take any action or fail to take any action that is permitted as an
exception to any of the covenants herein or which is within the permissible
limits of any of the covenants herein if such action or omission would result in
the breach of any other covenant herein.
SECTION 10.09 INDEMNITY. COMPANY AGREES TO AND DOES INDEMNIFY AND HOLD
HARMLESS EACH LENDER AND ITS OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS
AND SHAREHOLDERS (THE "INDEMNIFIED PARTIES") AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS
(WHETHER MADE OR THREATENED), COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER, INCLUDING WITHOUT LIMITATION THE REASONABLE OUT-OF-POCKET
FEES AND EXPENSES OF COUNSEL WHICH MAY BE IMPOSED ON OR INCURRED BY ANY LENDER
OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS OR
SHAREHOLDERS IN ANY WAY RELATING TO, OR ARISING OUT OF, ANY OF THE LOAN PAPERS
OR ANY OTHER ACT, OMISSION, EVENT OR OTHER TRANSACTION CONTEMPLATED THEREBY OR
THEREIN, TO THE EXTENT THAT ANY OF THE SAME RESULTS, DIRECTLY OR INDIRECTLY,
FROM ANY CLAIMS (WHETHER SUCH CLAIMS ARE MADE OR THREATENED AND INCLUDING
WITHOUT LIMITATION, CLAIMS RESULTING FROM THE NEGLIGENCE OF SUCH INDEMNIFIED
PARTY) OR ACTIONS, SUITS OR PROCEEDINGS (WHETHER MADE OR THREATENED AND
INCLUDING, WITHOUT LIMITATION, ACTIONS, SUITS OR PROCEEDINGS RESULTING FROM THE
NEGLIGENCE OF SUCH INDEMNIFIED PARTY) BY OR ON BEHALF OF ANY PERSON OTHER THAN A
CLAIM BY ANY LENDER (INCLUDING ADMINISTRATIVE LENDER) OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS OR SHAREHOLDERS, AGAINST ANY
SUCH INDEMNIFIED PARTY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SUCH
INDEMNITY SHALL EXTEND TO ANY AND ALL COSTS AND EXPENSES WHATSOEVER INCURRED BY
ANY LENDER AND ITS OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS OR
SHAREHOLDERS, INCLUDING WITHOUT LIMITATION THE REASONABLE OUT-OF-POCKET FEES AND
EXPENSES OF COUNSEL IN CONNECTION WITH INVESTIGATING, PREPARING FOR OR DEFENDING
AGAINST OR PROVIDING EVIDENCE, PRODUCING DOCUMENTS OR TAKING ANY ACTION WITH
RESPECT TO ANY SUCH ACTION, CLAIM (WHETHER MADE
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OR THREATENED), SUIT, LIABILITY, DAMAGE OR LOSS, WHETHER OR NOT RESULTING IN
ANY LIABILITY ON THE MERITS. EACH LENDER MAY SELECT ITS OWN LEGAL COUNSEL IN
CONNECTION WITH ANY MATTERS INDEMNIFIED AGAINST HEREUNDER. THE OBLIGATION OF
COMPANY UNDER THIS SECTION SHALL SURVIVE EXECUTION, DELIVERY, CONSUMMATION
AND ANY TERMINATION OF THIS AGREEMENT. COMPANY'S OBLIGATIONS UNDER THIS
SECTION ARE AND SHALL REMAIN ABSOLUTE AND UNCONDITIONAL, ENFORCEABLE AGAINST
COMPANY WHETHER OR NOT ANY ADVANCE IS EVER MADE, ANY LETTER OF CREDIT IS EVER
ISSUED, OR ANY OTHER OBLIGATION EVER ARISES OR ANY CONDITIONS OF LENDING ARE
EVER MET AND, EXCEPT AS PROVIDED IN THE LAST SENTENCE OF THIS SECTION,
WITHOUT REGARD TO ACT, OMISSION, BREACH, KNOWLEDGE, INVESTIGATION OR EVENT
BY, ATTRIBUTABLE TO, OR IN ANY MANNER INVOLVING ANY LENDER OR ANY OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS OR SHAREHOLDERS.
PAYMENT BY COMPANY IN RESPECT OF A CLAIM MADE BY ANY LENDER OR ANY OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS OR SHAREHOLDERS
PURSUANT TO THIS SECTION SHALL BE MADE WITHIN 30 DAYS AFTER DEMAND THEREFOR.
IF AND TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR
ANY REASON, COMPANY HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE
PAYMENT AND SATISFACTION OF EACH OF THE FOREGOING AMOUNTS THAT IS PERMISSIBLE
UNDER APPLICABLE LAW. NOTWITHSTANDING ANYTHING IN THIS SECTION TO THE
CONTRARY, COMPANY'S INDEMNITY OBLIGATION SHALL NOT EXTEND TO LIABILITY,
DAMAGE, COST OR LOSS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ADMINISTRATIVE LENDER OR ANY LENDER OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS, OR SHAREHOLDERS, OR FROM A
MATERIAL BREACH BY ADMINISTRATIVE LENDER OR ANY LENDER OF ITS OBLIGATIONS
PURSUANT TO THIS AGREEMENT OR THE OTHER LOAN PAPERS, OR FROM THE FAILURE OF
ADMINISTRATIVE LENDER OR ANY LENDER TO COMPLY WITH ANY LAW APPLICABLE TO THEM
OR THE LOAN PAPERS. THE INDEMNIFIED PARTIES WILL UNDERTAKE TO GIVE COMPANY
REASONABLE NOTICE OF THE ASSERTION OF ANY CLAIM AGAINST THEM WITHIN COMPANY'S
INDEMNITY OBLIGATION UNDER THIS SECTION, BUT THE FAILURE OF ANY INDEMNIFIED
PARTY TO GIVE NOTICE TO COMPANY HEREUNDER SHALL NOT IMPAIR SUCH INDEMNIFIED
PARTY'S RIGHT TO INDEMNITY PURSUANT TO THIS SECTION UNLESS COMPANY IS
MATERIALLY PREJUDICED BY SUCH FAILURE.
Section 10.10 AMENDMENT. No amendment or waiver of any provision of this
Agreement or any other Loan Papers, nor consent to any departure by Company or
any of its Subsidiaries therefrom (including, without limitation, any provision
of this Agreement specifically requiring the consent of Lenders), shall be
effective unless the same shall be in writing and signed by the Majority Lenders
(unless, in any such case, the text thereof specifically requires "each Lender"
or "all Lenders"), and then any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by each of Lenders affected thereby, (a) increase the Commitment or the
Letter of Credit Commitment, (b) reduce any principal, interest, fees or other
amounts payable to such Lenders hereunder, or waive or result in the waiver of
any Event of Default under Section 8.01(a) hereof, (c) postpone any date fixed
for any payment of principal, interest, fees or other amounts payable to such
Lenders hereunder, (d) release any collateral (if any) or Guaranties securing
the Obligations hereunder except as specifically provided for in the Loan Papers
on the Closing Date, (e) change the meaning of Specified Percentage or the
number of Lenders required to take any action hereunder, or (f) amend this
Section. No amendment, waiver or consent shall affect the Rights or duties of
Administrative Lender under any Loan Papers, unless it is in writing and signed
by Administrative Lender in addition to the requisite number of Lenders. This
Agreement embodies the entire agreement among the parties hereto, supersedes all
prior agreements and understandings, if any, relating to the subject matter
hereof, and may be amended only as provided above. Company acknowledges and
agrees that all Loan Papers evidence the Obligation.
SECTION 10.11 WAIVER OF TRIAL BY JURY. ADMINISTRATIVE LENDER, LENDERS,
COMPANY AND SUBSIDIARIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
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HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN PAPERS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ADMINISTRATIVE LENDER, LENDERS,
COMPANY OR ANY SUBSIDIARY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
ADMINISTRATIVE LENDER AND LENDERS ENTERING INTO THIS AGREEMENT.
Section 10.12 COUNTERPARTS. This Agreement and the other Loan Papers may
be executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, but in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.
SECTION 10.13 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER
WRITTEN DOCUMENTS DESCRIBED HEREIN OR CONTEMPLATED HEREBY REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
Section 10.14 SURVIVAL AND APPLICATION OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made under this Agreement and the other Loan
Papers shall be deemed to be made as of the Closing Date and as provided in
Section 4.02 and Section 4.03 hereof, and each shall be true and correct when
made, except to the extent (a) previously fulfilled in accordance with the terms
hereof, (b) subsequently inapplicable, or (c) waived in writing by
Administrative Lender and Majority Lenders with respect to any particular
factual circumstance. In addition, all such representations and warranties
relating to Company's Subsidiaries shall be deemed to be made with respect to
any newly formed or acquired Subsidiary as of its formation or acquisition, and
shall be true and correct on such date. All representations and warranties made
under this Agreement shall survive, and not be waived by, the execution of the
Loan Papers by Administrative Lender and Lenders, any investigation or inquiry
by Administrative Lender or any Lender, or any disbursement of an Advance
hereunder.
Section 10.15 RATE PROVISION. It is not the intention of any party to any
Loan Papers to make an agreement violative of the Laws of any applicable
jurisdiction relating to usury. Regardless of any provision in any of the Loan
Papers, no Lender shall ever be entitled to receive, collect or apply, on the
Obligation, any amount deemed to constitute interest in excess of the Maximum
Amount. If any Lender ever receives, collects or applies any such excess, such
amount which would be excessive interest shall be deemed a partial repayment of
principal and treated hereunder as such; and if principal is paid in full, any
remaining excess shall be paid to Company. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the Maximum
Amount, Company and Lenders shall, to the maximum extent permitted under
Applicable Laws, (a) characterize any nonprincipal payment as an expense, fee or
premium rather than as interest, (b) exclude voluntary prepayments and the
effect thereof, and (c) amortize, prorate, allocate and spread in equal parts,
the total amount of interest throughout the entire contemplated term of the
Obligation so that the interest rate is uniform throughout the entire term of
the Obligation; provided, however, that if the Obligation is paid and performed
in full prior to the end of the full contemplated term thereof, and if the
interest received for the actual period of existence thereof exceeds the Maximum
Amount, Lenders shall refund to Company the amount of such excess or credit the
amount of such excess against the total principal amount owing, and, in such
event, no Lender shall be subject to any penalties provided by any Laws for
contracting for, charging or receiving interest in excess of the Maximum Amount.
This Section shall control every other provision of all agreements among the
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parties to this Agreement pertaining to the transactions contemplated by or
contained in the Loan Papers.
Section 10.16 AMENDMENT, RESTATEMENT AND RENEWAL. This Agreement is a
renewal, amendment and restatement of the Original Credit Agreement (which was
an amendment, restatement and renewal of that certain Promissory Note, dated
August 3, 1992), and, as such, except for the "Obligations" as defined in the
Original Credit Agreement (which shall survive, be renewed and restated by the
terms of this Agreement), all other terms and provisions supersede in their
entirety the Original Credit Agreement. Company hereby agrees to notify (a) the
Subordinated Debt Trustee of this amendment, restatement and renewal of the
Original Credit Agreement and designate the Obligations hereunder as Senior
Indebtedness (as defined in the Subordinated Debt Indenture), and (b) the Senior
Notes Trustee of this amendment, restatement and renewal of the Original Credit
Agreement and designate the Obligations hereunder as Senior Indebtedness (as
defined in the Senior Notes Indenture). The Lenders and the Administrative
Lender each hereby agrees to release each guaranty that was executed by any
Subsidiary prior to the Closing Date (which guarantied debt under the Original
Credit Agreement).
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the date first above written.
MICHAELS STORES, INC.
By: /s/ Kristen L. Magnuson
----------------------------------
Kristen L. Magnuson
Vice President - Finance and
Business Planning
SPECIFIED PERCENTAGE:
18.0000% NATIONSBANK OF TEXAS N.A., as
Administrative Lender, and individually
Address: as a Lender
901 Main Street
67th Floor
Dallas, TX 75202
Attn: Delaney A. Burgdoerfer By: /s/ Delany A. Burgdoerfer
Phone: (214) 508-9394 ----------------------------------
Fax: (214) 508-0980 Delaney A. Burgdoerfer
Vice President
SPECIFIED PERCENTAGE:
17.0000% BANK OF AMERICA ILLINOIS, as Co-Agent,
and individually as a Lender
Address:
Three Allen Center, Suite 4550
Houston, Texas 77002-4103 By: /s/ W. Thomas Barnett
Attn: W. Thomas Barnett ----------------------------------
Phone: (713) 651-4906 Its: Vice President
Fax: (713) 651-4841 ----------------------------------
with a copy to:
231 South LaSalle
Chicago, Illinois 60697
Attn: Paul Youmara
Phone: (312) 828-6574
Fax: (312) 974-9626
SPECIFIED PERCENTAGE:
15.0000% CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
Address:
2200 Ross Avenue
Suite 4400W By: /s/ Jacques Yves Mulliez
Dallas, Texas 75201 ----------------------------------
Attn: Tim O'Connor Its: Senior Vice President
Phone: (214) 220-2300 ----------------------------------
Fax: (214) 220-2323
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SPECIFIED PERCENTAGE:
15.0000% WELLS FARGO BANK (TEXAS), N.A.,
as a Lender
Address:
1445 Ross Avenue
Third Floor
Dallas, Texas 75202 By: /s/ Susan Coulter
Attn: Susan Coulter ----------------------------------
Phone: (214) 740-1518 Its: Vice President
Fax: (214) 740-1543 ----------------------------------
SPECIFIED PERCENTAGE:
15.0000% MELLON BANK, N.A., as a Lender
Address:
One Mellon Bank Center
Room 4535 By: /s/ Marc T. Kennedy
Pittsburgh, Pennsylvania 15258-0001 ----------------------------------
Attn: Marc T. Kennedy Its: AVP
Phone: (412) 234-1942 ----------------------------------
Fax: (412) 236-1914
SPECIFIED PERCENTAGE:
10.0000% UNITED STATES NATIONAL BANK OF OREGON,
as a Lender
Address:
555 S.W. Oak, Suite 400
Portland, OR 97204 By: /s/ Nathan Rosenbaum
Attn: Nathan Rosenbaum ----------------------------------
Phone: (503) 275-3475 Its: Vice President
Fax: (503) 275-4267 ----------------------------------
SPECIFIED PERCENTAGE:
10.0000% THE FIRST NATIONAL BANK OF BOSTON,
as a Lender
Address:
100 Federal Street
Mail Stop 1-09-05 By: /s/ Judith A.E. Kelly
Boston, MA 02110-1802 ----------------------------------
Attn: Its: Vice President
Bethann R. Halligan ----------------------------------
Phone: (617) 434-0144
Fax: (617) 434-0630
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