Credit Agreement - STB Systems Inc., Bank One Texas NA and Comerica Bank-Texas
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------------------------
STB SYSTEMS, INC.
and
BANK ONE, TEXAS, N.A.,
as Administrative Agent
and
COMERICA BANK-TEXAS,
as Documentation Agent
-------------------------------------------------------
$25,000,000
December 21, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I - Definitions and References...................................................... 1
Section 1.1. Defined Terms......................................................... 1
Section 1.1. Exhibits and Schedules; Additional Definitions........................ 11
Section 1.2. Amendment of Defined Instruments...................................... 12
Section 1.3. References and Titles................................................. 12
Section 1.4. Calculations and Determinations....................................... 12
ARTICLE II - The Loans...................................................................... 12
Section 2.1. Commitments to Lend; Notes............................................ 12
Section 2.2. Requests for New Loans................................................ 13
Section 2.3. Continuations and Conversions of Existing Loans....................... 14
Section 2.4. Use of Proceeds....................................................... 15
Section 2.5. Fees.................................................................. 15
Section 2.6. Optional Prepayments.................................................. 16
Section 2.7. Mandatory Prepayments................................................. 16
Section 2.8. Subsequent Determinations of Borrowing Base........................... 16
ARTICLE III - Payments to Lenders........................................................... 17
Section 3.1. General Procedures.................................................... 17
Section 3.2. Capital Reimbursement................................................. 18
Section 3.3. Increased Cost of Eurodollar Loans.................................... 18
Section 3.4. Availability.......................................................... 19
Section 3.5. Funding Losses........................................................ 19
Section 3.6. Reimbursable Taxes.................................................... 19
Section 3.7. [RESERVED]............................................................ 21
Section 3.8. Replacement of Lenders................................................ 21
ARTICLE IV - Conditions Precedent to Lending................................................ 21
Section 4.1. Documents to be Delivered............................................. 21
Section 4.2. Additional Conditions Precedent....................................... 22
ARTICLE V - Representations and Warranties.................................................. 23
Section 5.1. No Default............................................................ 23
Section 5.2. Organization and Good Standing........................................ 23
Section 5.3. Authorization......................................................... 23
Section 5.4. No Conflicts or Consents.............................................. 24
Section 5.5. Enforceable Obligations............................................... 24
Section 5.6. Initial Financial Statements.......................................... 24
Section 5.7. Other Obligations and Restrictions. .................................. 24
Section 5.8. Full Disclosure....................................................... 24
Section 5.9. Litigation............................................................ 25
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Section 5.10. Labor Disputes and Acts of God........................................ 25
Section 5.11. ERISA Plans and Liabilities........................................... 25
Section 5.12. Environmental and Other Laws.......................................... 25
Section 5.13. Names and Places of Business.......................................... 26
Section 5.14. Borrower's Subsidiaries............................................... 26
Section 5.15. Title to Properties; Licenses......................................... 26
Section 5.16. Government Regulation................................................. 26
Section 5.17. Insider............................................................... 27
Section 5.18. Year 2000............................................................. 27
ARTICLE VI - Affirmative Covenants of Borrower.............................................. 27
Section 6.1. Payment and Performance............................................... 27
Section 6.2. Books, Financial Statements and Reports............................... 27
Section 6.3. Other Information and Inspections..................................... 29
Section 6.4. Notice of Material Events and Change of Address....................... 29
Section 6.5. Maintenance of Properties............................................. 30
Section 6.6. Maintenance of Existence and Qualifications........................... 30
Section 6.7. Payment of Trade Liabilities, Taxes, etc.............................. 30
Section 6.8. Insurance............................................................. 30
Section 6.9. Performance on Borrower's Behalf...................................... 31
Section 6.10. Interest.............................................................. 31
Section 6.11. Compliance with Agreements and Law.................................... 31
Section 6.12. Environmental Matters................................................. 31
Section 6.13. Evidence of Compliance................................................ 32
Section 6.14. Solvency.............................................................. 32
Section 6.15. Agreement to Deliver Security Documents............................... 32
Section 6.16. Bank Accounts; Offset................................................. 32
Section 6.17. Guaranties of Borrower's Subsidiaries................................. 33
Section 6.18. Audit................................................................. 33
ARTICLE VII - Negative Covenants of Borrower................................................ 33
Section 7.1. Indebtedness.......................................................... 34
Section 7.2. Limitation on Liens................................................... 34
Section 7.3. Hedging............................................................... 34
Section 7.4. Limitation on Mergers, Issuances of Securities........................ 35
Section 7.5. Limitation on Sales of Property....................................... 35
Section 7.6. Limitation on Dividends and Redemptions............................... 35
Section 7.7. Limitation on Investments and New Businesses.......................... 36
Section 7.8. Limitation on Credit Extensions....................................... 36
Section 7.9. Transactions with Affiliates.......................................... 36
Section 7.10. Certain Contracts; Amendments; Multiemployer ERISA Plans.............. 36
Section 7.11. Minimum Net Worth..................................................... 36
ARTICLE VIII - Events of Default and Remedies............................................... 36
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Section 8.1. Events of Default..................................................... 36
Section 8.2. Remedies.............................................................. 39
ARTICLE IX - Agent........................................................................... 39
Section 9.1. Appointment and Authority............................................. 39
Section 9.2. Exculpation, Agent's Reliance, Etc.................................... 39
Section 9.3. Credit Decisions...................................................... 40
Section 9.4. Indemnification....................................................... 40
Section 9.5. Rights as Lender...................................................... 41
Section 9.6. Sharing of Set-Offs and Other Payments................................ 41
Section 9.7. Investments........................................................... 41
Section 9.8. Benefit of Article IX................................................. 42
Section 9.9. Resignation........................................................... 42
ARTICLE X - Miscellaneous.................................................................... 42
Section 10.1. Waivers and Amendments; Acknowledgments............................... 42
Section 10.2. Survival of Agreements; Cumulative Nature............................. 44
Section 10.3. Notices............................................................... 44
Section 10.4. Payment of Expenses; Indemnity........................................ 45
Section 10.5. Joint and Several Liability; Parties in Interest; Assignments......... 46
Section 10.6. Confidentiality....................................................... 48
Section 10.7. Governing Law; Submission to Process.................................. 48
Section 10.8. Limitation on Interest................................................ 49
Section 10.9. Termination; Limited Survival......................................... 50
Section 10.10. Severability.......................................................... 50
Section 10.11. Counterparts.......................................................... 50
Section 10.12. Waiver of Jury Trial, Punitive Damages, etc........................... 50
Section 10.13. Restatement; Ratification of Agreements............................... 51
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Schedules and Exhibits:
Lender Schedule
Schedule 1 - Disclosure Schedule
Schedule 2 - Security Schedule
Schedule 3 - Insurance Schedule
Exhibit A - Promissory Note
Exhibit B - Request for Loan
Exhibit C - Continuation/Conversion Notice
Exhibit D - Certificate Accompanying Financial Statements
Exhibit E - Assignment and Acceptance
Exhibit F - Opinion of Counsel for Borrower
Exhibit G - Subsidiary Guaranty
Exhibit H - Parent Security Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is made as of DECEMBER 21,
1999, by and among STB Systems, Inc., a Texas corporation, doing business in the
State of Texas under the name of 3Dfx of Texas, Inc. (herein called "BORROWER"),
Bank One, Texas, N.A., individually and as agent (herein called "AGENT") and the
Lenders referred to below. In consideration of the mutual covenants and
agreements contained herein the parties hereto agree as follows:
ARTICLE I - Definitions and References
Section 1.1. Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it in this Section 1.1 or in the sections
and subsections referred to below:
"AFFILIATE" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power
(a) to vote 50% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGENT" means Bank One, Texas, N.A., as Agent hereunder, and its
successors in such capacity.
"AGREEMENT" means this Credit Agreement.
"APPLICABLE EURODOLLAR RATE MARGIN" means one percent (1.00%) per annum.
"BANK ONE" means Bank One, Texas, N.A., in its capacity as a Lender
hereunder.
"BANK PARTIES" means Agent and all Lenders.
"BASE RATE" means the higher of (a) the Prime Rate and (b) the Federal
Funds Rate, plus one-half percent (0.5%) per annum. If the Prime Rate or the
Federal Funds Rate changes after the date hereof the Base Rate shall be
automatically increased or decreased, as the case may be, without notice to
Borrower from time to time as of the effective time of each change in the Prime
Rate. The Base Rate shall in no event, however, exceed the Highest Lawful Rate.
"BASE RATE LOAN" means a Loan which does not bear interest at the
Eurodollar Rate.
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"BORROWER" means STB Systems, Inc., a Texas corporation.
"BORROWER'S MINIMUM ELIGIBLE RECEIVABLES" means at the particular time
in question, an amount equal to the amount determined by Agent from time to time
in its reasonable judgment (which judgment shall be exercised in good faith)
equal to the face amount of Eligible Receivables.
"BORROWING" means a borrowing of new Loans of a single Type pursuant to
Section 2.2 or a continuation or conversion of existing Loans into a single Type
(and, in the case of Eurodollar Loans, with the same Interest Period) pursuant
to Section 2.3.
"BORROWING BASE" means at the particular time in question, an amount
equal to the fair market value of the Marketable Securities Collateral
determined by Agent from time to time in its reasonable judgment (which judgment
shall be exercised in good faith); provided that in no event shall the Borrowing
Base exceed the Commitment.
"BORROWING BASE DEFICIENCY" has the meaning given it in Section 2.7(b).
"BORROWING BASE REPORT" means a report describing the Marketable
Securities Collateral in a form acceptable to Agent, prepared by Securities
Intermediary (and, upon request of Agent, copies of other information relating
to the Marketable Securities Collateral).
"BUSINESS DAY" means a day, other than a Saturday or Sunday, on which
commercial banks are open for business with the public in Dallas, Texas. Any
Business Day in any way relating to Eurodollar Loans (such as the day on which
an Interest Period begins or ends) must also be a day on which, in the judgment
of Agent, significant transactions in dollars are carried out in the interbank
eurocurrency market.
"COLLATERAL" means all property of any kind which is subject to a Lien
in favor of Lenders (or in favor of Agent for the benefit of Lenders) or which,
under the terms of any Security Document, is purported to be subject to such a
Lien.
"COMMITMENT" means the amount of $25,000,000.
"COMMITMENT PERIOD" means the period from and including the date hereof
until and including the Maturity Date (or, if earlier, the day on which any of
the Notes first becomes due and payable in full).
"CONSOLIDATED" refers to the consolidation of any Person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.
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"CONSOLIDATED BORROWER" means Borrower and Parent.
"CONSOLIDATED DEBT" means all Consolidated Indebtedness of Consolidated
Borrower that would under GAAP be shown on Consolidated Borrower's Consolidated
balance sheet as a liability.
"CONSOLIDATED NET WORTH" means, for any period, the total shareholder's
equity as reported on Consolidated Borrower's Consolidated Financial Statement
as reported to the Securities and Exchange Commission and/or Shareholders, or if
Consolidated Borrower's total shareholder's equity is not so reported,
Consolidated Borrower's Consolidated total shareholder's equity calculated in
accordance with GAAP.
"CONTINUATION/CONVERSION NOTICE" means a written or telephonic request,
or a written confirmation, made by Borrower which meets the requirements of
Section 2.3.
"DEFAULT" means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.
"DEFAULT RATE" means, at the time in question (a) with respect to any
Base Rate Loan, the rate per annum equal to two percent (2.0%) above the Base
Rate then in effect and (b) with respect to any Eurodollar Loan, the rate per
annum equal to two percent (2.0%) above the Eurodollar Rate then in effect for
such Loan, provided in each case that no Default Rate charged by any Person
shall ever exceed the Highest Lawful Rate.
"DISCLOSURE REPORT" means either a notice given by Borrower under
Section 6.4 or a certificate given by Borrower's chief financial officer under
Section 6.2(b).
"DISCLOSURE SCHEDULE" means Schedule 1 hereto.
"ELIGIBLE RECEIVABLES" means at any time an amount equal to the
aggregate net invoice or ledger amount owing on all trade accounts receivable of
Borrower for goods sold or services rendered, in which Agent has a perfected,
first priority security interest after deducting (a) any account that is owed by
the United States or any department, agency or instrumentality thereof, and (b)
all such accounts owing by Affiliates of Borrower or by officers or employees of
Borrower or any such Affiliate.
"ELIGIBLE TRANSFEREE" means a Person which either (a) is a Lender or an
Affiliate of a Lender, and (b) is consented to as an Eligible Transferee by
Agent (provided that no Person organized outside the United States may be an
Eligible Transferee if Borrower would be required to pay withholding taxes on
interest or principal owed to such Person).
"ENVIRONMENTAL LAWS" means any and all Laws relating to the environment
or to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or
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industrial, toxic or hazardous substances or wastes into the environment
including ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA PLAN" means any employee pension benefit plan subject to Title IV
of ERISA maintained by any Restricted Person with respect to which any
Restricted Person has a fixed or contingent liability.
"EURODOLLAR LOAN" means a Loan which is properly designated as a
Eurodollar Loan pursuant to Section 2.2 or 2.3.
"EURODOLLAR RATE" means, with respect to each particular Eurodollar Loan
and the associated LIBOR Rate and Reserve Percentage, the rate per annum
calculated by Agent (rounded upwards, if necessary, to the next higher 0.01%)
determined on a daily basis pursuant to the following formula:
Eurodollar Rate =
LIBOR Rate + Applicable Eurodollar Rate Margin
----------------------
100.0% - Reserve Percentage
The Eurodollar Rate for any Eurodollar Loan shall change whenever the Applicable
Eurodollar Rate Margin or the Reserve Percentage changes. No Eurodollar Rate
shall ever exceed the Highest Lawful Rate.
"EVENT OF DEFAULT" has the meaning given it in Section 8.1.
"FACILITY USAGE" means, at the time in question, the aggregate amount of
outstanding Loans at such time.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of one percent) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate quoted to Agent on such day on such transactions as determined by Agent.
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"FISCAL QUARTER" means a three-month period ending on January 31, April
30, July 31 or October 31 of any year.
"FISCAL YEAR" means a twelve-month period ending on January 31 of any
year.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of Borrower
and its Consolidated subsidiaries, are applied for all periods after the date
hereof in a manner consistent with the manner in which such principles and
practices were applied to the audited Initial Financial Statements. If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board (or any such successor) in order for such principle
or practice to continue as a generally accepted accounting principle or
practice, all reports and financial statements required hereunder with respect
to Borrower or with respect to Borrower and its Consolidated subsidiaries.
"GUARANTOR" means any Person who has guaranteed the Obligations pursuant
to a guaranty listed on the Security Schedule or any other Person who has
guaranteed the Obligations and who has been accepted by Agent as a Guarantor or
any Subsidiary of Borrower which now or hereafter executes and delivers a
guaranty to Agent pursuant to Section 6.17.
"HAZARDOUS MATERIALS" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.
"HEDGING CONTRACT" means (a) any agreement providing for options, swaps,
floors, caps, collars, forward sales or forward purchases involving interest
rates, commodities or commodity prices, equities, currencies, bonds, or indexes
based on any of the foregoing, (b) any option, futures or forward contract
traded on an exchange, and (c) any other derivative agreement or other similar
agreement or arrangement.
"HIGHEST LAWFUL RATE" means, with respect to each Lender, the maximum
nonusurious rate of interest that such Lender is permitted under applicable Law
to contract for, take, charge, or receive with respect to its Loan. All
determinations herein of the Highest Lawful Rate, or of any interest rate
determined by reference to the Highest Lawful Rate, shall be made separately for
each Lender as appropriate to assure that the Loan Documents are not construed
to obligate any Person to pay interest to any Lender at a rate in excess of the
Highest Lawful Rate applicable to such Lender.
"INDEBTEDNESS" of any Person means Liabilities in any of the following
categories:
(a) Liabilities for borrowed money,
(b) Liabilities constituting an obligation to pay the deferred purchase
price of property or services,
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(c) Liabilities evidenced by a bond, debenture, note or similar
instrument,
(d) Liabilities which would under GAAP be shown on such Person's balance
sheet as a liability,
(e) Liabilities arising under Hedging Contracts,
(f) Liabilities constituting principal under leases capitalized in
accordance with GAAP,
(g) Liabilities arising under conditional sales or other title retention
agreements,
(h) Liabilities owing under direct or indirect guaranties of Liabilities
of any other Person or constituting obligations to purchase or acquire or to
otherwise protect or insure a creditor against loss in respect of Liabilities of
any other Person (such as obligations under working capital maintenance
agreements, agreements to keep-well, or agreements to purchase Liabilities,
assets, goods, securities or services), but excluding endorsements in the
ordinary course of business of negotiable instruments in the course of
collection,
(i) Liabilities (for example, repurchase agreements) consisting of an
obligation to purchase securities or other property, if such Liabilities arises
out of or in connection with the sale of the same or similar securities or
property,
(j) Liabilities with respect to letters of credit or applications or
reimbursement agreements therefor, or
(k) Liabilities with respect to other obligations to deliver goods or
services in consideration of advance payments therefor;
provided, however, that the "INDEBTEDNESS" of any Person shall not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until such
Liabilities are outstanding more than 90 days past the original invoice or
billing date therefor.
"INITIAL FINANCIAL STATEMENTS" means (i) the audited annual Consolidated
financial statements of Consolidated Borrower dated as of October 31, 1999, and
(ii) the unaudited quarterly Consolidated financial statements of Consolidated
Borrower dated as of July 31, 1999.
"INSTRUMENTS" has the meaning given it in the UCC.
"INSURANCE SCHEDULE" means Schedule 3 attached hereto.
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"INTEREST PERIOD" means, with respect to each particular Eurodollar Loan
in a Borrowing, a period of 1, 2, 3, or 6 months, as specified in the Request
for Loan applicable thereto, beginning on and including the date specified in
such Request for Loan (which must be a Business Day), and ending on but not
including the same day of the month as the day on which it began (e.g., a period
beginning on the third day of one month shall end on but not include the third
day of another month), provided that each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (unless such next succeeding Business Day is the first Business Day
of a calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day). No Interest Period may be elected which
would extend past the date on which the associated Note is due and payable in
full.
"INVESTMENT" means any investment, in cash or by delivery of property
made, directly or indirectly in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or securities or by loan,
advance, capital contribution or otherwise.
"LAW" means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license, agreement or
other governmental restriction of the United States or any state or political
subdivision thereof or of any foreign country or any department, province or
other political subdivision thereof.
"LENDERS" means each signatory hereto (other than Borrower and
Restricted Persons a party hereto), including Bank One and the successors of
each such party as holder of a Note.
"LENDING OFFICE" means, with respect to any Lender, the office, branch,
or agency through which it funds its Eurodollar Loans; and, with respect to
Agent or Collateral Agent, the office, branch, or agency through which it
administers this Agreement.
"LIABILITIES" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent and whether or not required to be considered pursuant to GAAP.
"LIBOR RATE" means, with respect to each particular Eurodollar Loan for
the related Interest Period, the applicable British Bankers' Association
Interest Settlement Rate (rounded upwards, if necessary, to the nearest 1/16 of
1%) for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period, and having a maturity equal to such Interest Period, provided that, (i)
if Reuters Screen FRBD is not available to the Agent for any reason, the
applicable LIBOR Rate for the relevant Interest Period shall instead be the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, and having a maturity equal to such Interest Period,
and (ii) if no such British Bankers' Association Interest Settlement Rate is
available to the Agent, the applicable LIBOR Rate for the relevant Interest
Period shall instead be the rate determined by the
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Agent to be the rate at which Bank One or one of its Affiliate banks offers to
place deposits in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, in the approximate amount of such Eurodollar
Loan and having a maturity equal to such Interest Period.
"LIEN" means, with respect to any property or assets, any right or
interest therein of a creditor to secure Liabilities owed to him or any other
arrangement with such creditor which provides for the payment of such
Liabilities out of such property or assets or which allows him to have such
Liabilities satisfied out of such property or assets prior to the general
creditors of any owner thereof, including any lien, mortgage, security interest,
pledge, deposit, production payment, rights of a vendor under any title
retention or conditional sale agreement or lease substantially equivalent
thereto, tax lien, mechanic's or materialman's lien, or any other charge or
encumbrance for security purposes, whether arising by Law or agreement or
otherwise, but excluding any right of offset which arises without agreement in
the ordinary course of business. "LIEN" also means any filed financing
statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would serve
to perfect a Lien described in the preceding sentence, regardless of whether
such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.
"LOANS" has the meaning given it in Section 2.1.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security
Documents, and all other agreements, certificates, documents, instruments and
writings at any time delivered in connection herewith or therewith (exclusive of
term sheets, commitment letters, correspondence and similar documents used in
the negotiation hereof, except to the extent the same contain information about
Borrower or its Affiliates, properties, business or prospects).
"MAJORITY LENDERS" means Agent and Lenders whose aggregate Percentage
Shares equal or exceed sixty-six and two-thirds percent (66 2/3%).
"MARKETABLE SECURITIES COLLATERAL" means, at any time, all Securities,
Instruments, funds and other property, now or at any time hereafter on deposit
in the Securities Account.
"MATERIAL ADVERSE CHANGE" means a material and adverse change, from the
state of affairs presented in the Initial Financial Statements, to (a)
Borrower's and its Subsidiaries' Consolidated financial condition, (b) the
operations or properties of Borrower and its Subsidiaries, considered as a
whole, (c) Borrower's ability to timely pay the Obligations, or (d) the
enforceability of the material terms of any Loan Documents.
"MATURITY DATE" means December 19, 2000.
"NOTES" has the meaning given it in Section 2.1.
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"OBLIGATIONS" means all Liabilities from time to time owing by any
Restricted Person to any Bank Party under or pursuant to any of the Loan
Documents. "OBLIGATION" means any part of the Obligations.
"PARENT" means 3Dfx Interactive, Inc., a California corporation.
"PERCENTAGE SHARE" means, with respect to any Lender (a) when used in
Sections 2.1 or 2.5, in any Request for Loan or when no Loans are outstanding
hereunder, the percentage set forth opposite such Lender's name on Lender
Schedule attached hereto, and (b) when used otherwise, the percentage obtained
by dividing (i) the sum of the unpaid principal balance of such Lender's Loans
at the time in question, by (ii) the sum of the aggregate unpaid principal
balance of all Loans at such time.
"PERMITTED INVESTMENTS" means Investments in:
(a) marketable obligations, maturing within 12 months after acquisition
thereof, issued or unconditionally guaranteed by the United States of America or
an instrumentality or agency thereof and entitled to the full faith and credit
of the United States of America and securities purchased within the Bank One
Investment Advisors program.
(b) demand deposits, and time deposits (including certificates of
deposit) maturing within 12 months from the date of deposit thereof, with any
office of Bank One or with a domestic office of any national or state bank or
trust company which is organized under the Laws of the United States of America
or any state therein, which has capital, surplus and undivided profits of at
least $500,000,000, and whose certificates of deposit have at least the third
highest credit rating given by either Rating Agency.
(c) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (a) above entered into
with any commercial bank meeting the specifications of clause (b) above.
(d) open market commercial paper, maturing within 270 days after
acquisition thereof, which has the highest or second highest credit rating given
by either Rating Agency.
(e) investments in money market or other mutual funds substantially all
of whose assets comprise securities of the types described in clauses (a)
through (d) above.
(f) in joint ventures, so long as Agent is given 10 days advance notice
of each such investment and the aggregate amount paid, contributed, lent or
otherwise invested after the date hereof by the Restricted Persons in joint
ventures does not exceed $1,000,000.
"PERMITTED LIEN" has the meaning given to such term in Section 7.2.
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"PERSON" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust or trustee thereof,
estate or executor thereof, unincorporated organization or joint venture,
Tribunal, or any other legally recognizable entity.
"PRIME RATE" means a rate per annum equal to the prime rate of interest
announced from time to time by Agent or its parent (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.
"RATING AGENCY" means either Standard & Poor's Ratings Group (a division
of McGraw Hill, Inc.) or Moody's Investors Service, Inc., or their respective
successors.
"RECEIVABLES REPORT" means a report describing the Eligible Receivables
in a form acceptable to Agent, together with a detailed aged schedule of all
Eligible Receivables as of the date specified in such report, listing face
amounts and dates of invoices of each such Eligible Receivable and the name and
address of each account debtor obligated on such Eligible Receivable (and, upon
request of Agent, copies of invoices, credit reports, and any other matters and
information relating to the Eligible Receivables).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect.
"REQUEST FOR LOAN" means a written or telephonic request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.2.
"RESTRICTED PERSON" means any of Borrower, Parent, each Guarantor and
each Subsidiary of Borrower.
"RESERVE PERCENTAGE" means, on any day with respect to each particular
Eurodollar Loan, the maximum reserve requirement, as determined by Agent
(including without limitation any basic, supplemental, marginal, emergency or
similar reserves), expressed as a percentage and rounded to the next higher
0.01%, which would then apply under Regulation D with respect to "EUROCURRENCY
LIABILITIES", as such term is defined in Regulation D, of $1,000,000 or more. If
such reserve requirement shall change after the date hereof, the Reserve
Percentage shall be automatically increased or decreased, as the case may be,
from time to time as of the effective time of each such change in such reserve
requirement.
"SECURITIES" means both certificated and uncertificated securities as
such terms are defined in the UCC.
"SECURITIES ACCOUNT" means Banc One Investment Advisors, Liquidity Asset
Management Account #8334001711 in the name of Debtor established with Securities
Intermediary, and any custodial account which replaces such account.
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"SECURITIES INTERMEDIARY" means Bank One Trust Company, N.A., a national
banking association.
"SECURITIES PLEDGE AGREEMENT" means that certain Securities Pledge
Agreement dated as of November 23, 1999, executed by Borrower in favor of Agent,
as amended, supplemented or restated from time to time.
"SECURITY DOCUMENTS" means the instruments listed in the Security
Schedule and all other security agreements, deeds of trust, mortgages, chattel
mortgages, pledges, guaranties, financing statements, continuation statements,
extension agreements and other agreements or instruments now, heretofore, or
hereafter delivered by any Restricted Person to Agent in connection with this
Agreement or any transaction contemplated hereby to secure or guarantee the
payment of any part of the Obligations or the performance of any Restricted
Person's other duties and obligations under the Loan Documents.
"SECURITY SCHEDULE" means Schedule 2 hereto.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent or more by such Person.
"TRIBUNAL" means any government, any arbitration panel, any court or any
governmental department, commission, board, bureau, agency or instrumentality of
the United States of America or any state, province, commonwealth, nation,
territory, possession, county, parish, town, township, village or municipality,
whether now or hereafter constituted and/or existing.
"TYPE" means, with respect to any Loans, the characterization of such
Loans as either Base Rate Loans or Eurodollar Loans.
"UCC" means the Uniform Commercial Code in effect in the State of Texas
on the date hereof.
"VOTING STOCK" means, with respect to any Person, securities of any
class or classes of capital stock in such Person normally entitling the holders
thereof to vote in the election of members of the Board of Directors or other
governing body of such Person.
"YEAR 2000 ISSUES" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Borrower and its
Subsidiaries and of the Borrower's and its Subsidiaries' material customers,
suppliers and vendors.
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Section 1.1. Exhibits and Schedules; Additional Definitions. All
Exhibits and Schedules attached to this Agreement are a part hereof for all
purposes. Reference is hereby made to the Security Schedule for the meaning of
certain terms defined therein and used but not defined herein, which definitions
are incorporated herein by reference.
Section 1.2. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.
Section 1.3. References and Titles. All references in this Agreement to
Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "THIS
AGREEMENT", "THIS INSTRUMENT", "HEREIN", "HEREOF", "HEREBY", "HEREUNDER" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "THIS SECTION"
and "THIS SUBSECTION" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "OR" is not exclusive,
and the word "INCLUDING" (in its various forms) means "INCLUDING WITHOUT
LIMITATION". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
Section 1.4. Calculations and Determinations. All calculations under the
Loan Documents of interest chargeable with respect to Eurodollar Loans and of
fees shall be made on the basis of actual days elapsed (including the first day
but excluding the last) and a year of 360 days. Each determination by a Bank
Party of amounts to be paid under Sections 3.2 through 3.6 or any other matters
which are to be determined hereunder by a Bank Party (such as any Eurodollar
Rate, LIBOR Rate, Business Day, Interest Period, or Reserve Percentage) shall,
in the absence of manifest error, be conclusive and binding. Unless otherwise
expressly provided herein or unless Majority Lenders otherwise consent all
financial statements and reports furnished to any Bank Party hereunder shall be
prepared and all financial computations and determinations pursuant hereto shall
be made in accordance with GAAP.
ARTICLE II - The Loans
Section 2.1. Commitments to Lend; Notes. Subject to the terms and
conditions hereof, each Lender agrees to make advances to Borrower (herein
called such Lender's "LOANS") upon request from time to time during the
Commitment Period so long as (i) each Loan by such Lender does not exceed such
Lender's Percentage Share of the aggregate amount of Loans then
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requested from all Lenders, and (ii) the aggregate amount of such Lender's Loans
outstanding at any time does not exceed such Lender's Percentage Share of the
Borrowing Base determined as of the date on which the requested Loan is to be
made, and (iii) the aggregate amount of all Loans outstanding at any time does
not exceed the Borrowing Base. The aggregate amount of all Base Rate Loans
requested of all Lenders in any Request for Loan must be greater than or equal
to $100,000 or must equal the unadvanced portion of the Borrowing Base and the
aggregate amount of all Eurodollar Loans requested of all Lenders in any Request
for Loan must be greater than or equal to $1,000,000 (and in multiples of
$250,000 if in excess thereof). Borrower may have no more than five Borrowings
of Eurodollar Loans outstanding at any time. The obligation of Borrower to repay
to each Lender the aggregate amount of all Loans made by such Lender together
with interest accruing in connection therewith, shall be evidenced by a single
promissory note (herein called such Lender's "NOTE") made by Borrower payable to
the order of such Lender in the form of Exhibit A with appropriate insertions.
The amount of principal owing on any Lender's Note at any given time shall be
the aggregate amount of all Loans theretofore made by such Lender minus all
payments of principal theretofore received by such Lender on such Note. Interest
on each Note shall accrue and be due and payable as provided herein and therein,
with Eurodollar Loans bearing interest at the Eurodollar Rate and Base Rate
Loans bearing interest at the Base Rate (subject to the applicability of the
Default Rate). Subject to the terms and conditions hereof, Borrower may borrow,
repay, and reborrow under the Note during the Commitment Period.
Section 2.2. Requests for New Loans. Borrower must give to Agent written
notice (or telephonic notice promptly confirmed in writing) of any requested
Borrowing of new Loans to be advanced by Lenders. Each such notice constitutes a
"REQUEST FOR LOAN" hereunder and must:
(a) specify (i) the aggregate amount of any such Borrowing of new
Base Rate Loans and the date on which such Base Rate Loans are to be
advanced, or (ii) the aggregate amount of any such Borrowing of new
Eurodollar Loans, the date on which such Eurodollar Loans are to be
advanced (which shall be the first day of the Interest Period which is
to apply thereto), and the length of the applicable Interest Period; and
(b) be received by Agent (i) not later than 1:00 p.m., Dallas,
Texas time, on the day on which any such Base Rate Loans are to be made,
or (ii) on the third Business Day preceding the day on which any such
Eurodollar Loans are to be made.
Each such written request or confirmation must be made in the form and substance
of the "REQUEST FOR LOAN" attached hereto as Exhibit B, duly completed. Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by Borrower as to the matters which are required to
be set out in such written confirmation. Upon receipt of any such Request for
Loan, Agent shall give each Lender prompt notice of the terms thereof. If all
conditions precedent to such new Loans have been met, each Lender will on the
date requested promptly remit to Agent at Agent's office in Dallas, Texas the
amount of such Lender's new Loan in immediately available funds, and upon
receipt of such funds, unless to its actual knowledge any conditions precedent
to such Loans have been neither met nor waived as provided herein,
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Agent shall promptly make such Loans available to Borrower. Unless Agent shall
have received prompt notice from a Lender that such Lender will not make
available to Agent such Lender's new Loan, Agent may in its discretion assume
that such Lender has made such Loan available to Agent in accordance with this
section and Agent may if it chooses, in reliance upon such assumption, make such
Loan available to Borrower. If and to the extent such Lender shall not so make
its new Loan available to Agent, such Lender and Borrower severally agree to pay
or repay to Agent within three days after demand the amount of such Loan
together with interest thereon, for each day from the date such amount was made
available to Borrower until the date such amount is paid or repaid to Agent,
with interest at (i) the Federal Funds Rate, if such Lender is making such
payment and (ii) the interest rate applicable at the time to the other new Loans
made on such date, if Borrower is making such repayment. If neither such Lender
nor Borrower pay or repay to Agent such amount within such three-day period,
Agent shall in addition to such amount be entitled to recover from such Lender
and from Borrower, on demand, interest thereon at the Default Rate, calculated
from the date such amount was made available to Borrower. The failure of any
Lender to make any new Loan to be made by it hereunder shall not relieve any
other Lender of its obligation hereunder, if any, to make its new Loan, but no
Lender shall be responsible for the failure of any other Lender to make any new
Loan to be made by such other Lender.
Section 2.3. Continuations and Conversions of Existing Loans. Borrower
may make the following elections with respect to Loans already outstanding: to
convert Base Rate Loans to Eurodollar Loans, to convert Eurodollar Loans to Base
Rate Loans on the last day of the Interest Period applicable thereto, and to
continue Eurodollar Loans beyond the expiration of such Interest Period by
designating a new Interest Period to take effect at the time of such expiration.
In making such elections, Borrower may combine existing Loans made pursuant to
separate Borrowings into one new Borrowing or divide existing Loans made
pursuant to one Borrowing into separate new Borrowings. To make any such
election, Borrower must give to Agent written notice (or telephonic notice
promptly confirmed in writing) of any such conversion or continuation of
existing Loans, with a separate notice given for each new Borrowing. Each such
notice constitutes a "CONTINUATION/CONVERSION NOTICE" hereunder and must:
(a) specify the existing Loans which are to be continued or
converted;
(b) specify (i) the aggregate amount of any Borrowing of Base Rate
Loans into which such existing Loans are to be continued or converted
and the date on which such continuation or conversion is to occur, or
(ii) the aggregate amount of any Borrowing of Eurodollar Loans into
which such existing Loans are to be continued or converted, the date on
which such continuation or conversion is to occur (which shall be the
first day of the Interest Period which is to apply to such Eurodollar
Loans), and the length of the applicable Interest Period; and
(c) be received by Agent not later than 10:00 a.m., Dallas, Texas
time, on (i) the day on which any such continuation or conversion to
Base Rate Loans is to occur,
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or (ii) the third Business Day preceding the day on which any such
continuation or conversion to Eurodollar Loans is to occur.
Each such written request or confirmation must be made in the form and substance
of the "CONTINUATION/CONVERSION NOTICE" attached hereto as Exhibit C, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. Upon receipt of any such
Request for Loan, Agent shall give each Lender prompt notice of the terms
thereof. Each Request for Loan shall be irrevocable and binding on Borrower.
During the continuance of any Default, Borrower may not make any election to
convert existing Loans into Eurodollar Loans or continue existing Loans as
Eurodollar Loans. If (due to the existence of a Default or for any other reason)
Borrower fails to timely and properly give any notice of continuation or
conversion with respect to a Borrowing of existing Eurodollar Loans at least
three days prior to the end of the Interest Period applicable thereto, such
Eurodollar Loans shall automatically be converted into Base Rate Loans at the
end of such Interest Period. No new funds shall be repaid by Borrower or
advanced by any Lender in connection with any continuation or conversion of
existing Loans pursuant to this section, and no such continuation or conversion
shall be deemed to be a new advance of funds for any purpose; such continuations
and conversions merely constitute a change in the interest rate applicable to
already outstanding Loans.
Section 2.4. Use of Proceeds. Borrower shall use all Loans to refinance
existing revolving debt, to provide working capital for its operations and for
other general business purposes. In no event shall the funds from any Loan be
used directly or indirectly by any Person for personal, family, household or
agricultural purposes or for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin stock" or any "margin
securities" (as such terms are defined respectively in Regulation U and
Regulation G promulgated by the Board of Governors of the Federal Reserve
System) or to extend credit to others directly or indirectly for the purpose of
purchasing or carrying any such margin stock or margin securities. Borrower
represents and warrants that Borrower is not engaged principally, or as one of
Borrower's important activities, in the business of extending credit to others
for the purpose of purchasing or carrying such margin stock or margin
securities.
Section 2.5. Fees.
(a) Commitment Fees. (i) In consideration of Bank One's commitment to
make Loans, Borrower will pay to Agent for the account of Bank One a commitment
fee determined on a daily basis by applying a rate of twenty-five basis points
(0.25%) per annum to Bank One's Percentage Share of the unused portion of the
Commitment on each day during the Commitment Period, determined for each such
day by deducting from the amount of the Commitment at the end of such day the
Facility Usage. This commitment fee shall be due and payable in arrears on the
tenth day of each Fiscal Quarter for the immediately preceding Fiscal Quarter
and at the end of the Commitment Period.
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(ii) In consideration of the commitment of each Lender except for
Bank One, to make Loans, Borrower will pay to Agent for the account of each such
Lender, a commitment fee determined on a daily basis by applying a rate of
twenty-five basis points (0.25%) per annum to each such Lender's Percentage
Share of the unused portion of the Commitment on each day during the Commitment
Period, determined for each such day by deducting from the amount of the
Commitment at the end of such day the Facility Usage. This commitment fee shall
be due and payable in arrears on the tenth day of each Fiscal Quarter for the
immediately preceding Fiscal Quarter and at the end of the Commitment Period.
(iii) In consideration of Agent's obligations hereunder, Borrower
will pay to Agent for its own account a fee determined on a daily basis by
applying a rate of twelve and one-half basis points (0.125%) per annum to the
unused portion of the Commitment on each day during the Commitment Period,
determined for each such day by deducting from the amount of the Commitment at
the end of such day the Facility Usage. This fee shall be due and payable in
arrears on the tenth day of each Fiscal Quarter for the immediately preceding
Fiscal Quarter and at the end of the Commitment Period.
(b) Agent's Fees. In addition to all other amounts due to Agent under
the Loan Documents, Borrower will pay additional fees to Agent as mutually
agreed by Agent and Borrower from time to time.
Section 2.6. Optional Prepayments. Borrower may, upon one Business Days'
notice to each Lender, from time to time (and in the case of Eurodollar Loans,
prior to the last day of the Interest Period) and without premium or penalty
prepay the Notes, in whole or in part, so long as the aggregate amounts of all
partial prepayments of principal on the Notes equals $1,000,000 or any higher
integral multiple of $1,000,000 and so long as any applicable funding losses are
paid by Borrower as required by Section 3.5. Any principal or interest prepaid
pursuant to this section shall be in addition to, and not in lieu of, all
payments otherwise required to be paid under the Loan Documents at the time of
such prepayment.
Section 2.7. Mandatory Prepayments.
(a) If at any time the Facility Usage exceeds the Commitment (whether
due to a reduction in the Commitment in accordance with this Agreement, or
otherwise), Borrower shall immediately upon demand prepay the principal of the
Loans in an amount at least equal to such excess.
(b) If at any time the Facility Usage is less than the Commitment but in
excess of the Borrowing Base (such excess being herein called a "BORROWING BASE
DEFICIENCY"), Borrower shall, within one Business Day after Agent gives notice
of such fact to Borrower, prepay the principal of the Loans in an aggregate
amount at least equal to such Borrowing Base Deficiency. If any Lender notifies
Agent that a Borrowing Base Deficiency exists, Agent shall promptly notify
Borrower thereof.
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(c) Each prepayment of principal under this section shall be accompanied
by all interest then accrued and unpaid on the principal so prepaid. Any
principal or interest prepaid pursuant to this section shall be in addition to,
and not in lieu of, all payments otherwise required to be paid under the Loan
Documents at the time of such prepayment.
Section 2.8. Subsequent Determinations of Borrowing Base. Promptly after
receiving each Borrowing Base Report, Agent shall determine the Borrowing Base
(provided that all Lenders must agree to any increase in the Borrowing Base),
which determination shall take effect immediately and remain in effect until the
Agent receives the next Borrowing Base Report and determines the next Borrowing
Base. In the event Agent has not received an appropriately completed Borrowing
Base Report (with all attachments) within the time period specified therein,
Agent shall have no obligation to redetermine the Borrowing Base and no Lender
shall have any obligation to make any additional Advances until such time as
Agent shall have received such information.
ARTICLE III - Payments to Lenders
Section 3.1. General Procedures. Borrower will make each payment which
it owes under the Loan Documents to Agent for the account of the Bank Party to
whom such payment is owed. Each such payment must be received by Agent not later
than 11:00 a.m., Dallas, Texas time, on the date such payment becomes due and
payable, in lawful money of the United States of America, without set-off,
deduction or counterclaim, and in immediately available funds. Any payment
received by Agent after such time will be deemed to have been made on the next
following Business Day. Should any such payment become due and payable on a day
other than a Business Day, the maturity of such payment shall be extended to the
next succeeding Business Day, and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is due.
Each payment under a Loan Document shall be due and payable at the place
provided therein and, if no specific place of payment is provided, shall be due
and payable at the place of payment of Agent's Note. When Agent collects or
receives money on account of the Obligations, Agent shall distribute all money
so collected or received, and each Bank Party shall apply all such money so
distributed, as follows:
(a) first, for the payment of all Obligations which are then due
under the Loan Documents (and if such money is insufficient to pay all
such Obligations, first to any reimbursements due Agent under Section
6.9 or 10.4 and then to the partial payment of all other Obligations
then due in proportion to the amounts thereof, or as Bank Parties shall
otherwise agree);
(b) then for the prepayment of amounts owing under the Loan
Documents (other than principal on the Notes) if so specified by
Borrower;
(c) then for the prepayment of principal on the Notes, together
with accrued and unpaid interest on the principal so prepaid; and
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(d) last, for the payment or prepayment of any other obligations
secured by the Security Documents.
All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Sections
2.6 and 2.7. All distributions of amounts described in any of subsections (b),
(c) or (d) above shall be made by Agent pro rata to each Bank Party then owed
Obligations described in such subsection in proportion to all amounts owed to
all Bank Parties which are described in such subsection.
Section 3.2. Capital Reimbursement. If either (a) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any Law, or (b) the introduction or implementation of or the
compliance with any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force of Law) affects or
would affect the amount of capital required or expected to be maintained by any
Bank Party or any corporation controlling any Bank Party, then, upon demand by
such Bank Party, Borrower will pay to Agent for the benefit of such Bank Party,
from time to time as specified by such Bank Party, such additional amount or
amounts which such Bank Party shall determine to be appropriate to compensate
such Bank Party or any corporation controlling such Bank Party in light of such
circumstances, to the extent that such Bank Party reasonably determines that the
amount of any such capital would be increased or the rate of return on any such
capital would be reduced by or in whole or in part based on the existence of the
face amount of such Bank Party's Loans, or participations in commitments under
this Agreement.
Section 3.3. Increased Cost of Eurodollar Loans. If any applicable Law
(whether now in effect or hereinafter enacted or promulgated, including
Regulation D) or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of Law):
(a) shall change the basis of taxation of payments to any Bank
Party of any principal, interest, or other amounts attributable to any
Eurodollar Loan or otherwise due under this Agreement in respect of any
Eurodollar Loan (other than taxes imposed on the overall net income of
such Bank Party or any lending office of such Bank Party by any
jurisdiction in which such Bank Party or any such lending office is
located); or
(b) shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of any
Eurodollar Loan (excluding those for which such Bank Party is fully
compensated pursuant to adjustments made in the definition of Eurodollar
Rate) or against assets of, deposits with or for the account of, or
credit extended by, such Bank Party; or
(c) shall impose on any Bank Party or the interbank eurocurrency
deposit market any other condition affecting any Eurodollar Loan, the
result of which is to increase the cost to any Bank Party of funding or
maintaining any Eurodollar Loan or to
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reduce the amount of any sum receivable by any Bank Party in respect of
any Eurodollar Loan by an amount deemed by such Bank Party to be
material,
then such Bank Party shall promptly notify Agent and Borrower in writing of the
happening of such event and of the amount required to compensate such Bank Party
for such event (on an after-tax basis, taking into account any taxes on such
compensation), whereupon (i) Borrower shall pay such amount to Agent for the
account of such Bank Party and (ii) Borrower may elect, by giving to Agent and
such Bank Party not less than three Business Days' notice, to convert all (but
not less than all) of any such Eurodollar Loans into Base Rate Loans.
Section 3.4. Availability. If (a) any change in applicable Laws, or in
the interpretation or administration thereof of or in any jurisdiction
whatsoever, domestic or foreign, shall make it unlawful or impracticable for any
Bank Party to fund or maintain Eurodollar Loans, or shall materially restrict
the authority of any Bank Party to purchase or take offshore deposits of dollars
(i.e., "eurodollars"), or (b) any Bank Party determines that matching deposits
appropriate to fund or maintain any Eurodollar Loan are not available to it, or
(c) any Bank Party determines that the formula for calculating the Adjusted
Eurodollar Rate does not fairly reflect the cost to such Bank Party of making or
maintaining loans based on such rate, then, upon notice by such Bank Party to
Borrower and Agent, Borrower's right to elect Eurodollar Loans from such Bank
Party shall be suspended to the extent and for the duration of such illegality,
impracticability or restriction and all Eurodollar Loans of such Bank Party
which are then outstanding or are then the subject of any Request for Loan and
which cannot lawfully or practicably be maintained or funded shall immediately
become or remain, or shall be funded as, Base Rate Loans of such Bank Party.
Borrower agrees to reimburse each Bank Party for all costs, expenses, claims,
penalties, liabilities and damages which may result from any such change in Law,
interpretation or administration. Such reimbursement shall be on an after-tax
basis, taking into account any taxes imposed on the amounts reimbursed.
Section 3.5. Funding Losses. In addition to its other obligations
hereunder, Borrower will reimburse each Bank Party on demand for, any loss or
expense incurred or sustained by such Bank Party (including any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by a Bank Party to fund or maintain Eurodollar Loans), as a result of
(a) any payment or prepayment (whether authorized or required hereunder or
otherwise) of all or a portion of a Eurodollar Loan on a day other than the day
on which the applicable Interest Period ends, (b) any payment or prepayment,
whether required hereunder or otherwise, of a Loan made after the delivery, but
before the effective date, of a Continuation/Conversion Notice, if such payment
or prepayment prevents such Continuation/Conversion Notice from becoming fully
effective, (c) the failure of any Loan to be made or of any
Continuation/Conversion Notice to become effective due to any condition
precedent not being satisfied or due to any other action or inaction of any
Restricted Person, or (d) any conversion (whether authorized or required
hereunder or otherwise) of all or any portion of any Eurodollar Loan into a Base
Rate Loan or into a different Eurodollar Loan on a day other than the day on
which the applicable Interest Period ends. Such reimbursement shall be on an
after-tax basis, taking into account any taxes imposed on the amounts
reimbursed.
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Section 3.6. Reimbursable Taxes. Borrower covenants and agrees that:
(a) Borrower will reimburse each Bank Party for all present and
future income, stamp and other taxes, levies, costs and charges
whatsoever imposed, assessed, levied or collected on or in respect of
this Agreement or any Eurodollar Loans (whether or not legally or
correctly imposed, assessed, levied or collected), excluding, however,
any taxes imposed on or measured by the overall net income of Agent or
such Bank Party or any lending office of such Bank Party by any
jurisdiction in which such Bank Party or any such lending office is
located (all such non-excluded taxes, levies, costs and charges being
collectively called "REIMBURSABLE TAXES" in this section). Such
reimbursement shall be on an after-tax basis, taking into account any
taxes imposed on the amounts reimbursed.
(b) All payments on account of the principal of, and interest on,
each Bank Party's Loans and Note, and all other amounts payable by
Borrower to any Bank Party hereunder, shall be made in full without
set-off or counterclaim and shall be made free and clear of and without
deductions or withholdings of any nature by reason of any Reimbursable
Taxes, all of which will be for the account of Borrower. In the event of
Borrower being compelled by Law to make any such deduction or
withholding from any payment to any Bank Party, Borrower shall pay on
the due date of such payment, by way of additional interest, such
additional amounts as are needed to cause the amount receivable by such
Bank Party after such deduction or withholding to equal the amount which
would have been receivable in the absence of such deduction or
withholding. If Borrower should make any deduction or withholding as
aforesaid, Borrower shall within 60 days thereafter forward to such Bank
Party an official receipt or other official document evidencing payment
of such deduction or withholding.
(c) If Borrower is ever required to pay any Reimbursable Tax with
respect to any Eurodollar Loan, Borrower may elect, by giving to Agent
and such Bank Party not less than three Business Days' notice, to
convert all (but not less than all) of any such Eurodollar Loan into a
Base Rate Loan, but such election shall not diminish Borrower's
obligation to pay all Reimbursable Taxes.
(d) Notwithstanding the foregoing provisions of this section,
Borrower shall be entitled, to the extent it is required to do so by
Law, to deduct or withhold (and not to make any reimbursement for)
income or other similar taxes imposed by the United States of America
(other than any portion thereof attributable to a change in federal
income tax Laws effected after the date hereof) from interest, fees or
other amounts payable hereunder for the account of any Bank Party, other
than a Bank Party (i) who is a U.S. person for Federal income tax
purposes or (ii) who has the Prescribed Forms on file with Agent (with
copies provided to Borrower) for the applicable year to the extent
deduction or withholding of such taxes
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is not required as a result of the filing of such Prescribed Forms,
provided that if Borrower shall so deduct or withhold any such taxes, it
shall provide a statement to Agent and such Bank Party, setting forth
the amount of such taxes so deducted or withheld, the applicable rate
and any other information or documentation which such Bank Party may
reasonably request for assisting such Bank Party to obtain any allowable
credits or deductions for the taxes so deducted or withheld in the
jurisdiction or jurisdictions in which such Bank Party is subject to
tax. As used in this section, "Prescribed Forms" means such duly
executed forms or statements, and in such number of copies, which may,
from time to time, be prescribed by Law and which, pursuant to
applicable provisions of (x) an income tax treaty between the United
States and the country of residence of the Bank Party providing the
forms or statements, (y) the Internal Revenue Code of 1986, as amended
from time to time, or (z) any applicable rules or regulations
thereunder, permit Borrower to make payments hereunder for the account
of such Bank Party free of such deduction or withholding of income or
similar taxes.
Section 3.7. [RESERVED].
Section 3.8. Replacement of Lenders. If any Bank Party seeks
reimbursement for increased costs under Sections 3.2 through 3.6, then within
ninety days thereafter -- provided no Event of Default then exists -- Borrower
shall have the right (unless such Bank Party withdraws its request for
additional compensation) to replace such Bank Party by requiring such Bank Party
to assign its Loans and Notes and its commitments hereunder to an Eligible
Transferee reasonably acceptable to Agent and to Borrower, provided that: (i)
all Obligations of Borrower owing to such Bank Party being replaced (including
such increased costs, but excluding principal and accrued interest on the Notes
being assigned) shall be paid in full to such Bank Party concurrently with such
assignment, (ii) the replacement Eligible Transferee shall purchase the Note
being assigned by paying to such Bank Party a price equal to the principal
amount thereof plus accrued and unpaid interest thereon, and (iii) any
applicable funding losses are paid by Borrower as required by Section 3.5 a
result of such replacement. In connection with any such assignment Borrower,
Agent, such Bank Party and the replacement Eligible Transferee shall otherwise
comply with Section 10.5. Notwithstanding the foregoing rights of Borrower under
this section, however, Borrower may not replace any Bank Party which seeks
reimbursement for increased costs under Section 3.2 through 3.6 unless Borrower
is at the same time replacing all Bank Parties which are then seeking such
compensation.
ARTICLE IV - Conditions Precedent to Lending
Section 4.1. Documents to be Delivered. No Lender has any obligation to
make its first Loan, unless Agent shall have received all of the following, at
Agent's office in Dallas, Texas, duly executed and delivered and in form,
substance and date satisfactory to Agent:
(a) This Agreement and any other documents that Lenders are to
execute in connection herewith.
(b) Each Note.
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(c) Each Security Document listed in the Security Schedule.
(d) Certain certificates of Borrower including:
(i) An "Omnibus Certificate" of the Secretary and of the
Chairman of the Board or President of Borrower, which shall contain
the names and signatures of the officers of Borrower authorized to
execute Loan Documents and which shall certify to the truth,
correctness and completeness of the following exhibits attached
thereto: (1) a copy of resolutions duly adopted by the Board of
Directors of Borrower and in full force and effect at the time this
Agreement is entered into, authorizing the execution of this
Agreement and the other Loan Documents delivered or to be delivered
in connection herewith and the consummation of the transactions
contemplated herein and therein, (2) a copy of the charter
documents of Borrower and all amendments thereto, certified by the
appropriate official of Borrower's state of organization, and (3) a
copy of any bylaws of Borrower; and
(ii) A "Compliance Certificate" of the Chairman of the Board
or President and of the chief financial officer of Borrower, of
even date with such Loan, in which such officers certify to the
satisfaction of the conditions set out in subsections (a), (b), (c)
and (d) of Section 4.2.
(e) A certificate (or certificates) of the due formation, valid
existence and good standing of Borrower in its state of organization,
issued by the appropriate authorities of such jurisdiction, and
certificates of Borrower's good standing and due qualification to do
business, issued by appropriate officials in any states in which
Borrower owns property subject to Security Documents.
(f) Documents similar to those specified in subsections (d)(i) and
(e) of this section with respect to each Guarantor and the execution by
it of its guaranty of Borrower's Obligations.
(g) A favorable opinion of Locke Liddell Sapp, counsel for
Restricted Persons, substantially in the form set forth in Exhibit F.
(h) The Initial Financial Statements.
(i) Certificates or binders evidencing Restricted Persons'
insurance in effect on the date hereof.
Section 4.2. Additional Conditions Precedent. No Lender has any
obligation to make any Loan (including its first), unless the following
conditions precedent have been satisfied:
(a) All representations and warranties made by any Restricted
Person in any Loan Document shall be true on and as of the date of such
Loan (except to the extent that
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the facts upon which such representations are based have been changed by
the extension of credit hereunder) as if such representations and
warranties had been made as of the date of such Loan.
(b) No Default shall exist at the date of such Loan.
(c) No Material Adverse Change shall have occurred to, and no event
or circumstance shall have occurred that could cause a Material Adverse
Change to, Borrower's Consolidated financial condition or businesses
since the date of this Agreement.
(d) Each Restricted Person shall have performed and complied with
all agreements and conditions required in the Loan Documents to be
performed or complied with by it on or prior to the date of such Loan.
(e) The making of such Loan shall not be prohibited by any Law and
shall not subject any Lender to any penalty or other onerous condition
under or pursuant to any such Law.
(f) Agent shall have received all documents and instruments which
Agent has then requested, in addition to those described in Section 4.1
(including opinions of legal counsel for Restricted Persons and Agent;
corporate documents and records; documents evidencing governmental
authorizations, consents, approvals, licenses and exemptions; and
certificates of public officials and of officers and representatives of
Borrower and other Persons), as to (i) the accuracy and validity of or
compliance with all representations, warranties and covenants made by
any Restricted Person in this Agreement and the other Loan Documents,
(ii) the satisfaction of all conditions contained herein or therein, and
(iii) all other matters pertaining hereto and thereto. All such
additional documents and instruments shall be satisfactory to Agent in
form, substance and date.
(g) Payment of all commitment, facility, agency and other fees
required to be paid to any Bank Party pursuant to any Loan Documents or
any commitment agreement heretofore entered into.
ARTICLE V - Representations and Warranties
To confirm each Bank Party's understanding concerning Restricted Persons
and Restricted Persons' businesses, properties and obligations and to induce
each Bank Party to enter into this Agreement and to extend credit hereunder,
Borrower represents and warrants to each Bank Party that:
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Section 5.1. No Default. No Restricted Person is in default in the
performance of any of the covenants and agreements contained in any Loan
Document. To the best of Borrower's knowledge, no event has occurred and is
continuing which constitutes a Default.
Section 5.2. Organization and Good Standing. Each Restricted Person is
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby. Each
Restricted Person is duly qualified, in good standing, and authorized to do
business in all other jurisdictions within the United States wherein the
character of the properties owned or held by it or the nature of the business
transacted by it makes such qualification necessary. Each Restricted Person has
taken all actions and procedures customarily taken in order to enter, for the
purpose of conducting business or owning property, each jurisdiction outside the
United States wherein the character of the properties owned or held by it or the
nature of the business transacted by it makes such actions and procedures
desirable.
Section 5.3. Authorization. Each Restricted Person has duly taken all
action necessary to authorize the execution and delivery by it of the Loan
Documents to which it is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder. Borrower is duly authorized to borrow funds hereunder.
Section 5.4. No Conflicts or Consents. The execution and delivery by the
various Restricted Persons of the Loan Documents to which each is a party, the
performance by each of its obligations under such Loan Documents, and the
consummation of the transactions contemplated by the various Loan Documents, do
not and will not (i) conflict with any provision of (1) any Law, (2) the
organizational documents of any Restricted Person, or (3) any agreement,
judgment, license, order or permit applicable to or binding upon any Restricted
Person, (ii) result in the acceleration of any Indebtedness owed by any
Restricted Person, or (iii) result in or require the creation of any Lien upon
any assets or properties of any Restricted Person except as expressly
contemplated in the Loan Documents. Except as expressly contemplated in the Loan
Documents no consent, approval, authorization or order of, and no notice to or
filing with, any Tribunal or third party is required in connection with the
execution, delivery or performance by any Restricted Person of any Loan Document
or to consummate any transactions contemplated by the Loan Documents.
Section 5.5. Enforceable Obligations. This Agreement is, and the other
Loan Documents when duly executed and delivered will be, legal, valid and
binding obligations of each Restricted Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such enforcement
may be limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors' rights.
Section 5.6. Initial Financial Statements. Borrower has heretofore
delivered to each Bank Party true, correct and complete copies of the Initial
Financial Statements. The Initial Financial Statements fairly present Borrower's
Consolidated financial position at the respective dates thereof and the
Consolidated results of Borrower's operations and Borrower's Consolidated
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cash flows for the respective periods thereof. Since the date of the annual
Initial Financial Statements no Material Adverse Change has occurred. All
Initial Financial Statements were prepared in accordance with GAAP.
Section 5.7. Other Obligations and Restrictions. No Restricted Person
has any outstanding Liabilities of any kind (including contingent obligations,
tax assessments, and unusual forward or long-term commitments) which is, in the
aggregate, material to Borrower or material with respect to Borrower's
Consolidated financial condition and not shown in the Initial Financial
Statements or disclosed in the Disclosure Schedule or a Disclosure Report.
Except as shown in the Initial Financial Statements or disclosed in the
Disclosure Schedule or a Disclosure Report, no Restricted Person is subject to
or restricted by any franchise, contract, deed, charter restriction, or other
instrument or restriction which could cause a Material Adverse Change.
Section 5.8. Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Restricted Person to any
Bank Party in connection with the negotiation of this Agreement or in connection
with any transaction contemplated hereby contains any untrue statement of a
material fact or omits to state any material fact known to any Restricted Person
(other than industry-wide risks normally associated with the types of businesses
conducted by Restricted Persons) necessary to make the statements contained
herein or therein not misleading as of the date made or deemed made. There is no
fact known to any Restricted Person that has not been disclosed to each Bank
Party in writing which could cause a Material Adverse Change.
Section 5.9. Litigation. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (i) there are no actions, suits or
legal, equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Restricted Person threatened, against any Restricted Person
before any Tribunal which could cause a Material Adverse Change, and (ii) there
are no outstanding judgments, injunctions, writs, rulings or orders by any such
Tribunal against any Restricted Person or any Restricted Person's stockholders,
partners, directors or officers which could cause a Material Adverse Change.
Section 5.10. Labor Disputes and Acts of God. Except as disclosed in the
Disclosure Schedule or a Disclosure Report, neither the business nor the
properties of any Restricted Person has been affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), which could cause a Material Adverse
Change.
Section 5.11. ERISA Plans and Liabilities. All currently existing ERISA
Plans are listed in the Disclosure Schedule or a Disclosure Report. All
Restricted Persons are in compliance with ERISA in all material respects. No
Restricted Person is required to contribute to, or has any other absolute or
contingent liability in respect of, any "multiemployer plan" as defined in
Section 4001 of ERISA. Except as set forth in the Disclosure Schedule or a
Disclosure Report: (i) no "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as amended) exists with
respect to any ERISA Plan, whether or not waived by the
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Secretary of the Treasury or his delegate, and (ii) the current value of each
ERISA Plan's benefits does not exceed the current value of such ERISA Plan's
assets available for the payment of such benefits by more than $500,000.
Section 5.12. Environmental and Other Laws. Except as disclosed in the
Disclosure Schedule or a Disclosure Report: (a) Restricted Persons are
conducting their businesses in material compliance with all applicable Laws,
including Environmental Laws, and have and are in compliance with all licenses
and permits required under any such Laws; (b) none of the operations or
properties of any Restricted Person is the subject of federal, state or local
investigation evaluating whether any material remedial action is needed to
respond to a release of any Hazardous Materials into the environment or to the
improper storage or disposal (including storage or disposal at offsite
locations) of any Hazardous Materials; (c) no Restricted Person (and to the best
knowledge of Borrower, no other Person) has filed any notice under any Law
indicating that any Restricted Person is responsible for the improper release
into the environment, or the improper storage or disposal, of any material
amount of any Hazardous Materials or that any Hazardous Materials have been
improperly released, or are improperly stored or disposed of, upon any property
of any Restricted Person; (d) no Restricted Person has transported or arranged
for the transportation of any Hazardous Material to any location which is (i)
listed on the National Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, listed for
possible inclusion on such National Priorities List by the Environmental
Protection Agency in its Comprehensive Environmental Response, Compensation and
Liability Information System List, or listed on any similar state list or (ii)
the subject of federal, state or local enforcement actions or other
investigations which may lead to claims against any Restricted Person for
clean-up costs, remedial work, damages to natural resources or for personal
injury claims (whether under Environmental Laws or otherwise); and (e) no
Restricted Person otherwise has any known material contingent liability under
any Environmental Laws or in connection with the release into the environment,
or the storage or disposal, of any Hazardous Materials.
Section 5.13. Names and Places of Business. No Restricted Person has,
during the preceding five years, had, been known by, or used any other trade or
fictitious name, except as disclosed in the Disclosure Schedule. Except as
otherwise indicated in the Disclosure Schedule or a Disclosure Report, the chief
executive office and principal place of business of each Restricted Person are
(and for the preceding five years have been) located at the address of Borrower
set out in Section 10.3. Except as indicated in the Disclosure Schedule or a
Disclosure Report, no Restricted Person has any other office or place of
business.
Section 5.14. Borrower's Subsidiaries. Borrower does not presently have
any Subsidiary or own any stock in any other corporation or association except
those listed in the Disclosure Schedule or a Disclosure Report. Neither Borrower
nor any Restricted Person is a member of any general or limited partnership,
joint venture or association of any type whatsoever except those listed in the
Disclosure Schedule or a Disclosure Report. Except as otherwise revealed in a
Disclosure Report, Borrower owns, directly or indirectly, the equity interest in
each of its Subsidiaries which is indicated in the Disclosure Schedule.
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Section 5.15. Title to Properties; Licenses. Each Restricted Person has
good and to the best of Borrower's knowledge, defensible title to all of its
material properties and assets, free and clear of all Liens other than Permitted
Liens and of all impediments to the use of such properties and assets in such
Restricted Person's business. Each Restricted Person possesses all licenses,
permits, franchises, patents, copyrights, trademarks and trade names, and other
intellectual property (or otherwise possesses the right to use such intellectual
property without violation of the rights of any other Person) which are
necessary to carry out its business as presently conducted and as presently
proposed to be conducted hereafter, and no Restricted Person is in violation in
any material respect of the terms under which it possesses such intellectual
property or the right to use such intellectual property.
Section 5.16. Government Regulation. Neither Borrower nor any other
Restricted Person owing Obligations is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Investment
Company Act of 1940 (as any of the preceding acts have been amended) or any
other Law which regulates the incurring by such Person of Indebtedness,
including Laws relating to common contract carriers or the sale of electricity,
gas, steam, water or other public utility services.
Section 5.17. Insider. To the best of Borrower's knowledge, no
Restricted Person, nor any Person having "control" (as that term is defined in
12 U.S.C. Section 375b(9) or in regulations promulgated pursuant thereto) of any
Restricted Person, is a "director" or an "executive officer" or "principal
shareholder" (as those terms are defined in 12 U.S.C. Section 375b(8) or (9) or
in regulations promulgated pursuant thereto) of any Bank Party, of a bank
holding company of which any Bank Party is a Subsidiary or of any Subsidiary of
a bank holding company of which any Bank Party is a Subsidiary.
Section 5.18. Year 2000. Borrower has made a full and complete
assessment of the Year 2000 Issues and has a realistic and achievable program
for remediating the Year 2000 Issues on a timely basis (the "Year 2000
Program"). Based on such assessment and on the Year 2000 Program Borrower does
not reasonably anticipate that Year 2000 Issues will result in a Material
Adverse Change.
ARTICLE VI - Affirmative Covenants of Borrower
To conform with the terms and conditions under which each Bank Party is
willing to have credit outstanding to Borrower, and to induce each Bank Party to
enter into this Agreement and extend credit hereunder, Borrower warrants,
covenants and agrees that until the full and final payment of the Obligations
and the termination of this Agreement, unless Majority Lenders have previously
agreed otherwise:
Section 6.1. Payment and Performance. Borrower will pay all amounts due
under the Loan Documents in accordance with the terms thereof and will observe,
perform and comply with every covenant, term and condition expressed or implied
in the Loan Documents. Borrower
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will cause each other Restricted Person to observe, perform and comply with
every such term, covenant and condition.
Section 6.2. Books, Financial Statements and Reports. Each Restricted
Person will at all times maintain full and accurate books of account and
records. Borrower will maintain and will cause its Subsidiaries to maintain a
standard system of accounting, will maintain its Fiscal Year, and will furnish
the following statements and reports to each Bank Party at Borrower's expense:
(a) As soon as available, and in any event within 120 days after
the end of each Fiscal Year, complete Consolidated financial statements
of Borrower together with all notes thereto, prepared in reasonable
detail in accordance with GAAP, together with an unqualified opinion,
based on an audit using generally accepted auditing standards, by Price
Waterhouse, LLP or other independent certified public accountants
selected by Borrower and reasonably acceptable to Agent, stating that
such Consolidated financial statements have been so prepared. These
financial statements shall contain a Consolidated balance sheet as of
the end of such Fiscal Year and Consolidated statements of earnings, of
cash flows, and of changes in owners' equity for such Fiscal Year, each
setting forth in comparative form the corresponding figures for the
preceding Fiscal Year.
(b) Upon the reasonable request of Agent, complete consolidating
financial statements of Borrower, prepared by Borrower, together with
all notes thereto, prepared in reasonable detail in accordance with
GAAP. These financial statements shall contain a consolidating balance
sheet as of the end of such Fiscal Year and consolidating statements of
earnings for such Fiscal Year, each setting forth in comparative form
the corresponding figures for the preceding Fiscal Year.
(c) As soon as available, and in any event within forty-five (45)
days after the end of each Fiscal Quarter Borrower's Consolidated
balance sheet as of the end of such Fiscal Quarter and Consolidated
statements of Borrower's earnings and cash flows for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, all in reasonable detail and prepared in accordance with GAAP,
subject to changes resulting from normal year-end adjustments. In
addition Borrower will, together with each such set of financial
statements, furnish a certificate in the form of Exhibit D signed by the
chief financial officer of Borrower stating that such financial
statements are accurate and complete, stating that he has reviewed the
Loan Documents, containing calculations showing compliance (or
non-compliance) at the end of such Fiscal Quarter with the requirements
of Sections 7.11, 7.12, 7.13, and 7.14, and stating that no Default
exists at the end of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of existence of any such
Default.
(d) Promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent by any Restricted
Person to its stockholders and all registration statements, periodic
reports and other statements and schedules filed
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by any Restricted Person with any securities exchange, the Securities
and Exchange Commission or any similar governmental authority.
(e) Concurrently with any Request for Loan, and in any event at
least monthly, a Borrowing Base Report, appropriately completed and with
all attachments.
(f) As soon as available, and in any event within ninety (90) days
after the end of each Fiscal Year, financial projections for Borrower
(in form reasonably satisfactory to Agent), prepared by a senior
financial officer thereof, setting forth the financial projections for
the next Fiscal Year, including but not limited to, a projected balance
sheet and statements of projected earnings and cash flows for Borrower
for such Fiscal Year, and stating that such projections were based on
good faith estimates and assumptions at that time contained in such
projection believed by Borrower to be reasonable and such projections
have at that time been prepared in accordance with such assumptions.
Upon reasonable request, Borrower shall provide updated financial
projections, if available.
(g) Upon the request of Agent, but in no event more frequently than
one time per month a Receivables Report, appropriately completed and
with all attachments.
Section 6.3. Other Information and Inspections. Each Restricted Person
will furnish to each Bank Party any information which Agent may from time to
time reasonably request in writing concerning the Marketable Securities
Collateral (such as face amounts and dates of invoices and the name and address
of each account debtor obligated on such Eligible Receivable) and any covenant,
provision or condition of the Loan Documents or any matter in connection with
Restricted Persons' businesses and operations. Each Restricted Person will
permit representatives appointed by Agent (including independent accountants,
auditors, agents, attorneys, appraisers, representatives of any Lender and any
other Persons) to visit and inspect during normal business hours any of such
Restricted Person's property, including its books of account, other books and
records, and any facilities or other business assets, and to make extra copies
therefrom and photocopies and photographs thereof, and to write down and record
any information such representatives obtain, and each Restricted Person shall
permit Agent or its representatives to investigate and verify the accuracy of
the information furnished to Agent or any Lender in connection with the Loan
Documents and to discuss all such matters with its officers, employees and
representatives.
Section 6.4. Notice of Material Events and Change of Address. Borrower
will promptly notify each Bank Party in writing, stating that such notice is
being given pursuant to this Agreement, of:
(a) the occurrence of any Material Adverse Change,
(b) the occurrence of any Default,
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(c) the acceleration of the maturity of any Indebtedness owed by
any Restricted Person or of any default by any Restricted Person under
any indenture, mortgage, agreement, contract or other instrument to
which any of them is a party or by which any of them or any of their
properties is bound, if such acceleration or default could cause a
Material Adverse Change,
(d) any claim of $100,000 or more, any notice of potential
liability under any Environmental Laws which might exceed such amount,
or any other material adverse claim asserted against any Restricted
Person or with respect to any Restricted Person's properties,
(e) the filing of any suit or proceeding against any Restricted
Person in which an adverse decision could cause a Material Adverse
Change, and
(f) a reduction in Borrower's Minimum Eligible Receivables below
$40,000,000 at any time.
Upon the occurrence of any of the foregoing Restricted Persons will take all
necessary or appropriate steps to remedy promptly any such Material Adverse
Change, Default, acceleration, or default, to protect against any such adverse
claim, to defend any such suit or proceeding, and to resolve all controversies
on account of any of the foregoing. Borrower will also notify Agent and Agent's
counsel in writing at least twenty Business Days prior to the date that any
Restricted Person changes its name or the location of its chief executive office
or principal place of business or the place where it keeps its books and records
concerning the Collateral, furnishing with such notice any necessary financing
statement amendments or requesting Agent and its counsel to prepare the same.
Section 6.5. Maintenance of Properties. Each Restricted Person will
maintain, preserve, protect, and keep all Collateral and all other property used
or useful in the conduct of its business in good condition (ordinary wear and
tear excepted) and in compliance with all applicable Laws, and will from time to
time make all repairs, renewals and replacements needed to enable the business
and operations carried on in connection therewith to be promptly and
advantageously conducted at all times.
Section 6.6. Maintenance of Existence and Qualifications. Each
Restricted Person will maintain and preserve its existence and its rights and
franchises in full force and effect and will qualify to do business in all
states or jurisdictions where required by applicable Law, except where the
failure so to qualify will not cause a Material Adverse Change. Borrower will
maintain and preserve or cause to be maintained and preserved the existence and
rights and franchises in full force and effect of any management service
organization that is not a Restricted Person, but which enters into a management
service agreement on behalf of any Restricted Person.
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Section 6.7. Payment of Trade Liabilities, Taxes, etc. Each Restricted
Person will (a) timely file all required tax returns; (b) timely pay all taxes,
assessments, and other governmental charges or levies imposed upon it or upon
its income, profits or property; (c) within ninety (90) days after the same
becomes due pay all Liabilities owed by it on ordinary trade terms to vendors,
suppliers and other Persons providing goods and services used by it in the
ordinary course of its business; (d) pay and discharge when due all other
Liabilities now or hereafter owed by it; and (e) maintain appropriate accruals
and reserves for all of the foregoing in accordance with GAAP. Each Restricted
Person may, however, delay paying or discharging any of the foregoing so long as
it is in good faith contesting the validity thereof by appropriate proceedings
and has set aside on its books adequate reserves therefor.
Section 6.8. Insurance. Each Restricted Person will keep or cause to be
kept insured by financially sound and reputable insurers its property in
accordance with the Insurance Schedule. Borrower will maintain the additional
insurance coverage as described in the respective Security Documents. Upon
demand by Agent any insurance policies covering Collateral shall be endorsed (a)
to provide for payment of losses to Agent as its interests may appear, (b) to
provide that such policies may not be canceled or reduced or affected in any
material manner for any reason without fifteen days prior notice to Agent, (c)
to provide for any other matters specified in any applicable Security Document
or which Agent may reasonably require; and (d) to provide for insurance against
fire, casualty and any other hazards normally insured against, in the amount of
the full value (less a reasonable deductible not to exceed amounts customary in
the industry for similarly situated businesses and properties) of the property
insured. Each Restricted Person shall at all times maintain insurance against
its liability for injury to persons or property in accordance with the Insurance
Schedule, which insurance shall be by financially sound and reputable insurers.
Without limiting the foregoing, each Restricted Person shall at all time
maintain liability insurance in the amounts set out on the Insurance Schedule.
Section 6.9. Performance on Borrower's Behalf. If any Restricted Person
fails to pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Loan Document, Agent may pay the same.
Borrower shall immediately reimburse Agent for any such payments and each amount
paid by Agent shall constitute an Obligation owed hereunder which is due and
payable on the date such amount is paid by Agent.
Section 6.10. Interest. Borrower hereby promises to each Bank Party to
pay interest at the Default Rate on all Obligations (including Obligations to
pay fees or to reimburse or indemnify any Bank Party) which Borrower has in this
Agreement promised to pay to such Bank Party and which are not paid when due.
Such interest shall accrue from the date such Obligations become due until they
are paid.
Section 6.11. Compliance with Agreements and Law. Each Restricted Person
will perform all material obligations it is required to perform under the terms
of each indenture, mortgage, deed of trust, security agreement, lease,
franchise, agreement, contract or other instrument or obligation to which it is
a party or by which it or any of its properties is bound.
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Each Restricted Person will conduct its business and affairs in compliance with
all Laws applicable thereto.
Section 6.12. Environmental Matters.
(a) Each Restricted Person will comply in all material respects with all
Environmental Laws now or hereafter applicable to such Restricted Person and
shall obtain, at or prior to the time required by applicable Environmental Laws,
all environmental, health and safety permits, licenses and other authorizations
necessary for its operations and will maintain such authorizations in full force
and effect.
(b) Borrower will promptly furnish to Agent all written notices of
violation, orders, claims, citations, complaints, penalty assessments, suits or
other proceedings received by Borrower, or of which it has notice, pending or
threatened against Borrower, by any governmental authority with respect to any
alleged violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations in connection with its ownership or use of
its properties or the operation of its business.
(c) Borrower will promptly furnish to Agent all requests for
information, notices of claim, demand letters, and other notifications, received
by Borrower in connection with its ownership or use of its properties or the
conduct of its business, relating to potential responsibility with respect to
any investigation or clean-up of Hazardous Material at any location.
Section 6.13. Evidence of Compliance. Each Restricted Person will
furnish to each Bank Party at such Restricted Person's or Borrower's expense all
evidence which Agent from time to time reasonably requests in writing as to the
accuracy and validity of or compliance with all representations, warranties and
covenants made by any Restricted Person in the Loan Documents, the satisfaction
of all conditions contained therein, and all other matters pertaining thereto.
Section 6.14. Solvency. Upon giving effect to the issuance of the Notes,
the execution of the Loan Documents by Borrower and the consummation of the
transactions contemplated hereby, Borrower will be solvent (as such term is used
in applicable bankruptcy, liquidation, receivership, insolvency or similar
laws).
Section 6.15. Agreement to Deliver Security Documents.
(a) Borrower agrees to deliver and to cause each other Restricted Person
to deliver, to further secure the Obligations whenever requested by Agent in its
reasonable discretion, security agreements, financing statements and other
Security Documents in form and substance satisfactory to Agent for the purpose
of granting, confirming, and perfecting first and prior liens or security
interests in any real or personal property which is at such time Collateral or
which was intended to be Collateral pursuant to any Security Document previously
executed and not then released by Agent. Borrower will from time to time
deliver, and will cause each other Restricted
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Person from time to time to deliver, to Agent any financing statements,
continuation statements, extension agreements and other documents, properly
completed and executed (and acknowledged when required) by Restricted Persons in
form and substance reasonably satisfactory to Agent, which Agent requests for
the purpose of perfecting, confirming, or protecting any Liens or other rights
in Collateral securing any Obligations.
(b) If Borrower's Minimum Eligible Receivables are less than $40,000,000
at any time, then Parent shall deliver to Agent a security agreement in the form
as provided in Exhibit H, together with written evidence satisfactory to Agent
and its counsel that Parent has taken all corporate action necessary to duly
approve and authorize its execution, delivery and performance of such security
agreement and any other documents which it is required to execute.
Section 6.16. Bank Accounts; Offset. To secure the repayment of the
Obligations Borrower hereby grants to each Bank Party a security interest, a
lien, and a right of offset, each of which shall be in addition to all other
interests, liens, and rights of any Bank Party at common law, under the Loan
Documents, or otherwise, and each of which shall be upon and against (a) any and
all moneys, securities or other property (and the proceeds therefrom) of
Borrower now or hereafter held or received by or in transit to any Bank Party
from or for the account of Borrower, whether for safekeeping, custody, pledge,
transmission, collection or otherwise, (b) any and all deposits (general or
special, time or demand, provisional or final) of Borrower with any Bank Party,
and (c) any other credits and claims of Borrower at any time existing against
any Bank Party, including claims under certificates of deposit and excluding
Borrower's account number 8334001710 established with Bank One and all funds on
deposit therein which shall have the sole purpose of providing collateral to
secure Borrower's obligations under the lease covering its corporate
headquarters. At any time and from time to time after the occurrence of any
Default, each Bank Party is hereby authorized to foreclose upon, or to offset
against the Obligations then due and payable (in either case without notice to
Borrower), any and all items hereinabove referred to. The remedies of
foreclosure and offset are separate and cumulative, and either may be exercised
independently of the other without regard to procedures or restrictions
applicable to the other.
Section 6.17. Guaranties of Borrower's Subsidiaries. Parent and each
domestic Subsidiary of Borrower, now existing or created, acquired or coming
into existence after the date hereof shall, promptly upon request by Agent,
execute and deliver to Agent an absolute and unconditional guaranty of the
timely repayment of the Obligations and the due and punctual performance of the
obligations of Borrower hereunder, which guaranty shall be in the form of
Exhibit G attached hereto. Each Subsidiary of Borrower existing on the date
hereof shall duly execute and deliver such a guaranty prior to the making of any
Loan hereunder. Borrower will cause each of its Subsidiaries to deliver to
Agent, simultaneously with its delivery of such a guaranty, written evidence
satisfactory to Agent and its counsel that such Subsidiary has taken all
corporate or partnership action necessary to duly approve and authorize its
execution, delivery and performance of such guaranty and any other documents
which it is required to execute.
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Section 6.18. Audit. Allow (and cause each other Restricted Person to
allow) Agent or its representatives (including independent accountants,
auditors, agents, attorneys, appraisers, representatives of any Lender and any
other Persons, upon reasonable notice and during such Restricted Person's usual
business hours) (i) to inspect any Restricted Person's books, records, accounts,
and properties (including, without limitation, a field examination by Lender's
secured lending group to test systems and controls it deems appropriate in its
own reasonable discretion), (ii) to make and take away copies of those books,
records, and accounts, (iii) to discuss any Restricted Person's affairs,
conditions, finances, and prospects with any Restricted Person's directors,
officers, employees, or general or limited partners (or their respective
directors, officers, employees, or partners). If no Default or Potential Default
exists, any such audit shall be at the expense of Borrower only once during each
twelve month period during the term hereof. During any time when a Default or
Potential Default exists each such audit performed hereunder shall be at the
expense of Borrower.
ARTICLE VII - Negative Covenants of Borrower
To conform with the terms and conditions under which each Bank Party is
willing to have credit outstanding to Borrower, and to induce each Bank Party to
enter into this Agreement and make the Loans, Borrower warrants, covenants and
agrees that until the full and final payment of the Obligations and the
termination of this Agreement, unless Majority Lenders have previously agreed
otherwise:
Section 7.1. Indebtedness. No Restricted Person will in any manner owe
or be liable for Indebtedness except:
(a) the Obligations.
(b) Indebtedness outstanding under the instruments and agreements
described on the Disclosure Schedule, excluding any renewals or extensions of
such Indebtedness and providing that the original principal amount of any such
Indebtedness is not in excess of the purchase price of the asset acquired
thereby and such Indebtedness is secured only by the acquired asset.
(c) lease obligations arising pursuant to that certain Lease and
Development Agreement dated as of November 14, 1997, between Borrower and Asset
XVII Holdings Company, L.L.C., together with all amendments and supplements
thereto.
(d) purchase money Indebtedness or capital lease obligations in an
aggregate Consolidated principal amount not to exceed $3,000,000 at any time
(excluding those lease obligations permitted in 7.1 (c) above), provided that
the original principal amount of any such Indebtedness shall not be in excess of
the purchase price of the asset acquired thereby and such Indebtedness shall be
secured only by the acquired asset; provided that if Borrower requests that
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Lenders consent to an increase in such amount, Lenders' consent shall not be
unreasonably withheld.
(e) Indebtedness arising under Hedging Contracts permitted under Section
7.3 provided that no such contract requires any Restricted Person to meet margin
calls, or otherwise to put up money or other assets against the event of its
nonperformance, prior to actual default by such Restricted Person in performing
its obligations thereunder.
Section 7.2. Limitation on Liens. No Restricted Person will create,
assume or permit to exist any Lien upon any of the properties or assets which it
now owns or hereafter acquires, except, to the extent not otherwise forbidden by
the Security Documents the following ("Permitted Liens"):
(a) Liens which secure Obligations only.
(b) Statutory Liens for taxes, statutory mechanics' and materialmen's
Liens incurred in the ordinary course of business, and other similar Liens
incurred in the ordinary course of business, provided such Liens do not secure
Indebtedness and secure only Indebtedness which is not delinquent or which is
being contested as provided in Section 6.6.
(c) Liens securing Indebtedness described in Section 7.1(c) and leases
with Bank One Leasing described in the Disclosure Schedule.
Section 7.3. Hedging. No Restricted Person will be a party to or in any
manner be liable on any Hedging Contract except:
(a) contracts entered into by a Restricted Person with the purpose and
effect of fixing interest rates on a principal amount of indebtedness of such
Restricted Person that is accruing interest at a variable rate, provided that
(i) the aggregate notional amount of such contracts never exceeds seventy-five
percent (75%) of the anticipated outstanding principal balance of the
indebtedness to be hedged by such contracts or an average of such principal
balances calculated using a generally accepted method of matching interest swap
contracts to declining principal balances, (ii) the floating rate index of each
such contract generally matches the index used to determine the floating rates
of interest on the corresponding indebtedness to be hedged by such contract and
(iii) each such contract is with a counterparty or has a guarantor of the
obligations of the counterparty who (unless such counterparty is a Lender or one
of its Affiliates) at the time the contract is made has long-term obligations
rated AA or Aa2 or better, respectively, by either Rating Agency.
(b) interest rate swaps currently in place between Borrower and any
Affiliate of Agent (and any replacement swap in substantially the same terms)
with respect to that certain Lease and Development Agreement dated as of
November 14, 1997, between Borrower and Asset XVII Holdings Company, L.L.C.,
together with all amendments and supplements thereto.
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Section 7.4. Limitation on Mergers, Issuances of Securities. Except as
expressly provided in this subsection no Restricted Person will merge or
consolidate with or into any other business entity. Any Subsidiary of Borrower
may, however, be merged into or consolidated with (i) another Subsidiary of
Borrower, so long as a Guarantor is the surviving business entity, or (ii)
Borrower, so long as Borrower is the surviving business entity. No Restricted
Person will issue any additional shares of its capital stock or other securities
or any options, warrants or other rights to acquire such additional shares or
other securities, except that Borrower's wholly-owned Subsidiaries may issue
such shares, options, warrants or other rights to Borrower, and Borrower may
issue its common stock and warrants to purchase its common stock, but only to
the extent not otherwise forbidden under the terms hereof. No Subsidiary of
Borrower which is a partnership will allow any diminution of Borrower's interest
(direct or indirect) therein.
Section 7.5. Limitation on Sales of Property. No Restricted Person will
sell, transfer, lease, exchange, alienate or dispose of any of its material
assets or properties or any material interest therein except equipment which is
worthless or obsolete or which is replaced by equipment of equal suitability and
value. Neither Borrower nor any of Borrower's Subsidiaries will sell, transfer
or otherwise dispose of capital stock of any of Borrower's Subsidiaries except
that any Subsidiary of Borrower may sell or issue its own capital stock to the
extent not otherwise prohibited hereunder. No Restricted Person will discount,
sell, pledge or assign any notes payable to it, accounts receivable or future
income except to the extent expressly permitted under the Loan Documents.
Section 7.6. Limitation on Dividends and Redemptions. No Restricted
Person will declare or pay any dividends on, or make any other distribution in
respect of, any class of its capital stock or any partnership or other interest
in it, nor will any Restricted Person directly or indirectly make any capital
contribution to or purchase, redeem, acquire or retire any shares of the capital
stock of or partnership interests in any Restricted Person (whether such
interests are now or hereafter issued, outstanding or created), or cause or
permit any reduction or retirement of the capital stock of any Restricted
Person. The foregoing provisions of this Section 7.6 notwithstanding, so long as
no Default or Event of Default has occurred and is continuing (i) Borrower may
declare and pay dividends in its common stock and (ii) Parent may repurchase its
common stock so long as the price for all such common stock paid by Parent may
not exceed $15,000,000 in the aggregate.
Section 7.7. Limitation on Investments and New Businesses. No Restricted
Person will (i) make any expenditure or commitment or incur any obligation or
enter into or engage in any transaction except in the ordinary course of
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business, (ii) engage directly or indirectly in any business or conduct any
operations except in connection with or incidental to its present businesses and
operations, (iii) make any acquisitions of or capital contributions to or other
investments in any Person, other than Permitted Investments.
Section 7.8. Limitation on Credit Extensions. Except for Permitted
Investments, no Restricted Person will extend credit, make advances or make
loans other than (i) normal and prudent extensions of credit to customers buying
goods and services in the ordinary course of business, which extensions shall
not be for longer periods than those extended by similar businesses operated in
a normal and prudent manner, and (ii) loans to Parent in an aggregate amount not
to exceed $25,000,000, which shall be evidenced by a promissory note in form and
substance acceptable to Agent.
Section 7.9. Transactions with Affiliates. Neither Borrower nor any of
its Subsidiaries will engage in any material transaction with any of its
Affiliates on terms which are less favorable to it than those which would have
been obtainable at the time in arm's-length dealing with Persons other than such
Affiliates, provided that such restriction shall not apply to transactions among
Borrower, Parent and Borrower's wholly owned Subsidiaries.
Section 7.10. Certain Contracts; Amendments; Multiemployer ERISA Plans.
Except as expressly provided for in the Loan Documents, no Restricted Person
will, directly or indirectly, enter into, create, or otherwise allow to exist
any contract or other consensual restriction on the ability of any Subsidiary of
Borrower to: (i) pay dividends or make other distributions to Borrower, (ii) to
redeem equity interests held in it by Borrower, (iii) to repay loans and other
indebtedness owing by it to Borrower, or (iv) to transfer any of its assets to
Borrower. No Restricted Person will amend or permit any amendment to any
contract or lease which releases, qualifies, limits, makes contingent or
otherwise detrimentally affects the rights and benefits of Agent or any Lender
under or acquired pursuant to any Security Documents. No Restricted Person will
establish or incur any obligation to contribute to any ERISA Plan.
Section 7.11. Minimum Net Worth. The Consolidated Net Worth at the end
of each Fiscal Quarter will not be less than $175,000,000.
ARTICLE VIII - Events of Default and Remedies
Section 8.1. Events of Default. Each of the following events constitutes
an Event of Default under this Agreement:
(a) Any Restricted Person fails to pay any Obligation within five (5)
Business Days after the date when due, whether at a date for the payment of a
fixed installment or as a contingent or other payment becomes due and payable or
as a result of acceleration or otherwise;
(b) Any "default" or "event of default" occurs under any Loan Document
which defines either such term, and the same is not remedied within the
applicable period of grace (if any) provided in such Loan Document;
(c) Any Restricted Person fails to duly observe, perform or comply with
any covenant, agreement or provision of Section 6.4 or Article VII and such
failure remains unremedied for a period of fifteen (15) days after the earlier
to occur of: (i) written notice thereof is given by Agent to the Borrower or
(ii) any Restricted Person otherwise becomes aware of such failure;
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(d) Any Restricted Person fails (other than as referred to in
subsections (a), (b), (c) or (d) above) to duly observe, perform or comply with
any covenant, agreement, condition or provision of any Loan Document, and such
failure remains unremedied for a period of thirty (30) days after written notice
of such failure is given by Agent to Borrower;
(e) Any representation or warranty previously, presently or hereafter
made in writing by or on behalf of any Restricted Person in connection with any
Loan Document shall prove to have been false or incorrect in any material
respect on any date on or as of which made, or any Loan Document at any time
ceases to be valid, binding and enforceable as warranted in Section 5.5 for any
reason other than its release or subordination by Agent;
(f) Any Restricted Person fails to duly observe, perform or comply with
any agreement with any Person or any term or condition of any instrument, if
such agreement or instrument is materially significant to Borrower or to
Borrower and its subsidiaries on a Consolidated basis or materially significant
to any Guarantor, and such failure is not remedied within the applicable period
of grace (if any) provided in such agreement or instrument;
(g) Subject to Section 6.7, any Restricted Person (i) fails to pay any
portion, when such portion is due, of any of its Indebtedness in excess of
$350,000 or (ii) breaches or defaults in the performance of any agreement or
instrument by which any such Indebtedness is issued, evidenced, governed, or
secured, and any such failure, breach or default continues beyond any applicable
period of grace provided therefor;
(h) Any Restricted Person:
(i) suffers the entry against it of a judgment, decree or order for
relief by a Tribunal of competent jurisdiction in an involuntary
proceeding commenced under any applicable bankruptcy, insolvency or
other similar Law of any jurisdiction now or hereafter in effect,
including the federal Bankruptcy Code, as from time to time amended, or
has any such proceeding commenced against it which remains undismissed
for a period of thirty days; or
(ii) commences a voluntary case under any applicable bankruptcy,
insolvency or similar Law now or hereafter in effect, including the
federal Bankruptcy Code, as from time to time amended; or applies for or
consents to the entry of an order for relief in an involuntary case
under any such Law; or makes a general assignment for the benefit of
creditors; or fails generally to pay (or admits in writing its inability
to pay) its debts as such debts become due; or takes corporate or other
action to authorize any of the foregoing; or
(iii) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of all or a substantial part of its assets or of any
part of the Collateral in a proceeding brought against or initiated by
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it, and such appointment or taking possession is neither made
ineffective nor discharged within thirty days after the making thereof,
or such appointment or taking possession is at any time consented to,
requested by, or acquiesced to by it; or
(iv) suffers the entry against it of a final judgment for the
payment of money in excess of $1,000,000 (not covered by insurance
satisfactory to Agent in its discretion), unless the same is discharged
within thirty days after the date of entry thereof or an appeal or
appropriate proceeding for review thereof is taken within such period
and a stay of execution pending such appeal is obtained; or
(v) suffers a writ or warrant of attachment or any similar process
to be issued by any Tribunal against all or any substantial part of its
assets or any part of the Collateral, and such writ or warrant of
attachment or any similar process is not stayed or released within
thirty days after the entry or levy thereof or after any stay is vacated
or set aside; and
(i) Any Material Adverse Change occurs.
Upon the occurrence of an Event of Default described in subsection (h)(i),
(h)(ii) or (h)(iii) of this section with respect to Borrower, all of the
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Restricted Person who at any time
ratifies or approves this Agreement. Upon any such acceleration, any obligation
of any Lender to make any further Loans shall be permanently terminated. During
the continuance of any other Event of Default, Agent at any time and from time
to time may (and upon written instructions from Majority Lenders, Agent shall),
without notice to Borrower or any other Restricted Person, do either or both of
the following: (1) terminate any obligation of Lenders to make Loans hereunder,
and (2) declare any or all of the Obligations immediately due and payable, and
all such Obligations shall thereupon be immediately due and payable, without
demand, presentment, notice of demand or of dishonor and nonpayment, protest,
notice of protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Restricted Person who at any time
ratifies or approves this Agreement.
Section 8.2. Remedies. If any Default shall occur and be continuing,
each Bank Party may protect and enforce its rights under the Loan Documents by
any appropriate proceedings, including proceedings for specific performance of
any covenant or agreement contained in any Loan Document, and each Bank Party
may enforce the payment of any Obligations due it or enforce any other legal or
equitable right which it may have. All rights, remedies and powers conferred
upon Bank Parties under the Loan Documents shall be deemed cumulative and not
exclusive of any other rights, remedies or powers available under the Loan
Documents or at Law or in equity.
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ARTICLE IX - Agent
Section 9.1. Appointment and Authority. Each Lender which becomes a
party to this Agreement hereby irrevocably authorizes Agent, and Agent hereby
undertakes, to receive payments of principal, interest and other amounts due
hereunder as specified herein and to take all other actions and to exercise such
powers under the Loan Documents as are specifically delegated to Agent by the
terms hereof or thereof, together with all other powers reasonably incidental
thereto. The relationship of Agent to the other Bank Parties is only that of one
commercial lender acting as administrative agent for others, and nothing in the
Loan Documents shall be construed to constitute Agent a trustee or other
fiduciary for any holder of any of the Notes or of any participation therein nor
to impose on Agent duties and obligations other than those expressly provided
for in the Loan Documents. With respect to any matters not expressly provided
for in the Loan Documents and any matters which the Loan Documents place within
the discretion of Agent, Agent shall not be required to exercise any discretion
or take any action, and it may request instructions from Lenders with respect to
any such matter, in which case it shall be required to act or to refrain from
acting (and shall be fully protected and free from liability to all Lenders in
so acting or refraining from acting) upon the instructions of Majority Lenders
(including itself), provided, however, that Agent shall not be required to take
any action which exposes it to a risk of personal liability that it considers
unreasonable or which is contrary to the Loan Documents or to applicable Law.
Upon receipt by Agent from Borrower of any communication calling for action on
the part of Lenders or upon notice from any other Bank Party to Agent of any
Default or Event of Default, Agent shall promptly notify each other Bank Party
thereof.
Section 9.2. Exculpation, Agent's Reliance, Etc. Neither Agent nor any
of its directors, officers, agents, attorneys, or employees shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with the Loan Documents, INCLUDING THEIR NEGLIGENCE OF ANY KIND, except that
each shall be liable for its own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the assignment
or transfer thereof in accordance with this Agreement, signed by such payee and
in form satisfactory to Agent; (b) may consult with legal counsel (including
counsel for Borrower), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any other Bank Party and
shall not be responsible to any other Bank Party for any statements, warranties
or representations made in or in connection with the Loan Documents; (d) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of the Loan Documents on the part
of any Restricted Person or to inspect the property (including the books and
records) of any Restricted Person; (e) shall not be responsible to any other
Bank Party for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any instrument or
document furnished in connection therewith; (f) may rely upon the
representations and warranties of each Restricted Person and the Lenders in
exercising its
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powers hereunder; and (g) shall incur no liability under or in respect of the
Loan Documents by acting upon any notice, consent, certificate or other
instrument or writing (including any telecopy, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper Person or Persons.
Section 9.3. Credit Decisions. Each Bank Party acknowledges that it has,
independently and without reliance upon any other Bank Party, made its own
analysis of Borrower and the transactions contemplated hereby and its own
independent decision to enter into this Agreement and the other Loan Documents.
Each Bank Party also acknowledges that it will, independently and without
reliance upon any other Bank Party and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents.
Section 9.4. Indemnification. Each Lender agrees to indemnify Agent (to
the extent not reimbursed by Borrower within ten (10) days after demand) from
and against such Lender's Percentage Share of any and all liabilities,
obligations, claims, losses, damages, penalties, fines, actions, judgments,
suits, settlements, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs") which
to any extent (in whole or in part) may be imposed on, incurred by, or asserted
against Agent growing out of, resulting from or in any other way associated with
any of the Collateral, the Loan Documents and the transactions and events
(including the enforcement thereof) at any time associated therewith or
contemplated therein (including any violation or noncompliance with any
Environmental Laws by any Person or any liabilities or duties of any Person with
respect to Hazardous Materials found in or released into the environment).
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY AGENT,
provided only that no Lender shall be obligated under this section to indemnify
Agent for that portion, if any, of any liabilities and costs which is
proximately caused by Agent's own individual gross negligence or willful
misconduct, as determined in a final judgment. Cumulative of the foregoing, each
Lender agrees to reimburse Agent promptly upon demand for such Lender's
Percentage Share of any costs and expenses to be paid to Agent by Borrower under
Section 10.4(a) to the extent that Agent is not timely reimbursed for such
expenses by Borrower as provided in such section. As used in this section the
term "Agent" shall refer not only to the Person designated as such in Section
1.1 but also to each director, officer, agent, attorney, employee,
representative and Affiliate of such Person.
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Section 9.5. Rights as Lender. In its capacity as a Lender, Agent shall
have the same rights and obligations as any Lender and may exercise such rights
as though it were not Agent. Agent may accept deposits from, lend money to, act
as Trustee under indentures of, and generally engage in any kind of business
with any Restricted Person or their Affiliates, all as if it were not Agent
hereunder and without any duty to account therefor to any other Lender.
Section 9.6. Sharing of Set-Offs and Other Payments. Each Bank Party
agrees that if it shall, whether through the exercise of rights under Security
Documents or rights of banker's lien, set off, or counterclaim against Borrower
or otherwise, obtain payment of a portion of the aggregate Obligations owed to
it which, taking into account all distributions made by Agent under Section 3.1,
causes such Bank Party to have received more than it would have received had
such payment been received by Agent and distributed pursuant to Section 3.1,
then (a) it shall be deemed to have simultaneously purchased and shall be
obligated to purchase interests in the Obligations as necessary to cause all
Bank Parties to share all payments as provided for in Section 3.1, and (b) such
other adjustments shall be made from time to time as shall be equitable to
ensure that Agent and all Lenders share all payments of Obligations as provided
in Section 3.1; provided, however, that nothing herein contained shall in any
way affect the right of any Bank Party to obtain payment (whether by exercise of
rights of banker's lien, set-off or counterclaim or otherwise) of indebtedness
other than the Obligations. Borrower expressly consents to the foregoing
arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by Law exercise any
and all rights of banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
section is thereafter recovered from the seller under this section which
received the same, the purchase provided for in this section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to Tribunal order to be paid on account of
the possession of such funds prior to such recovery.
Section 9.7. Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute to Lenders any funds which it has
received, or whenever Agent in good faith determines that there is any dispute
among Lenders about how such funds should be distributed, Agent may choose to
defer distribution of the funds which are the subject of such uncertainty or
dispute. If Agent in good faith believes that the uncertainty or dispute will
not be promptly resolved, or if Agent is otherwise required to invest funds
pending distribution to Lenders, Agent shall invest such funds pending
distribution; all interest on any such investment shall be distributed upon the
distribution of such investment and in the same proportion and to the same
Persons as such investment. All moneys received by Agent for distribution to
Lenders (other than to the Person who is Agent in its separate capacity as a
Lender) shall be held by Agent pending such distribution solely as Agent for
such Lenders, and Agent shall have no equitable title to any portion thereof.
Section 9.8. Benefit of Article IX. The provisions of this Article
(other than the following Section 9.9) are intended solely for the benefit of
Bank Parties, and no Restricted
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Person shall be entitled to rely on any such provision or assert any such
provision in a claim or defense against any Bank Party. Bank Parties may waive
or amend such provisions as they desire without any notice to or consent of
Borrower or any Restricted Person.
Section 9.9. Resignation. Agent may resign at any time by giving written
notice thereof to Lenders and Borrower. Each such notice shall set forth the
date of such resignation. Upon any such resignation Lenders having aggregate
Percentage Shares of at least one hundred percent (100%) shall have the right to
appoint a successor Agent. A successor must be appointed for any retiring Agent,
and such Agent's resignation shall become effective when such successor accepts
such appointment. If, within thirty days after the date of the retiring Agent's
resignation, no successor Agent has been appointed and has accepted such
appointment, then the retiring Agent may appoint a successor Agent, which shall
be a commercial bank organized or licensed to conduct a banking or trust
business under the Laws of the United States of America or of any state thereof.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. After any retiring Agent's
resignation hereunder the provisions of this Article IX shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under the Loan Documents.
ARTICLE X - Miscellaneous
Section 10.1. Waivers and Amendments; Acknowledgments.
(a) Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by any Bank Party in exercising any right, power or remedy
which such Bank Party may have under any of the Loan Documents shall operate as
a waiver thereof or of any other right, power or remedy, nor shall any single or
partial exercise by any Bank Party of any such right, power or remedy preclude
any other or further exercise thereof or of any other right, power or remedy. No
waiver of any provision of any Loan Document and no consent to any departure
therefrom shall ever be effective unless it is in writing and signed as provided
below in this section, and then such waiver or consent shall be effective only
in the specific instances and for the purposes for which given and to the extent
specified in such writing. No notice to or demand on any Restricted Person shall
in any case of itself entitle any Restricted Person to any other or further
notice or demand in similar or other circumstances. This Agreement and the other
Loan Documents set forth the entire understanding between the parties hereto
with respect to the transactions contemplated herein and therein and supersede
all prior discussions and understandings with respect to the subject matter
hereof and thereof, and no waiver, consent, release, modification or amendment
of or supplement to this Agreement or the other Loan Documents shall be valid or
effective against any party hereto unless the same is in writing and signed by
(i) if such party is Borrower, by Borrower, (ii) if such party is Agent, by
Agent, and (iii) if such party is a Lender, by such Lender or by Agent on behalf
of such Lender with the written consent of Majority Lenders (which consent has
already been given as to the termination of the Loan Documents as provided in
Section 10.9). Anything to the contrary herein
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notwithstanding, Agent shall not, without the prior consent of each individual
Lender, execute and deliver on behalf of such Lender any waiver or amendment
which would: (1) waive any of the conditions specified in Article IV (provided
that Agent may in its discretion withdraw any request it has made under Section
4.2(f)), (2) increase the commitment of such Lender or subject such Lender to
any additional obligations, (3) reduce any fees payable to such Lender
hereunder, or the principal of, or interest on, such Lender's Note, (4) postpone
any date fixed for any payment of any such fees, principal or interest, or (5)
release Borrower from its obligation to pay such Lender's Note or any Guarantor
from its guaranty of such payment or, (6) release any Collateral, or (7) amend
the definition of Marketable Securities Collateral set forth in Section 1.1.
(b) Acknowledgments and Admissions. Borrower hereby represents,
warrants, acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents to which it is a
party, (ii) it has made an independent decision to enter into this Agreement and
the other Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by Agent or any Lender,
whether written, oral or implicit, other than as expressly set out in this
Agreement or in another Loan Document delivered on or after the date hereof,
(iii) there are no representations, warranties, covenants, undertakings or
agreements by any Bank Party as to the Loan Documents except as expressly set
out in this Agreement or in another Loan Document delivered on or after the date
hereof, (iv) no Bank Party has any fiduciary obligation toward Borrower with
respect to any Loan Document or the transactions contemplated thereby, (v) the
relationship pursuant to the Loan Documents between Borrower and the other
Restricted Persons, on one hand, and each Bank Party, on the other hand, is and
shall be solely that of debtor and creditor, respectively, (vi) no partnership
or joint venture exists with respect to the Loan Documents between any
Restricted Person and any Bank Party, (vii) Agent is not Borrower's Agent, but
Agent for Lenders, (viii) should an Event of Default or Default occur or exist,
each Bank Party will determine in its sole discretion and for its own reasons
what remedies and actions it will or will not exercise or take at that time,
(ix) without limiting any of the foregoing, Borrower is not relying upon any
representation or covenant by any Bank Party, or any representative thereof, and
no such representation or covenant has been made, that any Bank Party will, at
the time of an Event of Default or Default, or at any other time, waive,
negotiate, discuss, or take or refrain from taking any action permitted under
the Loan Documents with respect to any such Event of Default or Default or any
other provision of the Loan Documents, and (x) all Bank Parties have relied upon
the truthfulness of the acknowledgments in this section in deciding to execute
and deliver this Agreement and to become obligated hereunder.
(c) Representation by Lenders. Each Lender hereby represents that it
will acquire its Note for its own account in the ordinary course of its lending
business; however, the disposition of such Lender's property shall at all times
be and remain within its control and, in particular and without limitation, such
Lender may sell or otherwise transfer its Note, any participation interest or
other interest in its Note, or any of its other rights and obligations under the
Loan Documents.
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(d) Joint Acknowledgment. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 10.2. Survival of Agreements; Cumulative Nature. All of
Restricted Persons' various representations, warranties, covenants and
agreements in the Loan Documents shall survive the execution and delivery of
this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans and the delivery of the
Notes and the other Loan Documents, and shall further survive until all of the
Obligations are paid in full to each Bank Party and all of Bank Parties'
obligations to Borrower are terminated. All statements and agreements contained
in any certificate or other instrument delivered by any Restricted Person to any
Bank Party under any Loan Document shall be deemed representations and
warranties by Borrower or agreements and covenants of Borrower under this
Agreement. The representations, warranties, indemnities, and covenants made by
Restricted Persons in the Loan Documents, and the rights, powers, and privileges
granted to Bank Parties in the Loan Documents, are cumulative, and, except for
expressly specified waivers and consents, no Loan Document shall be construed in
the context of another to diminish, nullify, or otherwise reduce the benefit to
any Bank Party of any such representation, warranty, indemnity, covenant, right,
power or privilege. In particular and without limitation, no exception set out
in this Agreement to any representation, warranty, indemnity, or covenant herein
contained shall apply to any similar representation, warranty, indemnity, or
covenant contained in any other Loan Document, and each such similar
representation, warranty, indemnity, or covenant shall be subject only to those
exceptions which are expressly made applicable to it by the terms of the various
Loan Documents.
Section 10.3. Notices. All notices, requests, consents, demands and
other communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that Agent may give telephonic notices to the other Bank Parties), and shall be
deemed sufficiently given or furnished if delivered by personal delivery, by
telecopy or telex, by delivery service with proof of delivery, or by registered
or certified United States mail, postage prepaid, to Borrower and Restricted
Persons at the address of Borrower specified on the signature pages hereto and
to each Bank Party at its address specified on the signature pages hereto
(unless changed by similar notice in writing given by the particular Person
whose address is to be changed). Any such notice or communication shall be
deemed to have been given (a) in the case of personal delivery or delivery
service, as of the date of first attempted delivery during normal business hours
at the address provided herein, (b) in the case of telecopy or telex, upon
receipt, or (c) in the case of registered or certified United States mail, three
days after deposit in the mail; provided, however, that no Request for Loan
shall become effective until actually received by Agent.
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Section 10.4. Payment of Expenses; Indemnity.
(a) Payment of Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, Borrower will promptly (and in any event, within
30 days after any invoice or other statement or notice) pay: (i) all transfer,
stamp, mortgage, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any of the other Loan Documents or any other document referred to herein or
therein, (ii) all reasonable costs and expenses incurred by or on behalf of
Agent (including reasonable attorneys' fees, consultants' fees and engineering
fees, travel costs and miscellaneous expenses) in connection with (1) the
negotiation, preparation, execution and delivery of the Loan Documents, and any
and all consents, waivers or other documents or instruments relating thereto,
(2) the filing, recording, refiling and re-recording of any Loan Documents and
any other documents or instruments or further assurances required to be filed or
recorded or refiled or re-recorded by the terms of any Loan Document, (3) the
borrowings hereunder and other action reasonably required in the course of
administration hereof, (4) monitoring or confirming (or preparation or
negotiation of any document related to) Borrower's compliance with any covenants
or conditions contained in this Agreement or in any Loan Document, and (iii) all
reasonable costs and expenses incurred by or on behalf of any Bank Party
(including reasonable attorneys' fees, consultants' fees and accounting fees) in
connection with the defense or enforcement of any of the Loan Documents with
respect to the obligations of Borrowers (including this section) or the defense
of any Bank Party's exercise of its rights thereunder with respect to the
obligations of Borrower. In addition to the foregoing, until and all Obligations
have been paid in full, Borrower will also pay or reimburse Agent for all
reasonable out-of-pocket costs and expenses of Agent or its agents or employees
in connection with the continuing administration of the Loans and the related
due diligence of Agent, including travel and miscellaneous expenses and fees and
expenses of Agent's outside counsel, reserve engineers and consultants engaged
in connection with the Loan Documents.
(b) Indemnity. Borrower agrees to indemnify each Bank Party, upon
demand, from and against any and all liabilities, obligations, claims, losses,
damages, penalties, fines, actions, judgments, suits, settlements, costs,
expenses or disbursements (including reasonable fees of attorneys, accountants,
experts and advisors) of any kind or nature whatsoever (in this section
collectively called "liabilities and costs") which to any extent (in whole or in
part) may be imposed on, incurred by, or asserted against such Bank Party
growing out of, resulting from or in any other way associated with any of the
Collateral, the Loan Documents and the transactions and events (including the
enforcement or defense thereof) at any time associated therewith or contemplated
therein (including any violation or noncompliance with any Environmental Laws by
any Restricted Person or any liabilities or duties of any Restricted Person or
any Bank Party with respect to Hazardous Materials found in or released into the
environment).
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE
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CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY
BANK PARTY,
provided only that no Bank Party shall be entitled under this section to receive
indemnification for that portion, if any, of any liabilities and costs which is
proximately caused by its own individual gross negligence or willful misconduct,
as determined in a final judgment. If any Person (including Borrower or any of
its Affiliates) ever alleges such gross negligence or willful misconduct by any
Bank Party, the indemnification provided for in this section shall nonetheless
be paid upon demand, subject to later adjustment or reimbursement, until such
time as a court of competent jurisdiction enters a final judgment as to the
extent and effect of the alleged gross negligence or willful misconduct. As used
in this section the term "Bank Parties" shall refer not only to the Persons
designated as such in Section 1.1 but also to each director, officer, agent,
attorney, employee, representative and Affiliate of such Persons.
Section 10.5. Joint and Several Liability; Parties in Interest;
Assignments. All Obligations which are incurred by two or more Restricted
Persons shall be their joint and several obligations and liabilities. All
grants, covenants and agreements contained in the Loan Documents shall bind and
inure to the benefit of the parties thereto and their respective successors and
assigns; provided, however, that no Restricted Person may assign or transfer any
of its rights or delegate any of its duties or obligations under any Loan
Document without the prior consent of Agent. Neither Borrower nor any Affiliates
of Borrower shall directly or indirectly purchase or otherwise retire any
Obligations owed to any Lender nor will any Lender accept any offer to do so,
unless each Lender shall have received substantially the same offer with respect
to the same Percentage Share of the Obligations owed to it. If Borrower or any
Affiliate of Borrower at any time purchases some but less than all of the
Obligations owed to all Bank Parties, such purchaser shall not be entitled to
any rights of any Bank Party under the Loan Documents unless and until Borrower
or its Affiliates have purchased all of the Obligations.
(b) No Lender shall sell any participation interest in its commitment
hereunder or any of its rights under its Loans or under the Loan Documents to
any Person other than an Eligible Transferee, and then only if the agreement
between such Lender and such participant at all times provides: (i) that such
participation exists only as a result of the agreement between such participant
and such Lender and that such transfer does not give such participant any right
to vote as a Lender or any other direct claims or rights against any Person
other than such Lender, (ii) that such participant is not entitled to payment
from any Restricted Person under Sections 3.2 through 3.6 of amounts in excess
of those payable to such Lender under such sections (determined without regard
to the sale of such participation), and (iii) unless such participant is an
Affiliate of such Lender, that such participant shall not be entitled to require
such Lender to take any action under any Loan Document or to obtain the consent
of such participant prior to taking any action under any Loan Document, except
for actions which would require the consent of all Lenders under the
next-to-last sentence of subsection (a) of Section 10.1. No Lender selling such
a participation shall, as between the other parties hereto and such Lender, be
relieved of any of its obligations hereunder as a result of the sale of such
participation. Each Lender
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which sells any such participation to any Person (other than an Affiliate of
such Lender) shall give prompt notice thereof to Agent and Borrower.
(c) Except for sales of participations under the immediately preceding
subsection (b), no Lender shall make any assignment or transfer of any kind of
its commitments or any of its rights under its Loans or under the Loan
Documents, except for assignments to an Eligible Transferee, and then only if
such assignment is made in accordance with the following requirements:
(i) Each such assignment shall apply to all Obligations owing to
the assignor Lender hereunder and to the unused portion of the assignor
Lender's commitments, so that after such assignment is made the assignor
Lender shall have a fixed (and not a varying) Percentage Share in its
Loans and Note and be committed to make that Percentage Share of all
future Loans, the assignee shall have a fixed Percentage Share in such
Loans and Note and be committed to make that Percentage Share of all
future Loans, and the Percentage Share of the Commitment of both the
assignor and assignee shall equal or exceed $10,000,000.
(ii) The parties to each such assignment shall execute and deliver
to Agent, for its acceptance and recording in the "Register" (as defined
below in this section), an Assignment and Acceptance in the form of
Exhibit E, appropriately completed, together with the Note subject to
such assignment and a processing fee payable to Agent of $2,500. Upon
such execution, delivery, and payment and upon the satisfaction of the
conditions set out in such Assignment and Acceptance, then (i) Borrower
shall issue new Notes to such assignor and assignee upon return of the
old Notes to Borrower, and (ii) as of the "Settlement Date" specified in
such Assignment and Acceptance the assignee thereunder shall be a party
hereto and a Lender hereunder and Agent shall thereupon deliver to
Borrower and each Lender a schedule showing the revised Percentage
Shares of such assignor Lender and such assignee Lender and the
Percentage Shares of all other Lenders.
(iii) Each assignee Lender which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Internal Revenue Code
of 1986, as amended) for Federal income tax purposes, shall (to the
extent it has not already done so) provide Agent and Borrower with the
"Prescribed Forms" referred to in Section 3.6(d).
(d) Nothing contained in this section shall prevent or prohibit any
Lender from assigning or pledging all or any portion of its Loans and Note to
any Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank; provided that no such assignment or pledge
shall relieve such Lender from its obligations hereunder.
(e) By executing and delivering an Assignment and Acceptance, each
assignee Lender thereunder will be confirming to and agreeing with Borrower,
Agents and each other
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Lender hereunder that such assignee understands and agrees to the terms hereof,
including Article IX hereof.
(f) Agent shall maintain a copy of each Assignment and Acceptance and a
register for the recordation of the names and addresses of Lenders and the
Percentage Shares of, and principal amount of the Loans owing to, each Lender
from time to time (in this section called the "Register"). The entries in the
Register shall be conclusive, in the absence of manifest error, and Borrower and
each Bank Party may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes. The Register shall be available for
inspection by Borrower or any Bank Party at any reasonable time and from time to
time upon reasonable prior notice.
Section 10.6. Confidentiality. Each Bank Party agrees that it will take
all reasonable steps to keep confidential any proprietary information given to
it by any Restricted Person, provided, however, that this restriction shall not
apply to information which (i) has at the time in question entered the public
domain, (ii) is required to be disclosed by Law (whether valid or invalid) of
any Tribunal, (iii) is disclosed to any Bank Party's Affiliates, auditors,
attorneys, or agents, (iv) is furnished to any other Bank Party or to any
purchaser or prospective purchaser of participations or other interests in any
Loan or Loan Document, or (v) is disclosed in the course of enforcing its rights
and remedies during the existence of an Event of Default.
Section 10.7. Governing Law; Submission to Process. EXCEPT TO THE EXTENT
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT,
THE LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS
OF THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF
AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. CHAPTER 15 OF TEXAS
REVISED CIVIL STATUTES ANNOTATED ARTICLE 5069 (WHICH REGULATES CERTAIN REVOLVING
CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS
AGREEMENT OR TO THE NOTES. BORROWER HEREBY IRREVOCABLY SUBMITS ITSELF AND EACH
OTHER RESTRICTED PERSON TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE STATE OF TEXAS AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT OR ANY RESTRICTED PERSON IN ANY LEGAL
PROCEEDING RELATING TO THE LOAN DOCUMENTS OR THE OBLIGATIONS BY ANY MEANS
ALLOWED UNDER TEXAS OR FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN
ANY WAY RELATED TO ANY OF THE LOAN DOCUMENTS SHALL BE BROUGHT AND LITIGATED
EXCLUSIVELY IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
TEXAS, DALLAS DIVISION, TO THE EXTENT IT HAS SUBJECT MATTER JURISDICTION, AND
OTHERWISE IN THE TEXAS
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DISTRICT COURTS SITTING IN DALLAS COUNTY, TEXAS. THE PARTIES HERETO HEREBY WAIVE
AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, THAT ANY
SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER, AND FURTHER AGREE TO A TRANSFER OF ANY SUCH PROCEEDING TO A FEDERAL
COURT SITTING IN THE STATE OF TEXAS TO THE EXTENT THAT IT HAS SUBJECT MATTER
JURISDICTION, AND OTHERWISE TO A STATE COURT IN DALLAS, TEXAS. IN FURTHERANCE
THEREOF, BORROWER AND BANK PARTIES EACH HEREBY ACKNOWLEDGE AND AGREE THAT IT WAS
NOT INCONVENIENT FOR THEM TO NEGOTIATE AND RECEIVE FUNDING OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT IN SUCH COUNTY AND THAT IT WILL BE NEITHER
INCONVENIENT NOR UNFAIR TO LITIGATE OR OTHERWISE RESOLVE ANY DISPUTES OR CLAIMS
IN A COURT SITTING IN SUCH COUNTY.
Section 10.8. Limitation on Interest. Bank Parties, Restricted Persons
and any other parties to the Loan Documents intend to contract in strict
compliance with applicable usury law from time to time in effect. In furtherance
thereof such Persons stipulate and agree that none of the terms and provisions
contained in the Loan Documents shall ever be construed to create a contract to
pay, for the use, forbearance or detention of money, interest in excess of the
maximum amount of interest permitted to be charged by applicable law from time
to time in effect. Neither any Restricted Person nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of
any Obligation shall ever be liable for unearned interest thereon or shall ever
be required to pay interest thereon in excess of the maximum amount that may be
lawfully charged under applicable law from time to time in effect, and the
provisions of this section shall control over all other provisions of the Loan
Documents which may be in conflict or apparent conflict herewith. Bank Parties
expressly disavow any intention to charge or collect excessive unearned interest
or finance charges in the event the maturity of any Obligation is accelerated.
If (a) the maturity of any Obligation is accelerated for any reason, (b) any
Obligation is prepaid and as a result any amounts held to constitute interest
are determined to be in excess of the legal maximum, or (c) any Bank Party or
any other holder of any or all of the Obligations shall otherwise collect moneys
which are determined to constitute interest which would otherwise increase the
interest on any or all of the Obligations to an amount in excess of that
permitted to be charged by applicable law then in effect, then all sums
determined to constitute interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then outstanding principal of the
related Obligations or, at such Bank Party's or holder's option, promptly
returned to Borrower or the other payor thereof upon such determination. In
determining whether or not the interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted under applicable law, Bank
Parties and Restricted Persons (and any other payors thereof) shall to the
greatest extent permitted under applicable law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize,
prorate, allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from
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time to time thereunder and the maximum legal rate of interest from time to time
in effect under applicable law in order to lawfully charge the maximum amount of
interest permitted under applicable law. In the event applicable law provides
for an interest ceiling, the ceiling shall be the "weekly ceiling" as defined in
Section 303 of the Texas Finance Code and Chapter 1D of Title 79, Tex. Rev. Civ.
Stats. 1925, as amended and shall be used when appropriate in determining the
Highest Lawful Rate. As used in this section the term "applicable Law" means the
Laws of the State of Texas or the Laws of the United States of America,
whichever Laws allow the greater interest, as such Laws now exist or may be
changed or amended or come into effect in the future.
Section 10.9. Termination; Limited Survival. In its sole and absolute
discretion Borrower may at any time that no Obligations are owing elect in a
written notice delivered to Agent to terminate this Agreement. Upon receipt by
Agent of such a notice, if no Obligations are then owing this Agreement and all
other Loan Documents shall thereupon be terminated and the parties thereto
released from all prospective obligations thereunder. Notwithstanding the
foregoing or anything herein to the contrary, any waivers or admissions made by
any Restricted Person in any Loan Document, any Obligations under Sections 3.2
through 3.6, and any obligations which any Person may have to indemnify or
compensate any Bank Party shall survive any termination of this Agreement or any
other Loan Document. At the request and expense of Borrower, Agent shall prepare
and execute all necessary instruments to reflect and effect such termination of
the Loan Documents. Agent is hereby authorized to execute all such instruments
on behalf of all Lenders, without the joinder of or further action by any
Lender.
Section 10.10. Severability. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable Law.
Section 10.11. Counterparts. This Agreement may be separately executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same agreement.
Section 10.12. Waiver of Jury Trial, Punitive Damages, etc.
BORROWER AND EACH BANK PARTY HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR
ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (B) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY "SPECIAL DAMAGES", AS DEFINED BELOW, (C) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR
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OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION. AS USED IN THIS SECTION,
"SPECIAL DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE
DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS
WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER
PARTY HERETO.
Section 10.13. Ratification of Agreements. This Agreement amends and
restates in its entirety that certain Credit Agreement dated as of November 21,
1997, among Borrower, Agent and the lenders parties thereto, as supplemented or
amended to the date hereof, together with the promissory notes made by Borrower
thereunder (collectively, the "Existing Credit Agreement"). Borrower hereby
agrees that (i) the Indebtedness outstanding under the Existing Credit Agreement
and all accrued and unpaid interest thereon and (ii) all accrued and unpaid fees
under the Existing Credit Agreement shall be deemed to be outstanding under and
governed by this Agreement.
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<PAGE> 58
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
STB SYSTEMS, INC.
Borrower
By: /s/ BRYAN F. KEYES
------------------------------------
Name: Bryan F. Keyes
Title: Vice President
Address:
STB Systems, Inc.
3400 Waterview
Richardson, TX 75080
Attention: Bryan F. Keyes
Telephone: (972) 234-8750
Telecopy: (972) 680-7153
3DFX INTERACTIVE, INC.
Guarantor
By: /s/ BRYAN F. KEYES
------------------------------------
Name: Bryan F. Keyes
Title: Vice President
Address:
3dfx Interactive, Inc.
c/o STB Systems, Inc.
3400 Waterview
Richardson, TX 75080
Attention: Bryan F. Keyes
Telephone: (972) 234-8750
Telecopy: (972) 680-7153
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<PAGE> 59
BANK ONE, TEXAS, N.A.
Agent and Lender
By: /s/ RICK ROGERS
------------------------------------
Name: Rick Rogers
Title: Managing Director
Address:
1717 Main Street
Dallas, Texas 75201
Attention: Richard L. Rogers
Telephone: (214) 290-2305
Telecopy: (214) 290-2540
COMERICA BANK-TEXAS
Lender
By: /s/ ROBIN INGRAM
------------------------------------
Name: Robin Ingram
Title: Sr. Vice President
Address:
Comerica Bank - Texas
804 Congress Avenue, Suite 320
Austin, TX 78701
Attention: Robin Ingari
Telephone: (512) 427-7119
Telecopy: (512) 427-7120
54