Exhibit 10.3
[GRAPHIC OF COMERICA OMITTED]
Master Revolving Note
Eurodollar Rate-Maturity Date-Committed
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AMOUNT
NOTE DATE
MATURITY DATE TAX
IDENTIFICATION NUMBER
$22,000,000.00 July 27, 2004
July
26, 2007 88-0322261
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On the Maturity Date, as stated above, for
value received, the undersigned
promise(s) to pay to the order of Comerica
Bank ("Bank"), at any office of the
Bank in the State of Texas, Twenty Two
Million Dollars (U.S.) (or that portion
of it advanced by the Bank and not repaid
as later provided) with interest until
maturity, whether by acceleration or
otherwise, or until Default, as later
defined, at a per annum rate equal to the
lesser of (a) the Maximum Rate, as
later defined, or (b) the Stated Rate, as
later defined, and after that at a
rate equal to the rate of interest
otherwise prevailing under this Note plus two
percent (2%) per annum (but in no event in
excess of the Maximum Rate.) If on
any day the Stated Rate shall exceed the
Maximum Rate for that day, the rate of
interest applicable to this Note shall be
fixed at the Maximum Rate on that day
and on each day thereafter until the total
amount of interest accrued on the
unpaid principal balance of this Note
equals the total amount of interest which
would have accrued if there had been no
Maximum Rate. Interest rate changes will
be effective for interest computation
purposes as and when the Maximum Rate or
the Stated Rate, as applicable, changes.
Subject to the limitations hereinbelow
set forth, interest shall be calculated on
the basis of a 360-day year for
actual number of days the principal is
outstanding. Accrued interest on this
Note shall be payable on the first
Eurodollar Business Day, as later defined, of
each calendar quarter, commencing with the
first Eurodollar Business Day of the
calendar quarter following the date of this
Note and with respect to interest
accrued on any Eurodollar Balance, as later
defined, on the last day of the
applicable Eurodollar Interest Period, as
later defined, until the Maturity Date
(set forth above) when all amounts
outstanding under this Note shall be due and
payable in full. If any payment of
principal or interest under this Note shall
be payable on a day other than a day on
which the Bank is open for business,
this payment shall be extended to the next
succeeding business day and interest
shall be payable at the rate specified in
this Note during this extension. A
late payment charge equal to a reasonable
amount not to exceed five percent (5%)
of each late payment may be charged on any
payment not received by the Bank
within ten (10) calendar days after the
payment due date, but acceptance of
payment of this charge shall not waive any
Default under this Note.
Subject to the provisions hereof, the
undersigned shall have the option (an
"Interest Option") exercisable from time to
time to designate a portion of the
unpaid principal balance of this Note to
bear interest at the Prime Rate (such
portion being herein referred to as the
"Prime Rate Balance") and to designate
one or more portions of the unpaid
principal balance of this Note to bear
interest at a Eurodollar Rate (each such
portion being herein referred to as a
"Eurodollar Balance").
The term "Maximum Rate" as used herein,
shall mean at the particular time in
question the maximum nonusurious rate of
interest which, under applicable law,
may then be charged on this Note. If such
maximum rate of interest changes after
the date hereof, the Maximum Rate shall be
automatically increased or decreased,
as the case may be, without notice to the
undersigned from time to time as of
the effective date of each change in such
maximum rate. For purposes of
determining the Maximum Rate under the law
of the State of Texas, the applicable
interest rate ceiling shall be the "weekly
ceiling" from time to time in effect
under Chapter 303 of the Texas Finance
Code, as amended.
The term "Stated Rate," as used in this
Note, shall mean (a) with respect to the
Prime Rate Balance outstanding from time to
time, a fluctuating per annum rate
of interest equal to the Prime Rate and (b)
with respect to each Eurodollar
Balance, a per annum rate of interest equal
to the Eurodollar Rate for the
Eurodollar Interest Period then in effect
with respect to such Eurodollar
Balance plus the Applicable Margin.
The term "Prime Rate," as used herein,
shall mean that annual rate of interest
which is equal to the greater of the annual
rate of interest designated by the
Bank as its Prime Rate which is changed by
the Bank from time to time or a
variable per annum rate of interest
determined from day to day which equals the
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sum of 1% plus the average per annum rate
of interest on overnight Federal funds
transactions with members of Federal
Reserve System arranged by Federal funds
brokers ("Overnight Transactions")
transacted on the immediately preceding
Business Day, as published by the Federal
Reserve Bank of New York, or, if such
interest rate is not so published for any
Business Day, the average of the per
annum interest rate quotations for
Overnight Transactions received by the Bank
for such Business Day from 3 Federal funds
brokers of recognized standing
selected by the Bank. The Bank's Prime Rate
is a reference rate and does not
necessarily represent the lowest or best
rate actually charged by the Bank to
any of its customers. The Bank may make
commercial loans at rates of interest
at, above or below its Prime Rate.
The term "Eurodollar Rate", as used herein,
shall mean, with respect to the
applicable Eurodollar Interest Period and
applicable Eurodollar Balance (as
later defined), the quotient of the
following (rounded upwards, if necessary, to
the nearest 1/16 of 1%): (a) the interest
rate determined by the Bank (which
determination shall be conclusive) to be
the per annum interest rate at which
deposits in immediately available funds in
U.S. dollars are offered to the Bank
(or, if elected by the Bank, by the Bank's
designated eurodollar lending office)
at such time as the Bank elects on the
first day of such Eurodollar Interest
Period, to prime banks in the interbank
eurodollar market selected by Bank (or,
if applicable, by the Bank's designated
eurodollar lending office) for delivery
on the first day of such Eurodollar
Interest Period in an amount equal to the
principal amount of the corresponding
Eurodollar Balance for a period equal to
the length of such Eurodollar Interest
Period; divided by (b) a percentage
(expressed as a decimal) equal to 1.00
minus the maximum rate during such
interest period at which Bank (or, if
applicable, the Bank's designated
eurodollar lending office) is required to
maintain reserves on "Eurocurrency
Liabilities" as defined in and pursuant to
Regulation D of the Board of
Governors of the Federal Reserve System or,
if such regulation or designation is
modified, and as long as Bank (or, if
applicable, the Bank's designated
eurodollar lending office) is required to
maintain reserves against a category
of liabilities which includes eurodollar
deposits or includes a category of
assets which includes eurodollar loans, the
rate at which such reserves are
required to be maintained on such
category.
The term "Eurodollar Interest Period", as
used herein, shall mean, with respect
to the applicable Eurodollar Balance, a
period commencing on the date (which
must be a Eurodollar Business Day) upon
which, pursuant to an Interest Notice,
as later defined, the principal amount of
such Eurodollar Balance begins to
accrue interest at the applicable
Eurodollar Rate (or, in the case of a rollover
to a successive Eurodollar Interest Period,
the last day of the immediately
preceding Eurodollar Interest Period) and
ending 30, 60 or 90 days after the
commencement date (as designated in the
Interest Notice); provided, that: (i)
any Eurodollar Interest Period which would
otherwise end on a day which is not a
Eurodollar Business Day shall be extended
to the next succeeding Eurodollar
Business Day (unless such Eurodollar
Business Day falls in another calendar
month, in which case, such Eurodollar
Interest Period shall end on the next
preceding Eurodollar Business Day); and
(ii) any Eurodollar Interest Period
which begins on a day for which there is no
numerically corresponding day in the
calendar month at the end of such
Eurodollar Interest Period shall end on the
last Eurodollar Business Day of such last
calendar month; and (iii) no
Eurodollar Interest Period shall extend
beyond the Maturity Date.
The term "Eurodollar Business Day," as used
herein, shall mean a Business Day on
which dealings in U.S. dollars are carried
out in the interbank eurodollar
market selected by Bank (or, if applicable,
the Bank's designated eurodollar
lending office).
The term "Applicable Margin," as used
herein, shall be determined in accordance
with the following schedule based on the
ratio of Funded Debt to EBITDA, as such
terms are defined in the Credit Agreement
dated as of even date herewith between
Borrower and Bank (the "Credit
Agreement"):
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Funded Debt to EBITDA
Eurodollar Margin
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Greater than 2.50x
2.0%
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Less than or
equal to 2.50x
1.75%
but greater than or
equal to
2.00x
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Less than 2.00x
1.5%
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Any decrease in Stated Rate due to a change
in the Applicable Margin shall take
effect five (5) Business Days after the
undersigned has submitted an Interest
Notice, Compliance Certificate and
Financial Statements in accordance with the
Credit Agreement to Bank demonstrating a
Funded Debt to EBITDA Ratio which would
cause such decrease; provided, no reduction
in the Applicable Margin shall take
effect until Borrower shall have maintained
a certain Funded Debt to EBITDA
Ratio giving rise to such reduction for a
consecutive three (3) month period.
Any increase in the Stated Rate resulting
from an increase in the Applicable
Margin due to a change in the Funded Debt
to EBITDA Ratio shall take effect
immediately upon the Bank's receipt of a
Compliance Certificate or Financial
Statements (as defined in the Credit
Agreement) demonstrating a Funded Debt to
EBITDA Ratio which would cause such
increase, or in the event the Bank does not
timely receive a Compliance Certificate and
all Financial Statements as required
by the Credit Agreement or any other Loan
Document, as defined in the Credit
Agreement, then the Applicable Margin shall
become 2.0% for all Eurodollar
Balances on the earliest date on which
delivery the Compliance Certificate
and/or any Financial Statement was due.
The term "Business Day" as used herein,
shall mean any day other than a
Saturday, Sunday or holiday, on which the
Bank (and, if applicable, the Bank's
designated eurodollar lending office) is
open to carry on all or substantially
all of its normal commercial lending
business in Dallas, Texas.
The Interest Option shall be exercisable by
the undersigned subject to the other
limitations in this Note on the
undersigned's option to designate a portion of
the unpaid principal balance hereof as a
Eurodollar Balance and only in the
manner provided below:
(i) Before 12:00
noon at least 3 Business Days prior to the date the
undersigned has requested the Bank to make
an advance upon this Note, the
undersigned shall have given the Bank
written notice (any such notice, an
"Interest Notice") in form and content
satisfactory to Bank specifying the
initial Interest Option(s) and the
respective initial amounts of the Prime Rate
Balance and Eurodollar Balance designated
by the undersigned for each advance.
If the required Interest Notice shall not
have been timely received by the Bank
or fails to designate all or any portion of
the unpaid principal amount of the
advance as either a Prime Rate Balance or a
Eurodollar Balance in accordance
with the terms and provisions of this Note,
the undersigned shall be deemed
conclusively to have designated such
amounts to be a Prime Rate Balance and to
have given the Bank notice of such
designation.
(ii) At least
three (3) Business Days prior to the termination of any
Eurodollar Interest Period for a Eurodollar
Balance, the undersigned shall give
the Bank an Interest Notice specifying the
Interest Option which is to be
applicable to such Eurodollar Balance upon
the expiration of such Eurodollar
Interest Period. If the required Interest
Notice shall not have been timely
received by the Bank the undersigned shall
be deemed conclusively to have
designated such amount as a Prime Rate
Balance immediately upon the expiration
of such Eurodollar Interest Period and to
have given the Bank notice of such
designation.
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(iii) The
undersigned shall have the right, exercisable on any Business
Day
subject to the terms of this Note, to
convert an eligible portion of the Prime
Rate Balance to a Eurodollar Balance by
giving the Bank an Interest Notice of
such designation at least three (3)
Eurodollar Business Days prior to the
effective date of such exercise.
Additionally, upon termination of any
Eurodollar Interest Period, the undersigned
shall have the right, on any
Business Day, to convert all or a portion
of such principal amount from the
Eurodollar Balance to a Prime Rate Balance
by giving Bank an Interest Notice of
such selection at least three (3)
Eurodollar Business Days prior to effective
date of such exercise.
(iv) There may
be no more than four (4) Eurodollar Balances in effect at
any time.
(v) Each
Eurodollar Balance must be, as of the first day of the
applicable
Eurodollar Interest Period, at least
$1,000,000.
(vi) No Default,
or condition or event which, with the giving of notice or
the lapse of time, or both, would
constitute a Default, shall have occurred and
be continuing or exist.
(vii) Each
exercise of an Interest Option to designate a Eurodollar
Balance
to bear interest at a Stated Rate which is
based on the Eurodollar Rate shall
not be revocable.
Changes in the Stated Rate applicable to a
Prime Rate Balance or a Eurodollar
Balance shall become effective without
prior notice to the undersigned
automatically as of the opening of business
on the date of each change in the
Prime Rate or the Eurodollar Rate, as the
case may be.
If the Bank (or, if applicable, the Bank's
designated eurodollar lending office)
determines that deposits in U.S. dollars
(in the applicable amounts) are not
being offered to prime banks in the
interbank eurodollar market selected by the
Bank (or if applicable, the Bank's
designated eurodollar lending office for the
applicable Eurodollar Interest Period, or
that the rate at which such dollar
deposits are being offered will not
adequately and fairly reflect the cost to
the Bank (or, if applicable, the Bank's
designated eurodollar lending office) of
making or maintaining a Eurodollar Balance
for the applicable Eurodollar
Interest Period, the Bank shall forthwith
give notice thereof to the
undersigned, whereupon, until the Bank
notifies the undersigned that such
circumstances no longer exist, the right of
the undersigned to select an
Interest Option based upon the Eurodollar
Rate shall be suspended, and the
undersigned may only select Interest
Options based on the Prime Rate.
If the adoption of any applicable law, rule
or regulation, or any change
therein, or any change in the
interpretation or administration thereof by any
governmental authority, central bank or
comparable agency charged with the
4
<PAGE>
interpretation or administration thereof,
or compliance by the Bank (or, if
applicable, the Bank's designated
eurodollar lending office) with any request or
directive (whether or not having the force
of law) of any such authority,
central bank or comparable agency shall
make it unlawful or impractical for the
Bank (or, if applicable, the Bank's
designated eurodollar lending office) to
make or maintain a Eurodollar Balance, the
Bank shall so notify the undersigned
and any then-existing Eurodollar Balance
shall automatically convert to a Prime
Rate Balance either (i) on the last day of
the then-current Eurodollar Interest
Period applicable to such Eurodollar
Balance, if the Bank (and, if applicable,
its designated eurodollar lending office)
may lawfully continue to maintain and
fund such Eurodollar Balance to such day,
or (ii) immediately, if the Bank (or,
if applicable, its designated eurodollar
lending office) may not lawfully
continue to maintain such Eurodollar
Balance to such day. Further, until the
Bank notices the undersigned that such
conditions or circumstances no longer
exist, the right of the undersigned to
select an Interest Option based on the
Eurodollar Rate shall be suspended, and the
undersigned may only select Interest
Options based on the Prime Rate.
If either (i) the adoption of any
applicable law, rule or regulation, or any
change therein, or any change in the
interpretation or administration thereof by
any governmental authority, central bank or
comparable agency charged with the
interpretation or administration thereof,
or compliance by the Bank (or, if
applicable, its designated eurodollar
lending office) with any request or
directive (whether or not having the force
of law) of any such authority,
central bank or comparable agency shall
subject the Bank (or, if applicable, its
designated eurodollar lending office) to
any tax (including without limitation
any United States interest equalization or
similar tax, however named), duty or
other charge with respect to any Eurodollar
Balance, this Note or the Bank's
(or, if applicable, its designated
eurodollar lending office)obligation to
compute interest on the principal balance
of this Note at a rate based upon the
Eurodollar Rate, or shall change the basis
of taxation of payments to the Bank
(or, if applicable, its designated
eurodollar lending office) of
