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Exhibit 4.2
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[JPMorgan LOGO]
$300,000,000
REVOLVING CREDIT AGREEMENT
$150,000,000
TERM LOAN AGREEMENT
DATED AS OF
NOVEMBER 28, 2006
AMONG
SERVICE CORPORATION INTERNATIONAL
AS BORROWER,
THE LENDERS PARTY HERETO,
JPMORGAN CHASE BANK, N.A.,
AS ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A. AND THE BANK OF NOVA SCOTIA,
AS SYNDICATION AGENTS
FOR THE REVOLVING LOANS,
---------
J.P. MORGAN SECURITIES INC.
AND
BANC OF AMERICA SECURITIES LLC,
AS JOINT BOOKRUNNERS AND JOINT LEAD ARRANGERS
FOR THE REVOLVING LOANS
AND
J.P. MORGAN SECURITIES, INC.
AND
MERRILL LYNCH CAPITAL CORPORATION,
AS JOINT BOOKRUNNERS AND JOINT LEAD ARRANGERS
FOR THE TERM LOAN
===============================================================================
Andrews Kurth LLP
Counsel to the Administrative Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS........................................................1
SECTION 1.01 DEFINED
TERMS.............................................1
SECTION 1.02 CLASSIFICATION OF LOANS AND
BORROWINGS...................17
SECTION 1.03 TERMS
GENERALLY..........................................17
SECTION 1.04 ACCOUNTING TERMS;
GAAP...................................18
ARTICLE II THE
CREDITS......................................................18
SECTION 2.01 REVOLVING LOAN
COMMITMENTS...............................18
SECTION 2.02 REVOLVING LOANS AND
BORROWINGS...........................18
SECTION 2.03 REQUESTS FOR REVOLVING
BORROWINGS........................19
SECTION 2.04 TERM
LOANS...............................................20
SECTION 2.05 SWINGLINE
LOANS..........................................20
SECTION 2.06 LETTERS OF
CREDIT........................................21
SECTION 2.07 FUNDING OF
BORROWINGS....................................25
SECTION 2.08 INTEREST
ELECTIONS.......................................26
SECTION 2.09 TERMINATION AND REDUCTION OF
COMMITMENTS.................27
SECTION 2.10 REPAYMENT OF LOANS; EVIDENCE OF
DEBT.....................28
SECTION 2.11 PREPAYMENT OF
LOANS......................................29
SECTION 2.12
FEES.....................................................30
SECTION 2.13
INTEREST.................................................31
SECTION 2.14 ALTERNATE RATE OF
INTEREST...............................32
SECTION 2.15 INCREASED
COSTS..........................................32
SECTION 2.16 BREAK FUNDING
PAYMENTS...................................33
SECTION 2.17
TAXES....................................................34
SECTION 2.18 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.................................................35
SECTION 2.19 MITIGATION OBLIGATIONS; REPLACEMENT OF
LENDERS...........37
SECTION 2.20 INCREASE IN THE REVOLVING LOAN
COMMITMENTS...............37
ARTICLE III REPRESENTATIONS AND
WARRANTIES..................................38
SECTION 3.01 ORGANIZATION;
POWERS.....................................38
SECTION 3.02 AUTHORIZATION;
ENFORCEABILITY............................38
SECTION 3.03 GOVERNMENTAL APPROVALS; NO
CONFLICTS.....................39
SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE
CHANGE..........39
SECTION 3.05
PROPERTIES...............................................39
SECTION 3.06 LITIGATION AND ENVIRONMENTAL
MATTERS.....................39
SECTION 3.07 COMPLIANCE WITH LAWS AND
AGREEMENTS......................40
SECTION 3.08 INVESTMENT AND HOLDING COMPANY
STATUS....................40
SECTION 3.09
TAXES....................................................40
SECTION 3.10
ERISA....................................................40
SECTION 3.11
DISCLOSURE...............................................40
SECTION 3.12
SUBSIDIARIES.............................................41
SECTION 3.13 MARGIN
STOCK.............................................41
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SECTION 3.14 USE OF
PROCEEDS..........................................41
SECTION 3.15
SOLVENCY.................................................41
ARTICLE IV
CONDITIONS.......................................................41
SECTION 4.01 EFFECTIVE
DATE...........................................41
SECTION 4.02 EACH CREDIT
EVENT........................................43
ARTICLE V AFFIRMATIVE
COVENANTS.............................................43
SECTION 5.01 FINANCIAL STATEMENTS; RATINGS CHANGE AND OTHER
INFORMATION..............................................43
SECTION 5.02 NOTICES OF MATERIAL
EVENTS...............................44
SECTION 5.03 EXISTENCE; CONDUCT OF
BUSINESS...........................45
SECTION 5.04 PAYMENT OF
OBLIGATIONS...................................45
SECTION 5.05 MAINTENANCE OF
PROPERTIES................................45
SECTION 5.06 BOOKS AND RECORDS; INSPECTION
RIGHTS.....................45
SECTION 5.07 COMPLIANCE WITH
LAWS.....................................45
SECTION 5.08 USE OF PROCEEDS AND LETTERS OF
CREDIT....................46
SECTION 5.09
INSURANCE................................................46
SECTION 5.10 REQUIRED
GUARANTORS......................................46
ARTICLE VI NEGATIVE
COVENANTS...............................................46
SECTION 6.01 INDEBTEDNESS
COVENANT....................................46
SECTION 6.02 LIMIT ON PREFERRED EQUITY
ISSUANCE.......................48
SECTION 6.03 LIEN
COVENANT............................................48
SECTION 6.04 SALE AND LEASEBACK
TRANSACTIONS..........................49
SECTION 6.05 LIMITATION ON FUNDAMENTAL
CHANGES........................49
SECTION 6.06 RESTRICTIONS ON INVESTMENTS, LOANS,
ADVANCES, GUARANTEES AND ACQUISITIONS....................50
SECTION 6.07 LIMITATION ON ASSET
SALES................................52
SECTION 6.08 SWAP
AGREEMENTS..........................................53
SECTION 6.09 LIMITATION ON RESTRICTED
PAYMENTS........................53
SECTION 6.10 RESTRICTIONS ON TRANSACTIONS WITH
AFFILIATES.............55
SECTION 6.11 RESTRICTIONS ON RESTRICTIVE
AGREEMENTS...................55
SECTION 6.12 FINANCIAL
COVENANTS......................................55
ARTICLE VII EVENTS OF
DEFAULT...............................................56
ARTICLE VIII THE ADMINISTRATIVE
AGENT.......................................58
ARTICLE IX
MISCELLANEOUS....................................................60
SECTION 9.01
NOTICES..................................................60
SECTION 9.02 WAIVERS; AMENDMENTS; RELEASE OF
GUARANTORS...............61
SECTION 9.03 EXPENSES; INDEMNITY; DAMAGE
WAIVER.......................62
SECTION 9.04 SUCCESSORS AND
ASSIGNS...................................63
SECTION 9.05
SURVIVAL.................................................66
SECTION 9.06 COUNTERPARTS; INTEGRATION;
EFFECTIVENESS.................67
SECTION 9.07
SEVERABILITY.............................................67
SECTION 9.08 RIGHT OF
SETOFF..........................................67
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SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS..................................................67
SECTION 9.10 WAIVER OF JURY
TRIAL.....................................68
SECTION 9.11
HEADINGS.................................................68
SECTION 9.12
CONFIDENTIALITY..........................................68
SECTION 9.13 INTEREST RATE
LIMITATION.................................69
SECTION 9.14 USA PATRIOT
ACT..........................................69
SECTION 9.15 FINAL AGREEMENT OF THE
PARTIES...........................70
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<PAGE>
EXHIBITS:
Exhibit 1.01A Form of Guarantee Agreement
Exhibit 1.01B Form of Revolving Promissory Note
Exhibit 1.01C Form of Term Promissory Note
Exhibit 4.01(h) Form of Borrowing Request
Exhibit 5.01 Form of Compliance Certificate
Exhibit 9.04 Form of Assignment and Assumption
Annex I Standard Terms and Conditions for Assignment and
Assumption
SCHEDULES:
Schedule 2.01 Lender's Revolving Loan Commitments
Schedule 2.04 Lenders' Term Loan Commitments
Schedule 2.06(k) Existing Letters of Credit
Schedule 3.12 List of Subsidiaries
Schedule 6.03(b) Existing Liens
Schedule 6.06(b) Existing Investments
Schedule 6.11 Restrictive Agreements
Schedule 9.04 Approved Funds
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<PAGE>
CREDIT AGREEMENT dated as of November 28, 2006,is entered into
among
Service Corporation International, a Delaware corporation, the
Lenders party
hereto, Bank of America, N.A., as the Syndication Agent for the
Revolving Loans,
and JPMorgan Chase Bank, N.A., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the
following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to
whether such Loan, or the Loans comprising such Borrowing, are
bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar
Borrowing
for any Interest Period, an interest rate per annum (rounded
upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for
such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire
in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more
intermediaries, Controls
or is Controlled by or is under common Control with the Person
specified.
"ALDERWOODS" means Alderwoods Group, Inc., a Delaware
corporation.
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"ALDERWOODS DEBT" means the Indebtedness and all other
obligations
created and existing pursuant to that certain Credit Agreement
dated September
17, 2003 by and among Alderwoods Group, Inc. as borrower, Bank of
America, N.A.
as administrative agent and the other lenders party thereto, and
all related
documents.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal
to
the higher of (a) the Prime Rate in effect on such day and (b) the
Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate
shall be effective from and including the effective date of such
change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE MARGIN" means, for any day, with respect to any ABR
Loan
or Eurodollar Revolving Loan, or with respect to the facility fees
payable
hereunder, as the case
<PAGE>
may be, the Applicable Margin per annum set forth below under the
caption "ABR
Spread", "Eurodollar Spread" or "Commitment Fee Rate", as the case
may be, based
upon the Leverage Ratio:
For Revolving Loans:
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ABR EURODOLLAR COMMITMENT
CATEGORY LEVERAGE RATIO: SPREAD SPREAD FEE RATE
-----------------------------------------------------------------------------
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I = 4.0 to 1.0 1.0% 2.0% .50%
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II = 3.0 to 1.0 but < 4.0 to 1.0 .75% 1.75% .375%
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III = 2.0 to 1.0 but < 3.0 to 1.0 .50% 1.50% .375%
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IV < 2.0 to 1.0 .25% 1.25% .25%
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For Term Loans, the ABR Spread will be 1.0%, and the Eurodollar
Spread will be 2.0%.
For purposes of the foregoing, each change in the Applicable
Margin
resulting from a change in the Leverage Ratio shall be effective
during the
period commencing on and including the date of delivery to the
Administrative
Agent of such consolidated financial statements indicating such
change and
ending on the date immediately preceding the effective date of the
next such
change; provided that the Leverage Ratio shall be deemed to be in
Category I at
any time (a) that an Event of Default has occurred and is
continuing or (b) at
the option of the Administrative Agent or at the request of the
Required Lenders
if the Borrower fails to deliver the consolidated financial
statements required
to be delivered by it pursuant to SECTION 5.01(I) or SECTION
5.01(II), during
the period from the expiration of the time for delivery thereof
until such
consolidated financial statements are delivered.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the
percentage of the total Revolving Loan Commitments represented by
such Lender's
Revolving Loan Commitment. If the Revolving Loan Commitments have
terminated or
expired, the Applicable Percentages shall be determined based upon
the Revolving
Credit Exposures most recently in effect, giving effect to any
assignments.
"Approved Fund" has the meaning assigned to such term in
SECTION
9.04.
"ASSIGNMENT AND ASSUMPTION" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any
party whose
consent is required by SECTION 9.04), and accepted by the
Administrative Agent,
in the form of EXHIBIT 9.04 or any other form approved by the
Administrative
Agent.
"AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of the Revolving
Maturity Date and
the date of termination of the Revolving Loan Commitments.
2
<PAGE>
"BOARD" means the Board of Governors of the Federal Reserve
System
of the United States of America.
"BORROWER" means Service Corporation International, a Delaware
corporation.
"BORROWING" means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of
Eurodollar Loans, as
to which a single Interest Period is in effect, (b) the initial
funding of the
Term Loan and subsequent conversions or continuations thereof if
such Borrowing
is made as a Eurodollar Borrowing, subject to the limitation set
forth in (a)
above, or (c) a Swingline Loan.
"BORROWING REQUEST" means a request by the Borrower for a
Revolving
Borrowing substantially in the form of EXHIBIT 4.01(H).
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other
day on which commercial banks in Houston, Texas are authorized or
required by
law to remain closed; PROVIDED that, when used in connection with a
Eurodollar
Loan, the term "BUSINESS DAY" shall also exclude any day on which
banks are not
open for dealings in dollar deposits in the London interbank
market.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations
of
such Person to pay rent or other amounts under any lease of (or
other
arrangement conveying the right to use) real or personal property,
or a
combination thereof, which obligations are required to be
classified and
accounted for as capital leases on a balance sheet of such Person
under GAAP,
and the amount of such obligations shall be the capitalized amount
thereof
determined in accordance with GAAP.
"CASH INTEREST EXPENSE" means interest expense determined under
GAAP, less amortization of deferred loan costs and original issue
discounts.
"CHANGE IN CONTROL" means (a) the acquisition of ownership,
directly
or indirectly, beneficially or of record, by any Person or group
(within the
meaning of the Securities Exchange Act of 1934 and the rules of the
Securities
and Exchange Commission thereunder as in effect on the date hereof)
of Equity
Interests representing more than 25% of the aggregate ordinary
voting power
represented by the issued and outstanding Equity Interests of the
Borrower
(including Equity Interests referenced in (d) below); (b)
occupation of a
majority of the seats (other than vacant seats) on the board of
directors of the
Borrower by Persons who were neither (i) nominated by the board of
directors of
the Borrower nor (ii) appointed by directors so nominated; (c) the
acquisition
of direct or indirect Control of the Borrower by any Person or
group, or (d) any
event that gives holders of preferred Equity Interests or other
securities
issued pursuant to any shareholders' rights plan of the Borrower
the right to
purchase or to convert such securities to more than 25% of the
aggregate (less
the percentage of Equity Interests referenced in (a) above held by
the holders
of such preferred Equity Interests) voting Equity Interests of the
Borrower.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any
law, rule or
regulation or in the interpretation or application thereof by any
Governmental
Authority after the date of this Agreement or
3
<PAGE>
(c) compliance by any Lender or the Issuing Bank (or, for purposes
of SECTION
2.15(B), by any lending office of such Lender or by such Lender's
or the Issuing
Bank's holding company, if any) with any request, guideline or
directive
(whether or not having the force of law) of any Governmental
Authority made or
issued after the date of this Agreement.
"CLASS", when used in reference to any Loan or Borrowing, refers
to
whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans,
Term Loans or Swingline Loans.
"CODE" means the Internal Revenue Code of 1986, as amended from
time
to time.
"COMMITMENT" means, with respect to each Lender, the sum of (i)
such
Lender's Revolving Loan Commitment plus (ii) such Lender's Term
Loan Commitment.
"CONSOLIDATED EBITDA" means EBITDA for the Borrower and its
Subsidiaries on a consolidated basis.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
actual
Cash Interest Expense (including imputed interest expense in
respect of Capital
Lease Obligations) paid by the Borrower and the Subsidiaries or
accrued during
such period.
"CONSOLIDATED OPERATING INCOME" means, for any period, the
operating
income or loss of the Borrower and the Subsidiaries for such period
determined
on a consolidated basis in accordance with GAAP.
"CONTROL" means the possession, directly or indirectly, of the
power
to direct or cause the direction of the management or policies of a
Person,
whether through the ability to exercise voting power, by contract
or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative
thereto.
"DEFAULT" means any event or condition which constitutes an Event
of
Default or which upon notice, lapse of time or both would, unless
cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and
the
environmental matters disclosed in SCHEDULE 3.06.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is not a
Foreign
Subsidiary.
"EBITDA" means, for any period, without duplication, for the
Borrower and its Subsidiaries, Consolidated Operating Income
(i) minus any gains or plus any losses on sales and impairments
of
assets, to the extent included in Consolidated Operating
Income;
4
<PAGE>
(ii) plus depreciation and amortization (to the extent included
in
operating expenses and excluding amortization of deferred loan
costs);
(iii) plus non-cash stock compensation expense/amortization (to
the
extent included in operating expenses);
(iv) plus rent expense in previous periods associated with
assets
later capitalized with on-balance sheet debt;
(v) plus (A) actual Merger-related, non-recurring cash expenses
incurred to the extent included in operating expenses and not to
exceed
$60,000,000 in aggregate, including expenses within the first 24
months
after Effective Date, such as severance of management and
employees,
termination costs and buyouts of contracts and lease
agreements,
conversions of computer systems and networks, transfer of documents
and
other assets, legal and advisory fees directly related to the
Merger, and
other items reasonably incurred of a similar nature and (B)
non-cash merger
expenses that would not otherwise be picked up in other non-cash
addbacks
to EBITDA;
(vi) plus royalty income from American Memorial Life Insurance
Company;
(vii) minus expenses attributable to surety premiums;
(viii) minus Pro Forma Divested EBITDA (to the extent positive
and
previously included in operating income) or plus Pro Forma Divested
EBITDA
(to the extent negative and previously included in operating
income);
(ix) plus EBITDA of acquired operations in the quarters preceding
the
acquisition;
(x) plus EBITDA of discontinued operations still owned (to the
extent
positive) and minus EBITDA of discontinued operations still owned
(to the
extent negative); and
(xi) plus net cash flow from/to non-consolidated joint ventures to
the
extent received/paid in cash.
Provided, however, (a) EBITDA for the quarter ended March 31, 2006
shall be
$117,683,000, and EBITDA for the quarter ended June 30, 2006 shall
be
$109,851,000 (b) the EBITDA for each of such quarters is subject to
change to
reflect financial information as a result of acquisitions and
divestitures after
the Effective Date, (c) EBITDA for the quarter ended September 30,
2006 shall be
$118,634,000 and (d) the calculation of EBITDA for the fiscal
quarter ending
September 30, 2006 and the fiscal quarter ending December 31, 2006
shall include
the EBITDA of Alderwoods as a Subsidiary of the Borrower as if the
Merger had
occurred on the first day of the quarter for which EBITDA is being
calculated.
"EFFECTIVE DATE" means the date on which the conditions specified
in
Section 4.01 are satisfied (or waived in accordance with Section
9.02).
5
<PAGE>
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or
binding
agreements issued, promulgated or entered into by any Governmental
Authority,
relating in any way to the environment, preservation or reclamation
of natural
resources, the management, release or threatened release of any
Hazardous
Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of
environmental
remediation, fines, penalties or indemnities), of the Borrower or
any Subsidiary
directly or indirectly resulting from or based upon (a) violation
of any
Environmental Law, (b) the generation, use, handling,
transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous
Materials, (d) the release or threatened release of any Hazardous
Materials into
the environment or (e) any contract, agreement or other consensual
arrangement
pursuant to which liability is assumed or imposed with respect to
any of the
foregoing.
"EQUITY INTERESTS" means shares of capital stock, partnership
interests, membership interests in a limited liability company,
beneficial
interests in a trust or other equity ownership interests in a
Person, and any
warrants, options or other rights entitling the holder thereof to
purchase or
acquire any such equity interest.
"ERISA" means the Employee Retirement Income Security Act of
1974,
as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a
single employer
under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302
of ERISA and Section 412 of the Code, is treated as a single
employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with
respect to a
Plan (other than an event for which the 30 day notice period is
waived or the
Merger and the transactions contemplated thereby); (b) the
existence with
respect to any Plan of an "accumulated funding deficiency" (as
defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an
application for a waiver of the minimum funding standard with
respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any
liability under Title IV of ERISA with respect to the termination
of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the
PBGC or a plan
administrator of any notice relating to an intention to terminate
any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by the
Borrower or any of its ERISA Affiliates of any liability with
respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or
the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of
any notice,
concerning the imposition of Withdrawal Liability or a
determination that a
Multiemployer Plan is, or is expected to be, insolvent or in
reorganization,
within the meaning of Title IV of ERISA.
6
<PAGE>
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO
Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in
ARTICLE
VII.
"EXCESS CASH FLOW" means (i) EBITDA, minus (ii) the sum of
accrued
cash taxes, capital expenditures, Cash Interest Expense, scheduled
principal
payments made on all Indebtedness other than the Revolving Loans
(excluding any
payments made pursuant to Section SECTION 2.10(B)(II), Restricted
Payments made
and permitted hereunder, and cash expended for acquisitions
permitted by SECTION
6.06.
"EXCLUDED TAXES" means, with respect to the Administrative
Agent,
any Lender, the Issuing Bank or any other recipient of any payment
to be made by
or on account of any obligation of the Borrower hereunder, (a)
income or
franchise taxes imposed on (or measured by) its net income by the
United States
of America, or by the jurisdiction under the laws of which such
recipient is
organized or in which its principal office is located or, in the
case of any
Lender, in which its applicable lending office is located, (b) any
branch
profits taxes imposed by the United States of America or any
similar tax imposed
by any other jurisdiction in which the Borrower is located and (c)
in the case
of a Foreign Lender (other than an assignee pursuant to a request
by the
Borrower under SECTION 2.19(B)), any withholding tax that is
imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender
becomes a party
to this Agreement (or designates a new lending office) or is
attributable to
such Foreign Lender's failure to comply with SECTION 2.17(E),
except to the
extent that such Foreign Lender (or its assignor, if any) was
entitled, at the
time of designation of a new lending office (or assignment), to
receive
additional amounts from the Borrower with respect to such
withholding tax
pursuant to SECTION 2.17(A).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of
the rates on
overnight Federal funds transactions with members of the Federal
Reserve System
arranged by Federal funds brokers, as published on the next
succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is
not so
published for any day that is a Business Day, the average (rounded
upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day
for such
transactions received by the Administrative Agent from three
Federal funds
brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer,
principal
accounting officer, treasurer or controller of the Borrower.
"FOREIGN LENDER" means any Lender that is organized under the
laws
of a jurisdiction other than that in which the Borrower is located.
For purposes
of this definition, the United States of America, each State
thereof and the
District of Columbia shall be deemed to constitute a single
jurisdiction.
"FOREIGN SUBSIDIARY" means any Subsidiary organized under the
laws
of a jurisdiction other than the United States or any of its
territories or
possessions or any political
7
<PAGE>
subdivision thereof. For the avoidance of doubt, the Commonwealth
of Puerto Rico
is not a territory, possession or political subdivision of the
United States.
"GAAP" means generally accepted accounting principles in the
United
States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United
States
of America, any other nation or any political subdivision thereof,
whether state
or local, and any agency, authority, instrumentality, regulatory
body, court,
central bank or other entity exercising executive, legislative,
judicial,
taxing, regulatory or administrative powers or functions of or
pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing
or having the
economic effect of guaranteeing any Indebtedness or other
obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or
indirectly, and including any obligation of the guarantor, direct
or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase
or payment
of) such Indebtedness or other obligation or to purchase (or to
advance or
supply funds for the purchase of) any security for the payment
thereof, (b) to
purchase or lease property, securities or services for the purpose
of assuring
the owner of such Indebtedness or other obligation of the payment
thereof, (c)
to maintain working capital, equity capital or any other financial
statement
condition or liquidity of the primary obligor so as to enable the
primary
obligor to pay such Indebtedness or other obligation or (d) as an
account party
in respect of any letter of credit or letter of guaranty issued to
support such
Indebtedness or obligation; PROVIDED, that the term Guarantee shall
not include
endorsements for collection or deposit in the ordinary course of
business.
"GUARANTEE AGREEMENT" means the Guarantee of the Guarantors,
substantially in the form of EXHIBIT 1.01A hereto, guarantying the
Obligations
of Borrower under this Agreement and the Loan Documents and all
other
Indebtedness of the Borrower to any of the Agents or Lenders in
respect of any
hedging obligations, any overdrafts or treasury, depository, cash
management, or
similar services.
"GUARANTORS" means all Domestic Subsidiaries of the Borrower and
any
other Subsidiary required to execute a Guaranty Agreement pursuant
to SECTION
5.10.
"HAZARDOUS MATERIALS" means all explosive or radioactive
substances
or wastes and all hazardous or toxic substances, wastes or other
pollutants,
including petroleum or petroleum distillates, asbestos or asbestos
containing
materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes
and all other substances or wastes of any nature regulated pursuant
to any
Environmental Law.
"INCREASING LENDER" has the meaning set forth in Section 2.20.
"INDEBTEDNESS" of any Person means, without duplication, (a)
all
obligations of such Person for borrowed money or with respect to
deposits or
advances of any kind, (b) all obligations of such Person evidenced
by bonds,
debentures, notes or similar instruments, (c) all obligations of
such Person
upon which interest charges are customarily paid, (d) all
obligations
8
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of such Person under conditional sale or other title retention
agreements
relating to property acquired by such Person, (e) all obligations
of such Person
in respect of the deferred purchase price of property or services
(excluding
current accounts payable incurred in the ordinary course of
business), (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness
has an existing right, contingent or otherwise, to be secured by)
any Lien on
property owned or acquired by such Person, whether or not the
Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person
of
Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i)
all obligations, contingent or otherwise, of such Person as an
account party in
respect of letters of credit and letters of guaranty and (j) all
obligations,
contingent or otherwise, of such Person in respect of bankers'
acceptances. The
Indebtedness of any Person shall include the Indebtedness of any
other entity
(including any partnership in which such Person is a general
partner) to the
extent such Person is liable therefor as a result of such Person's
ownership
interest in or other relationship with such entity, except to the
extent the
terms of such Indebtedness provide that such Person is not liable
therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INFORMATION MEMORANDUM" means the Confidential Information
Memorandum dated September 2006 relating to the Borrower and the
Transactions.
"INTEREST COVERAGE RATIO" means the ratio of Consolidated EBITDA
to
Consolidated Interest Expense, in each case, for the immediately
preceding four
(4) fiscal quarters, provided, in such calculation for the quarter
ending (i)
December 31, 2006, Consolidated Interest Expense shall be deemed to
be the
amount thereof for such quarter multiplied by four (4), (ii) March
31, 2007,
Consolidated Interest Expense shall be deemed to be the amount
thereof for the
immediately preceding two (2) quarters multiplied by two (2), and
(iii) June 30,
2007, Consolidated Interest Expense shall be deemed to be the
amount thereof for
the immediately preceding three (3) quarters multiplied by
four-thirds (4/3).
"INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with
SECTION 2.08.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June,
September and
December, (b) with respect to any Eurodollar Loan, the last day of
the Interest
Period applicable to the Borrowing of which such Loan is a part
and, in the case
of a Eurodollar Borrowing with an Interest Period of more than
three months'
duration, each day prior to the last day of such Interest Period
that occurs at
intervals of three months' duration after the first day of such
Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan
is required
to be repaid.
"INTEREST PERIOD" means with respect to any Eurodollar
Borrowing,
the period commencing on the date of such Borrowing and ending on
the
numerically corresponding day in the calendar month that is one,
two, three or
six months thereafter, as the Borrower may elect; PROVIDED, that
(i) if any
Interest Period would end on a day other than a Business Day, such
Interest
Period shall be extended to the next succeeding Business Day
unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day
would fall in
the next calendar month, in which case such Interest Period shall
end on the
next preceding Business Day and (ii)
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any Interest Period that commences on the last Business Day of a
calendar month
(or on a day for which there is no numerically corresponding day in
the last
calendar month of such Interest Period) shall end on the last
Business Day of
the last calendar month of such Interest Period. For purposes
hereof, the date
of a Borrowing initially shall be the date on which such Borrowing
is made and
thereafter shall be the effective date of the most recent
conversion or
continuation of such Borrowing.
"ISSUING BANK" means JPMorgan Chase Bank, N.A., or Bank of
America,
N.A., and any Lender that is an issuing bank with respect to those
Letters of
Credit described in SECTION 2.06(K) hereof, each in its capacity as
the issuer
of Letters of Credit hereunder, and their successors in such
capacity as
provided in SECTION 2.06(I). The Issuing Bank may, in its
discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the
Issuing
Bank, in which case the term "Issuing Bank" shall include any such
Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC DISBURSEMENT" means a payment made by the Issuing Bank
pursuant
to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time
plus (b) the
aggregate amount of all LC Disbursements that have not yet been
reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any
Lender at any
time shall be its Applicable Percentage of the total LC Exposure at
such time.
"LENDERS" means the Persons listed on SCHEDULE 2.01 and any
other
Person that shall have become a party hereto pursuant to an
Assignment and
Assumption, other than any such Person that ceases to be a party
hereto pursuant
to an Assignment and Assumption. Unless the context otherwise
requires, the term
"Lenders" includes all Revolving Lenders, all Term Lenders and the
Swingline
Lender.
"LETTER OF CREDIT" means any letter of credit issued pursuant
to this Agreement.
"LEVERAGE RATIO" means, on any date, the ratio of the Total Debt
of
the Borrower and all of its Subsidiaries as of such date, to
Consolidated EBITDA
for the immediately preceding four (4) fiscal quarters, PROVIDED,
at such time
as the Borrower has no outstanding Indebtedness other than
Indebtedness which is
not prepayable, or is prepayable only with the addition of a
prepayment penalty
or premium, the Leverage Ratio shall be defined as follows:
the ratio of: (a)(i) Total Debt of the Borrower and all of its
Subsidiaries less (ii) all unrestricted cash on hand of said
Persons in
excess of $25,000,000, to (b) Consolidated EBITDA for the
immediately
preceding four (4) fiscal quarters.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for
any
Interest Period, the rate appearing on Page 3750 of Reuters (or on
any successor
or substitute page of such Service, or any successor to or
substitute for such
Service, providing rate quotations comparable to those currently
provided on
such page of such Service, as determined by the Administrative
Agent from time
to time for purposes of providing quotations of interest rates
applicable to
dollar deposits in the London interbank market) at approximately
11:00 a.m.,
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London time, two Business Days prior to the commencement of such
Interest
Period, as the rate for dollar deposits with a maturity comparable
to such
Interest Period. In the event that such rate is not available at
such time for
any reason, then the "LIBO RATE" with respect to such Eurodollar
Borrowing for
such Interest Period shall be the rate rounded upwards, if
necessary, to the
next 1/100 of 1% at which dollar deposits of $5,000,000 and for a
maturity
comparable to such Interest Period are offered by the principal
London office of
the Administrative Agent in immediately available funds in the
London interbank
market at approximately 11:00 a.m., London time, two Business Days
prior to the
commencement of such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed
of
trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in,
on or of such asset, (b) the interest of a vendor or a lessor under
any
conditional sale agreement, capital lease or title retention
agreement (or any
financing lease having substantially the same economic effect as
any of the
foregoing) relating to such asset and (c) in the case of
securities, any
purchase option, call or similar right of a third party with
respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guarantee
Agreement and any other documents executed in connection herewith
or therewith.
"LOAN PARTIES" means the Borrower and the Guarantors.
"LOANS" means the Term Loans, the Revolving Loans and the Swing
Line
Loans.
"MARKETED EBITDA" means the trailing 12-month EBITDA figure
disclosed to potential buyers preceding the sale of an operation or
a
Subsidiary.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a)
the
business, assets, operations, prospects or condition, financial or
otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability
of the
Borrower to perform any of its obligations under this Agreement or
(c) the
rights of or benefits available to the Lenders under this
Agreement.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans
and
Letters of Credit), or obligations in respect of one or more Swap
Agreements, of
any one or more of the Borrower and its Subsidiaries in an
aggregate principal
amount exceeding $15,000,000. For purposes of determining Material
Indebtedness,
the "principal amount" of the obligations of the Borrower or any
Subsidiary in
respect of any Swap Agreement at any time shall be the maximum
aggregate amount
(giving effect to any netting agreements) that the Borrower or such
Subsidiary
would be required to pay if such Swap Agreement were terminated at
such time.
"MERGER" means the merger of a wholly owned direct Subsidiary of
the
Borrower with and into Alderwoods, where Alderwoods is the
surviving corporation
as a direct, wholly owned Subsidiary of the Borrower.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
11
<PAGE>
`
"NOTE" means the promissory notes substantially in the form of
EXHIBIT 1.01B with respect to the Revolving Loans and EXHIBIT 1.01C
with respect
to the Term Loans executed by the Borrower to the order of a
Lender, partially
evidencing the Obligations.
"OBLIGATIONS" means all of the Borrower's obligations and
duties
under this Agreement and each of the other Loan Documents.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar
levies arising from any payment made hereunder or from the
execution, delivery
or enforcement of, or otherwise with respect to, this
Agreement.
"PARTICIPANT" has the meaning set forth in Section 9.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to
and defined in ERISA and any successor entity performing similar
functions.
"PERMITTED ACQUISITION" means any acquisition (by merger or
otherwise) by the Borrower or a Subsidiary of all or substantially
all the
assets of, or all the Equity Interests in, a Person or division or
line of
business of a Person, if (a) immediately after giving effect
thereto, no Default
has occurred and is continuing or would result therefrom, (b) the
business of
such acquired Person, or such acquired business, is reasonably
related to the
business of the Borrower on the date hereof, (c) the requirements
of SECTION
5.10 shall have been satisfied within the time periods specified
therein, (d)
the Borrower and the Subsidiaries are in compliance, on a pro forma
basis after
giving effect to such acquisition, with SECTION 6.12 to the extent
then
applicable, as if such acquisition had occurred on the first day of
the relevant
period for testing compliance with such Section, (e) such
acquisition has been
approved by all necessary corporate and other action by the Person
so acquired
or the Person selling the assets or other property so acquired by
the Borrower
or such Subsidiary and (f) in the case of any acquisition in which
the aggregate
consideration paid by the Borrower and the Subsidiaries exceeds
$10,000,000, the
Borrower has delivered to the Administrative Agent an officer's
certificate to
the effect set forth in clauses (a), (b), (c), (d) and (e) above,
together with
all financial information reasonably requested by the
Administrative Agent
relating to the Person or assets acquired and reasonably detailed
calculations
demonstrating satisfaction of the requirement set forth in clause
(d) above.
"PERMITTED ENCUMBRANCES" means:
(a) liens imposed by law for taxes that are not yet due or are
being
contested in good faith, with adequate reserves, and the failure of
such contest
could not reasonably be expected to result in a Material Adverse
Effect;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's
and other like liens imposed by law, arising in the ordinary course
of business
and securing obligations that are not overdue by more than 30 days
or are being
contested in good faith, with adequate reserves and the failure of
such contest
could not reasonably be expected to result in a Material Adverse
Effect;
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<PAGE>
(c) pledges and deposits made in the ordinary course of business
in
compliance with workers' compensation, unemployment insurance and
other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts,
leases, statutory obligations, surety and appeal bonds, performance
bonds and
other obligations of a like nature, in each case in the ordinary
course of
business;
(e) judgment liens in respect of judgments that do not constitute
an
event of default; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the
ordinary course
of business that do not secure any monetary obligations and do not
materially
detract from the value of the affected property or interfere with
the ordinary
conduct of business of the Borrower or any Subsidiary.
provided that the term "Permitted Encumbrances" shall not include
any lien
securing Indebtedness.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United
States of
America or Canada (or by any agency thereof to the extent such
obligations are
backed by the full faith and credit of the United States of America
or Canada),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days from
the
date of acquisition thereof and having, at such date of
acquisition, a rating of
A2 or better by S&P, P2 or better by Moody's, or R1 "mid" or
better by The
Dominion Bond Rating Service;
(c) investments in certificates of deposit, banker's acceptances
and
time deposits (including eurodollar deposits) maturing within 180
days from the
date of acquisition thereof issued or guaranteed by or placed with,
and money
market deposit accounts issued or offered by, any Lender or any
domestic office
of any commercial bank organized under the laws of the United
States of America
or Canada or any State or Province thereof which has a combined
capital and
surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not
more
than 30 days for securities described in clause (a) above and
entered into with
a financial institution satisfying the criteria described in clause
(c) above;
(e) money market funds that (i) comply with the criteria set forth
in
Securities and Exchange Commission Rule 2a-7 under the Investment
Company Act of
1940, (ii) are rated AAA by S&P or Aaa by Moody's and (iii)
have portfolio
assets of at least $5,000,000,000;
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<PAGE>
(f) investments in corporate debt securities (including loan
participations)
that (a) mature within 60 days from the date of acquisition, and
(b) are rated
BBB or better by S&P or Baa2 or better by Moody's at the date
of acquisition;
(g) investments in municipal securities or auction rate securities
that are
rated AA or better by S&P or Aa or better by Moody's, provided
that the Borrower
has the right to put such securities back to the issuer or seller
thereof at
least once every 60 days; and
(h) other investments in an amount not to exceed $10,000,000 in the
aggregate at
any one time by Foreign Subsidiaries in certificates of deposit,
banker's
acceptances and time deposits (or other substantially similar
investments)
maturing within 180 days from the date of acquisition thereof
issued or
guaranteed by or placed with, and money market deposit accounts (or
other
substantially similar deposit accounts) issued or offered by, any
foreign
commercial bank not organized under the laws of the United States
of America or
Canada or any state or province thereof.
"PERSON" means any natural person, corporation, limited
liability
company, trust, joint venture, association, company, partnership,
Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA
or Section
412 of the Code or Section 302 of ERISA, and in respect of which
the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would
under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of
ERISA.
"PRIME RATE" means the rate of interest per annum publicly
announced
from time to time by JPMorgan Chase Bank, N.A., as its prime rate
in effect at
its principal office in Houston, Texas; each change in the Prime
Rate shall be
effective from and including the date such change is publicly
announced as being
effective.
"PRIVATE PLACEMENT NOTES" means collectively, the Private
Placement
Notes Series A and the Private Placement Notes Series B.
"PRIVATE PLACEMENT NOTES SERIES A" means the Floating Rate Series
A
Senior Notes due November 28, 2011, in the aggregate principal
amount of
$50,000,000 issued pursuant to that certain Note Purchase Agreement
dated as of
November 28, 2006, by and among Borrower and the noteholders party
thereto.
"PRIVATE PLACEMENT NOTES SERIES B" means the Flowing Rate Series
B
Senior Notes due November 28, 2011, in the aggregate principal
amount of
$150,000,000 issued pursuant to that certain Note Purchase
Agreement dated as of
November 28, 2006, by and among Borrower and the noteholders party
thereto.
"PRO FORMA DIVESTED EBITDA" means the total Marketed EBITDA
from
divested operations included in Consolidated Operating Income in
the preceding
four quarters before consideration of divestures.
"REGISTER" has the meaning set forth in Section 9.04.
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<PAGE>
"RELATED PARTIES" means, with respect to any specified Person,
such
Person's Affiliates and the respective directors, officers,
employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders holding more than
50%
of the sum of the total (a) Term Loans, plus (b) Revolving Loan
Commitments (or,
if the Revolving Loan Commitments have terminated or expired, the
Revolving
Credit Exposures) at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any
Equity
Interests in the Borrower or any Subsidiary, or any payment
(whether in cash,
securities or other property), including any sinking fund or
similar deposit, on
account of the purchase, redemption, retirement, acquisition,
cancellation or
termination of any such Equity Interests or any option, warrant or
other right
to acquire any such Equity Interests.
"REVOLVING BORROWING" means a Borrowing under the Revolving
Loan
Commitment.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at
any
time, the sum of the outstanding principal amount of such Lender's
Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"REVOLVING LENDERS" means the Lenders having Revolving Loan
Commitments.
"REVOLVING LOAN" means a Loan made pursuant to Section 2.02.
"REVOLVING LOAN COMMITMENT" means, with respect to each
Revolving
Lender, the commitment of such Lender to make Revolving Loans
including the
acquisition participations in Letters of Credit and Swingline Loans
hereunder,
as such commitment may be (a) reduced from time to time pursuant to
SECTION
2.09, (b) increased from time to time pursuant to SECTION 2.20 and
(c) reduced
or increased from time to time pursuant to assignments by or to
such Lender
pursuant to SECTION 9.04. The initial amount of each Lender's
Revolving Loan
Commitment is set forth on SCHEDULE 2.01, or in the Assignment and
Assumption
pursuant to which such Lender shall have assumed its Revolving Loan
Commitment,
as applicable. The initial aggregate amount of the Lenders'
Revolving Loan
Commitments is $300,000,000.00.
"REVOLVING MATURITY DATE" means five (5) years from the date of
this
Agreement.
"SALE AND LEASEBACK TRANSACTION" means any arrangement whereby
the
Borrower or a Subsidiary shall sell or transfer any property, real
or personal,
used or useful in its business, whether now owned or hereinafter
acquired, and
thereafter rent or lease from the buyer or transferee of the sold
or transferred
property that it intends to use for substantially the same purpose
or purposes
as the property sold or transferred.
"S&P" means Standard & Poor's Rating Services, a division
of the
McGraw Hill Companies, Inc.
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<PAGE>
"STATUTORY RESERVE RATE" means a fraction (expressed as a
decimal),
the numerator of which is the number one and the denominator of
which is the
number one minus the aggregate of the maximum reserve percentages
(including any
marginal, special, emergency or supplemental reserves) expressed as
a decimal
established by the Board to which the Administrative Agent is
subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board).
Such reserve
percentages shall include those imposed pursuant to such Regulation
D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be
subject to such reserve requirements without benefit of or credit
for proration,
exemptions or offsets that may be available from time to time to
any Lender
under such Regulation D or any comparable regulation. The Statutory
Reserve Rate
shall be adjusted automatically on and as of the effective date of
any change in
any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at
any
date, any corporation, limited liability company, partnership,
association or
other entity the accounts of which would be consolidated with those
of the
parent in the parent's consolidated financial statements if such
financial
statements were prepared in accordance with GAAP as of such date,
as well as any
other corporation, limited liability company, partnership,
association or other
entity (a) of which securities or other ownership interests
representing more
than 50% of the equity or more than 50% of the ordinary voting
power or, in the
case of a partnership, more than 50% of the general partnership
interests are,
as of such date, owned, controlled or held, or (b) that is, as of
such date,
otherwise Controlled, by the parent or one or more subsidiaries of
the parent or
by the parent and one or more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Borrower.
"SWAP AGREEMENT" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar
agreement
involving, or settled by reference to, one or more rates,
currencies,
commodities, equity or debt instruments or securities, or economic,
financial or
pricing indices or measures of economic, financial or pricing risk
or value or
any similar transaction or any combination of these transactions;
PROVIDED that
no phantom stock or similar plan providing for payments only on
account of
services provided by current or former directors, officers,
employees or
consultants of the Borrower or the Subsidiaries shall be a Swap
Agreement.
"SWINGLINE EXPOSURE" means, at any time, the aggregate
principal
amount of all Swingline Loans outstanding at such time. The
Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the
total
Swingline Exposure at such time.
"SWINGLINE LENDER" means JPMorgan Chase Bank, N.A., in its
capacity
as lender of Swingline Loans hereunder.
"SWINGLINE LOAN" means a Loan made pursuant to Section 2.05.
"TAXES" means any and all present or future taxes, levies,
imposts,
duties, deductions, charges or withholdings imposed by any
Governmental
Authority.
"TERM LENDERS" means those Lenders having Term Loan
Commitments.
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<PAGE>
"TERM LOAN" means a Loan made pursuant to Section 2.04.
"TERM LOAN COMMITMENT" means, with respect to each Term Lender,
the
commitment of such Lender to make Term Loans hereunder on the
Effective Date, as
such commitment may be reduced or increased from time to time
pursuant to
SECTION 9.04. The initial amount of each Lender's Term Loan
Commitment is set
forth on SCHEDULE 2.04. The initial aggregate amount of the
Lenders' Term Loan
Commitments is $150,000,000.
"TERM LOAN MATURITY DATE" means three (3) years from the date
of
this Agreement.
"TOTAL DEBT" means the consolidated total Indebtedness of the
Borrower and each of its Subsidiaries.
"TRANSPORTATION EQUIPMENT LEASES" has the meaning assigned such
term
in Section 6.06(f).
"TRANSACTIONS" means the execution, delivery and performance by
the
Borrower of this Agreement, the borrowing of Loans, the use of the
proceeds
thereof and the issuance of Letters of Credit hereunder.
"TYPE", when used in reference to any Loan or Borrowing, refers
to
whether the rate of interest on such Loan, or on the Loans
comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate,
the Alternate
Base Rate.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as
a
result of a complete or partial withdrawal from such Multiemployer
Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS. For purposes
of
this Agreement, Loans may be classified and referred to by Class
(E.G., a
"Revolving Loan") or by Type (E.G., a "Eurodollar Loan") or by
Class and Type
(E.G., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and
referred to by Class (E.G., a "Revolving Borrowing") or by Type
(E.G., a
"Eurodollar Borrowing") or by Class and Type (E.G., a "Eurodollar
Revolving
Borrowing").
SECTION 1.03 TERMS GENERALLY. The definitions of terms herein
shall
apply equally to the singular and plural forms of the terms
defined. Whenever
the context may require, any pronoun shall include the
corresponding masculine,
feminine and neuter forms. The words "include", "includes" and
"including" shall
be deemed to be followed by the phrase "without limitation". The
word "will"
shall be construed to have the same meaning and effect as the word
"shall".
Unless the context requires otherwise (a) any definition of or
reference to any
agreement, instrument or other document herein shall be construed
as referring
to such agreement, instrument or other document as from time to
time amended,
supplemented or otherwise modified (subject to any restrictions on
such
amendments, supplements or modifications set forth herein), (b) any
reference
herein to any Person shall be construed to include such Person's
successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and
words of similar
import, shall be construed to refer to this Agreement in its
entirety and not
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to any particular provision hereof, (d) all references herein to
Articles,
Sections, Exhibits and Schedules shall be construed to refer to
Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words
"asset" and "property" shall be construed to have the same meaning
and effect
and to refer to any and all tangible and intangible assets and
properties,
including cash, securities, accounts and contract rights.
SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as otherwise
expressly
provided herein, all terms of an accounting or financial nature
shall be
construed in accordance with GAAP, as in effect from time to time;
PROVIDED
that, if the Borrower notifies the Administrative Agent that the
Borrower
requests an amendment to any provision hereof to eliminate the
effect of any
change occurring after the date hereof in GAAP or in the
application thereof on
the operation of such provision (or if the Administrative Agent
notifies the
Borrower that the Required Lenders request an amendment to any
provision hereof
for such purpose), regardless of whether any such notice is given
before or
after such change in GAAP or in the application thereof, then such
provision
shall be interpreted on the basis of GAAP as in effect and applied
immediately
before such change shall have become effective until such notice
shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01 REVOLVING LOAN COMMITMENTS. Subject to the terms
and
conditions set forth herein, each Revolving Lender agrees to make
Revolving
Loans to the Borrower from time to time during the Availability
Period in an
aggregate principal amount that will not result in (a) such
Lender's Revolving
Credit Exposure exceeding such Lender's Revolving Loan Commitment
as set forth
on SCHEDULE 2.01 or (b) the sum of the total Revolving Credit
Exposures
exceeding the total Revolving Loan Commitments. Within the
foregoing limits and
subject to the terms and conditions set forth herein, the Borrower
may borrow,
prepay and reborrow Revolving Loans.
SECTION 2.02 REVOLVING LOANS AND BORROWINGS. (a) Each Revolving
Loan
shall be made as part of a Borrowing consisting of Loans made by
the Lenders
ratably in accordance with their respective Revolving Loan
Commitments. The
failure of any Lender to make any Loan required to be made by it
shall not
relieve any other Lender of its obligations hereunder; PROVIDED
that the
Commitments of the Lenders are several and no Lender shall be
responsible for
any other Lender's failure to make Loans as required.
(b) Subject to SECTION 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower
may request
in accordance herewith; PROVIDED that all Borrowings made on the
Effective Date
must be made as ABR Borrowings, unless Borrower shall have notified
the
Administrative Agent in writing not later than 10:00 a.m., Houston
time, three
(3) Business Days before the Effective Date of its election for the
initial
Borrowing to be a Eurodollar Borrowing. Each Swingline Loan shall
be an ABR
Loan. Each Revolving Lender at its option may make any Eurodollar
Loan by
causing any domestic or foreign branch or Affiliate of such
Revolving Lender to
make such Revolving Loan; provided
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that any exercise of such option shall not affect the obligation of
the Borrower
to repay such Revolving Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount
that is an
integral multiple of $1,000,000.00 and not less than $5,000,000.00.
At the time
that each ABR Revolving Borrowing is made, such Borrowing shall be
in an
aggregate amount that is an integral multiple of $1,000,000.00 and
not less than
$5,000,000.00; PROVIDED that an ABR Revolving Borrowing may be in
an aggregate
amount that is equal to the entire unused balance of the total
Commitments or
that is required to finance the reimbursement of an LC Disbursement
as
contemplated by SECTION 2.06(E). Each Swingline Loan shall be in an
amount that
is an integral multiple of $100,000.00 and not less than
$1,000,000.00.
Borrowings of more than one Type and Class may be outstanding at
the same time;
PROVIDED that there shall not at any time be more than a total of
10 Eurodollar
Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert
or continue,
any Revolving Borrowing if the Interest Period requested with
respect thereto
would end after the Revolving Maturity Date.
SECTION 2.03 REQUESTS FOR REVOLVING BORROWINGS. To request a
Revolving
Borrowing, the Borrower shall notify the Administrative Agent of
such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than
10:00 a.m.,
Houston time, three Business Days before the date of the proposed
Borrowing or
(b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
Houston time, on
the date of the proposed Borrowing; PROVIDED that any such notice
of an ABR
Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by
SECTION 2.06(E) may be given not later than 10:00 a.m., Houston, on
the date of
the proposed Borrowing. Each such telephonic Borrowing Request
shall be
irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the
Administrative Agent of a written Borrowing Request. Each such
telephonic and
written Borrowing Request shall specify the following information
in compliance
with SECTION 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest
Period to be applicable thereto, which shall be a period
contemplated
by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which
funds
are to be disbursed, which shall comply with the requirements
of
SECTION 2.07.
If no election as to the Type of Revolving Borrowing is specified,
then the
requested Revolving Borrowing shall be an ABR Borrowing. If no
Interest Period
is specified with respect to any requested Eurodollar Borrowing,
then the
Borrower shall be deemed to have selected an Interest
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Period of one month's duration. Promptly following receipt of a
Borrowing
Request in accordance with this Section, the Administrative Agent
shall advise
each Lender of the details thereof and of the amount of such
Lender's Loan to be
made as part of the requested Borrowing.
SECTION 2.04 TERM LOANS. Subject to the terms and conditions
herein
set forth, each Term Lender agrees to make and maintain a Term Loan
in the
amount of such Lender's Term Loan Commitment as set forth on
SCHEDULE 2.04. The
Term Loans shall be fully advanced on the Effective Date, and no
Lender shall
have an obligation to make any additional Advance under the Term
Loans after
such date. Any amount repaid under the Term Loans may not be
reborrowed. All
amounts outstanding under the Term Loan shall, at the option of the
Borrower, be
made and maintained as ABR Borrowings or Eurodollar Borrowings;
PROVIDED that
all Loans comprising all or a portion of the same Borrowing shall
at all times
be of the same Type. The Term Loan may be made and maintained as
ten (10)
Borrowings bearing different interest rates; provided, that all of
the initial
Borrowings fully advancing the Term Loan on the Effective Date
shall be ABR
Borrowings, unless Borrower shall have notified the Administrative
Agent in
writing not later than 10:00 a.m., Houston time, one (1) Business
Day before the
Effective Date of its election for the initial Borrowing to be a
Eurodollar
Borrowing, and further provided that the amounts of each such
Borrowing shall be
in amounts as provided in SECTION 2.02(C) with respect to Revolving
Loans. Each
Term Lender at its option may make or maintain any Eurodollar Loan
by causing
any domestic or foreign branch of Affiliate of such Term Lender to
make or
maintain such Term Loan; provided that any exercise of such option
shall not
affect the Obligation of the Borrower to repay such Term Loan in
accordance with
this Agreement.
SECTION 2.05 SWINGLINE LOANS. (a) Subject to the terms and
conditions
set forth herein, the Swingline Lender agrees to make Swingline
Loans to the
Borrower from time to time during the Availability Period, in an
aggregate
principal amount at any time outstanding that will not result in
(i) the
aggregate principal amount of outstanding Swingline Loans
exceeding
$25,000,000.00 or (ii) the sum of the total Revolving Credit
Exposures exceeding
the total Revolving Loan Commitments; PROVIDED that the Swingline
Lender shall
not be required to make a Swingline Loan to refinance an
outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and
conditions set
forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by
telecopy), not
later than 3:00 p.m., Houston time, on the day of a proposed
Swingline Loan.
Each such notice shall be irrevocable and shall specify the
requested date
(which shall be a Business Day) and amount of the requested
Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of
any such
notice received from the Borrower. The Swingline Lender shall make
each
Swingline Loan available to the Borrower by means of a credit to
the general
deposit account of the Borrower with the Swingline Lender (or, in
the case of a
Swingline Loan made to finance the reimbursement of an LC
Disbursement as
provided in SECTION 2.06(E), by remittance to the Issuing Bank) by
4:00 p.m.,
Houston time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., Houston time, on
any Business
Day require the Revolving Lenders to acquire participations on such
Business Day
in all or a portion of the Swingline Loans
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outstanding. Such notice shall specify the aggregate amount of
Swingline Loans
in which Revolving Lenders will participate. Promptly upon receipt
of such
notice, the Administrative Agent will give notice thereof to each
Revolving
Lender, specifying in such notice such Revolving Lender's
Applicable Percentage
of such Swingline Loan or Loans. Each Revolving Lender hereby
absolutely and
unconditionally agrees, upon receipt of notice as provided above,
to pay to the
Administrative Agent, for the account of the Swingline Lender, such
Revolving
Lender's Applicable Percentage of such Swingline Loan or Loans.
Each Revolving
Lender acknowledges and agrees that its obligation to acquire
participations in
Swingline Loans pursuant to this paragraph is absolute and
unconditional and
shall not be affected by any circumstance whatsoever, including the
occurrence
and continuance of a Default or reduction or termination of the
Commitments, and
that each such payment shall be made without any offset, abatement,
withholding
or reduction whatsoever. Each Revolving Lender shall comply with
its obligation
under this paragraph by wire transfer of immediately available
funds, in the
same manner as provided in SECTION 2.07 with respect to Loans made
by such
Revolving Lender (and SECTION 2.07 shall apply, MUTATIS MUTANDIS,
to the payment
obligations of the Revolving Lenders), and the Administrative Agent
shall
promptly pay to the Swingline Lender the amounts so received by it
from the
Revolving Lenders. The Administrative Agent shall notify the
Borrower of any
participations in any Swingline Loan acquired pursuant to this
paragraph, and
thereafter payments in respect of such Swingline Loan shall be made
to the
Administrative Agent and not to the Swingline Lender. Any amounts
received by
the Swingline Lender from the Borrower (or other party on behalf of
the
Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender
of the proceeds of a sale of participations therein shall be
promptly remitted
to the Administrative Agent; any such amounts received by the
Administrative
Agent shall be promptly remitted by the Administrative Agent to the
Revolving
Lenders that shall have made their payments pursuant to this
paragraph and to
the Swingline Lender, as their interests may appear; provided that
any such
payment so remitted shall be repaid to the Swingline Lender or to
the
Administrative Agent, as applicable, if and to the extent such
payment is
required to be refunded to the Borrower for any reason. The
purchase of
participations in a Swingline Loan pursuant to this paragraph shall
not relieve
the Borrower of any default in the payment thereof.
SECTION 2.06 LETTERS OF CREDIT. (a) GENERAL. Subject to the terms
and
conditions set forth herein, the Borrower may request the issuance
of Letters of
Credit for its own account, in a form reasonably acceptable to
the
Administrative Agent and the Issuing Bank, at any time and from
time to time
during the Availability Period. In the event of any inconsistency
between the
terms and conditions of this Agreement and the terms and conditions
of any form
of letter of credit application or other agreement submitted by the
Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to
any Letter of
Credit, the terms and conditions of this Agreement shall
control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the
amendment,
renewal or extension of an outstanding Letter of Credit), the
Borrower shall
hand deliver or telecopy (or transmit by electronic communication,
if
arrangements for doing so have been approved by the Issuing Bank)
to the Issuing
Bank and the Administrative Agent (reasonably in advance of the
requested date
of issuance, amendment, renewal or extension) a notice requesting
the issuance
of a Letter of Credit, or identifying the Letter of Credit to be
amended,
renewed or extended, and specifying the date of issuance,
amendment, renewal or
extension (which shall be a Business
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Day), the date on which such Letter of Credit is to expire (which
shall comply
with paragraph (c) of this Section), the amount of such Letter of
Credit, the
name and address of the beneficiary thereof and such other
information as shall
be necessary to prepare, amend, renew or extend such Letter of
Credit. If
requested by the Issuing Bank, the Borrower also shall submit a
letter of credit
application on the Issuing Bank's standard form in connection with
any request
for a Letter of Credit; provided, that (a) in the event of any
conflict between
such application and this Agreement, this Agreement shall control,
and (b) any
grant of a Lien contained in such application shall be ineffective
so long as
this Agreement remains in place. A Letter of Credit shall be
issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal
or extension
of each Letter of Credit the Borrower shall be deemed to represent
and warrant
that), after giving effect to such issuance, amendment, renewal or
extension (i)
the LC Exposure shall not exceed $175,000,000 and (ii) the total
Revolving
Credit Exposures shall not exceed the total Revolving Loan
Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior
to
the close of business on the earlier of (i) the date one year after
the date of
the issuance of such Letter of Credit (or, in the case of any
renewal or
extension thereof, one year after such renewal or extension) and
(ii) the date
that is five Business Days prior to the Maturity Date provided, a
Letter of
Credit may provide for a later expiration date if, simultaneously
with the
issuance (or if applicable, the renewal) thereof, the Borrower
pledges to the
Issuing Bank, in a manner reasonably satisfactory to it, funds in
an account
with the Issuing Bank equal to 105% of the face amount of such
Letter of Credit.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or
an
amendment to a Letter of Credit increasing the amount thereof) and
without any
further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender
hereby
acquires from the Issuing Bank, a participation in such Letter of
Credit equal
to such Revolving Lender's Applicable Percentage of the aggregate
amount
available to be drawn under such Letter of Credit. In consideration
and in
furtherance of the foregoing, each Revolving Lender hereby
absolutely and
unconditionally agrees to pay to the Administrative Agent, for the
account of
the Issuing Bank, such Revolving Lender's Applicable Percentage of
each LC
Disbursement made by the Issuing Bank and not reimbursed by the
Borrower on the
date due as provided in paragraph (e) of this Section, or of any
reimbursement
payment required to be refunded to the Borrower for any reason.
Each Revolving
Lender acknowledges and agrees that its obligation to acquire
participations
pursuant to this paragraph in respect of Letters of Credit is
absolute and
unconditional and shall not be affected by any circumstance
whatsoever,
including any amendment, renewal or extension of any Revolving
Letter of Credit
or the occurrence and continuance of a Default or reduction or
termination of
the Commitments, and that each such payment shall be made without
any offset,
abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any LC
Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such
LC
Disbursement by paying to the Administrative Agent an amount equal
to such LC
Disbursement not later than 11:00 a.m., Houston time, on the date
that such LC
Disbursement is made, if the Borrower shall have received notice of
such LC
Disbursement prior to 9:00 a.m., Houston time, on such date, or, if
such notice
has not been received by the Borrower prior to such time on such
date, then not
later than
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11:00 a.m., Houston time, on (i) the Business Day that the Borrower
receives
such notice, if such notice is received prior to 9:00 a.m., Houston
time, on the
day of receipt, or (ii) the Business Day immediately following the
day that the
Borrower receives such notice, if such notice is not received prior
to such time
on the day of receipt; PROVIDED that, if such LC Disbursement is
not less than
$1,000,000, the Borrower may, subject to the conditions to
borrowing set forth
herein, request in accordance with SECTION 2.03 or SECTION 2.05
that such
payment be financed with an ABR Revolving Borrowing or Swingline
Loan in an
equivalent amount and, to the extent so financed, the Borrower's
obligation to
make such payment shall be discharged and replaced by the resulting
ABR
Revolving Borrowing or Swingline Loan. If the Borrower fails to
make such
payment when due, the Administrative Agent shall notify each Lender
of the
applicable LC Disbursement, the payment then due from the Borrower
in respect
thereof and such Revolving Lender's Applicable Percentage thereof.
Promptly
following receipt of such notice, each Revolving Lender shall pay
to the
Administrative Agent its Applicable Percentage of the payment then
due from the
Borrower, in the same manner as provided in SECTION 2.07 with
respect to Loans
made by such Revolving Lender (and SECTION 2.07 shall apply,
MUTATIS MUTANDIS,
to the payment obligations of the Revolving Lenders), and the
Administrative
Agent shall promptly pay to the Issuing Bank the amounts so
received by it from
the Revolving Lenders. Promptly following receipt by the
Administrative Agent of
any payment from the Borrower pursuant to this paragraph, the
Administrative
Agent shall distribute such payment to the Issuing Bank or, to the
extent that
Revolving Lenders have made payments pursuant to this paragraph to
reimburse the
Issuing Bank, then to such Revolving Lenders and the Issuing Bank
as their
interests may appear. Any payment made by a Revolving Lender
pursuant to this
paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the
funding of ABR Revolving Loans or a Swingline Loan as contemplated
above) shall
not constitute a Loan and shall not relieve the Borrower of its
obligation to
reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse
LC
Disbursements as provided in paragraph (e) of this Section shall be
absolute,
unconditional and irrevocable, and shall be performed strictly in
accordance
with the terms of this Agreement under any and all circumstances
whatsoever and
irrespective of (i) any lack of validity or enforceability of any
Letter of
Credit or this Agreement, or any term or provision therein, (ii)
any draft or
other document presented under a Letter of Credit proving to be
forged,
fraudulent or invalid in any respect or any statement therein being
untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under
a Letter of
Credit against presentation of a draft or other document that does
not comply
with the terms of such Letter of Credit, or (iv) any other event or
circumstance
whatsoever, whether or not similar to any of the foregoing, that
might, but for
the provisions of this Section, constitute a legal or equitable
discharge of, or
provide a right of setoff against, the Borrower's obligations
hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any
of their
Related Parties, shall have any liability or responsibility by
reason of or in
connection with the issuance or transfer of any Letter of Credit or
any payment
or failure to make any payment thereunder (irrespective of any of
the
circumstances referred to in the preceding sentence), or any error,
omission,
interruption, loss or delay in transmission or delivery of any
draft, notice or
other communication under or relating to any Letter of Credit
(including any
document required to make a drawing thereunder), any error in
interpretation of
technical terms or any consequence arising from causes beyond the
control of the
Issuing Bank; PROVIDED that the foregoing shall not be construed to
excuse the
Issuing Bank from liability to the
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Borrower to the extent of any direct damages (as opposed to
consequential
damages, claims in respect of which are hereby waived by the
Borrower to the
extent permitted by applicable law) suffered by the Borrower that
are caused by
the Issuing Bank's failure to exercise care when determining
whether drafts and
other documents presented under a Letter of Credit comply with the
terms
thereof. The parties hereto expressly agree that, in the absence of
negligence
or willful misconduct on the part of the Issuing Bank (as finally
determined by
a court of competent jurisdiction), the Issuing Bank shall be
deemed to have
exercised care in each such determination. In furtherance of the
foregoing and
without limiting the generality thereof, the parties agree that,
with respect to
documents presented which appear on their face to be in substantial
compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its
sole
discretion, either accept and make payment upon such documents
without
responsibility for further investigation, regardless of any notice
or
information to the contrary, or refuse to accept and make payment
upon such
documents if such documents are not in strict compliance with the
terms of such
Letter of Credit.
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to
represent a
demand for payment under a Letter of Credit. The Issuing Bank shall
promptly
notify the Administrative Agent and the Borrower by telephone
(confirmed
electronically or by telecopy) of such demand for payment and
whether the
Issuing Bank has made or will make an LC Disbursement thereunder;
PROVIDED that
any failure to give or delay in giving such notice shall not
relieve the
Borrower of its obligation to reimburse the Issuing Bank and the
Revolving
Lenders with respect to any such LC Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in
full on the date such LC Disbursement is made, the unpaid amount
thereof shall
bear interest, for each day from and including the date such LC
Disbursement is
made to but excluding the date that the Borrower reimburses such
LC
Disbursement, at the rate per annum then applicable to ABR
Revolving Loans;
PROVIDED that, if the Borrower fails to reimburse such LC
Disbursement when due
pursuant to paragraph (e) of this Section, then SECTION 2.13(D)
shall apply.
Interest accrued pursuant to this paragraph shall be for the
account of the
Issuing Bank, except that interest accrued on and after the date of
payment by
any Revolving Lender pursuant to paragraph (e) of this Section to
reimburse the
Issuing Bank shall be for the account of such Revolving Lender to
the extent of
such payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be
replaced
at any time by written agreement among the Borrower, the
Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The
Administrative
Agent shall notify the Revolving Lenders of any such replacement of
the Issuing
Bank. At the time any such replacement shall become effective, the
Borrower
shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank
pursuant to SECTION 2.12(B). From and after the effective date of
any such
replacement, (i) the successor Issuing Bank shall have all the
rights and
obligations of the Issuing Bank under this Agreement with respect
to Letters of
Credit to be issued thereafter and (ii) references herein to the
term "Issuing
Bank" shall be deemed to refer to such successor or to any previous
Issuing
Bank, or to such successor and all previous Issuing Banks, as the
context shall
require. After the replacement of an Issuing Bank hereunder,
the
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replaced Issuing Bank shall remain a party hereto and shall
continue to have all
the rights and obligations of an Issuing Bank under this Agreement
with respect
to Letters of Credit issued by it prior to such replacement, but
shall not be
required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and
be
continuing, on the Business Day that the Borrower receives notice
from the
Administrative Agent or the Revolving Lenders holding at least
fifty percent
(50%) of the Revolving Loan Commitments (or, if the maturity of the
Loans has
been accelerated, Lenders with LC Exposure representing greater
than 25% of the
total LC Exposure) demanding the deposit of cash collateral
pursuant to this
paragraph, the Borrower shall deposit in an account with the
Administrative
Agent, in the name of the Administrative Agent and for the benefit
of the
Revolving Lenders, an amount in cash equal to the LC Exposure as of
such date
plus any accrued and unpaid interest thereon; PROVIDED that the
obligation to
deposit such cash collateral shall become effective immediately,
and such
deposit shall become immediately due and payable, without demand or
other notice
of any kind, upon the occurrence of any Event of Default with
respect to the
Borrower described in clause (h) or (i) of ARTICLE VII. Such
deposit shall be
held by the Administrative Agent as collateral for the payment and
performance
of the obligations of the Borrower under this Agreement. The
Administrative
Agent shall have exclusive dominion and control, including the
exclusive right
of withdrawal, over such account. Other than any interest earned on
the
investment of such deposits, which investments shall be made at the
option and
sole discretion of the Administrative Agent and at the Borrower's
risk and
expense, such deposits shall not bear interest. Interest or
profits, if any, on
such investments shall accumulate in such account. Moneys in such
account shall
be applied by the Administrative Agent to reimburse the Issuing
Bank for LC
Disbursements for which it has not been reimbursed and, to the
extent not so
applied, shall be held for the satisfaction of the reimbursement
obligations of
the Borrower for the LC Exposure at such time or, if the maturity
of the Loans
has been accelerated (but subject to the consent of Lenders with LC
Exposure
representing greater than 25% of the total LC Exposure), be applied
to satisfy
other obligations of the Borrower to the Revolving Lenders under
this Agreement.
If the Borrower is required to provide an amount of cash collateral
hereunder as
a result of the occurrence of an Event of Default, such amount (to
the extent
not applied as aforesaid) shall be returned to the Borrower within
three
Business Days after all Events of Default have been cured or
waived.
(k) EXISTING LETTERS OF CREDIT. The letters of credit described
on
SCHEDULE 2.06(K) will for all purposes be considered Letters of
Credit under
this Credit Agreement.
SECTION 2.07 FUNDING OF BORROWINGS. (a) Each Lender shall make
each
Loan to be made by it hereunder on the proposed date thereof by
wire transfer of
immediately available funds by 2:00 p.m., Houston time, to the
account of the
Administrative Agent most recently designated by it for such
purpose by notice
to the Lenders; PROVIDED that Swingline Loans shall be made as
provided in
SECTION 2.05. The Administrative Agent will make such Loans
available to the
Borrower by promptly crediting the amounts so received, in like
funds, to an
account of the Borrower maintained with the Administrative Agent in
Houston and
designated by the Borrower in the applicable Borrowing Request;
PROVIDED that
ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as
provided in SECTION 2.06(e) shall be remitted by the Administrative
Agent to the
Issuing Bank.
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(b) Unless the Administrative Agent shall have received notice from
a
Lender prior to the proposed date of any Borrowing that such Lender
will not
make available to the Administrative Agent such Lender's share of
such
Borrowing, the Administrative Agent may assume that such Lender has
made such
share available on such date in accordance with paragraph (a) of
this Section
and may, in reliance upon such assumption, make available to the
Borrower a
corresponding amount. In such event, if a Lender has not in fact
made its share
of the applicable Borrowing available to the Administrative Agent,
then the
applicable Lender and the Borrower severally agree to pay to the
Administrative
Agent forthwith on demand such corresponding amount with interest
thereon, for
each day from and including the date such amount is made available
to the
Borrower to but excluding the date of payment to the Administrative
Agent, at
(i) in the case of such Lender, the greater of the Federal Funds
Effective Rate
and a rate determined by the Administrative Agent in accordance
with banking
industry rules on interbank compensation or (ii) in the case of the
Borrower,
the interest rate applicable to such Borrowing (without any
obligation to pay
any break funding payment under SECTION 2.16 in connection with
such payment).
If such Lender pays such amount to the Administrative Agent, then
such amount
shall constitute such Lender's Loan included in such Borrowing. If
the Borrower
pays such amount to the Administrative Agent, it shall not relieve
the
defaulting Lender of its legal responsibility for its default.
SECTION 2.08 INTEREST ELECTIONS. (a) Each Borrowing initially shall
be
of the Type specified in the applicable Borrowing Request and, in
the case of a
Eurodollar Borrowing, shall have an initial Interest Period as
specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert
such Borrowing
to a different Type or to continue such Borrowing and, in the case
of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in
this Section. The Borrower may elect different options with respect
to different
portions of the affected Borrowing, in which case each such portion
shall be
allocated ratably among the Revolving Lenders or Term Lenders, as
applicable,
holding the Loans comprising such Borrowing, and the Loans
comprising each such
portion shall be considered a separate Borrowing. This Section
shall not apply
to Swingline Borrowings, which may not be converted or
continued.
(b) To make an election pursuant to this Section, the Borrower
shall
notify the Administrative Agent of such election by telephone by
the time that a
Borrowing Request would be required under SECTION 2.03 if the
Borrower were
requesting a Revolving Borrowing of the Type resulting from such
election to be
made on the effective date of such election. Each such telephonic
Interest
Election Request shall be irrevocable and shall be confirmed
promptly by hand
delivery or telecopy to the Administrative Agent of a written
Interest Election
Request in a form approved by the Administrative Agent and signed
by the
Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with SECTION
2.02:
(i) the Borrowing to which such Interest Election Request applies
and,
if different options are being elected with respect to
different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be
specified
pursuant to clauses (iii) and (iv) below shall be specified for
each
resulting Borrowing);
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(ii) the effective date of the election made pursuant to such
Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or
a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to
such
election, which shall be a period contemplated by the definition
of
the term "Interest Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed
to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the
Administrative Agent shall advise each Lender of the details
thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of
the Interest
Period applicable thereto, then, unless such Borrowing is repaid as
provided
herein, at the end of such Interest Period such Borrowing shall be
converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of
Default has occurred and is continuing and the Administrative
Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so
long as an
Event of Default is continuing (i) no outstanding Borrowing may be
converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the
Interest
Period applicable thereto.
SECTION 2.09 TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Unless
previously terminated, the Revolving Loan Commitments shall
terminate on the
Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time
reduce, the Revolving Loan Commitments; PROVIDED that (i) each
reduction of the
Revolving Loan Commitments shall be in an amount that is an
integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrower shall
not
terminate or reduce the Revolving Loan Commitments if, after giving
effect to
any concurrent prepayment of the Revolving Loans in accordance with
SECTION 2.11
the Revolving Credit Exposure would exceed the total Revolving Loan
Commitments;
provided that for purposes of this paragraph, the LC Exposure shall
be deemed to
be zero if there exists either cash collateral equal to 105% of the
LC Exposure
or one or more back-up letters of credit for the benefit of the
Issuing Bank in
form and substance and issued by issuer(s) satisfactory to the
Issuing Bank in
its sole discretion. Upon the provision of such cash collateral or
back-up
letters of credit and the payment in full of all Obligations, then
the Lenders
shall be released from their obligations under SECTION 2.06(D), and
all letter
of credit fees accruing after the termination of the Revolving Loan
Commitments
shall be for the account of the Issuing Bank.
27
<PAGE>
(c) The Borrower shall notify the Administrative Agent of any
election
to terminate or reduce the Revolving Loan Commitments under
paragraph (b) of
this Section at least three Business Days prior to the effective
date of such
termination or reduction, specifying such election and the
effective date
thereof. Promptly following receipt of any notice, the
Administrative Agent
shall advise the Lenders of the contents thereof. Each notice
delivered by the
Borrower pursuant to this Section shall be irrevocable; PROVIDED
that a notice
of termination of the Revolving Loan Commitments delivered by the
Borrower may
state that such notice is conditioned upon the effectiveness of
other credit
facilities, in which case such notice may be revoked by the
Borrower (by notice
to the Administrative Agent on or prior to the specified effective
date) if such
condition is not satisfied. Any termination or reduction of the
Revolving Loan
Commitments shall be permanent. Each reduction of the Revolving
Loan Commitments
shall be made ratably among the Revolving Lenders in accordance
with their
respective Revolving Loan Commitments.
(d) There shall be no obligation under the Term Loan
Commitments
following the initial Borrowing of the Term Loan on the Effective
Date other
than to allow conversions or continuations of Term Loan Borrowing
made as
Eurodollar Borrowings at the expiration of the applicable Interest
Period.
SECTION 2.10 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The
Borrower
hereby uncondit
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