Exhibit 10

 

 

 

$150,000,000

 

CREDIT AGREEMENT

 

among

 

CONSOLIDATED GRAPHICS, INC.

as Borrower,

 

 

THE GUARANTORS PARTIES HERETO,

 

 

THE LENDERS PARTIES HERETO

 

and

 

BANK ONE, NA,

as Administrative Agent

 

 

Bank One Capital Markets, Inc.,

as Lead Arranger and Sole Book Runner

 

and

 

WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION,

as Syndication Agent,

 

 

Dated as of November 10, 2003

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS

 

Section 1.1

Defined Terms.

 

Section 1.2

Other Definitional Provisions.

 

Section 1.3

Accounting Terms.

 

 

 

 

ARTICLE II

THE LOANS; AMOUNT AND TERMS

 

Section 2.1

Revolving Loans.

 

Section 2.2

Swingline Loan Subfacility.

 

Section 2.3

Letter of Credit Subfacility.

 

Section 2.4

Fees.

 

Section 2.5

Commitment Reductions.

 

Section 2.6

Prepayments.

 

Section 2.7

Minimum Principal Amount of Tranches.

 

Section 2.8

Default Rate and Payment Dates.

 

Section 2.9

Conversion Options.

 

Section 2.10

Computation of Interest and Fees.

 

Section 2.11

Pro Rata Treatment and Payments.

 

Section 2.12

Non-Receipt of Funds by the Administrative Agent.

 

Section 2.13

Inability to Determine Interest Rate.

 

Section 2.14

Illegality.

 

Section 2.15

Requirements of Law.

 

Section 2.16

Indemnity.

 

Section 2.17

Taxes.

 

Section 2.18

Indemnification; Nature of Issuing Lender’s Duties.

 

 

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1

Financial Condition.

 

Section 3.2

No Change.

 

Section 3.3

Corporate Existence; Compliance with Law.

 

Section 3.4

Corporate Power; Authorization; Enforceable Obligations.

 

Section 3.5

No Legal Bar; No Default.

 

Section 3.6

No Material Litigation.

 

Section 3.7

Investment Company Act.

 

Section 3.8

Margin Regulations.

 

Section 3.9

ERISA.

 

Section 3.10

Environmental Matters.

 

Section 3.11

Purpose of Loans.

 

Section 3.12

Subsidiaries.

 

Section 3.13

Ownership.

 

Section 3.14

Indebtedness.

 

Section 3.15

Taxes.

 

Section 3.16

Intellectual Property.

 

 

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Section 3.17

Solvency.

 

Section 3.18

Investments.

 

Section 3.19

Location of Collateral.

 

Section 3.20

No Burdensome Restrictions.

 

Section 3.21

Brokers’ Fees.

 

Section 3.22

Labor Matters.

 

Section 3.23

Accuracy and Completeness of Information.

 

Section 3.24

Material Contracts.

 

Section 3.25

Security Documents.

 

Section 3.26

Insurance.

 

 

 

 

ARTICLE IV

CONDITIONS PRECEDENT

 

Section 4.1

Conditions to Closing Date and Initial Revolving Loans.

 

Section 4.2

Conditions to All Extensions of Credit.

 

 

 

 

ARTICLE V

AFFIRMATIVE COVENANTS

 

Section 5.1

Financial Statements.

 

Section 5.2

Certificates; Other Information.

 

Section 5.3

Payment of Obligations.

 

Section 5.4

Conduct of Business and Maintenance of Existence.

 

Section 5.5

Maintenance of Property; Insurance.

 

Section 5.6

Inspection of Property; Books and Records; Discussions.

 

Section 5.7

Notices.

 

Section 5.8

Environmental Laws.

 

Section 5.9

Financial Covenants.

 

Section 5.10

Additional Guarantors.

 

Section 5.11

Compliance with Law.

 

Section 5.12

Pledged Assets.

 

 

 

 

ARTICLE VI

NEGATIVE COVENANTS

 

Section 6.1

Indebtedness.

 

Section 6.2

Liens.

 

Section 6.3

Guaranty Obligations.

 

Section 6.4

Earnout Obligations.

 

Section 6.5

Nature of Business.

 

Section 6.6

Consolidation, Merger, Acquisitions, Sale or Purchase of Assets, etc.

 

Section 6.7

Advances, Investments and Loans.

 

Section 6.8

Transactions with Affiliates.

 

Section 6.9

Ownership of Subsidiaries; Restrictions.

 

Section 6.10

Fiscal Year; Organizational Documents; Material Contracts.

 

Section 6.11

Limitation on Restricted Actions.

 

Section 6.12

Restricted Payments.

 

Section 6.13

Prepayments of Indebtedness, etc.

 

Section 6.14

Sale Leasebacks.

 

Section 6.15

No Further Negative Pledges.

 

 

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ARTICLE VII

EVENTS OF DEFAULT

 

Section 7.1

Events of Default.

 

Section 7.2

Acceleration; Remedies.

 

 

 

 

ARTICLE VIII

THE ADMINISTRATIVE AGENT

 

Section 8.1

Appointment; Nature of Relationship.

 

Section 8.2

Powers.

 

Section 8.3

General Immunity.

 

Section 8.4

No Responsibility for Loans, Recitals, etc.

 

Section 8.5

Acting on Instructions of Lenders.

 

Section 8.6

Employment of Agents and Counsel.

 

Section 8.7

Reliance on Documents; Counsel.

 

Section 8.8

Administrative Agent’s Reimbursement and Indemnification.

 

Section 8.9

Notice of Default.

 

Section 8.10

Rights as a Lender.

 

Section 8.11

Lender Credit Decision.

 

Section 8.12

Successor Administrative Agent.

 

Section 8.13

Administrative Agent and Arranger Fees.

 

Section 8.14

Delegation to Affiliates.

 

Section 8.15

Execution of Collateral Documents.

 

Section 8.16

Collateral Releases.

 

Section 8.17

Documentation Agent.

 

 

 

 

ARTICLE IX

GUARANTY

 

Section 9.1

The Guaranty.

 

Section 9.2

Bankruptcy.

 

Section 9.3

Nature of Liability.

 

Section 9.4

Independent Obligation.

 

Section 9.5

Authorization.

 

Section 9.6

Reliance.

 

Section 9.7

Waiver.

 

Section 9.8

Limitation on Enforcement.

 

Section 9.9

Confirmation of Payment.

 

 

 

 

ARTICLE X

BENEFIT OF AGREEMENT; ASSIGNMENT; PARTICIPATIONS

 

Section 10.1

Successors and Assigns.

 

Section 10.2

Participations.

 

Section 10.3

Assignments.

 

Section 10.4

Dissemination of Information.

 

Section 10.5

Tax Treatment.

 

 

 

 

ARTICLE XI

MISCELLANEOUS

 

Section 11.1

Amendments, Waivers and Release of Collateral.

 

Section 11.2

Notices.

 

Section 11.3

No Waiver; Cumulative Remedies.

 

Section 11.4

Survival of Representations and Warranties.

 

 

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Section 11.5

Payment of Expenses and Taxes.

 

Section 11.6

Adjustments; Set-off.

 

Section 11.7

Table of Contents and Section Headings.

 

Section 11.8

Counterparts.

 

Section 11.9

Effectiveness.

 

Section 11.10

Severability.

 

Section 11.11

Integration.

 

Section 11.12

Governing Law.

 

Section 11.13

Consent to Jurisdiction and Service of Process.

 

Section 11.14

Arbitration.

 

Section 11.15

Confidentiality.

 

Section 11.16

Acknowledgments.

 

Section 11.17

Waivers of Jury Trial.

 

Section 11.18

Interest.

 

Section 11.19

Amendment to Security Agreement and Pledge Agreement.

 

Section 11.20

Amendment and Restatement; Renewal Notes.

 

 

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Schedules

 

 

Schedule 1.1(a)

 

Account Designation Letter

Schedule 1.1(b)

 

Liens

Schedule 1.1 (c)

 

Existing Letters of Credit

Schedule 2.1(a)

 

Schedule of Lenders and Commitments

Schedule 2.1(b)(i)

 

Form of Notice of Borrowing

Schedule 2.1(e)

 

Form of Revolving Note

Schedule 2.2(d)

 

Form of Swingline Note

Schedule 2.9

 

Form of Notice of Conversion/Extension

Schedule 2.17

 

Section 2.17 Certificate

Schedule 3.3

 

Corporate Existence

Schedule 3.6

 

Litigation

Schedule 3.9

 

ERISA

Schedule 3.12

 

Subsidiaries

Schedule 3.16

 

Intellectual Property

Schedule 3.19(a)

 

Location of Real Property

Schedule 3.19(b)

 

Location of Collateral

Schedule 3.19(c)

 

Chief Executive Offices

Schedule 3.22

 

Labor Matters

Schedule 3.24

 

Material Contracts

Schedule 4.1(c)

 

Form of Legal Opinion

Schedule 4.1(h)

 

Form of Solvency Certificate

Schedule 4.1(t)

 

Form of Covenant Compliance Certificate

Schedule 5.5(b)

 

Insurance

Schedule 5.10

 

Form of Joinder Agreement

Schedule 6.1(b)

 

Indebtedness

Schedule 6.4

 

Earnout Obligations

Schedule 10.3

 

Form of Assignment and Assumption Agreement

Schedule 11.2

 

Schedule of Lenders’ Lending Offices

 

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CREDIT AGREEMENT

 

CREDIT AGREEMENT, dated as of November 10, 2003, among CONSOLIDATED GRAPHICS,
INC., a Texas corporation (the “Borrower”), those Domestic Subsidiaries of the
Borrower listed on the signature pages hereto and as may from time to time
become a party hereto, (collectively the “Guarantors” and individually, a
“Guarantor”), the several banks and other financial institutions as may from
time to time become parties to this Agreement (collectively, the “Lenders” and
individually, a “Lender”), and BANK ONE, NA, a national banking association with
its main office in Chicago, Illinois, as Administrative Agent for the Lenders
hereunder (in such capacity, the “Administrative Agent”). 

 

W I T N E S S E T H:

 

WHEREAS, the Borrower has requested that the Lenders make loans and other
financial accommodations to the Borrower in the amount of up to $150,000,000, as
more particularly described herein;

 

WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

SECTION 1.1                                   DEFINED TERMS.

 

As used in this Agreement, terms defined in the preamble to this Agreement have
the meanings therein indicated, and the following terms have the following
meanings:

 

“Account Designation Letter” shall mean the Notice of Account Designation Letter
dated the Closing Date from the Borrower to the Administrative Agent
substantially in the form attached hereto as Schedule 1.1(a).

 

“Additional Credit Party” shall mean each Person that becomes a Guarantor by
execution of a Joinder Agreement in accordance with Section 5.10.

 

“Administrative Agent” shall have the meaning set forth in the first paragraph
of this Agreement and any successors in such capacity.

 

“Affiliate” shall mean as to any Person, any other Person (excluding any
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person.  For purposes of this definition,
a Person shall be deemed to be “controlled by” a

 

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Person if such Person possesses, directly or indirectly, power either (a) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such Person or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.

 

“Agreement” shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.

 

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to
the higher of (i) the Prime Rate for such day and (ii) the sum of the Federal
Funds Effective Rate for such day plus 1/2% per annum.

 

“Alternate Base Rate Loans” shall mean Loans that bear interest at an interest
rate based on the Alternate Base Rate.

 

“Applicable Percentage” shall mean, for any day, the rate per annum set forth
below opposite the applicable Level then in effect, it being understood that the
Applicable Percentage for (i) Revolving Loans which are Alternate Base Rate
Loans shall be the percentage set forth under the column “Alternate Base Rate
Margin for Revolving Loans”, (ii) Revolving Loans which are LIBOR Rate Loans
shall be the percentage set forth under the column “LIBOR Rate Margin for
Revolving Loans and Letter of Credit Fee”, (iii) the Commitment Fee shall be the
percentage set forth under the column “Commitment Fee” and (iv) the Letter of
Credit Fee shall be the percentage set forth under the column “LIBOR Rate Margin
for Revolving Loans and Letter of Credit Fee”:

 

Level

 

Leverage
Ratio

 

Alternate Base Rate
Margin for
Revolving Loans

 

LIBOR Rate Margin
for Revolving Loans
and Letter of Credit
Fee

 

Commitment
Fee

 

I

 

< 1.75 to 1.0

 

0

%

1.25

%

0.275

%

II

 

< 2.25 to 1.0 but
³ 1.75 to 1.0

 

0.25

%

1.50

%

0.325

%

III

 

< 2.625 to 1.0 but
³ 2.25 to 1.0

 

0.50

%

1.75

%

0.325

%

IV

 

³ 2.625 to 1.0

 

0.75

%

2.00

%

0.375

%

 

The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) (each an “Interest Determination Date”).  Such Applicable Percentage
shall be effective from such Interest Determination Date until the next such
Interest Determination Date.  The initial Applicable Percentages on the Closing
Date shall be based on Level II until the first

 

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Interest Determination Date occurring after December 31, 2003.  After the
Closing Date, if the Borrower shall fail to provide the quarterly financial
information and certifications in accordance with the provisions of
Sections 5.1(b) and 5.2(b), the Applicable Percentage from such Interest
Determination Date shall, on the date five (5) Business Days after the date by
which the Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be based on Level IV
until such time as such information and certifications are provided, whereupon
the Level shall be determined by the then current Leverage Ratio.  For purposes
hereof, the Leverage Ratio shall be determined in accordance with
Section 5.9(a).

 

“Approved Bank” shall have the meaning set forth in the definition of “Cash
Equivalents.”

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Arranger” shall mean Bank One Capital Markets, Inc.

 

“Asset Disposition” shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise.  The term “Asset Disposition”
shall not include (i) Specified Sales, (ii) the sale, lease or transfer of
assets permitted by Section 6.6(a)(iii), (iv), (v) or (vi) hereof, or (iii) any
Equity Issuance.

 

“Bank One” shall mean Bank One, NA, a national banking association.

 

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

 

“Borrower” shall have the meaning set forth in the first paragraph of this
Agreement.

 

“Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.

 

“Business” shall have the meaning set forth in Section 3.10.

 

“Business Day” shall mean a day other than a Saturday, Sunday or other day on
which commercial banks in Houston, Texas are authorized or required by law to
close; provided, however, that when used in connection with a rate
determination, borrowing or payment in respect of a LIBOR Rate Loan, the term
“Business Day” shall also exclude any day on which banks in London, England are
not open for dealings in Dollar deposits in the London interbank market.

 

“Capital Lease” shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.

 

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“Capital Lease Obligations” shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.

 

“Capital Stock” shall mean (i) in the case of a corporation, capital stock, (ii)
in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

 

“Cash Equivalents” shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition (“Government Obligations”), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody’s is at least P-1 or the equivalent thereof (any such bank being an
“Approved Bank”), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody’s and maturing within six months of the date of acquisition,
(iv) repurchase agreements with a bank or trust company (including a Lender) or
a recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, (vi) auction preferred stock rated
in the highest short-term credit rating category by S&P or Moody’s, and
(vii) investments in mutual funds whose investment criteria substantially
complies with the provisions hereof.

 

“Change of Control” shall mean the occurrence of any of the following events: 
(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities and Exchange Act of 1934, as amended) becomes after the date
hereof the “beneficial owner” (defined as aforesaid), directly or indirectly, of
more than 35% of the Voting Stock of the Borrower, or (b) Continuing Directors,
shall cease for any reason to constitute a majority of the Board of Directors of
the Borrower then in office.

 

“Closing Date” shall mean the date of this Agreement.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

 

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“Collateral” shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents.

 

“Commitment” shall mean the Revolving Commitment, the LOC Commitment, the
Swingline Commitment, individually or collectively, as appropriate.

 

“Commitment Fee” shall have the meaning set forth in Section 2.4(a).

 

“Commitment Percentage” shall mean the Revolving Commitment Percentage and/or
the LOC Commitment Percentage, as appropriate.

 

“Commitment Period” shall mean the period from and including the Closing Date to
but not including the Revolving Commitment Termination Date.

 

“Commonly Controlled Entity” shall mean an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.

 

“Consolidated Capital Expenditures” shall mean, for any period, all capital
expenditures of the Borrower and its Subsidiaries on a consolidated basis for
such period, as determined in accordance with GAAP.  The term “Consolidated
Capital Expenditures” shall not include (i) capital expenditures in respect of
the reinvestment of proceeds derived from Recovery Events received by the
Borrower and its Subsidiaries to the extent that such reinvestment is permitted
under the Credit Documents or (ii) acquisitions of all or substantially all of
the assets or stock of businesses and/or mergers with other businesses. 
Furthermore, for purposes of calculating the Fixed Charge Coverage Ratio only,
“Consolidated Capital Expenditures” shall not include capital expenditures that
are financed by the Borrower or its Subsidiaries under equipment financings
permitted under Sections 6.1(c) or (j).

 

“Consolidated Cash Taxes” means, for any period, the aggregate of all taxes on
income of the Borrower and its Subsidiaries on a consolidated basis for such
period, as determined in accordance with GAAP.

 

“Consolidated EBITDA” shall mean, for any period, the sum of (i) Consolidated
Net Income for such period, plus (ii) an amount which, in the determination of
Consolidated Net Income for such period, has been deducted for (A) Consolidated
Interest Expense, (B) total federal, state, local and foreign income taxes and
other similar taxes, (C) losses (or minus gains) on the sale or disposition of
assets outside the ordinary course of business and (D) depreciation,
amortization expense and other non-cash charges, all as determined in accordance
with GAAP.

 

“Consolidated Interest Expense” shall mean, for any period, all interest expense
of the Borrower and its Subsidiaries (including, without limitation. the
interest component under Capital Leases), as determined in accordance with GAAP.

 

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“Consolidated Net Income” shall mean, for any period, net income (excluding
extraordinary items) after taxes for such period of the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with GAAP.

 

“Consolidated Tangible Net Worth” shall mean, as of any date with respect to the
Borrower and its Subsidiaries on a consolidated basis, the consolidated
stockholders’ equity of the Borrower and its Subsidiaries, as determined in
accordance with GAAP, less goodwill and other intangible assets determined in
accordance with GAAP.

 

“Continuing Directors” shall mean either during any period of up to 24
consecutive months commencing after the Closing Date, individuals who at the
beginning of such 24 month period were directors of the Borrower (together with
any new director whose election by the Borrower’s board of directors or whose
nomination for election by the Borrower’s shareholders was approved by a vote of
at least (60%) sixty percent of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved).

 

“Contractual Obligation” shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Credit Documents” shall mean this Agreement, each of the Notes, any Joinder
Agreement, the Letters of Credit, LOC Documents and the Security Documents.

 

“Credit Party” shall mean any of the Borrower or the Guarantors.

 

“Credit Party Obligations” shall mean, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Administrative Agent, whenever arising, under this Agreement, the Notes
or any of the other Credit Documents (including, but not limited to, any
interest accruing after the occurrence of a filing of a petition of bankruptcy
under the Bankruptcy Code with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code) and (ii)
all liabilities and obligations, whenever arising, owing from the Borrower or
any of its Subsidiaries to any Lender, or any Affiliate of a Lender, arising
under any Hedging Agreement relating to the Loans.

 

“Debt Issuance” shall mean the issuance of any Indebtedness for borrowed money
by any Credit Party or any of its Subsidiaries (excluding, for purposes hereof,
any Equity Issuance or any Indebtedness of the Borrower and its Subsidiaries
permitted to be incurred pursuant to Section 6.1 hereof).

 

“Default” shall mean any of the events specified in Section 7.1, whether or not
any requirement for the giving of notice or the lapse of time, or both, or any
other condition, has been satisfied.

 

“Default Rate” shall have the meaning set forth in Section 2.8.

 

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“Defaulting Lender” shall mean, at any time, any Lender that, at such time (a)
has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.

 

“Dollars” and “$” shall mean dollars in lawful currency of the United States of
America.

 

“Domestic Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s Domestic Lending Office shown on Schedule 11.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which Alternate Base Rate Loans of such Lender are to be made.

 

“Domestic Subsidiary” shall mean any Subsidiary that is organized and existing
under the laws of the United States or any state or commonwealth thereof or
under the laws of the District of Columbia.

 

“Earnout Obligation” shall mean a contingent obligation to make a cash payment
to a non-Affiliate Person based upon the future earnings or performance of an
acquired business.

 

“Environmental Laws” shall mean any and all applicable foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirement
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as are now or may at any time be in effect during the term of this Agreement.

 

“Equity Issuance” shall mean any issuance by any Credit Party or any Subsidiary
to any Person which is not a Credit Party of (a) shares of its Capital Stock,
(b) any shares of its Capital Stock pursuant to the exercise of options or
warrants or (c) any shares of its Capital Stock pursuant to the conversion of
any debt securities to equity.  The term “Equity Issuance” shall not include any
Asset Disposition or any Debt Issuance.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

 

“Eurodollar Reserve Percentage” shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

 

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“Event of Default” shall mean any of the events specified in Section 7.1;
provided, however, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.

 

“Existing Letters of Credit” means the letters of credit listed on Schedule
1.1(c) attached hereto.

 

“Extension of Credit” shall mean, as to any Lender, the making of a Loan by such
Lender or the issuance of, or participation in, a Letter of Credit by such
Lender.

 

“Federal Funds Effective Rate” means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m.
(Houston, Texas time) on such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent in its sole discretion.

 

“Fee Letter” shall mean the letter agreement dated September 18, 2003 addressed
to the Borrower from Bank One and the Arranger, as amended, modified or
otherwise supplemented.

 

“Fixed Charge Coverage Ratio” means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Borrower, the ratio of (a) Pro Forma
Consolidated EBITDA minus Consolidated Capital Expenditures minus Consolidated
Cash Taxes minus dividends for such period to (b) Consolidated Interest Expense
plus Scheduled Payments of Funded Debt.

 

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“Funded Debt” shall mean, with respect to any Person, without duplication (for
example, a Guaranty Obligation will not duplicate any Indebtedness already
included in the calculation of any financial covenant in this Agreement), (a)
all Indebtedness of such Person other than Indebtedness of the types referred to
in clause (e), (f), (g), (i) and (l) of the definition of “Indebtedness” set
forth in this Section 1.1 (provided, however, that letters of credit issued in
support of industrial revenue bond financings shall be excluded from the
calculation of Funded Debt hereunder), (b) all Funded Debt of others of the type
referred to in clause (a) above secured by (or for which the holder of such
Funded Debt has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of production from, Property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (c) all Guaranty Obligations of such Person with respect to Funded
Debt of the type referred to in clause (a) above of another Person and (d)
Funded Debt of the type referred to in clause (a) above of any partnership or

 

8

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unincorporated joint venture in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto.

 

“GAAP” shall mean generally accepted accounting principles in effect in the
United States of America applied on a consistent basis, subject, however, in the
case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.

 

“Government Acts” shall have the meaning set forth in Section 2.18.

 

“Government Obligations” shall have the meaning set forth in the definition of
“Cash Equivalents.”

 

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

 

“Guarantor” shall have the meaning set forth in the first paragraph of this
Agreement.

 

“Guaranty” shall mean the guaranty of the Guarantors set forth in Article IX.

 

“Guaranty Obligations” shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof.  The amount of
any Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.

 

“Hedging Agreements” shall mean, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.

 

“Indebtedness” shall mean, with respect to any Person, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily

 

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made, (c) all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations of such
Person issued or assumed as the deferred purchase price of Property or services
purchased by such Person (other than trade debt and expenses incurred in the
ordinary course of business and due within six months of the incurrence thereof)
which would appear as liabilities on a balance sheet of such Person, (e) all
obligations of such Person under take-or-pay or similar arrangements or under
commodities agreements, (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, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements, (j) the maximum amount of all standby letters
of credit issued or bankers’ acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product, and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer.

 

“Insolvency” shall mean, with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.

 

“Insolvent” shall mean being in a condition of Insolvency.

 

“Intellectual Property”  shall have the meaning set forth in the Security
Agreement.

 

“Interest Determination Date” shall have the meaning assigned thereto in the
definition of “Applicable Percentage”.

 

“Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan or
Swingline Loan, the last day of each March, June, September and December and on
the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an Interest
Period of three months or less, the last day of such Interest Period, and (c) as
to any LIBOR Rate Loan having an Interest Period longer than three months, each
day which is three months after the first day of such Interest Period and the
last day of such Interest Period.

 

“Interest Period” shall mean, with respect to any LIBOR Rate Loan,

 

(i)            initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan and
ending one, two, three or six months thereafter, as selected by the Borrower in
the notice of borrowing or notice of conversion given with respect thereto; and

 

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(ii)           thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan and
ending one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with respect thereto;

 

provided that the foregoing provisions are subject to the following:

 

(A)          if any Interest Period pertaining to a LIBOR Rate Loan would
otherwise end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding Business Day;

 

(B)           any Interest Period pertaining to a LIBOR Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the relevant calendar month;

 

(C)           if the Borrower shall fail to give notice as provided above, the
Borrower shall be deemed to have selected a one (1) month LIBOR Rate Loan to
replace the affected LIBOR Rate Loan;

 

(D)          any Interest Period in respect of any Loan that would otherwise
extend beyond the applicable Maturity Date shall end on the Maturity Date; and

 

(E)           no more than eight (8) LIBOR Rate Loans may be in effect at any
time.  For purposes hereof, LIBOR Rate Loans with different Interest Periods
shall be considered as separate LIBOR Rate Loans, even if they shall begin on
the same date and have the same duration, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new LIBOR Rate Loan with a
single Interest Period.

 

“Issuing Lender” shall mean Bank One.

 

“Issuing Lender Fees” shall have the meaning set forth in Section 2.4(c).

 

“Joinder Agreement” shall mean a Joinder Agreement substantially in the form of
Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.

 

“Lender” shall have the meaning set forth in the first paragraph of this
Agreement.

 

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“Letters of Credit” shall mean any letter of credit issued by the Issuing Lender
pursuant to the terms hereof, as such Letters of Credit may be amended,
modified, extended, renewed or replaced from time to time.

 

“Letter of Credit Fee” shall have the meaning set forth in Section 2.4(b).

 

“Leverage Ratio” shall mean, with respect to the Borrower and its Subsidiaries
on a consolidated basis for the twelve month period ending on the last day of
any fiscal quarter, the ratio of (a) Funded Debt of the Borrower and its
Subsidiaries on a consolidated basis on the last day of such period to (b) Pro
Forma Consolidated EBITDA for such twelve month period.

 

“LIBOR” means, with respect to a LIBOR Rate Loan for the relevant Interest
Period, the applicable British Bankers’ Association LIBOR rate for deposits in
U.S. dollars as reported by any generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, and having a maturity equal to such Interest Period,
provided that, if no such British Bankers’ Association LIBOR rate is available
to the Administrative Agent, the applicable LIBOR for the relevant Interest
Period shall instead be the rate determined by the Administrative Agent to be
the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first class banks in the interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of Bank One’s relevant LIBOR
Rate Loan and having a maturity equal to such Interest Period.

 

“LIBOR Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s LIBOR Lending Office shown on Schedule 11.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

 

“LIBOR Rate” means, with respect to a LIBOR Rate Loan for the relevant Interest
Period, a rate per annum (rounded upwards, if necessary, to the next higher
1/100th of 1%)  equal to the quotient of (a) the LIBOR applicable to such
Interest Period, divided by (b) one minus the Eurodollar Reserve Requirement
(expressed as a decimal) applicable to such Interest Period.

 

“LIBOR Rate Loan” shall mean Loans the rate of interest applicable to which is
based on the LIBOR Rate.

 

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).

 

“Loan” shall mean a Revolving Loan and/or a Swingline Loan, as appropriate.

 

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“LOC Commitment” shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender’s
LOC Committed Amount as specified in Schedule 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.

 

“LOC Commitment Percentage” shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Article X.

 

“LOC Committed Amount” shall mean, collectively, the aggregate amount of all of
the LOC Commitments of the Lenders to issue and participate in Letters of Credit
as referenced in Section 2.3 and, individually, the amount of each Lender’s LOC
Commitment as specified in Schedule 2.1(a).

 

“LOC Documents” shall mean, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (i) the rights and obligations of the parties
concerned or (ii) any collateral security for such obligations.

 

“LOC Obligations” shall mean, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Lender but
not theretofore reimbursed.

 

“Mandatory Borrowing” shall have the meaning set forth in Section 2.2(b)(ii) or
Section 2.3(e), as the context may require.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, assets, liabilities (actual or contingent), operations, properties,
condition (financial or otherwise) or prospects of the Borrower or its
Subsidiaries taken as a whole, (b) the ability of the Borrower and the
Guarantors taken as a whole to perform their obligations, when such obligations
are required to be performed, under this Agreement, any of the Notes or any
other Credit Document or (c) the validity or enforceability of this Agreement,
any of the Notes or any of the other Credit Documents or the rights or remedies
of the Administrative Agent or the Lenders hereunder or thereunder.

 

“Material Contract” shall mean any contract or other arrangement, whether
written or oral, to which the Borrower or any of its Subsidiaries is a party as
to which the breach, nonperformance, cancellation or failure to renew by any
party thereto could reasonably be expected to have a Material Adverse Effect.

 

“Materials of Environmental Concern” shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances,

 

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materials or wastes, defined or regulated as such in or under any Environmental
Law, including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.

 

“Maturity Date” shall mean the Revolving Commitment Termination Date.

 

“Maximum Rate” means, with respect to the Lenders, the maximum nonusurious
interest rate, if any, that at any time or from time to time, may be contracted
for, taken, reserved, charged, or received on the Notes or on other
Indebtedness, as the case may be, under the laws which are presently in effect
in the United States of America and the State of Texas applicable to the Lenders
and such indebtedness or, to the extent permitted by law, under such applicable
laws of the United States of America and the State of Texas which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.  To the extent that Chapter 303 of the Texas Finance
Code (the “Code”), is relevant to the Lenders for the purposes of determining
the Maximum Rate, the Lenders elect to determine such applicable legal rate
under the Code pursuant to the “weekly ceiling,” from time to time in effect, as
referred to and defined in Chapter 303 of the Code; subject, however, to the
limitations on such applicable ceiling referred to and defined in Chapter 303 of
the Code, and further subject to any right the Lenders may have subsequently,
under applicable law, to change the method of determining the Maximum Rate.  If
no Maximum Rate is established by applicable law, then the Maximum Rate shall be
equal to eighteen percent (18%).

 

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successors thereto.

 

“Multiemployer Plan” shall mean a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.

 

“Net Cash Proceeds” shall mean the aggregate cash proceeds received by any
Credit Party or any Subsidiary in respect of any Asset Disposition, Recovery
Event or Debt Issuance, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, and sales commissions), (b) taxes
paid or payable as a result thereof, (c) in the case of an Asset Disposition or
Recovery Event, the amount of all payments required to be made by the Borrower
or any Subsidiary to repay Indebtedness (other than the Loans) as a result of
such Asset Disposition or Recovery Event, and (d) in the case of an Asset
Disposition or Recovery Event, the amount of any reserves established to fund
contingent liabilities that are reasonably estimated to be payable during the
two years following such Asset Disposition or Recovery Event and that are
directly attributable to such Asset Disposition or Recovery Event; it being
understood that “Net Cash Proceeds” shall include, without limitation, (i) any
cash received upon the sale or other disposition of any non-cash consideration
received by the Borrower or any Subsidiary in any Asset Disposition, Recovery
Event or Debt Issuance and (ii) an amount equal to any reserves previously taken
against contingent liabilities in connection with an Asset Disposition or
Recovery Event immediately upon those reserves being determined by the Borrower
to be in excess of such contingent liabilities.

 

“Note” or “Notes” shall mean the Revolving Notes and/or the Swingline Note,
collectively, separately or individually, as appropriate.

 

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“Notice of Borrowing” shall mean the written notice of borrowing as referenced
and defined in Section 2.1(b)(i).

 

“Notice of Conversion” shall mean the written notice of extension or conversion
as referenced in Section 2.9.

 

“Obligations” shall mean, collectively, Loans and LOC Obligations.

 

“Participant” shall have the meaning set forth in Section 10.2.

 

“Participation Interest” shall mean the purchase by a Lender of a participation
interest in Swingline Loans as provided in Section 2.2(b)(ii) or in Letters of
Credit as provided in Section 2.3.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.

 

“Permitted Acquisition” shall mean an acquisition permitted under Section 6.6(c)
hereof.

 

“Permitted Investments” shall mean:

 

(i)            cash and Cash Equivalents;

 

(ii)           receivables owing to the Borrower or any of its Subsidiaries or
any receivables and advances to suppliers, in each case if created, acquired or
made in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;

 

(iii)          investments in and loans to any Credit Parties;

 

(iv)          loans and advances to officers, directors, employees and
Affiliates in an aggregate amount not to exceed $500,000 at any time
outstanding;

 

(v)           investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;

 

(vi)          investments, acquisitions or transactions permitted under Section
6.6(b) and (c); and

 

(vii)         additional loan advances and/or investments of a nature not
contemplated by the foregoing clauses hereof, provided that such loans, advances
and/or investments made pursuant to this clause (vii) shall not exceed an
aggregate amount of $500,000 at any time.

 

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As used herein, “investment” shall mean all investments, in cash or by delivery
of property made, directly or indirectly in, to or from any Person, whether by
acquisition of shares of Capital Stock, property, assets, indebtedness or other
obligations or securities or by loan advance, capital contribution or otherwise.

 

“Permitted Liens” shall mean:

 

(i)            Liens created by or otherwise existing, under or in connection
with this Agreement or the other Credit Documents in favor of the Lenders;

 

(ii)           Liens in favor of a Lender hereunder in connection with Hedging
Agreements, but only (A) to the extent such Liens secure obligations under
Hedging Agreements with any Lender, or any Affiliate of a Lender, (B) to the
extent such Liens are on the same collateral as to which the Administrative
Agent on behalf of the Lenders also has a Lien and (C) if such provider and the
Lenders shall share pari passu in the collateral subject to such Liens;

 

(iii)          purchase money Liens securing purchase money Indebtedness to the
extent permitted under Sections 6.1(c) or (j) (to the extent that the applicable
purchase money Indebtedness is funded after the date of acquisition of the
applicable asset or the date of completion of construction, as the case may be,
Agent shall, upon request by Borrower, execute lien subordination agreements
whereby the Liens under the Credit Documents are subordinated to the Liens
securing the applicable purchase money Indebtedness and otherwise in form and
substance reasonably satisfactory to the Administrative Agent);

 

                (iv)          Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of grace (not to
exceed 60 days), if any, related thereto has not expired or which are being
contested in good faith by appropriate proceedings; provided that adequate
reserves with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP (or, in the case of
Subsidiaries with significant operations outside of the United States of
America, generally accepted accounting principles in effect from time to time in
their respective jurisdictions of incorporation);

 

(v)           statutory landlord Liens and carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other like Liens arising in the
ordinary course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate proceedings;

 

(vi)          pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;

 

(vii)         deposits to secure the performance of bids, trade contracts,
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;

 

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(viii)        Liens existing on the Closing Date and set forth on Schedule
1.1(b);

 

(ix)           Liens arising in connection with Capital Leases permitted under
Sections 6.1(c) and (j) incurred to provide all or a portion of the purchase
price (or finance such purchase price within ninety (90) days of acquisition) or
cost of improvement or construction of an asset so long as the Indebtedness
under such Capital Lease when incurred shall not exceed the purchase price or
cost of construction of the applicable asset; and

 

(x)            any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in the
foregoing clauses; provided that such extension, renewal or replacement Lien
shall be limited to all or a part of the property which secured the Lien so
extended, renewed or replaced (plus improvements on such property).  In the case
of purchase money indebtedness or Capital Leases, financing shall be deemed to
be given in renewal or replacement of the applicable purchase money indebtedness
or Capital Leases if it is funded within 180 days after the payment of such
purchase money indebtedness or Capital Leases and is designated by the Borrower
as having been given in renewal or replacement of the applicable purchase money
indebtedness or Capital Leases (and in such event, Agent shall, upon request by
Borrower, execute lien subordination agreements whereby the Liens under the
Credit Documents are subordinated to the Liens securing the applicable purchase
money indebtedness or Capital Leases, as the case may, and otherwise in form and
substance reasonably satisfactory to the Administrative Agent).

 

“Person” shall mean an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.

 

“Plan” shall mean, at any particular time, any employee benefit plan which is
covered by Title IV of ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.

 

“Pledge Agreement” shall mean the Pledge Agreement dated December 11, 2000 given
by the Credit Parties to the Administrative Agent (or its predecessor as
administrative agent), as the same may have been or may hereafter from time to
time be amended, supplemented or otherwise modified in accordance with the terms
hereof and thereof.

 

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

 

“Pro Forma Basis” shall mean, with respect to any Permitted Acquisition or other
transaction permitted hereunder, that such Permitted Acquisition or other
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most

 

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recent fiscal quarter end for which financial statements have been delivered
pursuant to Sections 5.1(a) or 5.1(b), as applicable.

 

“Pro Forma Compliance Certificate” shall mean a certificate of a Responsible
Officer delivered to the Administrative Agent in connection with a Permitted
Acquisition and containing reasonably detailed calculations, upon giving effect
to the applicable transaction on a Pro Forma Basis, of the financial covenants
set forth in Section 5.9 as of the closing date for such Permitted Acquisition
utilizing the financial statements most recently delivered pursuant to
Sections 5.1(a) or 5.1(b), as applicable.

 

“Pro Forma Consolidated EBITDA” shall mean, for any period, as to the Borrower
and its consolidated Subsidiaries, Consolidated EBITDA of the Borrower and its
consolidated Subsidiaries plus (or minus), without duplication, the allocable
share of Consolidated EBITDA, for such period of any Person acquired or divested
during such period on a Pro Forma Basis (calculated as if such Person had been a
Subsidiary for all of such period).

 

“Properties” shall have the meaning set forth in Section 3.10(a).

 

“Property” shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.

 

“Recovery Event” shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.

 

“Register” shall have the meaning set forth in Section 10.3.

 

“Remote Sales Office” shall mean any office or other location of the Borrower or
any of its Subsidiaries (i) that is not owned by the Borrower or any of its
Subsidiaries, (ii) at which no manufacturing assets are maintained, (iii) that
has square footage of less than 800 square feet and (iv) at which assets with a
book value or fair market value of less than $50,000 in the aggregate for all
such assets at such location are maintained.

 

“Reorganization” shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.

 

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty-day notice period is
waived under PBGC Reg. §4043.

 

“Required Lenders” shall mean Lenders holding in the aggregate more than 50% of
all Revolving Loans and LOC Obligations then outstanding at such time plus the
aggregate unused Revolving Commitments at such time (treating for purposes
hereof in the case of Swingline Loans and LOC Obligations, in the case of the
Swingline Lender and the Issuing Lender, only the

 

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portion of the Swingline Loans and the LOC Obligations of the Swingline Lender
and the Issuing Lender, respectively, which is not subject to the Participation
Interests of the other Lenders and, in the case of the Lenders other than the
Swingline Lender and the Issuing Lender, the Participation Interests of such
Lenders in Swingline Loans and LOC Obligations hereunder as direct Obligations);
provided, however, that if any Lender shall be a Defaulting Lender at such time,
then there shall be excluded from the determination of Required Lenders,
Obligations (including Participation Interests) owing to such Defaulting Lender
and such Defaulting Lender’s Commitments, or after termination of the
Commitments, the principal balance of the Obligations owing to such Defaulting
Lender.

 

“Requirement of Law” shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

 

“Responsible Officer” shall mean, as to (a) the Borrower, the President, the
Chief Executive Officer, the Chief Financial Officer, the Treasurer or Assistant
Treasurer or (b) any other Credit Party, any duly authorized officer thereof.

 

“Restricted Payment” shall mean (a) any dividend or other distribution, direct
or indirect, on account of any shares of any class of Capital Stock of the
Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding
or (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries, now or hereafter
outstanding.

 

“Revolving Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make Revolving Loans in an aggregate principal amount at any
time outstanding up to such Lender’s Revolving Committed Amount.

 

“Revolving Commitment Percentage” shall mean, for each Lender, the percentage
identified as its Revolving Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Article X.

 

“Revolving Committed Amount” shall mean, collectively, the aggregate amount of
all Revolving Commitments as referenced in Section 2.1(a), as such amount may be
reduced or increased from time to time in accordance with the provisions hereof.

 

“Revolving Commitment Termination Date” shall mean July 31, 2007.

 

“Revolving Loans” shall have the meaning set forth in Section 2.1.

 

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“Revolving Note” or “Revolving Notes” shall mean the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Revolving Loans provided
pursuant to Section 2.1(e), individually or collectively, as appropriate, as
such promissory notes may be amended, modified, supplemented, extended, renewed
or replaced from time to time.

 

“S&P” shall mean Standard & Poor’s Ratings Group, a division of McGraw Hill,
Inc. and any successors thereto.

 

“Scheduled Payments of Funded Debt” shall mean, on any date of determination,
with respect to the Borrower and its Subsidiaries on a consolidated basis, the
sum of all scheduled payments of principal on Funded Debt to be made during the
twelve month period then beginning (including the principal component of
payments due on Capital Leases or under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product), it being understood that Scheduled Payments of Funded Debt shall not
include optional prepayments or the mandatory prepayments required pursuant to
Section 2.6.

 

“Security Agreement” shall mean the Security Agreement dated December 11, 2000
given by the Borrower and the other Credit Parties to the Administrative Agent
(or its predecessor as administrative agent), as the same may have been or may
hereafter amended, modified or supplemented from time to time in accordance with
its terms.

 

“Security Documents” shall mean the Security Agreement, the Pledge Agreement and
such other documents executed and delivered in connection with the attachment
and perfection of the Administrative Agent’s security interests and liens
arising thereunder, including, without limitation, UCC financing statements and
patent and trademark filings.

 

“Single Employer Plan” shall mean any Plan which is not a Multiemployer Plan.

 

“Specified Sales” shall mean (a) the sale, transfer, lease or other disposition
of inventory, and materials in the ordinary course of business and (b) the sale,
transfer or other disposition of Permitted Investments described in clauses (i)
or (v) of the definition thereof.

 

“Stock Repurchases” shall mean the purchase by the Borrower of its Capital Stock
as permitted pursuant to Section 6.12 hereof.

 

“Subordinated Indebtedness” shall mean any and all Indebtedness of the Borrower
or any of its Subsidiaries which is subordinated in right of payment to the
prior payment in full of the Credit Party Obligations.

 

“Subsidiary” shall mean, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.  Unless otherwise qualified,
all references to a

 

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“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.

 

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding up to
the Swingline Committed Amount, and the commitment of the Lenders to purchase
participation interests in the Swingline Loans as provided in Section
2.2(b)(ii), as such amounts may be reduced from time to time in accordance with
the provisions hereof.

 

“Swingline Committed Amount” shall mean the amount of the Swingline Lender’s
Swingline Commitment as specified in Section 2.2(a).

 

“Swingline Lender” shall mean Bank One, in its capacity as such.

 

“Swingline Loan” or “Swingline Loans” shall have the meaning set forth in
Section 2.2(a).

 

“Swingline Note” shall mean the promissory note of the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans provided pursuant to Section
2.2(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

 

“Taxes” shall have the meaning set forth in Section 2.17.

 

“Tranche” shall mean the collective reference to LIBOR Rate Loans whose Interest
Periods begin and end on the same day.  A Tranche may sometimes be referred to
as a “LIBOR Tranche”.

 

“Transfer Effective Date” shall have the meaning set forth in each Commitment
Transfer Supplement.

 

“2.17 Certificate” shall have the meaning set forth in Section 2.17.

 

“Type” shall mean, as to any Loan, its nature as an Alternate Base Rate Loan or
LIBOR Rate Loan, as the case may be.

 

“Voting Stock” shall mean, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.

 

SECTION 1.2                                   OTHER DEFINITIONAL PROVISIONS.

 

(A)           UNLESS OTHERWISE SPECIFIED THEREIN, ALL TERMS DEFINED IN THIS
AGREEMENT SHALL HAVE THE DEFINED MEANINGS WHEN USED IN THE NOTES OR OTHER CREDIT
DOCUMENTS OR ANY CERTIFICATE OR OTHER DOCUMENT MADE OR DELIVERED PURSUANT
HERETO.

 

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(B)           THE WORDS “HEREOF”, “HEREIN” AND “HEREUNDER” AND WORDS OF SIMILAR
IMPORT WHEN USED IN THIS AGREEMENT SHALL REFER TO THIS AGREEMENT AS A WHOLE AND
NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT, AND SECTION, SUBSECTION,
SCHEDULE AND EXHIBIT REFERENCES ARE TO THIS AGREEMENT UNLESS OTHERWISE
SPECIFIED.

 

(C)           THE MEANINGS GIVEN TO TERMS DEFINED HEREIN SHALL BE EQUALLY
APPLICABLE TO BOTH THE SINGULAR AND PLURAL FORMS OF SUCH TERMS.

 

SECTION 1.3                                   ACCOUNTING TERMS.

 

Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower’s compliance with such covenant shall be determined
on the basis of GAAP applied on a basis consistent with the most recent audited
consolidated statements of the Borrower delivered to the Lenders in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Lenders.

 

The Borrower shall deliver to the Administrative Agent and each Lender at the
same time as the delivery of any annual or quarterly financial statements given
in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.

 

Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of calculations that are designated herein to be made on a “Pro Forma
Basis”, (i) any Indebtedness of such Person that is acquired during such period
which is retired in connection with a Permitted Acquisition shall be excluded
from such calculations and deemed to have been retired as of the first day of
such applicable period and (ii) income statement items and other balance sheet
items (whether positive or negative) attributable to the such Person acquired in
such transaction shall be included in such calculations to the extent relating
to the period for which the Pro Forma Basis calculations are being made, subject
to adjustments mutually acceptable to the Administrative Agent and the Borrower.

 

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ARTICLE II
THE LOANS; AMOUNT AND TERMS

 

SECTION 2.1                                   REVOLVING LOANS.

 

(A)           REVOLVING COMMITMENT.  DURING THE COMMITMENT PERIOD, SUBJECT TO
THE TERMS AND CONDITIONS HEREOF, EACH LENDER SEVERALLY AGREES TO MAKE REVOLVING
CREDIT LOANS (“REVOLVING LOANS”) TO THE BORROWER FROM TIME TO TIME FOR THE
PURPOSES HEREINAFTER SET FORTH; PROVIDED, HOWEVER, THAT (I) WITH REGARD TO EACH
LENDER INDIVIDUALLY, THE SUM OF SUCH LENDER’S SHARE OF OUTSTANDING REVOLVING
LOANS PLUS SUCH LENDER’S REVOLVING COMMITMENT PERCENTAGE OF SWINGLINE LOANS PLUS
SUCH LENDER’S LOC COMMITMENT PERCENTAGE OF LOC OBLIGATIONS SHALL NOT EXCEED SUCH
LENDER’S REVOLVING COMMITMENT PERCENTAGE OF THE AGGREGATE REVOLVING COMMITTED
AMOUNT, AND (II) WITH REGARD TO THE LENDERS COLLECTIVELY, THE SUM OF THE
AGGREGATE AMOUNT OF OUTSTANDING REVOLVING LOANS PLUS SWINGLINE LOANS PLUS LOC
OBLIGATIONS SHALL NOT EXCEED THE AGGREGATE REVOLVING COMMITTED AMOUNT.  FOR
PURPOSES HEREOF, THE AGGREGATE AMOUNT AVAILABLE HEREUNDER SHALL BE ONE HUNDRED
FIFTY MILLION DOLLARS ($150,000,000) (AS SUCH AGGREGATE MAXIMUM AMOUNT MAY BE
REDUCED FROM TIME TO TIME AS PROVIDED IN SECTION 2.5, THE “REVOLVING COMMITTED
AMOUNT”).  REVOLVING LOANS MAY CONSIST OF ALTERNATE BASE RATE LOANS OR LIBOR
RATE LOANS, OR A COMBINATION THEREOF, AS THE BORROWER MAY REQUEST, AND MAY BE
REPAID AND REBORROWED IN ACCORDANCE WITH THE PROVISIONS HEREOF.  LIBOR RATE
LOANS SHALL BE MADE BY EACH LENDER AT ITS LIBOR LENDING OFFICE AND ALTERNATE
BASE RATE LOANS AT ITS DOMESTIC LENDING OFFICE.

 

(B)           REVOLVING LOAN BORROWINGS.

 

(i)            Notice of Borrowing.  The Borrower may request a Revolving Loan
borrowing by written notice (or telephone notice promptly confirmed in writing
which confirmation may be by fax) to the Administrative Agent not later than
1:00 p.m. (Houston, Texas time) on the Business Day of the requested borrowing
in the case of Alternate Base Rate Loans, and on the third Business Day prior to
the date of the requested borrowing in the case of LIBOR Rate Loans.  Each such
request for borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to be borrowed and
(D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR
Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the
Interest Period(s) therefor.  A form of Notice of Borrowing (a “Notice of
Borrowing”) is attached as Schedule 2.1(b)(i).  If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable Interest Period in the
case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for
an Interest Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a one (1) month LIBOR Rate
Loan hereunder.  The Administrative Agent shall give notice to each Lender
promptly upon receipt of each Notice of Borrowing, the contents thereof and each
such Lender’s share thereof.

 

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(ii)           Minimum Amounts.  Each Revolving Loan borrowing shall be in a
minimum aggregate amount of (A) for Revolving Loans made as LIBOR Rate Loans,
$1,000,000 and integral multiples of $100,000 in excess thereof or (B) for
Revolving Loans made as Alternate Base Rate Loans, $1,000,000 and integral
multiples of $100,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).

 

(iii)          Advances.  Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Administrative
Agent for the account of the Borrower at the office of the Administrative Agent
specified in Schedule 11.2, or at such other office as the Administrative Agent
may designate in writing, by 2:00 p.m. (Houston, Texas time) on the date
specified in the applicable Notice of Borrowing in Dollars and in funds
immediately available to the Administrative Agent.  Such borrowing will then be
made available to the Borrower by the Administrative Agent by crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.

 

(C)           REPAYMENT.  THE PRINCIPAL AMOUNT OF ALL REVOLVING LOANS SHALL BE
DUE AND PAYABLE IN FULL ON THE MATURITY DATE.

 

(D)           INTEREST.  SUBJECT TO THE PROVISIONS OF SECTION 2.8, REVOLVING
LOANS SHALL BEAR INTEREST AS FOLLOWS:

 

(i)            Alternate Base Rate Loans.  During such periods as Revolving
Loans shall be comprised of Alternate Base Rate Loans, each such Alternate Base
Rate Loan shall bear interest at a per annum rate equal to the sum of the
Alternate Base Rate plus the Applicable Percentage; and

 

(ii)           LIBOR Rate Loans.  During such periods as Revolving Loans shall
be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest
at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable
Percentage.

 

Interest on Revolving Loans shall be payable in arrears on each Interest Payment
Date.

 

(E)           REVOLVING NOTES.  EACH LENDER’S REVOLVING COMMITMENT PERCENTAGE OF
THE REVOLVING LOANS SHALL BE EVIDENCED BY A DULY EXECUTED PROMISSORY NOTE OF THE
BORROWER TO SUCH LENDER IN SUBSTANTIALLY THE FORM OF SCHEDULE 2.1(E).

 

SECTION 2.2                                   SWINGLINE LOAN SUBFACILITY.

 

(A)           SWINGLINE COMMITMENT.  DURING THE COMMITMENT PERIOD, SUBJECT TO
THE TERMS AND CONDITIONS HEREOF, THE SWINGLINE LENDER, IN ITS INDIVIDUAL
CAPACITY, AGREES TO

 

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MAKE CERTAIN REVOLVING CREDIT LOANS TO THE BORROWER (EACH A “SWINGLINE LOAN”
AND, COLLECTIVELY, THE “SWINGLINE LOANS”) FOR THE PURPOSES HEREINAFTER SET
FORTH; PROVIDED, HOWEVER, (I) THE AGGREGATE AMOUNT OF SWINGLINE LOANS
OUTSTANDING AT ANY TIME SHALL NOT EXCEED FIFTEEN MILLION DOLLARS ($15,000,000)
(THE “SWINGLINE COMMITTED AMOUNT”), AND (II) THE SUM OF THE AGGREGATE AMOUNT OF
OUTSTANDING REVOLVING LOANS PLUS SWINGLINE LOANS PLUS LOC OBLIGATIONS SHALL NOT
EXCEED THE AGGREGATE REVOLVING COMMITTED AMOUNT; PROVIDED FURTHER, HOWEVER, THAT
THE SWINGLINE LENDER SHALL NOT MAKE ANY SWINGLINE LOAN DURING THE EXISTENCE OF
AN EVENT OF DEFAULT OF WHICH THE SWINGLINE LENDER HAS RECEIVED WRITTEN NOTICE
FROM ANY LENDER (WHICH NOTICE SHALL INCLUDE A REQUEST THAT SWINGLINE LENDER
REFRAIN FROM MAKING FURTHER SWINGLINE LOANS) PRIOR TO THE FUNDING OF SUCH
SWINGLINE LOAN.  SWINGLINE LOANS HEREUNDER MAY BE REPAID AND REBORROWED IN
ACCORDANCE WITH THE PROVISIONS HEREOF.

 

(B)           SWINGLINE LOAN BORROWINGS.

 

(i)            Notice of Borrowing and Disbursement.  The Swingline Lender will
make Swingline Loans available to the Borrower on any Business Day upon request
made by the Borrower not later than 1:00 p.m. (Houston, Texas time) on such
Business Day.  A notice of request for Swingline Loan borrowing shall be made in
the form of Schedule 2.1(b)(i) with appropriate modifications.  Swingline Loan
borrowings hereunder shall be made in minimum amounts of $100,000 and in
integral amounts of $50,000 in excess thereof.

 

(ii)           Repayment of Swingline Loans.  Each Swingline Loan borrowing
shall be due and payable on the Maturity Date.  The Swingline Lender may, at any
time, in its sole discretion, by written notice to the Borrower and the
Administrative Agent, demand repayment of its Swingline Loans by way of a
Revolving Loan borrowing, in which case the Borrower shall be deemed to have
requested a Revolving Loan borrowing comprised entirely of Alternate Base Rate 
Loans in the amount of such Swingline Loans; provided, however, that, in the
following circumstances, any such demand shall also be deemed to have been given
one Business Day prior to each of (A) the Maturity Date, (B) the occurrence of
any Event of Default described in Section 7.1(e), (C) upon acceleration of the
Credit Party Obligations hereunder, whether on account of an Event of Default
described in Section 7.1(e) or any other Event of Default, and (D) the exercise
of remedies in accordance with the provisions of Section 7.2 hereof (each such
Revolving Loan borrowing made on account of any such deemed request therefor as
provided herein being hereinafter referred to as a “Mandatory Borrowing”).  Each
Lender hereby irrevocably agrees to make such Revolving Loans promptly upon any
such request or deemed request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the same
such date notwithstanding (I) the amount of Mandatory Borrowing may not comply
with the minimum amount for borrowings of Revolving Loans otherwise required
hereunder, (II) whether any conditions specified in Section 4.2 are then
satisfied, (III) whether a Default or an Event of Default then exists, (IV)
failure of any such request or deemed request for

 

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Revolving Loans to be made by the time otherwise required in Section 2.1(b)(i),
(V) the date of such Mandatory Borrowing, or (VI) any reduction in the Revolving
Committed Amount or termination of the Revolving Commitments immediately prior
to such Mandatory Borrowing or contemporaneously therewith.  In the event that
any Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code with respect to the Borrower), then
each Lender hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase)
from the Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such Swingline Loans
ratably based upon its respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to Section
7.2), provided that (x) all interest payable on the Swingline Loans shall be for
the account of the Swingline Lender until the date as of which the respective
participation is purchased, and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay to the Swingline Lender interest on the principal amount of such
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the Federal Funds
Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

(C)           INTEREST ON SWINGLINE LOANS.  SUBJECT TO THE PROVISIONS OF SECTION
2.8, SWINGLINE LOANS SHALL BEAR INTEREST AT A PER ANNUM RATE EQUAL TO THE
ALTERNATE BASE RATE PLUS THE APPLICABLE PERCENTAGE FOR REVOLVING LOANS THAT ARE
ALTERNATE BASE RATE LOANS.  INTEREST ON SWINGLINE LOANS SHALL BE PAYABLE IN
ARREARS ON EACH INTEREST PAYMENT DATE.

 

(D)           SWINGLINE NOTE.  THE SWINGLINE LOANS SHALL BE EVIDENCED BY A DULY
EXECUTED PROMISSORY NOTE OF THE BORROWER TO THE SWINGLINE LENDER IN THE ORIGINAL
AMOUNT OF THE SWINGLINE COMMITTED AMOUNT AND SUBSTANTIALLY IN THE FORM OF
SCHEDULE 2.2(D).

 

SECTION 2.3                                   LETTER OF CREDIT SUBFACILITY.

 

(A)           ISSUANCE.  SUBJECT TO THE TERMS AND CONDITIONS HEREOF AND OF THE
LOC DOCUMENTS, IF ANY, AND ANY OTHER TERMS AND CONDITIONS WHICH THE ISSUING
LENDER MAY REASONABLY REQUIRE CONSISTENT WITH CUSTOMARY PRACTICE AT SUCH TIME,
DURING THE COMMITMENT PERIOD THE ISSUING LENDER SHALL ISSUE, AND THE LENDERS
SHALL PARTICIPATE IN, LETTERS OF CREDIT FOR THE ACCOUNT OF THE BORROWER FROM
TIME TO TIME UPON REQUEST IN A FORM ACCEPTABLE TO THE ISSUING LENDER; PROVIDED,
HOWEVER, THAT (I) THE AGGREGATE AMOUNT OF LOC OBLIGATIONS SHALL NOT AT ANY TIME
EXCEED TEN MILLION DOLLARS ($10,000,000) (THE “LOC COMMITTED AMOUNT”), (II) THE
SUM OF THE AGGREGATE AMOUNT OF REVOLVING LOANS PLUS SWINGLINE LOANS PLUS LOC
OBLIGATIONS SHALL NOT AT ANY TIME

 

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EXCEED THE AGGREGATE REVOLVING COMMITTED AMOUNT, (III) ALL LETTERS OF CREDIT
SHALL BE DENOMINATED IN U.S. DOLLARS AND (IV) LETTERS OF CREDIT SHALL BE ISSUED
FOR THE PURPOSE OF SUPPORTING TAX-ADVANTAGED VARIABLE RATE DEMAND NOTE FINANCING
AND FOR OTHER LAWFUL CORPORATE PURPOSES AND MAY BE ISSUED AS STANDBY LETTERS OF
CREDIT, INCLUDING IN CONNECTION WITH WORKERS’ COMPENSATION AND OTHER INSURANCE
PROGRAMS, AND TRADE LETTERS OF CREDIT.  EXCEPT AS OTHERWISE EXPRESSLY AGREED
UPON BY ALL THE LENDERS, NO LETTER OF CREDIT SHALL HAVE AN ORIGINAL EXPIRY DATE
MORE THAN TWELVE (12) MONTHS FROM THE DATE OF ISSUANCE; PROVIDED, HOWEVER, SO
LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND
SUBJECT TO THE OTHER TERMS AND CONDITIONS TO THE ISSUANCE OF LETTERS OF CREDIT
HEREUNDER, THE EXPIRY DATES OF LETTERS OF CREDIT MAY BE EXTENDED ANNUALLY OR
PERIODICALLY FROM TIME TO TIME ON THE REQUEST OF THE BORROWER OR BY OPERATION OF
THE TERMS OF THE APPLICABLE LETTER OF CREDIT TO A DATE NOT MORE THAN TWELVE (12)
MONTHS FROM THE DATE OF EXTENSION; PROVIDED, FURTHER, THAT NO LETTER OF CREDIT,
AS ORIGINALLY ISSUED OR AS EXTENDED, SHALL HAVE AN EXPIRY DATE EXTENDING BEYOND
THE MATURITY DATE.  EACH LETTER OF CREDIT SHALL COMPLY WITH THE RELATED LOC
DOCUMENTS.  THE ISSUANCE AND EXPIRY DATE OF EACH LETTER OF CREDIT SHALL BE A
BUSINESS DAY.  ANY LETTERS OF CREDIT ISSUED HEREUNDER SHALL BE IN A MINIMUM
ORIGINAL FACE AMOUNT OF $10,000 OR SUCH OTHER AMOUNT AS AGREED BY THE
ADMINISTRATIVE AGENT AND THE BORROWER.  BANK ONE SHALL BE THE ISSUING LENDER ON
ALL LETTERS OF CREDIT ISSUED AFTER THE CLOSING DATE.

 

(B)           NOTICE AND REPORTS.  THE REQUEST FOR THE ISSUANCE OF A LETTER OF
CREDIT SHALL BE SUBMITTED TO THE ISSUING LENDER AT LEAST THREE (3) BUSINESS DAYS
PRIOR TO THE REQUESTED DATE OF ISSUANCE.  THE ISSUING LENDER WILL PROMPTLY UPON
REQUEST PROVIDE TO THE ADMINISTRATIVE AGENT FOR DISSEMINATION TO THE LENDERS A
DETAILED REPORT SPECIFYING THE LETTERS OF CREDIT WHICH ARE THEN ISSUED AND
OUTSTANDING AND ANY ACTIVITY WITH RESPECT THERETO WHICH MAY HAVE OCCURRED SINCE
THE DATE OF ANY PRIOR REPORT, AND INCLUDING THEREIN, AMONG OTHER THINGS, THE
ACCOUNT PARTY, THE BENEFICIARY, THE FACE AMOUNT, EXPIRY DATE AS WELL AS ANY
PAYMENTS OR EXPIRATIONS WHICH MAY HAVE OCCURRED.  THE ISSUING LENDER WILL
FURTHER PROVIDE TO THE ADMINISTRATIVE AGENT PROMPTLY UPON REQUEST COPIES OF THE
LETTERS OF CREDIT.  THE ISSUING LENDER WILL PROVIDE TO THE ADMINISTRATIVE AGENT
PROMPTLY UPON REQUEST A SUMMARY REPORT OF THE NATURE AND EXTENT OF LOC
OBLIGATIONS THEN OUTSTANDING.

 

(C)           PARTICIPATIONS.  EACH LENDER UPON ISSUANCE OF A LETTER OF CREDIT,
SHALL BE DEEMED TO HAVE PURCHASED WITHOUT RECOURSE A RISK PARTICIPATION FROM THE
ISSUING LENDER IN SUCH LETTER OF CREDIT AND THE OBLIGATIONS ARISING THEREUNDER
AND ANY COLLATERAL RELATING THERETO, IN EACH CASE IN AN AMOUNT EQUAL TO ITS LOC
COMMITMENT PERCENTAGE OF THE OBLIGATIONS UNDER SUCH LETTER OF CREDIT AND SHALL
ABSOLUTELY, UNCONDITIONALLY AND IRREVOCABLY ASSUME, AS PRIMARY OBLIGOR AND NOT
AS SURETY, AND BE OBLIGATED TO PAY TO THE ISSUING LENDER THEREFOR AND DISCHARGE
WHEN DUE, ITS LOC COMMITMENT PERCENTAGE OF THE OBLIGATIONS ARISING UNDER SUCH
LETTER OF CREDIT.  WITHOUT LIMITING THE SCOPE AND NATURE OF EACH LENDER’S
PARTICIPATION IN ANY LETTER OF CREDIT, TO THE EXTENT THAT THE ISSUING LENDER HAS
NOT BEEN REIMBURSED AS REQUIRED HEREUNDER OR UNDER ANY LOC DOCUMENT, EACH SUCH
LENDER SHALL PAY TO THE ISSUING LENDER ITS LOC COMMITMENT PERCENTAGE OF SUCH
UNREIMBURSED DRAWING IN SAME DAY FUNDS ON THE DAY OF NOTIFICATION BY THE ISSUING
LENDER OF AN UNREIMBURSED DRAWING PURSUANT TO THE PROVISIONS OF SUBSECTION (D)
HEREOF.  THE OBLIGATION OF EACH LENDER TO SO REIMBURSE THE ISSUING LENDER SHALL
BE ABSOLUTE AND

 

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UNCONDITIONAL AND SHALL NOT BE AFFECTED BY THE OCCURRENCE OF A DEFAULT, AN EVENT
OF DEFAULT OR ANY OTHER OCCURRENCE OR EVENT.  ANY SUCH REIMBURSEMENT SHALL NOT
RELIEVE OR OTHERWISE IMPAIR THE OBLIGATION OF THE BORROWER TO REIMBURSE THE
ISSUING LENDER UNDER ANY LETTER OF CREDIT, TOGETHER WITH INTEREST AS HEREINAFTER
PROVIDED.

 

(D)           REIMBURSEMENT.  IN THE EVENT OF ANY DRAWING UNDER ANY LETTER OF
CREDIT, THE ISSUING LENDER WILL PROMPTLY NOTIFY THE BORROWER AND THE
ADMINISTRATIVE AGENT.  THE BORROWER SHALL REIMBURSE THE ISSUING LENDER ON THE
DAY OF DRAWING UNDER ANY LETTER OF CREDIT (WITH THE PROCEEDS OF A SWINGLINE LOAN
OR A REVOLVING LOAN OBTAINED HEREUNDER OR OTHERWISE) IN SAME DAY FUNDS AS
PROVIDED HEREIN OR IN THE LOC DOCUMENTS.  IF THE BORROWER SHALL FAIL TO
REIMBURSE THE ISSUING LENDER AS PROVIDED HEREIN, THE UNREIMBURSED AMOUNT OF SUCH
DRAWING SHALL BEAR INTEREST AT A RATE EQUAL TO THE DEFAULT RATE.  UNLESS THE
BORROWER SHALL IMMEDIATELY NOTIFY THE ISSUING LENDER AND THE ADMINISTRATIVE
AGENT OF ITS INTENT TO OTHERWISE REIMBURSE THE ISSUING LENDER, THE BORROWER
SHALL BE DEEMED TO HAVE REQUESTED A REVOLVING LOAN IN THE AMOUNT OF THE DRAWING
AS PROVIDED IN SUBSECTION (E) HEREOF, THE PROCEEDS OF WHICH WILL BE USED TO
SATISFY THE REIMBURSEMENT OBLIGATIONS.  ABSENT THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ANY SUCH PERSON (IT BEING THE INTENTION OF THIS PROVISION THAT
SUCH REIMBURSEMENT OBLIGATION WILL BE APPLICABLE REGARDLESS OF WHETHER CAUSED IN
WHOLE OR IN PART BY THE ORDINARY NEGLIGENCE OF ANY OF THE PARTIES BEING
REIMBURSED), THE BORROWER’S REIMBURSEMENT OBLIGATIONS HEREUNDER SHALL BE
ABSOLUTE AND UNCONDITIONAL UNDER ALL CIRCUMSTANCES IRRESPECTIVE OF ANY RIGHTS OF
SET-OFF, COUNTERCLAIM OR DEFENSE TO PAYMENT THE BORROWER MAY CLAIM OR HAVE
AGAINST THE ISSUING LENDER, THE ADMINISTRATIVE AGENT, THE LENDERS, THE
BENEFICIARY OF THE LETTER OF CREDIT DRAWN UPON OR ANY OTHER PERSON, INCLUDING
WITHOUT LIMITATION ANY DEFENSE BASED ON ANY FAILURE OF THE BORROWER TO RECEIVE
CONSIDERATION OR THE LEGALITY, VALIDITY, REGULARITY OR UNENFORCEABILITY OF THE
LETTER OF CREDIT.  THE ISSUING LENDER WILL PROMPTLY NOTIFY THE OTHER LENDERS OF
THE AMOUNT OF ANY UNREIMBURSED DRAWING AND EACH LENDER SHALL PROMPTLY PAY TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE ISSUING LENDER IN DOLLARS AND IN
IMMEDIATELY AVAILABLE FUNDS, THE AMOUNT OF SUCH LENDER’S LOC COMMITMENT
PERCENTAGE OF SUCH UNREIMBURSED DRAWING.  SUCH PAYMENT SHALL BE MADE ON THE DAY
SUCH NOTICE IS RECEIVED BY SUCH LENDER FROM THE ISSUING LENDER IF SUCH NOTICE IS
RECEIVED AT OR BEFORE 3:00 P.M. (HOUSTON, TEXAS TIME), OTHERWISE SUCH PAYMENT
SHALL BE MADE AT OR BEFORE 1:00 P.M. (HOUSTON, TEXAS TIME) ON THE BUSINESS DAY
NEXT SUCCEEDING THE DAY SUCH NOTICE IS RECEIVED.  IF SUCH LENDER DOES NOT PAY
SUCH AMOUNT TO THE ISSUING LENDER IN FULL UPON SUCH REQUEST, SUCH LENDER SHALL,
ON DEMAND, PAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE ISSUING LENDER
INTEREST ON THE UNPAID AMOUNT DURING THE PERIOD FROM THE DATE OF SUCH DRAWING
UNTIL SUCH LENDER PAYS SUCH AMOUNT TO THE ISSUING LENDER IN FULL AT A RATE PER
ANNUM EQUAL TO, IF PAID WITHIN TWO (2) BUSINESS DAYS OF THE DATE OF DRAWING, THE
FEDERAL FUNDS EFFECTIVE RATE AND THEREAFTER AT A RATE EQUAL TO THE ALTERNATE
BASE RATE.  EACH LENDER’S OBLIGATION TO MAKE SUCH PAYMENT TO THE ISSUING LENDER,
AND THE RIGHT OF THE ISSUING LENDER TO RECEIVE THE SAME, SHALL BE ABSOLUTE AND
UNCONDITIONAL, SHALL NOT BE AFFECTED BY ANY CIRCUMSTANCE WHATSOEVER AND WITHOUT
REGARD TO THE TERMINATION OF THIS AGREEMENT OR THE COMMITMENTS HEREUNDER, THE
EXISTENCE OF A DEFAULT OR EVENT OF DEFAULT OR THE ACCELERATION OF THE CREDIT
PARTY OBLIGATIONS

 

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HEREUNDER AND SHALL BE MADE WITHOUT ANY OFFSET, ABATEMENT, WITHHOLDING OR
REDUCTION WHATSOEVER.

 

(E)           REPAYMENT WITH REVOLVING LOANS.  ON ANY DAY ON WHICH THE BORROWER
SHALL HAVE REQUESTED, OR BEEN DEEMED TO HAVE REQUESTED, A REVOLVING LOAN TO
REIMBURSE A DRAWING UNDER A LETTER OF CREDIT, THE ADMINISTRATIVE AGENT SHALL
GIVE NOTICE TO THE LENDERS THAT A REVOLVING LOAN HAS BEEN REQUESTED OR DEEMED
REQUESTED IN CONNECTION WITH A DRAWING UNDER A LETTER OF CREDIT, IN WHICH CASE A
REVOLVING LOAN BORROWING COMPRISED ENTIRELY OF ALTERNATE BASE RATE LOANS (EACH
SUCH BORROWING, A “MANDATORY BORROWING”) SHALL BE IMMEDIATELY MADE (WITHOUT
GIVING EFFECT TO ANY TERMINATION OF THE COMMITMENTS PURSUANT TO SECTION 7.2) PRO
RATA BASED ON EACH LENDER’S RESPECTIVE REVOLVING COMMITMENT PERCENTAGE
(DETERMINED BEFORE GIVING EFFECT TO ANY TERMINATION OF THE COMMITMENTS PURSUANT
TO SECTION 7.2) AND IN THE CASE OF BOTH CLAUSES (I) AND (II) THE PROCEEDS
THEREOF SHALL BE PAID DIRECTLY TO THE ISSUING LENDER FOR APPLICATION TO THE
RESPECTIVE LOC OBLIGATIONS.  EACH LENDER HEREBY IRREVOCABLY AGREES TO MAKE SUCH
REVOLVING LOANS IMMEDIATELY UPON ANY SUCH REQUEST OR DEEMED REQUEST ON ACCOUNT
OF EACH MANDATORY BORROWING IN THE AMOUNT AND IN THE MANNER SPECIFIED IN THE
PRECEDING SENTENCE AND ON THE SAME SUCH DATE NOTWITHSTANDING (I) THE AMOUNT OF
MANDATORY BORROWING MAY NOT COMPLY WITH THE MINIMUM AMOUNT FOR BORROWINGS OF
REVOLVING LOANS OTHERWISE REQUIRED HEREUNDER, (II) WHETHER ANY CONDITIONS
SPECIFIED IN SECTION 4.2 ARE THEN SATISFIED, (III) WHETHER A DEFAULT OR AN EVENT
OF DEFAULT THEN EXISTS, (IV) FAILURE FOR ANY SUCH REQUEST OR DEEMED REQUEST FOR
REVOLVING LOAN TO BE MADE BY THE TIME OTHERWISE REQUIRED IN SECTION 2.1(B), (V)
THE DATE OF SUCH MANDATORY BORROWING, OR (VI) ANY REDUCTION IN THE REVOLVING
COMMITTED AMOUNT AFTER ANY SUCH LETTER OF CREDIT MAY HAVE BEEN DRAWN UPON.  IN
THE EVENT THAT ANY MANDATORY BORROWING CANNOT FOR ANY REASON BE MADE ON THE DATE
OTHERWISE REQUIRED ABOVE (INCLUDING, WITHOUT LIMITATION, AS A RESULT OF THE
COMMENCEMENT OF A PROCEEDING UNDER THE BANKRUPTCY CODE WITH RESPECT TO THE
BORROWER), THEN EACH SUCH LENDER HEREBY AGREES THAT IT SHALL FORTHWITH FUND (AS
OF THE DATE THE MANDATORY BORROWING WOULD OTHERWISE HAVE OCCURRED, BUT ADJUSTED
FOR ANY PAYMENTS RECEIVED FROM THE BORROWER ON OR AFTER SUCH DATE AND PRIOR TO
SUCH PURCHASE) ITS PARTICIPATION INTERESTS IN THE OUTSTANDING LOC OBLIGATIONS;
PROVIDED, FURTHER, THAT IN THE EVENT ANY LENDER SHALL FAIL TO FUND ITS
PARTICIPATION INTEREST ON THE DAY THE MANDATORY BORROWING WOULD OTHERWISE HAVE
OCCURRED, THEN THE AMOUNT OF SUCH LENDER’S UNFUNDED PARTICIPATION INTEREST
THEREIN SHALL BEAR INTEREST PAYABLE TO THE ISSUING LENDER UPON DEMAND, AT THE
RATE EQUAL TO, IF PAID WITHIN TWO (2) BUSINESS DAYS OF SUCH DATE, THE FEDERAL
FUNDS EFFECTIVE RATE, AND THEREAFTER AT A RATE EQUAL TO THE ALTERNATE BASE RATE.

 

(F)            MODIFICATION, EXTENSION.  THE ISSUANCE OF ANY RENEWAL OR
EXTENSION TO ANY LETTER OF CREDIT OR ANY SUPPLEMENT, MODIFICATION OR AMENDMENT
IN THE NATURE OF A RENEWAL OR EXTENSION THEREOF, SHALL, FOR PURPOSES HEREOF, BE
TREATED IN ALL RESPECTS THE SAME AS THE ISSUANCE OF A NEW LETTER OF CREDIT
HEREUNDER.

 

(G)           UNIFORM CUSTOMS AND PRACTICES.  THE ISSUING LENDER SHALL HAVE THE
LETTERS OF CREDIT BE SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS, AS PUBLISHED AS OF THE DATE OF ISSUE BY THE INTERNATIONAL CHAMBER OF
COMMERCE (THE “UCP”),

 

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IN WHICH CASE THE UCP MAY BE INCORPORATED THEREIN AND DEEMED IN ALL RESPECTS TO
BE A PART THEREOF.

 

SECTION 2.4                                   FEES.

 

(A)           COMMITMENT FEE.  IN CONSIDERATION OF THE REVOLVING COMMITMENT, THE
BORROWER AGREES TO PAY TO THE ADMINISTRATIVE AGENT FOR THE RATABLE BENEFIT OF
THE LENDERS (OTHER THAN ANY DEFAULTING LENDER) A COMMITMENT FEE (THE “COMMITMENT
FEE”) IN AN AMOUNT EQUAL TO THE APPLICABLE PERCENTAGE PER ANNUM ON THE AVERAGE
DAILY UNUSED AMOUNT OF THE AGGREGATE REVOLVING COMMITMENTS OF SUCH LENDERS.  FOR
PURPOSES OF COMPUTING THE COMMITMENT FEE HEREUNDER, LOC OBLIGATIONS SHALL BE
CONSIDERED USAGE OF THE REVOLVING COMMITMENTS, BUT SWINGLINE LOANS SHALL NOT BE
CONSIDERED USAGE OF THE REVOLVING COMMITMENTS.  THE COMMITMENT FEE SHALL BE DUE
AND PAYABLE QUARTERLY IN ARREARS ON THE 15TH DAY FOLLOWING THE LAST DAY OF EACH
CALENDAR QUARTER FOR THE PRIOR CALENDAR QUARTER.

 

(B)           LETTER OF CREDIT FEES.  IN CONSIDERATION OF THE LOC COMMITMENTS,
THE BORROWER AGREES TO PAY TO THE ISSUING LENDER A FEE (THE “LETTER OF CREDIT
FEE”) EQUAL TO THE APPLICABLE PERCENTAGE PER ANNUM ON THE AVERAGE DAILY MAXIMUM
AMOUNT AVAILABLE TO BE DRAWN UNDER EACH LETTER OF CREDIT FROM THE DATE OF
ISSUANCE TO THE DATE OF EXPIRATION.  IN ADDITION TO SUCH LETTER OF CREDIT FEE,
THE ISSUING LENDER MAY CHARGE, AND RETAIN FOR ITS OWN ACCOUNT WITHOUT SHARING BY
THE OTHER LENDERS, AN ADDITIONAL FACING FEE OF ONE-EIGHTH OF ONE PERCENT
(0.125%) PER ANNUM ON THE AVERAGE DAILY MAXIMUM AMOUNT AVAILABLE TO BE DRAWN
UNDER EACH SUCH LETTER OF CREDIT ISSUED BY IT.  THE ISSUING LENDER SHALL
PROMPTLY PAY OVER TO THE ADMINISTRATIVE AGENT FOR THE RATABLE BENEFIT OF THE
LENDERS (INCLUDING THE ISSUING LENDER, BUT EXCLUDING ANY DEFAULTING LENDER) THE
LETTER OF CREDIT FEE.  THE LETTER OF CREDIT FEE SHALL BE DUE AND PAYABLE
QUARTERLY IN ARREARS ON THE 15TH DAY FOLLOWING THE LAST DAY OF EACH CALENDAR
QUARTER FOR THE PRIOR CALENDAR QUARTER AND ON THE REVOLVING COMMITMENT
TERMINATION DATE.

 

(C)           ISSUING LENDER FEES.  IN ADDITION TO THE LETTER OF CREDIT FEES
PAYABLE PURSUANT TO SUBSECTION (B) HEREOF, THE BORROWER SHALL PAY TO THE ISSUING
LENDER FOR ITS OWN ACCOUNT WITHOUT SHARING BY THE OTHER LENDERS THE REASONABLE
AND CUSTOMARY CHARGES FROM TIME TO TIME OF THE ISSUING LENDER WITH RESPECT TO
THE AMENDMENT, TRANSFER, ADMINISTRATION, CANCELLATION AND CONVERSION OF, AND
DRAWINGS UNDER, SUCH LETTERS OF CREDIT (COLLECTIVELY, THE “ISSUING LENDER
FEES”).

 

SECTION 2.5                                   COMMITMENT REDUCTIONS.

 

(A)           VOLUNTARY REDUCTIONS.  THE BORROWER SHALL HAVE THE RIGHT TO
TERMINATE OR PERMANENTLY REDUCE THE UNUSED PORTION OF THE REVOLVING COMMITTED
AMOUNT AT ANY TIME OR FROM TIME TO TIME UPON NOT LESS THAN FIVE BUSINESS DAYS’
PRIOR NOTICE TO THE ADMINISTRATIVE AGENT (WHICH SHALL NOTIFY THE LENDERS THEREOF
AS SOON AS PRACTICABLE) OF EACH SUCH TERMINATION OR REDUCTION, WHICH NOTICE
SHALL SPECIFY THE EFFECTIVE DATE THEREOF AND THE AMOUNT OF ANY SUCH REDUCTION
WHICH SHALL BE IN A MINIMUM AMOUNT OF $5,000,000 OR A WHOLE MULTIPLE OF
$1,000,000 IN EXCESS THEREOF AND SHALL BE IRREVOCABLE AND EFFECTIVE

 

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UPON RECEIPT BY THE ADMINISTRATIVE AGENT, PROVIDED THAT NO SUCH REDUCTION OR
TERMINATION SHALL BE PERMITTED IF AFTER GIVING EFFECT THERETO, AND TO ANY
PREPAYMENTS OF THE REVOLVING LOANS MADE ON THE EFFECTIVE DATE THEREOF, THE SUM
OF THE THEN OUTSTANDING AGGREGATE PRINCIPAL AMOUNT OF THE REVOLVING LOANS PLUS
SWINGLINE LOANS PLUS LOC OBLIGATIONS WOULD EXCEED THE REVOLVING COMMITTED
AMOUNT.

 

(B)           REVOLVING COMMITMENT TERMINATION DATE.  THE REVOLVING COMMITMENT,
THE SWINGLINE COMMITMENT AND THE LOC COMMITMENT SHALL AUTOMATICALLY TERMINATE ON
THE REVOLVING COMMITMENT TERMINATION DATE.

 

SECTION 2.6                                   PREPAYMENTS.

 

(A)           OPTIONAL PREPAYMENTS.  THE BORROWER SHALL HAVE THE RIGHT TO PREPAY
LOANS IN WHOLE OR IN PART FROM TIME TO TIME; PROVIDED, HOWEVER, THAT (I) EACH
PARTIAL PREPAYMENT OF REVOLVING LOANS SHALL BE IN A MINIMUM PRINCIPAL AMOUNT OF
$1,000,000 AND INTEGRAL MULTIPLES OF $100,000 IN EXCESS THEREOF (OR THE
REMAINING UNPAID AMOUNT) AND (II) EACH PARTIAL PREPAYMENT OF SWINGLINE LOANS
SHALL BE IN A MINIMUM PRINCIPAL AMOUNT OF $100,000 AND INTEGRAL MULTIPLES OF
$50,000 IN EXCESS THEREOF (OR THE REMAINING UNPAID AMOUNT).  THE BORROWER SHALL
GIVE THREE BUSINESS DAYS’ IRREVOCABLE NOTICE IN THE CASE OF LIBOR RATE LOANS AND
IRREVOCABLE NOTICE NOT LATER THAN 1:00 P.M. (HOUSTON, TEXAS TIME) ON THE SAME
BUSINESS DAY IN THE CASE OF ALTERNATE BASE RATE LOANS, TO THE ADMINISTRATIVE
AGENT (WHICH SHALL NOTIFY THE LENDERS THEREOF AS SOON AS PRACTICABLE).  SUBJECT
TO THE FOREGOING TERMS, AMOUNTS PREPAID UNDER THIS SECTION 2.6(A) SHALL BE
APPLIED AS THE BORROWER ELECTS; PROVIDED THAT IF THE BORROWER FAILS TO SPECIFY
THE APPLICATION OF AN OPTIONAL PREPAYMENT THEN SUCH PREPAYMENT SHALL BE APPLIED
TO REVOLVING LOANS, FIRST TO ALTERNATE BASE RATE LOANS AND THEN TO LIBOR RATE
LOANS IN DIRECT ORDER OF INTEREST PERIOD MATURITIES.  ALL PREPAYMENTS UNDER THIS
SECTION 2.6(A) SHALL BE SUBJECT TO SECTION 2.16, BUT OTHERWISE WITHOUT PREMIUM
OR PENALTY.  INTEREST ON THE PRINCIPAL AMOUNT PREPAID SHALL BE PAYABLE ON THE
NEXT OCCURRING INTEREST PAYMENT DATE THAT WOULD HAVE OCCURRED HAD SUCH LOAN NOT
BEEN PREPAID OR, AT THE REQUEST OF THE ADMINISTRATIVE AGENT, INTEREST ON THE
PRINCIPAL AMOUNT PREPAID SHALL BE PAYABLE ON ANY DATE THAT A PREPAYMENT IS MADE
HEREUNDER THROUGH THE DATE OF PREPAYMENT.  AMOUNTS PREPAID ON THE REVOLVING
LOANS AND THE SWINGLINE LOANS MAY BE REBORROWED IN ACCORDANCE WITH THE TERMS
HEREOF.

 

(B)           MANDATORY PREPAYMENTS.

 

(i)            Revolving Committed Amount.  If at any time after the Closing
Date, the sum of the aggregate principal amount of outstanding Revolving Loans
plus Swingline Loans plus LOC Obligations shall exceed the aggregate Revolving
Committed Amount, the Borrower immediately shall prepay the Revolving Loans
including any Swingline Loans) in the amount of such excess and (after all
Revolving Loans have been repaid) cash collateralize the LOC Obligations, in an
amount sufficient to eliminate such excess.

 

(ii)           Asset Dispositions.  Promptly following any Asset Disposition in
excess of $5,000,000 for all such Asset Dispositions occurring during the term
of

 

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this Agreement which are not applied to purchase or otherwise acquire
replacement assets or property within 180 days following the receipt by a Credit
Party of such cash proceeds, the Borrowers shall prepay the Loans in an
aggregate amount equal to 100% of the Net Cash Proceeds derived from such Asset
Disposition that were not reinvested within such 180 days (such prepayment to be
applied as set forth in clause (v) below).

 

(iii)          Debt Issuances.  Promptly, but in any event within three (3)
Business Days, upon receipt by any Credit Party of proceeds from any Debt
Issuance, the Borrower shall prepay the Loans in an aggregate amount equal to
one hundred percent (100%) of the Net Cash Proceeds of such Debt Issuance (such
prepayment to be applied as set forth in clause (v) below).

 

(iv)          Recovery Event.  To the extent of cash proceeds received in
connection with a Recovery Event which are in excess of $5,000,000 in the
aggregate and which are not applied to repair or replacement costs in accordance
with Section 6.6(a)(ii), immediately following the 180th day occurring after the
receipt by a Credit Party of such cash proceeds, the Borrower shall prepay the
Loans in an aggregate amount equal to one hundred percent (100%) of such Net
Cash Proceeds (such prepayment to be applied as set forth in clause (v) below).

 

(v)           Application of Mandatory Prepayments.  All amounts required to be
paid pursuant to this Section 2.6(b) shall be applied to Revolving Loans
(including Swingline Loans) and (after all Revolving Loans have been repaid) to
a cash collateral account in respect of LOC Obligations.  Within the parameters
of the applications set forth above, prepayments shall be applied first to
Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of
Interest Period maturities.  All prepayments under this Section 2.6(b) shall be
subject to Section 2.16 but otherwise without premium or penalty, and be
accompanied by interest on the principal amount prepaid through the date of
prepayment.

 

SECTION 2.7                                   MINIMUM PRINCIPAL AMOUNT OF
TRANCHES.

 

All borrowings, payments and prepayments in respect of Revolving Loans (other
than mandatory prepayments) shall be in such amounts and be made pursuant to
such elections so that after giving effect thereto the aggregate principal
amount thereof comprising any Tranche shall not be less than $1,000,000 or a
whole multiple of $100,000 in excess thereof.

 

SECTION 2.8                                   DEFAULT RATE AND PAYMENT DATES.

 

Upon the occurrence, and during the continuance, of an Event of Default, the
principal of and, to the extent permitted by law, interest on the Loans and any
other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Alternate Base Rate plus the
Applicable Percentage plus 2%) (the “Default Rate”).

 

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SECTION 2.9                                   CONVERSION OPTIONS.

 

(A)           THE BORROWER MAY ELECT FROM TIME TO TIME TO CONVERT ALTERNATE BASE
RATE LOANS TO LIBOR RATE LOANS, BY GIVING THE ADMINISTRATIVE AGENT AT LEAST
THREE BUSINESS DAYS’ PRIOR IRREVOCABLE WRITTEN NOTICE OF SUCH ELECTION.  A FORM
OF NOTICE OF CONVERSION/ EXTENSION IS ATTACHED AS SCHEDULE 2.9.  IF THE DATE
UPON WHICH AN ALTERNATE BASE RATE LOAN IS TO BE CONVERTED TO A LIBOR RATE LOAN
IS NOT A BUSINESS DAY, THEN SUCH CONVERSION SHALL BE MADE ON THE NEXT SUCCEEDING
BUSINESS DAY AND DURING THE PERIOD FROM SUCH LAST DAY OF AN INTEREST PERIOD TO
SUCH SUCCEEDING BUSINESS DAY SUCH LOAN SHALL BEAR INTEREST AS IF IT WERE AN
ALTERNATE BASE RATE LOAN.  ALL OR ANY PART OF OUTSTANDING ALTERNATE BASE RATE
LOANS MAY BE CONVERTED AS PROVIDED HEREIN, PROVIDED THAT (I) NO LOAN MAY BE
CONVERTED INTO A LIBOR RATE LOAN WHEN ANY DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING AND (II) PARTIAL CONVERSIONS SHALL BE IN AN AGGREGATE
PRINCIPAL AMOUNT OF $1,000,000 OR A WHOLE MULTIPLE OF $100,000 IN EXCESS
THEREOF.

 

(B)           ANY LIBOR RATE LOANS MAY BE CONTINUED AS SUCH UPON THE EXPIRATION
OF AN INTEREST PERIOD WITH RESPECT THERETO BY COMPLIANCE BY THE BORROWER WITH
THE NOTICE PROVISIONS CONTAINED IN SECTION 2.9(A); PROVIDED, THAT NO LIBOR RATE
LOAN MAY BE CONTINUED AS SUCH WHEN ANY DEFAULT OR EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING, IN WHICH CASE SUCH LOAN SHALL BE AUTOMATICALLY CONVERTED TO
AN ALTERNATE BASE RATE LOAN AT THE END OF THE APPLICABLE INTEREST PERIOD WITH
RESPECT THERETO.  IF THE BORROWER SHALL FAIL TO GIVE TIMELY NOTICE OF AN
ELECTION TO CONTINUE A LIBOR RATE LOAN, AND THE CONTINUATION OF SUCH LIBOR RATE
LOANS IS PERMITTED HEREUNDER, SUCH LIBOR RATE LOANS SHALL BE AUTOMATICALLY
CONTINUE AS A ONE (1) MONTH LIBOR RATE LOAN AT THE END OF THE APPLICABLE
INTEREST PERIOD WITH RESPECT THERETO.

 

SECTION 2.10                            COMPUTATION OF INTEREST AND FEES.

 

(A)           INTEREST PAYABLE HEREUNDER WITH RESPECT TO ALTERNATE BASE RATE
LOANS AND COMMITMENT FEES SHALL BE CALCULATED ON THE BASIS OF A YEAR OF 365 DAYS
(OR 366 DAYS, AS APPLICABLE) FOR THE ACTUAL DAYS ELAPSED.  ALL OTHER FEES,
INTEREST AND ALL OTHER AMOUNTS PAYABLE HEREUNDER SHALL BE CALCULATED ON THE
BASIS OF A 360 DAY YEAR FOR THE ACTUAL DAYS ELAPSED.  THE ADMINISTRATIVE AGENT
SHALL AS SOON AS PRACTICABLE NOTIFY THE BORROWER AND THE LENDERS OF EACH
DETERMINATION OF A LIBOR RATE ON THE BUSINESS DAY OF THE DETERMINATION THEREOF. 
ANY CHANGE IN THE INTEREST RATE ON A LOAN RESULTING FROM A CHANGE IN THE
ALTERNATE BASE RATE SHALL BECOME EFFECTIVE AS OF THE OPENING OF BUSINESS ON THE
DAY ON WHICH SUCH CHANGE IN THE ALTERNATE BASE RATE SHALL BECOME EFFECTIVE.  THE
ADMINISTRATIVE AGENT SHALL AS SOON AS PRACTICABLE NOTIFY THE BORROWER AND THE
LENDERS OF THE EFFECTIVE DATE AND THE AMOUNT OF EACH SUCH CHANGE.

 

(B)           EACH DETERMINATION OF AN INTEREST RATE BY THE ADMINISTRATIVE AGENT
PURSUANT TO ANY PROVISION OF THIS AGREEMENT SHALL BE CONCLUSIVE AND BINDING ON
THE BORROWER AND THE LENDERS IN THE ABSENCE OF MANIFEST ERROR.  THE
ADMINISTRATIVE AGENT SHALL, AT THE REQUEST OF THE BORROWER, DELIVER TO THE
BORROWER A STATEMENT SHOWING THE COMPUTATIONS USED BY THE ADMINISTRATIVE AGENT
IN DETERMINING ANY INTEREST RATE.

 

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SECTION 2.11                            PRO RATA TREATMENT AND PAYMENTS.

 

(A)           EACH BORROWING OF REVOLVING LOANS AND ANY REDUCTION OF THE
REVOLVING COMMITMENTS SHALL BE MADE PRO RATA ACCORDING TO THE RESPECTIVE
COMMITMENT PERCENTAGES OF THE LENDERS.  EACH PAYMENT UNDER THIS AGREEMENT OR ANY
NOTE SHALL BE APPLIED, FIRST, TO ANY FEES THEN DUE AND OWING BY THE BORROWER
PURSUANT TO SECTION 2.4, SECOND, TO INTEREST THEN DUE AND OWING IN RESPECT OF
THE NOTES OF THE BORROWER AND, THIRD, TO PRINCIPAL THEN DUE AND OWING HEREUNDER
AND UNDER THE NOTES OF THE BORROWER.  EACH PAYMENT ON ACCOUNT OF ANY FEES
PURSUANT TO SECTION 2.4 SHALL BE MADE PRO RATA IN ACCORDANCE WITH THE RESPECTIVE
AMOUNTS DUE AND OWING (EXCEPT AS TO THE PORTION OF THE LETTER OF CREDIT RETAINED
BY THE ISSUING LENDER AND THE ISSUING LENDER FEES).  EACH PAYMENT (OTHER THAN
PREPAYMENTS) BY THE BORROWER ON ACCOUNT OF PRINCIPAL OF AND INTEREST ON THE
REVOLVING LOANS SHALL BE MADE PRO RATA ACCORDING TO THE RESPECTIVE AMOUNTS DUE
AND OWING IN ACCORDANCE WITH SECTION 2.6 HEREOF.  EACH OPTIONAL PREPAYMENT ON
ACCOUNT OF PRINCIPAL OF THE LOANS SHALL BE APPLIED IN ACCORDANCE WITH SECTION
2.6(A).  EACH MANDATORY PREPAYMENT ON ACCOUNT OF PRINCIPAL OF THE LOANS SHALL BE
APPLIED IN ACCORDANCE WITH SECTION 2.6(B).  ALL PAYMENTS (INCLUDING PREPAYMENTS)
TO BE MADE BY THE BORROWER ON ACCOUNT OF PRINCIPAL, INTEREST AND FEES SHALL BE
MADE WITHOUT DEFENSE, SET-OFF OR COUNTERCLAIM (EXCEPT AS PROVIDED IN
SECTION 2.17(B)) AND SHALL BE MADE TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT
OF THE LENDERS AT THE ADMINISTRATIVE AGENT’S OFFICE SPECIFIED ON SCHEDULE 11.2
IN DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS NOT LATER THAN 2:00 P.M. (HOUSTON,
TEXAS TIME) ON THE DATE WHEN DUE.  THE ADMINISTRATIVE AGENT SHALL DISTRIBUTE
SUCH PAYMENTS TO THE LENDERS ENTITLED THERETO PROMPTLY UPON RECEIPT IN LIKE
FUNDS AS RECEIVED.  IF ANY PAYMENT HEREUNDER (OTHER THAN PAYMENTS ON THE LIBOR
RATE LOANS) BECOMES DUE AND PAYABLE ON A DAY OTHER THAN A BUSINESS DAY, SUCH
PAYMENT SHALL BE EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY, AND, WITH RESPECT
TO PAYMENTS OF PRINCIPAL, INTEREST THEREON SHALL BE PAYABLE AT THE THEN
APPLICABLE RATE DURING SUCH EXTENSION.  IF ANY PAYMENT ON A LIBOR RATE LOAN
BECOMES DUE AND PAYABLE ON A DAY OTHER THAN A BUSINESS DAY, THE MATURITY THEREOF
SHALL BE EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY UNLESS THE RESULT OF SUCH
EXTENSION WOULD BE TO EXTEND SUCH PAYMENT INTO ANOTHER CALENDAR MONTH, IN WHICH
EVENT SUCH PAYMENT SHALL BE MADE ON THE IMMEDIATELY PRECEDING BUSINESS DAY.

 

(B)           ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.  NOTWITHSTANDING
ANY OTHER PROVISIONS OF THIS CREDIT AGREEMENT TO THE CONTRARY, AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, ALL AMOUNTS
COLLECTED OR RECEIVED BY THE ADMINISTRATIVE AGENT OR ANY LENDER ON ACCOUNT OF
THE CREDIT PARTY OBLIGATIONS OR ANY OTHER AMOUNTS OUTSTANDING UNDER ANY OF THE
CREDIT DOCUMENTS OR IN RESPECT OF THE COLLATERAL SHALL BE PAID OVER OR DELIVERED
AS FOLLOWS:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation reasonable attorneys’ fees) of the Administrative
Agent in connection with enforcing the rights of the Lenders under the Credit
Documents and any protective advances made by the Administrative Agent with
respect to the Collateral under or pursuant to the terms of the Collateral
Documents;

 

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SECOND, to payment of any fees owed to the Administrative Agent;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation, reasonable attorneys’ fees) of each of the
Lenders in connection with enforcing its rights under the Credit Documents or
otherwise with respect to the Credit Party Obligations owing to such Lender;

 

FOURTH, to the payment of all of the Credit Party Obligations consisting of
accrued fees and interest;

 

FIFTH, to the payment of the outstanding principal amount of the Credit Party
Obligations (including the payment or cash collateralization of the outstanding
LOC Obligations);

 

SIXTH, to all other Credit Party Obligations and other obligations which shall
have become due and payable under the Credit Documents or otherwise and not
repaid pursuant to clauses “FIRST” through “FIFTH” above; and

 

SEVENTH, to the payment of the surplus, if any, to the Borrower or whoever else
may be lawfully entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans and
LOC Obligations held by such Lender bears to the aggregate then outstanding
Loans and LOC Obligations) of amounts available to be applied pursuant to
clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent
that any amounts available for distribution pursuant to clause “FIFTH” above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses “FIFTH” and “SIXTH” above in the manner provided in this
Section 2.11(b).

 

SECTION 2.12                            NON-RECEIPT OF FUNDS BY THE
ADMINISTRATIVE AGENT.

 

(A)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED IN
WRITING BY A LENDER PRIOR TO THE DATE A LOAN IS TO BE MADE BY SUCH LENDER (WHICH
NOTICE SHALL BE EFFECTIVE UPON RECEIPT) THAT SUCH LENDER DOES NOT INTEND TO MAKE
THE PROCEEDS OF SUCH LOAN AVAILABLE TO THE ADMINISTRATIVE AGENT, THE
ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH PROCEEDS
AVAILABLE TO THE ADMINISTRATIVE AGENT ON SUCH DATE, AND THE ADMINISTRATIVE AGENT
MAY IN RELIANCE UPON SUCH ASSUMPTION (BUT SHALL NOT BE REQUIRED TO) MAKE
AVAILABLE TO THE BORROWER A CORRESPONDING AMOUNT.  IF SUCH CORRESPONDING AMOUNT
IS NOT IN FACT MADE AVAILABLE TO THE ADMINISTRATIVE AGENT, THE

 

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ADMINISTRATIVE AGENT SHALL BE ABLE TO RECOVER SUCH CORRESPONDING AMOUNT FROM
SUCH LENDER.  IF SUCH LENDER DOES NOT PAY SUCH CORRESPONDING AMOUNT FORTHWITH
UPON THE ADMINISTRATIVE AGENT’S DEMAND THEREFOR, THE ADMINISTRATIVE AGENT WILL
PROMPTLY NOTIFY THE BORROWER, AND THE BORROWER SHALL IMMEDIATELY PAY SUCH
CORRESPONDING AMOUNT TO THE ADMINISTRATIVE AGENT.  THE ADMINISTRATIVE AGENT
SHALL ALSO BE ENTITLED TO RECOVER FROM THE LENDER OR THE BORROWER, AS THE CASE
MAY BE, INTEREST ON SUCH CORRESPONDING AMOUNT IN RESPECT OF EACH DAY FROM THE
DATE SUCH CORRESPONDING AMOUNT WAS MADE AVAILABLE BY THE ADMINISTRATIVE AGENT TO
THE BORROWER TO THE DATE SUCH CORRESPONDING AMOUNT IS RECOVERED BY THE
ADMINISTRATIVE AGENT AT A PER ANNUM RATE EQUAL TO (I) FROM THE BORROWER AT THE
APPLICABLE RATE FOR THE APPLICABLE BORROWING PURSUANT TO THE NOTICE OF BORROWING
AND (II) FROM A LENDER AT THE FEDERAL FUNDS EFFECTIVE RATE.

 

(B)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED IN
WRITING BY THE BORROWER, PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE FROM IT
HEREUNDER (WHICH NOTICE SHALL BE EFFECTIVE UPON RECEIPT) THAT THE BORROWER DOES
NOT INTEND TO MAKE SUCH PAYMENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT THE
BORROWER HAS MADE SUCH PAYMENT WHEN DUE, AND THE ADMINISTRATIVE AGENT MAY IN
RELIANCE UPON SUCH ASSUMPTION (BUT SHALL NOT BE REQUIRED TO) MAKE AVAILABLE TO
EACH LENDER ON SUCH PAYMENT DATE AN AMOUNT EQUAL TO THE PORTION OF SUCH ASSUMED
PAYMENT TO WHICH SUCH LENDER IS ENTITLED HEREUNDER, AND IF THE BORROWER HAS NOT
IN FACT MADE SUCH PAYMENT TO THE ADMINISTRATIVE AGENT, SUCH LENDER SHALL, ON
DEMAND, REPAY TO THE ADMINISTRATIVE AGENT THE AMOUNT MADE AVAILABLE TO SUCH
LENDER.  IF SUCH AMOUNT IS REPAID TO THE ADMINISTRATIVE AGENT ON A DATE AFTER
THE DATE SUCH AMOUNT WAS MADE AVAILABLE TO SUCH LENDER, SUCH LENDER SHALL PAY TO
THE ADMINISTRATIVE AGENT ON DEMAND INTEREST ON SUCH AMOUNT IN RESPECT OF EACH
DAY FROM THE DATE SUCH AMOUNT WAS MADE AVAILABLE BY THE ADMINISTRATIVE AGENT TO
SUCH LENDER TO THE DATE SUCH AMOUNT IS RECOVERED BY THE ADMINISTRATIVE AGENT AT
A PER ANNUM RATE EQUAL TO THE FEDERAL FUNDS EFFECTIVE RATE.

 

(C)           A CERTIFICATE OF THE ADMINISTRATIVE AGENT SUBMITTED TO THE
BORROWER OR ANY LENDER WITH RESPECT TO ANY AMOUNT OWING UNDER THIS SECTION 2.12
SHALL BE CONCLUSIVE IN THE ABSENCE OF MANIFEST ERROR.

 

SECTION 2.13                            INABILITY TO DETERMINE INTEREST RATE.

 

Notwithstanding any other provision of this Agreement, if (i) the Administrative
Agent shall reasonably determine (which determination shall be conclusive and
binding absent manifest error) that, by reason of circumstances affecting the
relevant market, reasonable and adequate means do not exist for ascertaining
LIBOR for such Interest Period, or (ii) the Required Lenders shall reasonably
determine (which determination shall be conclusive and binding absent manifest
error) that the LIBOR Rate does not adequately and fairly reflect the cost to
such Lenders of funding LIBOR Rate Loans that the Borrower has requested be
outstanding as a LIBOR Tranche during such Interest Period, the Administrative
Agent shall forthwith give telephone notice of such determination, confirmed in
writing, to the Borrower, and the Lenders at least two Business Days prior to
the first day of such Interest Period.  Unless the Borrower shall have notified
the Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans, any Loans that
were requested to be made as LIBOR

 

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Rate Loans shall be made as Alternate Base Rate Loans and any Loans that were
requested to be converted into or continued as LIBOR Rate Loans shall remain as
or be converted into Alternate Base Rate Loans.  Until any such notice has been
withdrawn by the Administrative Agent, no further Loans shall be made as,
continued as, or converted into, LIBOR Rate Loans for the Interest Periods so
affected.

 

SECTION 2.14                            ILLEGALITY.

 

Notwithstanding any other provision of this Agreement, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
by the relevant Governmental Authority to any Lender shall make it unlawful for
such Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans as
contemplated by this Agreement, or to obtain in the interbank eurodollar market
through its LIBOR Lending Office the funds with which to make such Loans, (a)
such Lender shall promptly (and in any event within ninety (90) days from the
date the Lender knew or should have known of the facts pertaining thereto)
notify the Administrative Agent and the Borrower thereof, (b) the commitment of
such Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as
such shall forthwith be suspended until the Administrative Agent shall give
notice that the condition or situation which gave rise to the suspension shall
no longer exist, and (c) such Lender’s Loans then outstanding as LIBOR Rate
Loans, if any, shall be converted on the last day of the Interest Period for
such Loans or within such earlier period as required by law as Alternate Base
Rate Loans.  The Borrower hereby agrees promptly to pay any Lender, upon its
demand, any additional amounts necessary to compensate such Lender for actual
and direct costs (but not including anticipated profits or losses sustained by
virtue of the Lender’s failure to give the Borrower the aforesaid notice within
the prescribed time period) reasonably incurred by such Lender in making any
repayment in accordance with this Section including, but not limited to, any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans hereunder.  A certificate as to
any additional amounts payable pursuant to this Section submitted by such
Lender, through the Administrative Agent, to the Borrower shall constitute prima
facie evidence as to the accuracy of the facts contained therein.  Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be
payable pursuant to this Section; provided, however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.

 

SECTION 2.15                            REQUIREMENTS OF LAW.

 

(A)           IF THE ADOPTION OF OR ANY CHANGE IN ANY REQUIREMENT OF LAW OR IN
THE INTERPRETATION OR APPLICATION THEREOF OR COMPLIANCE BY ANY LENDER WITH ANY
REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF LAW) FROM ANY CENTRAL
BANK OR OTHER GOVERNMENTAL AUTHORITY MADE SUBSEQUENT TO THE DATE HEREOF:

 

(i)            shall subject such Lender to any tax of any kind whatsoever with
respect to any Letter of Credit or any application relating thereto, any LIBOR
Rate Loan made by it, or change the basis of taxation of payments to such Lender
in

 

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respect thereof (except for changes in the rate of tax on the overall net income
of such Lender);

 

(ii)           shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender which is not otherwise included in the determination of the LIBOR
Rate hereunder; or

 

(iii)          shall impose on such Lender any other condition;

 

and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining LIBOR Rate Loans or the Letters of Credit or to reduce any
amount receivable hereunder or under any Note, then, in any such case, the
Borrower shall promptly pay upon its demand, any additional amounts necessary to
compensate such Lender for such additional cost or reduced amount receivable
which such Lender reasonably deems to be material as determined by such Lender
with respect to its LIBOR Rate Loans or Letters of Credit; provided, however,
such Lender shall promptly (and in any event with ninety (90) days from the date
the Lender knew or should have known of the facts pertaining thereto) notify the
Borrower of the aforesaid facts and the Borrower shall not be responsible costs
or losses sustained by virtue of the Lender’s failure to give the Borrower the
aforesaid notice.  A certificate as to any additional amounts payable pursuant
to this Section submitted by such Lender, through the Administrative Agent, to
the Borrower shall constitute prima facie evidence as to the accuracy of the
facts contained therein.  Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office or LIBOR
Lending Office, as the case may be) to avoid or to minimize any amounts which
might otherwise be payable pursuant to this paragraph of this Section; provided,
however, that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender to be
material.

 

(B)           IF ANY LENDER SHALL HAVE REASONABLY DETERMINED THAT THE ADOPTION
OF OR ANY CHANGE IN ANY REQUIREMENT OF LAW REGARDING CAPITAL ADEQUACY OR IN THE
INTERPRETATION OR APPLICATION THEREOF OR COMPLIANCE BY SUCH LENDER OR ANY
CORPORATION CONTROLLING SUCH LENDER WITH ANY REQUEST OR DIRECTIVE REGARDING
CAPITAL ADEQUACY (WHETHER OR NOT HAVING THE FORCE OF LAW) FROM ANY CENTRAL BANK
OR GOVERNMENTAL AUTHORITY MADE SUBSEQUENT TO THE DATE HEREOF DOES OR SHALL HAVE
THE EFFECT OF REDUCING THE RATE OF RETURN ON SUCH LENDER’S OR SUCH CORPORATION’S
CAPITAL AS A CONSEQUENCE OF ITS OBLIGATIONS HEREUNDER TO A LEVEL BELOW THAT
WHICH SUCH LENDER OR SUCH CORPORATION COULD HAVE ACHIEVED BUT FOR SUCH ADOPTION,
CHANGE OR COMPLIANCE (TAKING INTO CONSIDERATION SUCH LENDER’S OR SUCH
CORPORATION’S POLICIES WITH RESPECT TO CAPITAL ADEQUACY) BY AN AMOUNT REASONABLY
DEEMED BY SUCH LENDER TO BE MATERIAL, THEN FROM TIME TO TIME, WITHIN FIFTEEN
(15) DAYS AFTER DEMAND BY SUCH LENDER, THE BORROWER SHALL PAY TO SUCH LENDER
SUCH ADDITIONAL AMOUNT AS SHALL BE CERTIFIED BY SUCH LENDER AS BEING REQUIRED TO
COMPENSATE IT FOR SUCH REDUCTION; PROVIDED, HOWEVER, SUCH LENDER SHALL PROMPTLY
(AND IN ANY EVENT WITH NINETY (90) DAYS FROM THE DATE THE LENDER KNEW OR SHOULD
HAVE KNOWN OF THE FACTS PERTAINING THERETO)

 

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NOTIFY THE BORROWER OF THE AFORESAID FACTS AND THE BORROWER SHALL NOT BE
RESPONSIBLE FOR COSTS OR LOSSES SUSTAINED BY VIRTUE OF THE LENDER’S FAILURE TO
GIVE THE BORROWER THE AFORESAID NOTICE WITHIN THE PRESCRIBED TIME PERIOD.  SUCH
A CERTIFICATE AS TO ANY ADDITIONAL AMOUNTS PAYABLE UNDER THIS SECTION SUBMITTED
BY A LENDER (WHICH CERTIFICATE SHALL INCLUDE A DESCRIPTION OF THE BASIS FOR THE
COMPUTATION), THROUGH THE ADMINISTRATIVE AGENT, TO THE BORROWER SHALL CONSTITUTE
PRIMA FACIE EVIDENCE AS TO THE ACCURACY OF THE FACTS CONTAINED THEREIN.

 

(C)           THE AGREEMENTS IN THIS SECTION 2.15 SHALL SURVIVE THE TERMINATION
OF THIS AGREEMENT AND PAYMENT OF THE NOTES AND ALL OTHER AMOUNTS PAYABLE
HEREUNDER.

 

SECTION 2.16                            INDEMNITY.

 

The Borrower hereby agrees to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense which such Lender may sustain or incur
as a consequence of (a) default by the Borrower in payment of the principal
amount of or interest on any Loan by such Lender in accordance with the terms
hereof, (b) default by the Borrower in accepting a borrowing of Loans after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment of Loans after the Borrower has given a
notice in accordance with the terms hereof, and/or (d) the making by the
Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is
not the last day of the Interest Period with respect thereto, in each case
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to
maintain its Loans hereunder.  A certificate as to any additional amounts
payable pursuant to this Section submitted by any Lender, through the
Administrative Agent, to the Borrower (which certificate must be delivered to
the Administrative Agent within thirty days following such default, prepayment
or conversion) shall constitute prima facie evidence as to the accuracy of the
facts contained therein.  The agreements in this Section shall survive
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.

 

SECTION 2.17                            TAXES.

 

(A)           ALL PAYMENTS MADE BY THE BORROWER HEREUNDER OR UNDER ANY NOTE WILL
BE, EXCEPT AS PROVIDED IN SECTION 2.17(B), MADE FREE AND CLEAR OF, AND WITHOUT
DEDUCTION OR WITHHOLDING FOR, ANY PRESENT OR FUTURE TAXES, LEVIES, IMPOSTS,
DUTIES, FEES, ASSESSMENTS OR OTHER CHARGES OF WHATEVER NATURE NOW OR HEREAFTER
IMPOSED BY ANY GOVERNMENTAL AUTHORITY OR BY ANY POLITICAL SUBDIVISION OR TAXING
AUTHORITY THEREOF OR THEREIN WITH RESPECT TO SUCH PAYMENTS (BUT EXCLUDING ANY
TAX IMPOSED ON OR MEASURED BY THE NET INCOME OR PROFITS OF A LENDER PURSUANT TO
THE LAWS OF THE JURISDICTION IN WHICH IT IS ORGANIZED OR THE JURISDICTION IN
WHICH THE PRINCIPAL OFFICE OR APPLICABLE LENDING OFFICE OF SUCH LENDER IS
LOCATED OR ANY SUBDIVISION THEREOF OR THEREIN) AND ALL INTEREST, PENALTIES OR
SIMILAR LIABILITIES WITH RESPECT THERETO (ALL SUCH NON-EXCLUDED TAXES, LEVIES,
IMPOSTS, DUTIES, FEES, ASSESSMENTS OR OTHER CHARGES BEING REFERRED TO
COLLECTIVELY AS “TAXES”).  IF ANY TAXES ARE SO LEVIED OR IMPOSED, THE BORROWER
AGREES TO PAY THE FULL AMOUNT OF SUCH TAXES, AND SUCH ADDITIONAL AMOUNTS AS MAY
BE NECESSARY SO THAT EVERY PAYMENT OF ALL AMOUNTS DUE UNDER THIS AGREEMENT OR
UNDER ANY NOTE, AFTER WITHHOLDING OR DEDUCTION FOR

 

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OR ON ACCOUNT OF ANY TAXES, WILL NOT BE LESS THAN THE AMOUNT PROVIDED FOR HEREIN
OR IN SUCH NOTE.  THE BORROWER WILL FURNISH TO THE ADMINISTRATIVE AGENT AS SOON
AS PRACTICABLE AFTER THE DATE THE PAYMENT OF ANY TAXES IS DUE PURSUANT TO
APPLICABLE LAW CERTIFIED COPIES (TO THE EXTENT REASONABLY AVAILABLE AND REQUIRED
BY LAW) OF TAX RECEIPTS EVIDENCING SUCH PAYMENT BY THE BORROWER.  THE BORROWER
AGREES TO INDEMNIFY AND HOLD HARMLESS EACH LENDER, AND REIMBURSE SUCH LENDER
UPON ITS WRITTEN REQUEST, FOR THE AMOUNT OF ANY TAXES SO LEVIED OR IMPOSED AND
PAID BY SUCH LENDER.

 

(B)           EACH LENDER THAT IS NOT A UNITED STATES PERSON (AS SUCH TERM IS
DEFINED IN SECTION 7701(A)(30) OF THE CODE) AGREES TO DELIVER TO THE BORROWER
AND THE ADMINISTRATIVE AGENT ON OR PRIOR TO THE CLOSING DATE, OR IN THE CASE OF
A LENDER THAT IS AN ASSIGNEE OR TRANSFEREE OF AN INTEREST UNDER THIS AGREEMENT
PURSUANT TO ARTICLE X (UNLESS THE RESPECTIVE LENDER WAS ALREADY A LENDER
HEREUNDER IMMEDIATELY PRIOR TO SUCH ASSIGNMENT OR TRANSFER), ON THE DATE OF SUCH
ASSIGNMENT OR TRANSFER TO SUCH LENDER, (I) IF THE LENDER IS A “BANK” WITHIN THE
MEANING OF SECTION 881(C)(3)(A) OF THE CODE, TWO ACCURATE AND COMPLETE ORIGINAL
SIGNED COPIES OF INTERNAL REVENUE SERVICE FORM W-8ECI OR W-8BEN (OR SUCCESSOR
FORMS) CERTIFYING SUCH LENDER’S ENTITLEMENT TO A COMPLETE EXEMPTION FROM UNITED
STATES WITHHOLDING TAX WITH RESPECT TO PAYMENTS TO BE MADE UNDER THIS AGREEMENT
AND UNDER ANY NOTE, OR (II) IF THE LENDER IS NOT A “BANK” WITHIN THE MEANING OF
SECTION 881(C)(3)(A) OF THE CODE, EITHER INTERNAL REVENUE SERVICE FORM W-8ECI OR
W-8BEN AS SET FORTH IN CLAUSE (I) ABOVE, OR (X) A CERTIFICATE SUBSTANTIALLY IN
THE FORM OF SCHEDULE 2.17 (ANY SUCH CERTIFICATE, A “2.17 CERTIFICATE”) AND (Y)
TWO ACCURATE AND COMPLETE ORIGINAL SIGNED COPIES OF INTERNAL REVENUE SERVICE
FORM W-8ECI OR W-8BEN (OR SUCCESSOR FORM) CERTIFYING SUCH LENDER’S ENTITLEMENT
TO AN EXEMPTION FROM UNITED STATES WITHHOLDING TAX AND BACKUP WITHHOLDING TAX
WITH RESPECT TO PAYMENTS OF INTEREST TO BE MADE UNDER THIS AGREEMENT AND UNDER
ANY NOTE. IN ADDITION, EACH LENDER AGREES THAT IT WILL DELIVER UPON THE
BORROWER’S REQUEST UPDATED VERSIONS OF THE FOREGOING, AS APPLICABLE, WHENEVER
THE PREVIOUS CERTIFICATION HAS BECOME OBSOLETE OR INACCURATE IN ANY MATERIAL
RESPECT, TOGETHER WITH SUCH OTHER FORMS AS MAY BE REQUIRED IN ORDER TO CONFIRM
OR ESTABLISH THE ENTITLEMENT OF SUCH LENDER TO A CONTINUED EXEMPTION FROM OR
REDUCTION IN UNITED STATES WITHHOLDING TAX WITH RESPECT TO PAYMENTS UNDER THIS
AGREEMENT AND ANY NOTE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
SECTION 2.17(A), BUT SUBJECT TO THE IMMEDIATELY SUCCEEDING SENTENCE, (X) THE
BORROWER SHALL BE ENTITLED, TO THE EXTENT IT IS REQUIRED TO DO SO BY LAW, TO
DEDUCT OR WITHHOLD TAXES IMPOSED BY THE UNITED STATES (OR ANY POLITICAL
SUBDIVISION OR TAXING AUTHORITY THEREOF OR THEREIN) FROM INTEREST, FEES OR OTHER
AMOUNTS PAYABLE HEREUNDER FOR THE ACCOUNT OF ANY LENDER WHICH IS NOT A UNITED
STATES PERSON (AS SUCH TERM IS DEFINED IN SECTION 7701(A)(30) OF THE CODE) FOR
U.S. FEDERAL INCOME TAX PURPOSES TO THE EXTENT THAT SUCH LENDER HAS NOT PROVIDED
TO THE BORROWER U.S. INTERNAL REVENUE SERVICE FORMS THAT ESTABLISH A COMPLETE
EXEMPTION FROM SUCH DEDUCTION OR WITHHOLDING AND (Y) THE BORROWER SHALL NOT BE
OBLIGATED PURSUANT TO SECTION 2.17(A) HEREOF TO GROSS-UP PAYMENTS TO BE MADE TO
A LENDER IN RESPECT OF TAXES IMPOSED BY THE UNITED STATES IF (I) SUCH LENDER HAS
NOT PROVIDED TO THE BORROWER THE INTERNAL REVENUE SERVICE FORMS REQUIRED TO BE
PROVIDED TO THE BORROWER PURSUANT TO THIS SECTION 2.17(B) OR (II) IN THE CASE OF
A PAYMENT, OTHER THAN INTEREST, TO A LENDER DESCRIBED IN CLAUSE (II) ABOVE, TO
THE EXTENT THAT SUCH FORMS DO NOT ESTABLISH A COMPLETE EXEMPTION FROM
WITHHOLDING OF SUCH TAXES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
IN THE

 

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PRECEDING SENTENCE OR ELSEWHERE IN THIS SECTION 2.17, THE BORROWER AGREES TO PAY
ADDITIONAL AMOUNTS AND TO INDEMNIFY EACH LENDER IN THE MANNER SET FORTH IN
SECTION 2.17(A) (WITHOUT REGARD TO THE IDENTITY OF THE JURISDICTION REQUIRING
THE DEDUCTION OR WITHHOLDING) IN RESPECT OF ANY AMOUNTS DEDUCTED OR WITHHELD BY
IT AS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE AS A RESULT OF ANY CHANGES
AFTER THE CLOSING DATE, IN ANY APPLICABLE LAW, TREATY, GOVERNMENTAL RULE,
REGULATION, GUIDELINE OR ORDER, OR IN THE INTERPRETATION THEREOF, RELATING TO
THE DEDUCTING OR WITHHOLDING OF TAXES.

 

(C)           EACH LENDER AGREES TO USE REASONABLE EFFORTS (INCLUDING REASONABLE
EFFORTS TO CHANGE ITS DOMESTIC LENDING OFFICE OR LIBOR LENDING OFFICE, AS THE
CASE MAY BE) TO AVOID OR TO MINIMIZE ANY AMOUNTS WHICH MIGHT OTHERWISE BE
PAYABLE PURSUANT TO THIS SECTION; PROVIDED, HOWEVER, THAT SUCH EFFORTS SHALL NOT
CAUSE THE IMPOSITION ON SUCH LENDER OF ANY ADDITIONAL COSTS OR LEGAL OR
REGULATORY BURDENS DEEMED BY SUCH LENDER IN ITS SOLE DISCRETION TO BE MATERIAL.

 

(D)           IF THE BORROWER PAYS ANY ADDITIONAL AMOUNT PURSUANT TO THIS
SECTION 2.17 WITH RESPECT TO A LENDER, SUCH LENDER SHALL USE REASONABLE EFFORTS
TO OBTAIN A REFUND OF TAX OR CREDIT AGAINST ITS TAX LIABILITIES ON ACCOUNT OF
SUCH PAYMENT; PROVIDED THAT SUCH LENDER SHALL HAVE NO OBLIGATION TO USE SUCH
REASONABLE EFFORTS IF EITHER (I) IT IS IN AN EXCESS FOREIGN TAX CREDIT POSITION
OR (II) IT BELIEVES IN GOOD FAITH, IN ITS SOLE DISCRETION, THAT CLAIMING A
REFUND OR CREDIT WOULD CAUSE ADVERSE TAX CONSEQUENCES TO IT.  IN THE EVENT THAT
SUCH LENDER RECEIVES SUCH A REFUND OR CREDIT, SUCH LENDER SHALL PAY TO THE
BORROWER AN AMOUNT THAT SUCH LENDER REASONABLY DETERMINES IS EQUAL TO THE NET
TAX BENEFIT OBTAINED BY SUCH LENDER AS A RESULT OF SUCH PAYMENT BY THE
BORROWER.  IN THE EVENT THAT NO REFUND OR CREDIT IS OBTAINED WITH RESPECT TO THE
BORROWER’S PAYMENTS TO SUCH LENDER PURSUANT TO THIS SECTION 2.17, THEN SUCH
LENDER SHALL UPON REQUEST PROVIDE A CERTIFICATION THAT SUCH LENDER HAS NOT
RECEIVED A REFUND OR CREDIT FOR SUCH PAYMENTS.  NOTHING CONTAINED IN THIS
SECTION 2.17 SHALL REQUIRE A LENDER TO DISCLOSE OR DETAIL THE BASIS OF ITS
CALCULATION OF THE AMOUNT OF ANY TAX BENEFIT OR ANY OTHER AMOUNT OR THE BASIS OF
ITS DETERMINATION REFERRED TO IN THE PROVISO TO THE FIRST SENTENCE OF THIS
SECTION 2.17 TO THE BORROWER OR ANY OTHER PARTY.

 

(E)           THE AGREEMENTS IN THIS SECTION 2.17 SHALL SURVIVE THE TERMINATION
OF THIS AGREEMENT AND THE PAYMENT OF THE NOTES AND ALL OTHER AMOUNTS PAYABLE
HEREUNDER.

 

SECTION 2.18                            INDEMNIFICATION; NATURE OF ISSUING
LENDER’S DUTIES.

 

(A)           IN ADDITION TO ITS OTHER OBLIGATIONS UNDER SECTION 2.3, THE
BORROWER HEREBY AGREES TO PROTECT, INDEMNIFY, PAY AND SAVE THE ISSUING LENDER
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES,
LOSSES, COSTS, CHARGES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) THAT
THE ISSUING LENDER MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECT OR
INDIRECT, OF (I) THE ISSUANCE OF ANY LETTER OF CREDIT OR (II) THE FAILURE OF THE
ISSUING LENDER TO HONOR A DRAWING UNDER A LETTER OF CREDIT AS A RESULT OF ANY
ACT OR OMISSION, WHETHER RIGHTFUL OR WRONGFUL, OF ANY PRESENT OR FUTURE DE JURE
OR DE FACTO GOVERNMENT OR GOVERNMENTAL AUTHORITY (ALL SUCH ACTS OR OMISSIONS,
HEREIN CALLED “GOVERNMENT ACTS”).

 

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(B)           AS BETWEEN THE BORROWER AND THE ISSUING LENDER, THE BORROWER SHALL
ASSUME ALL RISKS OF THE ACTS, OMISSIONS OR MISUSE OF ANY LETTER OF CREDIT BY THE
BENEFICIARY THEREOF.  THE ISSUING LENDER SHALL NOT BE RESPONSIBLE:  (I) FOR THE
FORM, VALIDITY, SUFFICIENCY, ACCURACY, GENUINENESS OR LEGAL EFFECT OF ANY
DOCUMENT SUBMITTED BY ANY PARTY IN CONNECTION WITH THE APPLICATION FOR AND
ISSUANCE OF ANY LETTER OF CREDIT, EVEN IF IT SHOULD IN FACT PROVE TO BE IN ANY
OR ALL RESPECTS INVALID, INSUFFICIENT, INACCURATE, FRAUDULENT OR FORGED; (II)
FOR THE VALIDITY OR SUFFICIENCY OF ANY INSTRUMENT TRANSFERRING OR ASSIGNING OR
PURPORTING TO TRANSFER OR ASSIGN ANY LETTER OF CREDIT OR THE RIGHTS OR BENEFITS
THEREUNDER OR PROCEEDS THEREOF, IN WHOLE OR IN PART, THAT MAY PROVE TO BE
INVALID OR INEFFECTIVE FOR ANY REASON; (III) FOR FAILURE OF THE BENEFICIARY OF A
LETTER OF CREDIT TO COMPLY FULLY WITH CONDITIONS REQUIRED IN ORDER TO DRAW UPON
A LETTER OF CREDIT; (IV) FOR ERRORS, OMISSIONS, INTERRUPTIONS OR DELAYS IN
TRANSMISSION OR DELIVERY OF ANY MESSAGES, BY MAIL, CABLE, TELEGRAPH, TELEX OR
OTHERWISE, WHETHER OR NOT THEY BE IN CIPHER; (V) FOR ERRORS IN INTERPRETATION OF
TECHNICAL TERMS; (VI) FOR ANY LOSS OR DELAY IN THE TRANSMISSION OR OTHERWISE OF
ANY DOCUMENT REQUIRED IN ORDER TO MAKE A DRAWING UNDER A LETTER OF CREDIT OR OF
THE PROCEEDS THEREOF; AND (VII) FOR ANY CONSEQUENCES ARISING FROM CAUSES BEYOND
THE CONTROL OF THE ISSUING LENDER, INCLUDING, WITHOUT LIMITATION, ANY GOVERNMENT
ACTS.  NONE OF THE ABOVE SHALL AFFECT, IMPAIR, OR PREVENT THE VESTING OF THE
ISSUING LENDER’S RIGHTS OR POWERS HEREUNDER.

 

(C)           IN FURTHERANCE AND EXTENSION AND NOT IN LIMITATION OF THE SPECIFIC
PROVISIONS HEREINABOVE SET FORTH, ANY ACTION TAKEN OR OMITTED BY THE ISSUING
LENDER, UNDER OR IN CONNECTION WITH ANY LETTER OF CREDIT OR THE RELATED
CERTIFICATES, IF TAKEN OR OMITTED IN GOOD FAITH, SHALL NOT PUT THE ISSUING
LENDER UNDER ANY RESULTING LIABILITY TO THE BORROWER.  IT IS THE INTENTION OF
THE PARTIES THAT THIS AGREEMENT SHALL BE CONSTRUED AND APPLIED TO PROTECT AND
INDEMNIFY THE ISSUING LENDER AGAINST ANY AND ALL RISKS INVOLVED IN THE ISSUANCE
OF THE LETTERS OF CREDIT, ALL OF WHICH RISKS ARE HEREBY ASSUMED BY THE BORROWER,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL RISKS OF THE ACTS OR OMISSIONS,
WHETHER RIGHTFUL OR WRONGFUL, OF ANY GOVERNMENT AUTHORITY.  THE ISSUING LENDER
SHALL NOT, IN ANY WAY, BE LIABLE FOR ANY FAILURE BY THE ISSUING LENDER OR ANYONE
ELSE TO PAY ANY DRAWING UNDER ANY LETTER OF CREDIT AS A RESULT OF ANY GOVERNMENT
ACTS OR ANY OTHER CAUSE BEYOND THE CONTROL OF THE ISSUING LENDER.

 

(D)           NOTHING IN THIS SECTION 2.18 IS INTENDED TO LIMIT THE
REIMBURSEMENT OBLIGATION OF THE BORROWER CONTAINED IN SECTION 2.3(D) HEREOF. 
THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 2.18 SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.  NO ACT OR OMISSIONS OF ANY CURRENT OR PRIOR
BENEFICIARY OF A LETTER OF CREDIT SHALL IN ANY WAY AFFECT OR IMPAIR THE RIGHTS
OF THE ISSUING LENDER TO ENFORCE ANY RIGHT, POWER OR BENEFIT UNDER THIS
AGREEMENT.

 

(E)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECTION 2.18, THE BORROWER SHALL HAVE NO OBLIGATION TO INDEMNIFY THE ISSUING
LENDER IN RESPECT OF ANY LIABILITY INCURRED BY THE ISSUING LENDER ARISING OUT OF
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ISSUING LENDER (INCLUDING
ACTION NOT TAKEN BY THE ISSUING LENDER), AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION (IT BEING THE INTENTION OF THIS PROVISION THAT SUCH INDEMNIFICATION
OBLIGATION WILL BE

 

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APPLICABLE REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE ORDINARY
NEGLIGENCE OF ANY OF THE PARTIES BEING INDEMNIFIED).

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders to enter into this Agreement and to make the Extensions of
Credit herein provided for, the Credit Parties hereby represent and warrant to
the Administrative Agent and to each Lender that:

 

SECTION 3.1                                   FINANCIAL CONDITION.

 

The balance sheets and the related statements of income and of cash flows of the
Borrower for fiscal years ending March 31, 2001 and March 31, 2002  audited by
Arthur Andersen LLP, and for the fiscal year ending March 31, 2003 audited by
KPMG, L.L.P., are complete and correct and present fairly the financial
condition of the Borrower and its Subsidiaries as of such dates.  Additionally,
the most recently provided company-prepared projections of income and cash flow
for the fiscal years ending March 31, 2004, March 31, 2005 and March 31, 2006
have been prepared in good faith based upon reasonable assumptions.  All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except for projections, pro forma statements, and/or as
disclosed therein).

 

SECTION 3.2                                   NO CHANGE.

 

Since March 31, 2003 there has been no development or event which has had or
could reasonably be expected to have a Material Adverse Effect.

 

SECTION 3.3                                   CORPORATE EXISTENCE; COMPLIANCE
WITH LAW.

 

Except as set forth on Schedule 3.3, each of the Borrower and the other Credit
Parties (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) has the requisite corporate
power and authority to own and operate all its material property, to lease the
material property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified to conduct business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to so qualify or be in good standing could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

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SECTION 3.4                                   CORPORATE POWER; AUTHORIZATION;
ENFORCEABLE OBLIGATIONS.

 

Each of the Borrower and the other Credit Parties has full corporate power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of the Credit Documents to which
it is party.  No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery or performance of any Credit Document by the Borrower or the other
Credit Parties (other than those which have been obtained) or with the validity
or enforceability of any Credit Document against the Borrower or the other
Credit Parties (except such filings as are necessary in connection with the
perfection of the Liens created by such Credit Documents).  Each Credit Document
to which it is a party has been duly executed and delivered on behalf of the
Borrower or the other Credit Parties, as the case may be.  Each Credit Document
to which it is a party constitutes a legal, valid and binding obligation of the
Borrower or the other Credit Parties, as the case may be, enforceable against
the Borrower or such other Credit Party, as the case may be, in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer, fraudulent
conveyance, or similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).

 

SECTION 3.5                                   NO LEGAL BAR; NO DEFAULT.

 

The execution, delivery and performance of the Credit Documents, the borrowings
thereunder and the use of the proceeds of the Loans will not violate any
Requirement of Law or any Contractual Obligation of the Borrower or any other
Credit Party (except those as to which waivers or consents have been obtained),
and will not result in, or require, the creation or imposition of any material
Lien on any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents.  Neither the Borrower
nor any other Credit Party is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect.  No Default or Event of Default has occurred and
is continuing.

 

SECTION 3.6                                   NO MATERIAL LITIGATION.

 

Except as set forth in Schedule 3.6, no litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against any Credit Party or any of
its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which could reasonably be expected to
be adversely determined, and if adversely determined, could reasonably be
expected to have a Material Adverse Effect.

 

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SECTION 3.7                                   INVESTMENT COMPANY ACT.

 

Neither the Borrower nor any Credit Party is an “investment company”, or a
company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended.

 

SECTION 3.8                                   MARGIN REGULATIONS.

 

No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect.  The Borrower
and its Subsidiaries taken as a group do not own “margin stock” except as
identified in the financial statements referred to in Section 3.1 and the
aggregate value of all “margin stock” owned by the Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.

 

SECTION 3.9                                   ERISA.

 

Except as set forth in Schedule 3.9, neither a Reportable Event nor an
“accumulated funding deficiency” (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect.  No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect.  The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect.  Neither the Borrower nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.

 

SECTION 3.10                            ENVIRONMENTAL MATTERS.

 

Except as could not reasonably be expected to have a Material Adverse Effect:

 

(A)           TO THE KNOWLEDGE OF THE BORROWER AND THE OTHER CREDIT PARTIES, THE
FACILITIES AND PROPERTIES COMPRISING REAL ESTATE OWNED, LEASED OR OPERATED BY
THE BORROWER AND THE OTHER CREDIT PARTIES OR ANY OF THEIR SUBSIDIARIES (THE
“PROPERTIES”) DO NOT CONTAIN ANY MATERIALS OF ENVIRONMENTAL CONCERN IN AMOUNTS
OR CONCENTRATIONS WHICH (I) CONSTITUTE A VIOLATION OF, OR (II) COULD GIVE RISE
TO LIABILITY UNDER, ANY ENVIRONMENTAL LAW.

 

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(B)           TO THE KNOWLEDGE OF THE BORROWER AND THE OTHER CREDIT PARTIES, THE
PROPERTIES AND ALL OPERATIONS OF THE BORROWER AND THE OTHER CREDIT PARTIES
AND/OR THEIR SUBSIDIARIES AT THE PROPERTIES ARE IN COMPLIANCE, AND HAVE IN THE
LAST FIVE YEARS BEEN IN COMPLIANCE, IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE
ENVIRONMENTAL LAWS, AND THERE IS NO CONTAMINATION AT, UNDER OR ABOUT THE
PROPERTIES OR VIOLATION OF ANY ENVIRONMENTAL LAW WITH RESPECT TO THE PROPERTIES
OR THE BUSINESS OPERATED BY THE BORROWER AND THE OTHER CREDIT PARTIES OR ANY OF
THEIR SUBSIDIARIES (THE “BUSINESS”).

 

(C)           NEITHER THE BORROWER NOR ANY OF THE OTHER CREDIT PARTIES HAS
RECEIVED ANY WRITTEN OR ACTUAL NOTICE OF VIOLATION, ALLEGED VIOLATION,
NON-COMPLIANCE, LIABILITY OR POTENTIAL LIABILITY REGARDING ENVIRONMENTAL MATTERS
OR COMPLIANCE WITH ENVIRONMENTAL LAWS WITH REGARD TO ANY OF THE PROPERTIES OR
THE BUSINESS, NOR DOES THE BORROWER OR ANY OF THE OTHER CREDIT PARTIES NOR ANY
OF THEIR SUBSIDIARIES HAVE KNOWLEDGE OR REASON TO BELIEVE THAT ANY SUCH NOTICE
WILL BE RECEIVED OR IS BEING THREATENED.

 

(D)           TO THE KNOWLEDGE OF THE BORROWER AND THE OTHER CREDIT PARTIES,
MATERIALS OF ENVIRONMENTAL CONCERN HAVE NOT BEEN TRANSPORTED OR DISPOSED OF FROM
THE PROPERTIES IN VIOLATION OF, OR IN A MANNER OR TO A LOCATION WHICH COULD GIVE
RISE TO LIABILITY UNDER ANY ENVIRONMENTAL LAW, NOR HAVE ANY MATERIALS OF
ENVIRONMENTAL CONCERN BEEN GENERATED, TREATED, STORED OR DISPOSED OF AT, ON OR
UNDER ANY OF THE PROPERTIES IN VIOLATION OF, OR IN A MANNER THAT COULD GIVE RISE
TO LIABILITY UNDER, ANY APPLICABLE ENVIRONMENTAL LAW.

 

(E)           NO JUDICIAL PROCEEDING OR GOVERNMENTAL OR ADMINISTRATIVE ACTION IS
PENDING OR, TO THE KNOWLEDGE OF THE BORROWER AND THE OTHER CREDIT PARTIES,
THREATENED, UNDER ANY ENVIRONMENTAL LAW TO WHICH THE BORROWER OR ANY OTHER
CREDIT PARTY OR ANY SUBSIDIARY IS OR WILL BE NAMED AS A PARTY WITH RESPECT TO
THE PROPERTIES OR THE BUSINESS, NOR ARE THERE ANY CONSENT DECREES OR OTHER
DECREES, CONSENT ORDERS, ADMINISTRATIVE ORDERS OR OTHER ORDERS, OR OTHER
ADMINISTRATIVE OR JUDICIAL REQUIREMENTS OUTSTANDING UNDER ANY ENVIRONMENTAL LAW
WITH RESPECT TO THE PROPERTIES OR THE BUSINESS.

 

(F)            TO THE KNOWLEDGE OF THE BORROWER AND THE OTHER CREDIT PARTIES,
THERE HAS BEEN NO RELEASE OR THREAT OF RELEASE OF MATERIALS OF ENVIRONMENTAL
CONCERN AT OR FROM THE PROPERTIES, OR ARISING FROM OR RELATED TO THE OPERATIONS
OF THE BORROWER OR ANY OTHER CREDIT PARTY OR ANY SUBSIDIARY IN CONNECTION WITH
THE PROPERTIES OR OTHERWISE IN CONNECTION WITH THE BUSINESS, IN VIOLATION OF OR
IN AMOUNTS OR IN A MANNER THAT COULD GIVE RISE TO LIABILITY UNDER ENVIRONMENTAL
LAWS.

 

SECTION 3.11                            PURPOSE OF LOANS.

 

The proceeds of the Loans will be used (i) to repay certain existing
Indebtedness of the Borrower, (ii) to finance Permitted Acquisitions, (iii) to
finance the repurchase of Capital Stock of the Borrower as permitted under
Section 6.12 and (iv) to provide for working capital and other general corporate
purposes.

 

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SECTION 3.12                            SUBSIDIARIES.

 

Set forth on Schedule 3.12 is a complete and accurate list of all direct and
indirect Subsidiaries of the Credit Parties as of the Closing Date.  Information
on the attached Schedule includes state of incorporation; the number of shares
of each class of Capital Stock or other equity interests outstanding; the number
and percentage of outstanding shares of each class of stock; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and similar rights.  The outstanding Capital Stock and other equity
interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).

 

SECTION 3.13                            OWNERSHIP.

 

Each of the Credit Parties and its Subsidiaries is the owner of, and has
transferable title to, or a valid leasehold interest in, all of its respective
assets except as may be permitted pursuant to Section 6.14 hereof and none of
such assets is subject to any Lien other than Permitted Liens.

 

SECTION 3.14                            INDEBTEDNESS.

 

Except as otherwise permitted under Section 6.1, the Borrower and its
Subsidiaries have no Indebtedness.

 

SECTION 3.15                            TAXES.

 

Each of the Borrower and its Subsidiaries has filed, or caused to be filed, all
tax returns (federal, state, local and foreign) required to be filed and paid
(a) all amounts of taxes shown thereon to be due (including interest and
penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP.  Neither the Borrower nor any of its Subsidiaries is aware
as of the Closing Date of any proposed tax assessments against it or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.

 

SECTION 3.16                            INTELLECTUAL PROPERTY.

 

Each of the Borrower and its Subsidiaries owns, or has the legal right to use,
all trademarks, trade names, copyrights, technology, know-how and processes
necessary for each of them to conduct its business as currently conducted.  Set
forth on Schedule 3.16 is a list of all material Intellectual Property owned by
each of the Borrower and its Subsidiaries as of the Closing Date (or as of such
later date on which the Borrower may update such schedule) or that the Borrower
or any of its Subsidiaries has the right to use other than corporate names and
assumed names.  Except as provided on Schedule 3.16, no claim has been asserted
and is pending by any Person challenging or questioning the use of any such
material Intellectual Property or the validity or effectiveness of any such
material Intellectual Property, nor does the

 

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Borrower or any of its Subsidiaries know of any such claim, and, to the
knowledge of the Borrower or any of its Subsidiaries, the use of such material
Intellectual Property by the Borrower or any of its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.  Schedule 3.16 may be updated from time to time by the Borrower
to include new material Intellectual Property by giving written notice thereof
to the Administrative Agent.

 

SECTION 3.17                            SOLVENCY.

 

The fair saleable value of the assets of the Borrower individually, and of the
Credit Parties taken as a whole, measured on a going concern basis, exceeds all
probable liabilities, including those to be incurred pursuant to this Credit
Agreement.  Neither the Borrower individually, nor the Credit Parties taken as a
whole (a) has unreasonably small capital in relation to the business in which it
is or proposes to be engaged or (b) has incurred, or believes that it will incur
after giving effect to the transactions contemplated by this Credit Agreement,
debts beyond its ability to pay such debts as they become due.

 

SECTION 3.18                            INVESTMENTS.

 

All Investments of each of the Borrower and its Subsidiaries are Permitted
Investments.

 

SECTION 3.19                            LOCATION OF COLLATERAL.

 

Set forth on Schedule 3.19(a) is a list of the real estate of the Borrower and
its Subsidiaries with street address, county and state where located as of the
Closing Date (or such later date on which the Borrower may update such
schedule).  Set forth on Schedule 3.19(b) is a list of all locations (other than
Remote Sales Offices) where any tangible personal property of the Borrower and
its Subsidiaries is located as of the Closing Date (or such later date on which
the Borrower may update such schedule), including county and state where
located.  Set forth on Schedule 3.19(c) is the chief executive office and
principal place of business of each of the Borrower and its Subsidiaries as of
the Closing Date (or such later date on which the Borrower may update such
schedule).  Schedule 3.19(a), 3.19(b) and 3.19(c) may be updated from time to
time by the Borrower to include new properties or locations by giving written
notice thereof to the Administrative Agent (in which event the Borrower shall
use its commercially reasonable efforts to deliver to the Administrative Agent,
promptly after giving such written notice, a landlord lien waiver letter in form
and substance reasonably acceptable to the Administrative Agent and the Borrower
from each of the landlords of those new locations).

 

SECTION 3.20                            NO BURDENSOME RESTRICTIONS.

 

None of the Borrower or any of its Subsidiaries is a party to any agreement or
instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

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SECTION 3.21                            BROKERS’ FEES.

 

None of the Borrower or any of its Subsidiaries has any obligation to any Person
in respect of any finder’s, broker’s, investment banking or other similar fee in
connection with any of the transactions contemplated under the Credit Documents
other than the closing and other fees payable pursuant to this Credit Agreement.

 

SECTION 3.22                            LABOR MATTERS.

 

There are no collective bargaining agreements or Multiemployer Plans covering
the employees of the Borrower or any of its Subsidiaries as of the Closing Date,
other than as set forth in Schedule 3.22 hereto, and none of the Borrower or any
of its Subsidiaries as of the Closing Date (i) has suffered any strikes,
walkouts, work stoppages or other material labor difficulty within the last
three years or since the date of acquisition of such Subsidiary, whichever is
later, other than as set forth in Schedule 3.22 hereto or (ii) has knowledge of
any potential or pending strike, walkout or work stoppage, which could
reasonably be expected to have a Material Adverse Effect.

 

SECTION 3.23                            ACCURACY AND COMPLETENESS OF
INFORMATION.

 

All factual information heretofore or contemporaneously furnished by or on
behalf of any Credit Party or any of its Subsidiaries to the Administrative
Agent or any Lender for purposes of or in connection with this Agreement or any
other Credit Document, or any transaction contemplated hereby or thereby, is
true and accurate in all material respects and not incomplete by omitting to
state any material fact necessary to make such information not misleading when
taken together with all other information provided to Lender.  There is no fact
now known to the Borrower, any other Credit Party or any of their Subsidiaries
which has, or could reasonably be expected to have, a Material Adverse Effect
which fact has not been set forth herein, in the financial statements of the
Borrower and its Subsidiaries furnished to the Administrative Agent and/or the
Lenders, or in any certificate, opinion or other written statement made or
furnished by any Credit Party to the Administrative Agent and/or the Lenders.

 

SECTION 3.24                            MATERIAL CONTRACTS.

 

Set forth on Schedule 3.24 is a list of the Material Contracts of each of the
Credit Parties.  Such contracts are in full force and effect as of the Closing
Date.

 

SECTION 3.25                            SECURITY DOCUMENTS.

 

The Security Documents create valid security interests in, and Liens on, the
Collateral purported to be covered thereby, which security interests and Liens
are currently (or will be, upon the filing of appropriate financing statements
and the recordation of the applicable Mortgage Instruments in each case in favor
of Bank One, as Collateral Administrative Agent for the Lenders) perfected
security interests and Liens, prior to all other Liens other than Permitted
Liens.

 

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SECTION 3.26                            INSURANCE.

 

As of the Closing Date, the insurance coverage of the Credit Parties is outlined
as to carrier, policy number, expiration date, type and amount on Schedule
5.5(b).  The Credit Parties maintain insurance in accordance in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or similar business.

 

ARTICLE IV
CONDITIONS PRECEDENT

 

SECTION 4.1                                   CONDITIONS TO CLOSING DATE AND
INITIAL REVOLVING LOANS.

 

This Agreement shall become effective upon, and the obligation of each Lender to
make the initial Revolving Loans on the Closing Date is subject to, the
satisfaction of the following conditions precedent:

 

(A)           EXECUTION OF AGREEMENT.  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED (I) COUNTERPARTS OF THIS AGREEMENT EXECUTED BY A DULY AUTHORIZED
OFFICER OF EACH PARTY HERETO, (II) FOR THE ACCOUNT OF EACH LENDER, A REVOLVING
NOTE, (III) FOR THE ACCOUNT OF THE SWINGLINE LENDER, A SWINGLINE NOTE AND (III)
COUNTERPARTS OF THE SECURITY AGREEMENT AND THE PLEDGE AGREEMENT, IN EACH CASE
CONFORMING TO THE REQUIREMENTS OF THIS AGREEMENT AND EXECUTED BY DULY AUTHORIZED
OFFICERS OF THE CREDIT PARTIES.

 

(B)           AUTHORITY DOCUMENTS.  EXCEPT AS SET FORTH ON SCHEDULE 3.3, THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE FOLLOWING:

 

(i)            Articles of Incorporation.  Copies of the articles or certificate
of incorporation of each Credit Party certified to be true and complete as of a
recent date by the appropriate governmental authority of the state of its
incorporation.

 

(ii)           Resolutions.  Copies of resolutions of the board of directors of
each Credit Party approving and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery thereof, certified
by an officer of such Credit Party as of the Closing Date to be true and correct
and in force and effect as of such date.

 

(iii)          Bylaws.  A copy of the bylaws of each Credit Party certified by
an officer of such Credit Party as of the Closing Date to be true and correct
and in force and effect as of such date.

 

(iv)          Good Standing.  Copies of (i) certificates of good standing,
existence or its equivalent with respect to each Credit Party certified as of a
recent date by the appropriate governmental authorities of the state of
incorporation and each other state in which the failure to so qualify and be in
good standing could

 

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reasonably be expected to have a Material Adverse Effect on the business or
operations of the Borrower and its Subsidiaries in such state and (ii) a
certificate indicating payment of all corporate franchise taxes certified as of
a recent date by the appropriate governmental taxing authorities.

 

(v)           Incumbency.  An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and correct as of the
Closing Date.

 

(C)           LEGAL OPINIONS OF COUNSEL.                THE ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED AN OPINION OF WINSTEAD SECHREST & MINICK P.C., COUNSEL FOR
THE CREDIT PARTIES, DATED THE CLOSING DATE AND ADDRESSED TO THE ADMINISTRATIVE
AGENT AND THE LENDERS IN THE FORM ATTACHED HERETO AS SCHEDULE 4.1(C).

 

(D)           PERSONAL PROPERTY COLLATERAL.  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT:

 

(i)            searches of Uniform Commercial Code filings in the jurisdiction
of the chief executive office of each Credit Party and each jurisdiction where
any Collateral is located or where a filing would need to be made in order to
perfect the Administrative Agent’s security interest in the Collateral, copies
of the financing statements on file in such jurisdictions and evidence that no
Liens exist other than Permitted Liens;

 

(ii)           duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to
perfect the Administrative Agent’s security interest in the Collateral;

 

(iii)          searches of ownership of intellectual property in the appropriate
governmental offices and such patent/trademark/copyright filings as requested by
the Administrative Agent in order to perfect the Administrative Agent’s security
interest in the Collateral consisting of intellectual property;

 

(iv)          all stock certificates evidencing the Capital Stock pledged to the
Administrative Agent pursuant to the Pledge Agreement, together with duly
executed in blank undated stock powers attached thereto (unless, with respect to
the pledged Capital Stock of any Foreign Subsidiary, such stock powers are
deemed unnecessary by the Administrative Agent in its reasonable discretion
under the law of the jurisdiction of incorporation of such Person);

 

(v)           all instruments and chattel paper evidencing obligations in excess
of $100,000 in the aggregate in the possession of any of the Credit Parties,
together with allonges or assignments as may be necessary or appropriate to
perfect the Administrative Agent’s security interest in such Collateral;

 

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(vi)          duly executed consents as are necessary, in the Administrative
Agent’s sole discretion, to perfect the Lenders’ security interest in the
Collateral; and

 

(vii)         in the case of any personal property Collateral located at
premises leased by a Credit Party, such estoppel letters, consents and waivers
from the landlords on such real property as may be required by and in form and
substance satisfactory to the Administrative Agent.

 

(E)           LIABILITY AND CASUALTY INSURANCE.  THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED COPIES OF INSURANCE POLICIES OR CERTIFICATES OF INSURANCE
EVIDENCING LIABILITY AND CASUALTY INSURANCE MEETING THE REQUIREMENTS SET FORTH
HEREIN OR IN THE SECURITY DOCUMENTS.  THE ADMINISTRATIVE AGENT SHALL BE NAMED AS
LOSS PAYEE AND ADDITIONAL INSURED ON ALL SUCH INSURANCE POLICIES FOR THE BENEFIT
OF THE LENDERS.

 

(F)            FEES.  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED ALL FEES, IF
ANY, OWING PURSUANT TO THE FEE LETTER.

 

(G)           LITIGATION.  THERE SHALL NOT EXIST ANY PENDING OR THREATENED
LITIGATION, PROCEEDING, INJUNCTION, ORDER, CLAIM OR INVESTIGATION AFFECTING OR
RELATING TO BORROWER OR ANY OF ITS SUBSIDIARIES OR THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, OR THE OTHER CREDIT DOCUMENTS THAT IN THE REASONABLE JUDGMENT
OF THE ADMINISTRATIVE AGENT COULD MATERIALLY ADVERSELY AFFECT THE BORROWER OR
ANY OF ITS SUBSIDIARIES OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
THE OTHER CREDIT DOCUMENTS, THAT HAS NOT BEEN SETTLED, DISMISSED, VACATED,
DISCHARGED OR TERMINATED PRIOR TO THE CLOSING DATE.

 

(H)           SOLVENCY EVIDENCE.  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
AN OFFICER’S CERTIFICATE PREPARED BY THE CHIEF ACCOUNTING OFFICER OF THE
BORROWER AS TO THE FINANCIAL CONDITION, SOLVENCY AND RELATED MATTERS OF THE
BORROWER INDIVIDUALLY, AND THE CREDIT PARTIES TAKEN AS A WHOLE, IN EACH CASE
AFTER GIVING EFFECT TO THE INITIAL BORROWINGS UNDER THE CREDIT DOCUMENTS, IN
SUBSTANTIALLY THE FORM OF SCHEDULE 4.1(H) HERETO.

 

(I)            ACCOUNT DESIGNATION LETTER.  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED THE EXECUTED ACCOUNT DESIGNATION LETTER IN THE FORM OF SCHEDULE 1.1(A)
HERETO.

 

(J)            MATERIAL CONTRACTS.  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
AND REVIEWED TO ITS SATISFACTION ALL MATERIAL CONTRACTS OF THE CREDIT PARTIES.

 

(K)           CORPORATE STRUCTURE.  THE CORPORATE, CAPITAL AND OWNERSHIP
STRUCTURE OF THE BORROWER AND THE OTHER CREDIT PARTIES SHALL BE AS DESCRIBED IN
SCHEDULE 3.12.  THE ADMINISTRATIVE AGENT SHALL BE SATISFIED WITH THE MANAGEMENT
STRUCTURE, LEGAL STRUCTURE, VOTING CONTROL, LIQUIDITY, TOTAL LEVERAGE AND TOTAL
CAPITALIZATION OF THE BORROWER AND THE OTHER CREDIT PARTIES AS OF THE CLOSING
DATE.

 

(L)            GOVERNMENT CONSENT.  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
EVIDENCE THAT ALL GOVERNMENTAL, SHAREHOLDER AND MATERIAL THIRD PARTY CONSENTS
AND

 

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APPROVALS NECESSARY IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY HAVE
BEEN OBTAINED AND ALL APPLICABLE WAITING PERIODS HAVE EXPIRED WITHOUT ANY ACTION
BEING TAKEN BY ANY AUTHORITY THAT COULD RESTRAIN, PREVENT OR IMPOSE ANY MATERIAL
ADVERSE CONDITIONS ON THE TRANSACTIONS OR THAT COULD SEEK OR THREATEN ANY OF THE
FOREGOING.

 

(M)          COMPLIANCE WITH LAWS.  THE TRANSACTIONS CONTEMPLATED HEREBY SHALL
BE IN COMPLIANCE WITH ALL APPLICABLE LAWS AND REGULATIONS (INCLUDING ALL
APPLICABLE SECURITIES AND BANKING LAWS, RULES AND REGULATIONS).

 

(N)           BANKRUPTCY.  THERE SHALL BE NO BANKRUPTCY OR INSOLVENCY
PROCEEDINGS WITH RESPECT TO THE BORROWER OR ANY OF ITS SUBSIDIARIES.

 

(O)           FINANCIAL INFORMATION.  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED COPIES OF THE FINANCIAL INFORMATION REFERRED TO IN SECTION 3.1 HEREOF,
EACH IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(P)           MATERIAL ADVERSE CHANGE.  SINCE MARCH 31, 2003, NO DEVELOPMENT OR
EVENT WHICH HAS HAD OR COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT SHALL HAVE OCCURRED.

 

(Q)           DUE DILIGENCE.  THE ADMINISTRATIVE AGENT AND THE ARRANGER SHALL
HAVE COMPLETED, IN FORM AND SCOPE SATISFACTORY THERETO, THEIR DUE DILIGENCE ON
THE CREDIT PARTIES.

 

(R)            ENVIRONMENTAL REPORTS.  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED SATISFACTORY ENVIRONMENTAL REVIEWS OF ALL REAL PROPERTY OWNED BY THE
CREDIT PARTIES.

 

(S)           OFFICER’S CERTIFICATES.  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A CERTIFICATE OR CERTIFICATES EXECUTED BY A RESPONSIBLE OFFICER OF THE
BORROWER AS OF THE CLOSING DATE STATING THAT (I) NO ACTION, SUIT, INVESTIGATION
OR PROCEEDING IS PENDING OR, TO THE KNOWLEDGE OF ANY CREDIT PARTY, THREATENED IN
ANY COURT OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL INSTRUMENTALITY THAT PURPORTS
TO AFFECT ANY CREDIT PARTY OR ANY TRANSACTION CONTEMPLATED BY THE CREDIT
DOCUMENTS, IF SUCH ACTION, SUIT, INVESTIGATION OR PROCEEDING COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT AND (II) IMMEDIATELY AFTER GIVING
EFFECT TO THIS CREDIT AGREEMENT, THE OTHER CREDIT DOCUMENTS AND ALL THE
TRANSACTIONS CONTEMPLATED THEREIN TO OCCUR ON SUCH DATE, (A) NO DEFAULT OR EVENT
OF DEFAULT EXISTS, (B) ALL REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN AND
IN THE OTHER CREDIT DOCUMENTS ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS, AND
(C) THE CREDIT PARTIES ARE IN COMPLIANCE WITH EACH OF THE FINANCIAL COVENANTS
SET FORTH IN SECTION 5.9.

 

(T)            FINANCIAL COVENANT COMPLIANCE CERTIFICATE.  THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED A CERTIFICATE DATED THE CLOSING DATE IN SUBSTANTIALLY
THE FORM OF SCHEDULE 4.1(T) EXECUTED BY A RESPONSIBLE OFFICER OF THE BORROWER
DEMONSTRATING COMPLIANCE WITH THE FINANCIAL COVENANTS SET FORTH IN SECTION 5.9
FOR THE LAST TWELVE CONSECUTIVE CALENDAR MONTH PERIOD ENDING ON JUNE 30, 2003.

 

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(U)           ENVIRONMENTAL CERTIFICATE.  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A CERTIFICATE EXECUTED BY A RESPONSIBLE OFFICER OF THE BORROWER AS OF
THE CLOSING DATE STATING THAT, TO THE BEST OF HIS KNOWLEDGE, (A) THE PROPERTIES
DO NOT CONTAIN ANY MATERIALS OF ENVIRONMENTAL CONCERN IN AMOUNTS OR
CONCENTRATIONS WHICH (I) CONSTITUTE A VIOLATION OF, OR (II) WOULD GIVE RISE TO
LIABILITY UNDER, ANY ENVIRONMENTAL LAW; (B) THE PROPERTIES AND ALL OPERATIONS OF
THE BORROWER AND THE OTHER CREDIT PARTIES AND/OR THEIR SUBSIDIARIES AT THE
PROPERTIES ARE IN COMPLIANCE, AND HAVE IN THE LAST FIVE YEARS OR SINCE THE DATE
OF ACQUISITION OF SUCH SUBSIDIARY, WHICHEVER IS LATER, BEEN IN COMPLIANCE, IN
ALL MATERIAL RESPECTS WITH ALL APPLICABLE ENVIRONMENTAL LAWS, AND THERE IS NO
CONTAMINATION AT, UNDER OR ABOUT THE PROPERTIES OR VIOLATION OF ANY
ENVIRONMENTAL LAW WITH RESPECT TO THE PROPERTIES OR BUSINESS; (C) NEITHER THE
BORROWER NOR ANY OF THE OTHER CREDIT PARTIES HAS RECEIVED ANY WRITTEN NOTICE OF
VIOLATION, ALLEGED VIOLATION, NON-COMPLIANCE, LIABILITY OR POTENTIAL LIABILITY
REGARDING COMPLIANCE WITH ENVIRONMENTAL LAWS WITH REGARD TO ANY OF THE
PROPERTIES OR THE BUSINESS, NOR DOES THE BORROWER OR ANY OF THE OTHER CREDIT
PARTIES NOR ANY OF THEIR SUBSIDIARIES HAVE ANY AWARENESS OF OR REASON TO BELIEVE
THAT ANY SUCH NOTICE WILL BE RECEIVED OR IS BEING THREATENED; (D) MATERIALS OF
ENVIRONMENTAL CONCERN HAVE NOT BEEN TRANSPORTED OR DISPOSED OF FROM THE
PROPERTIES IN VIOLATION OF, OR IN A MANNER OR TO A LOCATION WHICH WOULD GIVE
RISE TO LIABILITY UNDER ANY ENVIRONMENTAL LAW, NOR HAVE ANY MATERIALS OF
ENVIRONMENTAL CONCERN BEEN GENERATED, TREATED, STORED OR DISPOSED OF AT, ON OR
UNDER ANY OF THE PROPERTIES IN VIOLATION OF, OR IN A MANNER THAT WOULD GIVE RISE
TO LIABILITY UNDER, ANY APPLICABLE ENVIRONMENTAL LAW; (E) NO JUDICIAL PROCEEDING
OR GOVERNMENTAL OR ADMINISTRATIVE ACTION IS PENDING OR, TO THE KNOWLEDGE OF THE
BORROWER AND THE OTHER CREDIT PARTIES, THREATENED, UNDER ANY ENVIRONMENTAL LAW
TO WHICH THE BORROWER OR ANY OTHER CREDIT PARTY OR ANY SUBSIDIARY IS OR WILL BE
NAMED AS A PARTY WITH RESPECT TO THE PROPERTIES OR THE BUSINESS, NOR ARE THERE
ANY CONSENT DECREES OR OTHER DECREES, CONSENT ORDERS, ADMINISTRATIVE ORDERS OR
OTHER ORDERS, OR OTHER BINDING AND ENFORCEABLE REQUIREMENTS OF LAW OUTSTANDING
UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE PROPERTIES OR THE BUSINESS; AND
(F) THERE HAS BEEN NO RELEASE OR THREAT OF RELEASE OF MATERIALS OF ENVIRONMENTAL
CONCERN AT OR FROM THE PROPERTIES, OR ARISING FROM OR RELATED TO THE OPERATIONS
OF THE BORROWER OR ANY OTHER CREDIT PARTY OR ANY SUBSIDIARY IN CONNECTION WITH
THE PROPERTIES, IN VIOLATION OF OR IN AMOUNTS OR IN A MANNER THAT WOULD GIVE
RISE TO LIABILITY UNDER ENVIRONMENTAL LAWS.

 

(V)           ADDITIONAL MATTERS.  ALL OTHER DOCUMENTS AND LEGAL MATTERS IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE
REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE ADMINISTRATIVE AGENT AND
ITS COUNSEL.

 

SECTION 4.2                                   CONDITIONS TO ALL EXTENSIONS OF
CREDIT.

 

The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:

 

(A)           REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND
WARRANTIES MADE BY THE CREDIT PARTIES HEREIN, IN THE SECURITY DOCUMENTS OR WHICH
ARE CONTAINED IN ANY CERTIFICATE FURNISHED AT ANY TIME UNDER OR IN CONNECTION
HEREWITH SHALL BE TRUE AND CORRECT

 

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IN ALL MATERIAL RESPECTS ON AND AS OF THE DATE OF SUCH EXTENSION OF CREDIT AS IF
MADE ON AND AS OF SUCH DATE (EXCEPT FOR THOSE WHICH EXPRESSLY RELATE TO AN
EARLIER DATE).

 

(B)           NO DEFAULT OR EVENT OF DEFAULT.  NO DEFAULT OR EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING ON SUCH DATE OR AFTER GIVING EFFECT TO THE
EXTENSION OF CREDIT TO BE MADE ON SUCH DATE UNLESS SUCH DEFAULT OR EVENT OF
DEFAULT SHALL HAVE BEEN WAIVED IN ACCORDANCE WITH THIS AGREEMENT.

 

(C)           COMPLIANCE WITH COMMITMENTS.  IMMEDIATELY AFTER GIVING EFFECT TO
THE MAKING OF ANY SUCH EXTENSION OF CREDIT (AND THE APPLICATION OF THE PROCEEDS
THEREOF), (I) THE SUM OF THE AGGREGATE PRINCIPAL AMOUNT OF OUTSTANDING REVOLVING
LOANS PLUS SWINGLINE LOANS PLUS LOC OBLIGATIONS SHALL NOT EXCEED THE AGGREGATE
REVOLVING COMMITTED AMOUNT, (II) THE SWINGLINE LOANS SHALL NOT EXCEED THE
SWINGLINE COMMITMENT AND (III) THE LOC OBLIGATIONS SHALL NOT EXCEED THE LOC
COMMITTED AMOUNT.

 

(D)           ADDITIONAL CONDITIONS TO REVOLVING LOANS.  IF SUCH LOAN IS MADE
PURSUANT TO SECTION 2.1, ALL CONDITIONS SET FORTH IN SUCH SECTION SHALL HAVE
BEEN SATISFIED.

 

(E)           ADDITIONAL CONDITIONS TO SWINGLINE LOAN. IF SUCH LOAN IS MADE
PURSUANT TO SECTION 2.2, ALL CONDITIONS SET FORTH IN SUCH SECTION SHALL HAVE
BEEN SATISFIED.

 

(F)            ADDITIONAL CONDITIONS TO LETTERS OF CREDIT.  IF SUCH EXTENSION OF
CREDIT IS MADE PURSUANT TO SECTION 2.3, ALL CONDITIONS SET FORTH IN SUCH SECTION
SHALL HAVE BEEN SATISFIED.

 

Each request for an Extension of Credit and each acceptance by the Borrower of
any such Extension of Credit shall be deemed to constitute a representation and
warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a) through (f) of this Section have been
satisfied.

 

ARTICLE V
AFFIRMATIVE COVENANTS

 

Each Credit Party hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Credit Party
Obligations, together with interest, Commitment Fees and all other amounts owing
to the Administrative Agent or any Lender hereunder, are paid in full, the
Borrower shall, and shall cause each of its Subsidiaries (other than in the case
of Sections 5.1, 5.2 or 5.7 hereof), to:

 

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SECTION 5.1                                   FINANCIAL STATEMENTS.

 

Furnish to the Administrative Agent and each of the Lenders:

 

(A)           ANNUAL FINANCIAL STATEMENTS.  AS SOON AS AVAILABLE, BUT IN ANY
EVENT WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER THE END OF EACH FISCAL YEAR, A
COPY OF THE CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS CONSOLIDATED
SUBSIDIARIES AS AT THE END OF SUCH FISCAL YEAR AND THE RELATED CONSOLIDATED
STATEMENTS OF INCOME AND RETAINED EARNINGS AND OF CASH FLOWS OF THE BORROWER AND
ITS CONSOLIDATED SUBSIDIARIES FOR SUCH YEAR, WHICH CONSOLIDATED STATEMENTS SHALL
BE AUDITED BY A FIRM OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF NATIONALLY
RECOGNIZED STANDING REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT, SETTING
FORTH IN EACH CASE IN COMPARATIVE FORM THE FIGURES FOR THE PREVIOUS YEAR,
REPORTED ON WITHOUT A “GOING CONCERN” OR LIKE QUALIFICATION OR EXCEPTION, OR
QUALIFICATION INDICATING THAT THE SCOPE OF THE AUDIT WAS INADEQUATE TO PERMIT
SUCH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO CERTIFY SUCH FINANCIAL
STATEMENTS WITHOUT SUCH QUALIFICATION;

 

(B)           QUARTERLY FINANCIAL STATEMENTS.  AS SOON AS AVAILABLE AND IN ANY
EVENT WITHIN SIXTY (60) DAYS AFTER THE END OF EACH OF THE FIRST THREE FISCAL
QUARTERS OF THE BORROWER, A COMPANY-PREPARED CONSOLIDATED BALANCE SHEET OF THE
BORROWER AND ITS CONSOLIDATED SUBSIDIARIES AS AT THE END OF SUCH PERIOD AND
RELATED COMPANY-PREPARED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
AND OF CASH FLOWS FOR THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES FOR SUCH
QUARTERLY PERIOD AND FOR THE PORTION OF THE FISCAL YEAR ENDING WITH SUCH PERIOD,
IN EACH CASE SETTING FORTH IN COMPARATIVE FORM CONSOLIDATED FIGURES FOR THE
CORRESPONDING PERIOD OR PERIODS OF THE PRECEDING FISCAL YEAR (SUBJECT TO NORMAL
YEAR-END AUDIT ADJUSTMENTS);

 

(C)           ANNUAL BUDGET PLAN AND FINANCIAL PROJECTIONS.  AS SOON AS
AVAILABLE, BUT IN ANY EVENT WITHIN SIXTY (60) DAYS AFTER THE BEGINNING OF EACH
FISCAL YEAR, A COPY OF DETAILED PROJECTIONS OF THE INCOME STATEMENTS, CASH FLOW
AND BALANCE SHEETS OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES FOR EACH
FISCAL YEAR THROUGH THE MATURITY DATE, IN FORM AND DETAIL REASONABLY ACCEPTABLE
TO THE ADMINISTRATIVE AGENT AND THE REQUIRED LENDERS, TOGETHER WITH A SUMMARY OF
THE MATERIAL ASSUMPTIONS MADE IN THE PREPARATION OF SUCH ANNUAL BUDGET OR PLAN
AND FINANCIAL PROJECTIONS;

 

all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.

 

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SECTION 5.2                                   CERTIFICATES; OTHER INFORMATION.

 

Furnish to the Administrative Agent and each of the Lenders:

 

(A)           CONCURRENTLY WITH THE DELIVERY OF THE FINANCIAL STATEMENTS
REFERRED TO IN SECTION 5.1(A) ABOVE, A CERTIFICATE OF THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS REPORTING ON SUCH FINANCIAL STATEMENTS STATING THAT IN MAKING
THE EXAMINATION NECESSARY THEREFOR NO KNOWLEDGE WAS OBTAINED OF ANY DEFAULT OR
EVENT OF DEFAULT, EXCEPT AS SPECIFIED IN SUCH CERTIFICATE;

 

(B)           CONCURRENTLY WITH THE DELIVERY OF THE FINANCIAL STATEMENTS
REFERRED TO IN SECTIONS 5.1(A) AND 5.1(B) ABOVE, A CERTIFICATE OF A RESPONSIBLE
OFFICER STATING THAT, TO THE BEST OF SUCH RESPONSIBLE OFFICER’S KNOWLEDGE, EACH
OF THE CREDIT PARTIES DURING SUCH PERIOD OBSERVED OR PERFORMED IN ALL MATERIAL
RESPECTS ALL OF ITS COVENANTS AND OTHER AGREEMENTS, AND SATISFIED IN ALL
MATERIAL RESPECTS EVERY CONDITION, CONTAINED IN THIS AGREEMENT TO BE OBSERVED,
PERFORMED OR SATISFIED BY IT, AND THAT SUCH RESPONSIBLE OFFICER HAS OBTAINED NO
KNOWLEDGE OF ANY DEFAULT OR EVENT OF DEFAULT EXCEPT AS SPECIFIED IN SUCH
CERTIFICATE AND SUCH CERTIFICATE SHALL INCLUDE THE CALCULATIONS IN REASONABLE
DETAIL REQUIRED TO INDICATE COMPLIANCE WITH SECTIONS 5.9, 6.1 AND 6.4(B);

 

(C)           WITHIN THIRTY (30) DAYS AFTER THE SAME ARE SENT, COPIES OF ALL
REPORTS (OTHER THAN THOSE OTHERWISE PROVIDED PURSUANT TO SECTION 5.1 AND THOSE
WHICH ARE OF A PROMOTIONAL NATURE) AND OTHER FINANCIAL INFORMATION WHICH THE
BORROWER SENDS TO ITS SHAREHOLDERS OR NOTEHOLDERS GENERALLY, AND WITHIN THIRTY
DAYS AFTER THE SAME ARE FILED, COPIES OF ALL FINANCIAL STATEMENTS AND
NON-CONFIDENTIAL REPORTS WHICH THE BORROWER MAY MAKE TO, OR FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION OR ANY SUCCESSOR OR ANALOGOUS GOVERNMENTAL
AUTHORITY;

 

(D)           WITHIN THIRTY (30) DAYS AFTER RECEIPT THEREOF, A COPY OF ANY OTHER
REPORT OR “MANAGEMENT LETTER” SUBMITTED BY INDEPENDENT ACCOUNTANTS TO THE
BORROWER OR ANY OF ITS SUBSIDIARIES IN CONNECTION WITH ANY ANNUAL, INTERIM OR
SPECIAL AUDIT OF THE BOOKS OF SUCH PERSON; AND

 

(E)           IN CONNECTION WITH THE CONSUMMATION OF ANY PERMITTED ACQUISITION,
THE BORROWER SHALL SATISFY THE FOLLOWING REQUIREMENTS:

 

(i)            within thirty (30) days after completion of the acquisition, the
Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance
Certificate dated as of the expected closing date of the acquisition;

 

(ii)           within thirty (30) days after completion of the acquisition, the
Borrower shall have delivered to the Administrative Agent a description of the
acquisition (including, without limitation, a description of the Person or
assets to be acquired, the purchase price, the manner of acquisition and the
payment structure;

 

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(iii)          within thirty (30) days after completion of the acquisition, the
Borrower shall have delivered to the Administrative Agent all documents required
pursuant to Section 5.10 hereof pursuant to the provisions thereof;

(iv)          the Borrower shall have delivered to the Administrative Agent
copies of the purchase agreement, merger agreement or similar governing document
(including schedules thereto to the extent such schedules are then available and
relate to the Borrower’s compliance with this Agreement, but excluding
exhibit(s) and all opinions of counsel to the seller and/or the Person to be
acquired) with respect to the acquisition within sixty (60) days after the
closing of the acquisition; and

 

(v)           within thirty (30) days after completion of the acquisition, the
Borrower shall have provided to the Administrative Agent such other documents
reasonably requested by the Administrative Agent in connection with such
acquisition.

 

(F)            IN CONNECTION WITH THE ANY ACQUISITION OTHER THAN A PERMITTED
ACQUISITION, FOR WHICH THE CONSENT OF THE REQUIRED LENDERS IS REQUIRED, THE
BORROWER SHALL COMPLY WITH THE FOLLOWING ADDITIONAL REQUIREMENTS:

 

(i)            the Borrower shall have delivered to the Lenders, not less than
ten (10) business days prior to the proposed closing date of the acquisition, a
description of the acquisition (including, without limitation, a description of
the Person or assets to be acquired, the purchase price, the manner of
acquisition, the payment structure and any other terms and conditions reasonably
required by the Administrative Agent) and a draft copy of the purchase
agreement, merger agreement or similar governing document (including schedules
thereto to the extent such schedules are then available and relate to the
Borrower’s compliance with this Agreement, but excluding exhibits) with respect
to the acquisition;

 

(ii)           the Borrower shall have delivered to the Lenders, not less than
ten (10) business days prior to the proposed closing date of the acquisition,
all due diligence reports prepared by or on behalf of the Borrower or the
applicable Subsidiary thereof;

 

(iii)          the Borrower shall have delivered to the Lenders, not less than
ten (10) business days prior to the proposed closing date of the acquisition,
the historical financial statements of the Person to be acquired, if applicable,
for the most recent two (2) year period and the most recent interim financial
statements of the Person to be acquired;

 

(iv)          the Borrower shall have delivered to the Lenders, not less than
ten (10) business days prior to the proposed closing date of the acquisition, a
projected income statement, statement of cash flows and balance sheet
(including, without limitation, a summary of assumptions and pro forma
adjustments made in

 

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connection therewith) of the Person to be acquired, if applicable, prepared on a
quarterly basis for the ensuing three (3) year period;

 

(v)           the Borrower shall have delivered to the Administrative Agent, on
or before the closing date of the acquisition, a Pro Forma Compliance
Certificate;

 

(vi)          the Borrower shall have delivered to the Administrative Agent all
documents required pursuant to Section 5.10 hereof pursuant to the provisions
thereof;

 

(vii)         the Borrower shall deliver to the Administrative Agent, promptly
after the  closing date of the acquisition, copies of all opinions of counsel to
the seller and/or the Person to be acquired which are delivered in connection
with the acquisition;

 

(viii)        the Borrower shall have delivered to the Administrative Agent
evidence of the approval of the acquisition by the board of directors or
equivalent governing body (or the shareholders) of the seller and/or or the
Person to be acquired within twenty (20) days after the closing of the
acquisition;

 

(ix)           the Borrower shall have delivered to the Administrative Agent a
copy of the final purchase agreement, merger agreement or similar governing
document (including schedules thereto to the extent such schedules are then
available and relate to the Borrower’s compliance with this Agreement, but
excluding exhibits) with respect to the acquisition on the closing of the
acquisition within twenty (20) days after the closing of the acquisition; and

 

(x)            the Borrower shall have provided to the Administrative Agent such
other documents reasonably requested by the Administrative Agent in connection
with such acquisition.

 

(g)           promptly, such additional financial and other information as the
Administrative Agent, on behalf of any Lender, may from time to time reasonably
request.

 

SECTION 5.3                                   PAYMENT OF OBLIGATIONS.

 

Pay, discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, in accordance with industry practice (subject,
where applicable, to specified grace periods) all its material obligations of
whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such obligations, except when
the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries as the case may be.

 

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SECTION 5.4                                   CONDUCT OF BUSINESS AND
MAINTENANCE OF EXISTENCE.

 

Continue to engage in business of the same general type as now conducted by it
on the Closing Date and preserve, renew and keep in full force and effect its
corporate existence (except for transactions permitted by Section 6.6(b)) and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business and comply with all
Contractual Obligations and Requirements of Law applicable to it except to the
extent that failure to comply with this Section 5.4 could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.5                                   MAINTENANCE OF PROPERTY;
INSURANCE.

 

(A)           KEEP ALL PROPERTY USEFUL AND NECESSARY IN ITS BUSINESS IN GOOD
WORKING ORDER AND CONDITION (IMMATERIAL PORTIONS OF SUCH PROPERTY AND ORDINARY
WEAR AND TEAR AND OBSOLESCENCE EXCEPTED);

 

(B)           MAINTAIN WITH FINANCIALLY SOUND AND REPUTABLE INSURANCE COMPANIES
INSURANCE ON ALL ITS MATERIAL PROPERTY (INCLUDING WITHOUT LIMITATION ITS
MATERIAL TANGIBLE COLLATERAL) IN AT LEAST SUCH AMOUNTS AND AGAINST AT LEAST SUCH
RISKS AS ARE USUALLY INSURED AGAINST IN THE SAME GENERAL AREA BY COMPANIES
ENGAGED IN THE SAME OR A SIMILAR BUSINESS; AND FURNISH TO THE ADMINISTRATIVE
AGENT, UPON WRITTEN REQUEST, FULL INFORMATION AS TO THE INSURANCE CARRIED;
PROVIDED, HOWEVER, THAT THE BORROWER AND ITS SUBSIDIARIES MAY MAINTAIN SELF
INSURANCE PLANS TO THE EXTENT COMPANIES OF SIMILAR SIZE AND IN SIMILAR
BUSINESSES DO SO.  THE ADMINISTRATIVE AGENT SHALL BE NAMED AS LOSS PAYEE OR
MORTGAGEE, AS ITS INTEREST MAY APPEAR, WITH RESPECT TO CASUALTY POLICIES AND/OR
ADDITIONAL INSURED WITH RESPECT TO ANY LIABILITY INSURANCE PROVIDING COVERAGE IN
RESPECT OF ANY COLLATERAL, AND EACH PROVIDER OF ANY SUCH INSURANCE SHALL AGREE,
BY ENDORSEMENT UPON THE POLICY OR POLICIES ISSUED BY IT OR BY INDEPENDENT
INSTRUMENTS FURNISHED TO THE ADMINISTRATIVE AGENT, THAT IT WILL GIVE THE
ADMINISTRATIVE AGENT THIRTY (30) DAYS PRIOR WRITTEN NOTICE BEFORE ANY SUCH
POLICY OR POLICIES SHALL BE ALTERED OR CANCELED, AND THAT NO ACT OR DEFAULT OF
THE BORROWER OR ANY OF ITS SUBSIDIARIES OR ANY OTHER PERSON SHALL AFFECT THE
RIGHTS OF THE ADMINISTRATIVE AGENT OR THE LENDERS UNDER SUCH POLICY OR
POLICIES.  THE INSURANCE COVERAGE OF THE BORROWER AND ITS SUBSIDIARIES AS OF THE
CLOSING DATE IS OUTLINED AS TO CARRIER, POLICY NUMBER, EXPIRATION DATE, TYPE AND
AMOUNT ON SCHEDULE 5.5(B); AND

 

(C)           IN CASE OF ANY LOSS, DAMAGE TO OR DESTRUCTION OF A MATERIAL
PORTION OF THE COLLATERAL OF ANY CREDIT PARTY OR ANY PART THEREOF, SUCH CREDIT
PARTY SHALL PROMPTLY GIVE WRITTEN NOTICE THEREOF TO THE ADMINISTRATIVE AGENT
GENERALLY DESCRIBING THE NATURE AND EXTENT OF SUCH LOSS, DAMAGE OR DESTRUCTION. 
IN CASE OF ANY LOSS, DAMAGE TO OR DESTRUCTION OF THE COLLATERAL OF ANY CREDIT
PARTY OR ANY PART THEREOF SUCH CREDIT PARTY WILL ENSURE THAT THE NET INSURANCE
PROCEEDS OF ANY SUCH EVENT ARE COLLECTED AND APPLIED IN ACCORDANCE WITH THE
APPLICABLE PROVISIONS OF THIS AGREEMENT.

 

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SECTION 5.6                                   INSPECTION OF PROPERTY; BOOKS AND
RECORDS; DISCUSSIONS.

 

Keep proper books of records and account in which full, true and correct entries
in compliance with all Requirements of Law shall be made of all dealings and
transactions in relation to its businesses and activities and, in the case of
Borrower, sufficient to permit reporting in accordance with GAAP; and permit,
during regular business hours and upon reasonable notice by the Administrative
Agent or any Lender, the Administrative Agent or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records (other than materials protected by the attorney-client privilege and
materials which the Borrower may not disclose without violation of a
confidentiality obligation binding upon it) at any reasonable time and as often
as may reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with their independent certified public accountants.

 

SECTION 5.7                                   NOTICES.

 

Give notice in writing to the Administrative Agent (which shall promptly
transmit such notice to each Lender) of:

 

(A)           PROMPTLY BUT IN ANY EVENT WITHIN TWO (2) BUSINESS DAYS AFTER THE
BORROWER KNOWS OR HAS REASON TO KNOW THEREOF OF THE OCCURRENCE OF ANY DEFAULT OR
EVENT OF DEFAULT;

 

(B)           PROMPTLY, ANY DEFAULT OR EVENT OF DEFAULT UNDER ANY CONTRACTUAL
OBLIGATION OF THE BORROWER OR ANY OF ITS SUBSIDIARIES OR MATERIAL CONTRACTS
WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(C)           PROMPTLY, ANY LITIGATION, OR ANY INVESTIGATION OR PROCEEDING KNOWN
TO THE BORROWER, AFFECTING THE BORROWER OR ANY OF ITS SUBSIDIARIES WHICH, IF
ADVERSELY DETERMINED, COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT;

 

(D)           AS SOON AS POSSIBLE AND IN ANY EVENT WITHIN THIRTY (30) DAYS AFTER
THE BORROWER KNOWS OR HAS REASON TO KNOW: (I) THE OCCURRENCE OR EXPECTED
OCCURRENCE OF ANY REPORTABLE EVENT WITH RESPECT TO ANY PLAN, A FAILURE TO MAKE
ANY REQUIRED CONTRIBUTION TO A PLAN THE CREATION OF ANY LIEN IN FAVOR OF THE
PBGC (OTHER THAN A PERMITTED LIEN) OR A PLAN OR ANY WITHDRAWAL FROM, OR THE
TERMINATION, REORGANIZATION OR INSOLVENCY OF, ANY MULTIEMPLOYER PLAN OR (II) THE
INSTITUTION OF PROCEEDINGS OR THE TAKING OF ANY OTHER ACTION BY THE PBGC OR THE
BORROWER OR ANY COMMONLY CONTROLLED ENTITY OR ANY MULTIEMPLOYER PLAN WITH
RESPECT TO THE WITHDRAWAL FROM, OR THE TERMINATING, REORGANIZATION OR INSOLVENCY
OF ANY PLAN; AND

 

(E)           PROMPTLY, ANY OTHER DEVELOPMENT OR EVENT WHICH COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

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Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.  In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.

 

SECTION 5.8                                   ENVIRONMENTAL LAWS.

 

(A)           COMPLY IN ALL MATERIAL RESPECTS WITH, AND ENSURE COMPLIANCE IN ALL
MATERIAL RESPECTS BY ALL TENANTS AND SUBTENANTS, IF ANY, WITH, ALL APPLICABLE
ENVIRONMENTAL LAWS AND OBTAIN AND COMPLY IN ALL MATERIAL RESPECTS WITH AND
MAINTAIN, AND ENSURE THAT ALL TENANTS AND SUBTENANTS OBTAIN AND COMPLY IN ALL
MATERIAL RESPECTS WITH AND MAINTAIN, ANY AND ALL LICENSES, APPROVALS,
NOTIFICATIONS, REGISTRATIONS OR PERMITS REQUIRED BY APPLICABLE ENVIRONMENTAL
LAWS, EXCEPT TO THE EXTENT THAT FAILURE TO DO SO COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(B)           CONDUCT AND COMPLETE ALL INVESTIGATIONS, STUDIES, SAMPLING AND
TESTING, AND ALL REMEDIAL, REMOVAL AND OTHER ACTIONS REQUIRED UNDER
ENVIRONMENTAL LAWS AND PROMPTLY COMPLY IN ALL MATERIAL RESPECTS WITH ALL LAWFUL
ORDERS AND DIRECTIVES OF ALL GOVERNMENTAL AUTHORITIES REGARDING ENVIRONMENTAL
LAWS EXCEPT TO THE EXTENT THAT THE SAME ARE BEING CONTESTED IN GOOD FAITH BY
APPROPRIATE PROCEEDINGS AND THE PENDENCY OF SUCH PROCEEDINGS COULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; AND

 

(C)           DEFEND, INDEMNIFY AND HOLD HARMLESS THE ADMINISTRATIVE AGENT AND
THE LENDERS, AND THEIR RESPECTIVE EMPLOYEES, AGENTS, OFFICERS AND DIRECTORS,
FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, PENALTIES, FINES, LIABILITIES,
SETTLEMENTS, DAMAGES, COSTS AND EXPENSES OF WHATEVER KIND OR NATURE KNOWN OR
UNKNOWN, CONTINGENT OR OTHERWISE, ARISING OUT OF, OR IN ANY WAY RELATING TO THE
VIOLATION OF, NONCOMPLIANCE WITH OR LIABILITY UNDER, ANY ENVIRONMENTAL LAW
APPLICABLE TO THE OPERATIONS OF THE BORROWER, ANY OF ITS SUBSIDIARIES OR THE
PROPERTIES, OR ANY ORDERS, REQUIREMENTS OR DEMANDS OF GOVERNMENTAL AUTHORITIES
RELATED THERETO, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEY’S AND
CONSULTANT’S FEES, INVESTIGATION AND LABORATORY FEES, RESPONSE COSTS, COURT
COSTS AND LITIGATION EXPENSES, EXCEPT TO THE EXTENT THAT ANY OF THE FOREGOING
ARISE OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED
PERSON (IT BEING THE INTENTION OF THIS PROVISION THAT SUCH INDEMNIFICATION
OBLIGATION WILL BE APPLICABLE REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART
BY THE ORDINARY NEGLIGENCE OF ANY OF THE PARTIES BEING INDEMNIFIED).  THE
AGREEMENTS IN THIS PARAGRAPH SHALL SURVIVE REPAYMENT OF THE NOTES AND ALL OTHER
AMOUNTS PAYABLE HEREUNDER.

 

SECTION 5.9                                   FINANCIAL COVENANTS.

 

Commencing on the day immediately following the Closing Date, the Borrower
shall, and shall cause each other Credit Party to, comply with the following
financial covenants:

 

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(A)           LEVERAGE RATIO.  THE LEVERAGE RATIO, AS OF THE LAST DAY OF EACH
FISCAL QUARTER OF THE BORROWER AND ITS SUBSIDIARIES OCCURRING DURING THE PERIODS
INDICATED BELOW, SHALL BE LESS THAN OR EQUAL TO 2.75 TO 1.0.

 

(B)           FIXED CHARGE COVERAGE RATIO.  THE FIXED CHARGE COVERAGE RATIO, AS
OF THE LAST DAY OF EACH FISCAL QUARTER OF THE BORROWER AND ITS SUBSIDIARIES
OCCURRING DURING THE PERIODS INDICATED BELOW, SHALL BE GREATER THAN OR EQUAL TO
1.50 TO 1.0.

 

(C)           CONSOLIDATED TANGIBLE NET WORTH.  CONSOLIDATED TANGIBLE NET WORTH
AT ALL TIMES SHALL BE GREATER THAN OR EQUAL TO 85% OF CONSOLIDATED TANGIBLE NET
WORTH OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES AS OF JUNE 30, 2003 PLUS
50% OF CONSOLIDATED NET INCOME FOR ALL FISCAL QUARTERS AFTER JUNE 30, 2003 WHERE
CONSOLIDATED NET INCOME WAS POSITIVE PLUS 100% OF ALL EQUITY ISSUANCES AFTER
JUNE 30, 2003 LESS 100% OF THE AGGREGATE AMOUNT OF ALL STOCK REPURCHASES AFTER
JUNE 30, 2003 IN AN AGGREGATE AMOUNT UP TO (BUT NOT EXCEEDING) $10,000,000.

 

(D)           CONSOLIDATED CAPITAL EXPENDITURES.  AS OF THE END OF EACH FISCAL
QUARTER OF THE BORROWER BEGINNING WITH THE FISCAL QUARTER ENDING DECEMBER 31,
2003, CONSOLIDATED CAPITAL EXPENDITURES OF THE BORROWER FOR THE IMMEDIATELY
PRECEDING TWELVE MONTH PERIOD SHALL NOT EXCEED ONE HUNDRED FIFTY PERCENT (150%)
OF THE LAST TWELVE MONTH DEPRECIATION AND AMORTIZATION OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES DETERMINED ON A ROLLING FOUR FISCAL QUARTER BASIS.

 

SECTION 5.10                            ADDITIONAL GUARANTORS.

 

The Credit Parties will cause each of their Domestic Subsidiaries, whether newly
formed, after acquired or otherwise existing, upon the creation or acquisition
thereof, to become a Guarantor hereunder by way of execution of a Joinder
Agreement.  The guaranty obligations of any such Additional Credit Party shall
be secured by, among other things, the Collateral of the Additional Credit Party
and a pledge of 100% of the Capital Stock or other equity interest of its
Domestic Subsidiaries and 65% of the Capital Stock or other equity interest of
its first tier Foreign Subsidiaries, and a pledge by the Borrower or other
Credit Party which is the owner of the Capital Stock or other equity interest in
such Subsidiary of 100% of the Capital Stock if it is a Domestic Subsidiary and
65% of its Capital Stock or other equity interest if it is a first tier Foreign
Subsidiary.

 

SECTION 5.11                            COMPLIANCE WITH LAW.

 

Each Credit Party will, and will cause each of its Subsidiaries to, comply with
all laws, rules, regulations and orders, and all applicable restrictions imposed
by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.

 

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SECTION 5.12                            PLEDGED ASSETS.

 

(A)           EACH CREDIT PARTY WILL CAUSE 100% OF THE CAPITAL STOCK OF EACH OF
ITS DIRECT OR INDIRECT DOMESTIC SUBSIDIARIES OWNED BY SUCH CREDIT PARTY AND ITS
DOMESTIC SUBSIDIARIES AND 65% OF THE CAPITAL STOCK IN EACH OF THE FIRST TIER
FOREIGN SUBSIDIARIES OWNED BY SUCH CREDIT PARTY AND ITS DOMESTIC SUBSIDIARIES TO
BE SUBJECT AT ALL TIMES TO A FIRST PRIORITY, PERFECTED LIEN (SUBJECT TO
PERMITTED LIENS AND IN THE CASE OF FOREIGN SUBSIDIARIES, APPLICABLE FOREIGN LAWS
REGARDING SECURITY INTEREST AND PERFECTION MATTERS) IN FAVOR OF THE
ADMINISTRATIVE AGENT PURSUANT TO THE TERMS AND CONDITIONS OF THE SECURITY
DOCUMENTS OR SUCH OTHER SECURITY DOCUMENTS AS THE ADMINISTRATIVE AGENT SHALL
REASONABLY REQUEST.

 

(B)           IF, SUBSEQUENT TO THE CLOSING DATE, A CREDIT PARTY SHALL (A)
ACQUIRE ANY INTELLECTUAL PROPERTY, SECURITIES, INSTRUMENTS, CHATTEL PAPER OR
OTHER PERSONAL PROPERTY REQUIRED TO BE PLEDGED TO THE ADMINISTRATIVE AGENT AS
COLLATERAL HEREUNDER OR UNDER ANY OF THE SECURITY DOCUMENTS OR (B) ACQUIRE OR
LEASE ANY REAL PROPERTY, THE BORROWER SHALL PROMPTLY (AND IN ANY EVENT WITHIN
TEN (10) BUSINESS DAYS) AFTER ANY RESPONSIBLE OFFICER OF A CREDIT PARTY ACQUIRES
KNOWLEDGE OF SAME NOTIFY THE ADMINISTRATIVE AGENT OF SAME.  EACH CREDIT PARTY
SHALL, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO, TAKE SUCH ACTION AT ITS OWN
EXPENSE AS REQUESTED BY THE ADMINISTRATIVE AGENT (INCLUDING, WITHOUT LIMITATION,
ANY OF THE ACTIONS DESCRIBED IN SECTION 4.1(D) OR (E) HEREOF) TO ENSURE THAT THE
ADMINISTRATIVE AGENT HAS A FIRST PRIORITY PERFECTED LIEN TO SECURE THE CREDIT
PARTY OBLIGATIONS IN (I) ALL PERSONAL PROPERTY OF THE CREDIT PARTIES LOCATED IN
THE UNITED STATES AND (II) TO THE EXTENT DEEMED TO BE MATERIAL BY THE
ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS IN ITS OR THEIR SOLE REASONABLE
DISCRETION, ALL OTHER PERSONAL PROPERTY OF THE CREDIT PARTIES, SUBJECT IN EACH
CASE ONLY TO PERMITTED LIENS.  EACH CREDIT PARTY SHALL, AND SHALL CAUSE EACH OF
ITS SUBSIDIARIES TO, ADHERE TO THE COVENANTS REGARDING THE LOCATION OF PERSONAL
PROPERTY AS SET FORTH IN THE SECURITY DOCUMENTS.

 

ARTICLE VI
NEGATIVE COVENANTS

 

The Borrower and each other Credit Party hereby covenants and agrees that on the
Closing Date, and thereafter for so long as this Agreement is in effect and
until the Commitments have terminated, no Note remains outstanding and unpaid
and the Credit Party Obligations, together with interest, Commitment Fees and
all other amounts owing to the Administrative Agent or any Lender hereunder, are
paid in full that:

 

SECTION 6.1                                   INDEBTEDNESS.

 

The Credit Parties will not, nor will they permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:

 

(A)           INDEBTEDNESS ARISING OR EXISTING UNDER THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS;

 

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(B)           INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES EXISTING AS OF
SEPTEMBER 30, 2003 AND SET OUT MORE SPECIFICALLY IN SCHEDULE 6.1(B) HERETO AND
INDEBTEDNESS ASSUMED AFTER SEPTEMBER 30, 2003 IN CONNECTION WITH ACQUISITIONS
PERMITTED UNDER SECTION 6.6(C) (PROVIDED THAT SUCH INDEBTEDNESS WAS NOT INCURRED
IN CONNECTION WITH SUCH ACQUISITION AND ANY LIENS EXISTING IN CONNECTION WITH
SUCH INDEBTEDNESS SHALL RELATE ONLY TO THE ASSETS FINANCED THEREBY), AND
RENEWALS, REFINANCINGS OR EXTENSIONS OF ANY OF THE ABOVE IN A PRINCIPAL AMOUNT
NOT IN EXCESS OF THAT OUTSTANDING AS OF THE DATE OF SUCH RENEWAL, REFINANCING OR
EXTENSION;

 

(C)           INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES INCURRED AFTER
SEPTEMBER 30, 2003 CONSISTING OF PURCHASE MONEY INDEBTEDNESS INCURRED TO PROVIDE
ALL OR A PORTION OF THE PURCHASE PRICE OR COST OF CONSTRUCTION OF EQUIPMENT
(WHICH MAY BE FUNDED UP TO, BUT NOT LATER THAN, 180 DAYS AFTER THE DATE OF
ACQUISITION OF THE APPLICABLE ASSET OR THE DATE OF COMPLETION OF CONSTRUCTION,
AS THE CASE MAY BE) PROVIDED THAT (I) SUCH INDEBTEDNESS WHEN INCURRED SHALL NOT
EXCEED THE PURCHASE PRICE OR COST OF CONSTRUCTION OF SUCH EQUIPMENT; (II) NO
SUCH INDEBTEDNESS SHALL BE REFINANCED FOR A PRINCIPAL AMOUNT IN EXCESS OF THE
PRINCIPAL BALANCE OUTSTANDING THEREON AT THE TIME OF SUCH REFINANCING (PROVIDED
THAT SEPARATE PURCHASE MONEY INDEBTEDNESS FACILITIES MAY BE AGGREGATED IN
CONNECTION WITH ANY REFINANCING, IN WHICH EVENT THE AGGREGATE REFINANCED AMOUNT
MAY BE SECURED BY ALL OF THE ASSETS THAT SECURED SUCH SEPARATE FACILITIES AND,
IN SUCH EVENT, AGENT SHALL, UPON REQUEST BY BORROWER, EXECUTE LIEN SUBORDINATION
AGREEMENTS WHEREBY THE LIENS UNDER THE CREDIT DOCUMENTS ARE SUBORDINATED TO THE
LIENS SECURING THE APPLICABLE REFINANCING AND OTHERWISE IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT); AND (III) THE AMOUNT OF
SUCH INDEBTEDNESS INCURRED PURSUANT TO THIS SECTION 6.1(C) PLUS THE AMOUNT OF
THE INDEBTEDNESS OF THE TYPE DESCRIBED HEREIN AND SET FORTH ON SCHEDULE 6.1(B)
SHALL NOT EXCEED THE GREATER OF (X) $100,000,000 OR (Y) 100% OF PRO FORMA
CONSOLIDATED EBITDA OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES FOR THE
TWELVE MONTH PERIOD ENDING ON THE LAST DAY OF THE MOST RECENTLY ENDED FISCAL
QUARTER;

 

(D)           UNSECURED INTERCOMPANY INDEBTEDNESS AMONG THE BORROWER AND ITS
SUBSIDIARIES;

 

(E)           INDEBTEDNESS AND OBLIGATIONS OWING UNDER HEDGING AGREEMENTS
RELATING TO THE LOANS HEREUNDER AND OTHER HEDGING AGREEMENTS ENTERED INTO IN
ORDER TO MANAGE EXISTING OR ANTICIPATED INTEREST RATE, EXCHANGE RATE OR
COMMODITY PRICE RISKS AND NOT FOR SPECULATIVE PURPOSES;

 

(F)            INDEBTEDNESS AND OBLIGATIONS OF THE CREDIT PARTIES OWING UNDER
DOCUMENTARY LETTERS OF CREDIT FOR THE PURCHASE OF GOODS OR OTHER MERCHANDISE
(BUT NOT UNDER STANDBY, DIRECT PAY OR OTHER LETTERS OF CREDIT EXCEPT FOR THE
LETTERS OF CREDIT HEREUNDER) GENERALLY;

 

(G)           INDEBTEDNESS WHICH MAY BE DEEMED TO EXIST PURSUANT TO ANY
PERFORMANCE, SURETY, STATUTORY, APPEAL OR SIMILAR OBLIGATIONS OBTAINED IN THE
ORDINARY COURSE OF BUSINESS;

 

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(H)           GUARANTY OBLIGATIONS PERMITTED BY SECTION 6.3;

 

(I)            OTHER INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES OWING TO
BANK ONE INCURRED AFTER SEPTEMBER 30, 2003 WHICH WHEN ADDED TO THE AMOUNT OF
INDEBTEDNESS OWING TO BANK ONE SET FORTH ON SCHEDULE 6.1(B) TO THE EXTENT NOT
INCLUDED IN SECTIONS 6.1(C) OR (J) HEREOF DOES NOT EXCEED $5,000,000 IN THE
AGGREGATE AT ANY TIME OUTSTANDING AND OTHER INDEBTEDNESS OF THE BORROWER AND ITS
SUBSIDIARIES OWING TO WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION INCURRED
AFTER SEPTEMBER 30, 2003 WHICH WHEN ADDED TO THE AMOUNT OF INDEBTEDNESS OWING TO
WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION SET FORTH ON SCHEDULE 6.1(B) TO THE
EXTENT NOT INCLUDED IN SECTIONS 6.1(C) OR (J) HEREOF DOES NOT EXCEED $3,000,000
IN THE AGGREGATE AT ANY TIME OUTSTANDING

 

(J)            OTHER INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES INCURRED
AFTER SEPTEMBER 30, 2003 WHICH WHEN ADDED TO THE AMOUNT OF INDEBTEDNESS SET
FORTH ON SCHEDULE 6.1(B) TO THE EXTENT NOT INCLUDED IN SECTIONS 6.1(C) OR 6.1(I)
HEREOF DOES NOT EXCEED $40,000,000 IN THE AGGREGATE AT ANY TIME OUTSTANDING.

 

SECTION 6.2                                   LIENS.

 

The Credit Parties will not, nor will they permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.

 

SECTION 6.3                                   GUARANTY OBLIGATIONS.

 

The Credit Parties will not, nor will they permit any Subsidiary to, enter into
or otherwise become or be liable in respect of any Guaranty Obligations
(excluding specifically therefrom endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) except:

 

(A)           THOSE IN FAVOR OF THE LENDERS IN CONNECTION WITH THE CREDIT PARTY
OBLIGATIONS;

 

(B)           GUARANTY OBLIGATIONS BY THE BORROWER OR ITS SUBSIDIARIES OF
INDEBTEDNESS AND OTHER OBLIGATIONS REFERRED TO IN AND PERMITTED UNDER SECTION
6.1 (EXCEPT, AS REGARDS INDEBTEDNESS UNDER SUBSECTION (B) THEREOF, ONLY IF AND
TO THE EXTENT SUCH INDEBTEDNESS WAS GUARANTEED ON THE CLOSING DATE); AND

 

(C)           OTHER GUARANTY OBLIGATIONS WHICH DO NOT EXCEED $7,500,000 IN THE
AGGREGATE AT ANY TIME OUTSTANDING.

 

SECTION 6.4                                   EARNOUT OBLIGATIONS.

 

The Borrower will not, nor will it permit any Subsidiary to, enter into any
agreement (in connection with any Permitted Acquisition or otherwise) the result
of which, would cause the

 

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Borrower and/or any Subsidiary of the Borrower to become obligated, or
contingently obligated, for an Earnout Obligation except:

 

(A)           EARNOUT OBLIGATIONS EXISTING AS OF SEPTEMBER 30, 2003, AS SET
FORTH ON SCHEDULE 6.4; AND

 

(B)           OTHER EARNOUT OBLIGATIONS WHICH (I) DO NOT EXCEED $35,000,000 IN
THE AGGREGATE (INCLUDING, WITHOUT LIMITATION, EARNOUT OBLIGATIONS SET FORTH ON
SCHEDULE 6.4 AND NOT EXPIRED) AND (II) DO NOT CAUSE THE AGGREGATE AMOUNT OF
EARNOUT OBLIGATIONS POTENTIALLY DUE IN ANY ONE FISCAL YEAR OF THE BORROWER TO
EXCEED $10,000,000.

 

SECTION 6.5                                   NATURE OF BUSINESS.

 

Except as otherwise permitted in Section 6.6, the Borrower will not, nor will it
permit any Subsidiary to, alter the character of the business of the Borrower or
its Subsidiaries in any material respect from that conducted as of the Closing
Date.

 

SECTION 6.6                                   CONSOLIDATION, MERGER,
ACQUISITIONS, SALE OR PURCHASE OF ASSETS, ETC.

 

The Borrower will not, nor will it permit any Subsidiary to,

 

(A)           DISSOLVE, LIQUIDATE OR WIND UP ITS AFFAIRS, SELL, TRANSFER, LEASE
(AS LESSOR) OR OTHERWISE DISPOSE OF ITS PROPERTY OR ASSETS OR AGREE TO DO SO AT
A FUTURE TIME EXCEPT THE FOLLOWING, WITHOUT DUPLICATION, SHALL BE EXPRESSLY
PERMITTED:

 

(i)            Specified Sales;

 

(ii)           the sale, transfer, lease or other disposition of property or
assets to an unrelated party not in the ordinary course of business (other than
Specified Sales), where and to the extent that they are the result of a Recovery
Event, so long as and the net proceeds therefrom are, to the extent herein
required, used to (A) repair or replace damaged property or to purchase or
otherwise acquire replacement assets or property within 180 days of the receipt
of such proceeds or (B) prepay the Loans in accordance with Section 2.6(b)(iv);

 

(iii)          the sale, lease, transfer or other disposition of machinery,
parts, equipment, land and buildings no longer used or useful in the conduct of
the business of the Borrower or any of its Subsidiaries, as appropriate, in its
reasonable discretion, so long as and the net proceeds therefrom are, to the
extent herein required, used to (A) repair or replace damaged property or to
purchase or otherwise acquire replacement assets or property, provided that such
purchase or acquisition is committed to within 180 days of receipt of the net
proceeds and such purchase or acquisition is consummated within 270 days of
receipt of such proceeds or (B) prepay the Loans in accordance with Section
2.6(b)(ii);

 

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(iv)          the sale, lease, transfer or other disposition of assets of an
acquired company or business, provided such disposition is completed within 180
days of the initial acquisition of such assets;

 

(v)           the sale, lease or transfer of property or assets (at fair value)
between the Borrower and any Guarantor;

 

(vi)          the sale, lease or transfer of property or assets from a Credit
Party other than the Borrower to another Credit Party;

 

(vii)         the sale, lease or transfer of property or assets not otherwise
permitted by clauses (i) through (vi) above, provided the amount of such sale,
lease or transfer does not exceed $10,000,000 in the aggregate in any fiscal
year; and

 

(viii)        the voluntary dissolution, liquidation or winding-up in connection
with a merger or sale of all or substantially all of the assets of a Subsidiary
otherwise permitted hereunder;

provided, that (a) with respect to subclause (vii) above at least 75% of the
consideration received therefor by the Borrower or any such Subsidiary is in the
form of cash or Cash Equivalents and (b) with respect to sales of assets
permitted hereunder only, the Administrative Agent shall be entitled, without
the consent of the Required Lenders, to release its Liens relating to the
particular assets sold; or

 

(B)           ENTER INTO ANY TRANSACTION OF MERGER OR CONSOLIDATION, EXCEPT FOR
THE MERGER OR CONSOLIDATION OF A CREDIT PARTY WITH AND INTO ANOTHER CREDIT
PARTY, PROVIDED THAT IF THE BORROWER IS A PARTY THERETO, THE BORROWER WILL BE
THE SURVIVING CORPORATION; OR

 

(C)           ENTER INTO ANY TRANSACTION OR SERIES OF TRANSACTIONS FOR THE
PURPOSES OF ACQUIRING ALL OR A SUBSTANTIAL PORTION OF THE ASSETS, PROPERTY
AND/OR CAPITAL STOCK OF ANY PERSON OTHER THAN, SO LONG AS NO DEFAULT OR EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR WOULD RESULT THEREFROM ON A PRO
FORMA BASIS, THE ACQUISITION BY ANY CREDIT PARTY OF ALL OR A MAJORITY OF THE
CAPITAL STOCK OR OTHER OWNERSHIP INTEREST IN (OR ALL OR A SUBSTANTIAL PORTION OF
THE ASSETS, PROPERTY AND/OR OPERATIONS OF) ANY PERSON PROVIDED THAT (I) SUCH
ACQUISITION IS OF A PERSON IN THE SAME OR A SIMILAR LINE OF BUSINESS, (II) THE
BORROWER CAN DEMONSTRATE, ON A PRO FORMA BASIS, AFTER GIVING EFFECT TO SUCH
ACQUISITION THAT THE LEVERAGE RATIO OF THE BORROWER DOES NOT EXCEED 2.50 TO
1.00, AND (III) THE BORROWER SHALL COMPLY WITH THE REQUIREMENTS OF
SECTION 5.2(E) HEREOF.

 

SECTION 6.7                                   ADVANCES, INVESTMENTS AND LOANS.

 

The Borrower will not, nor will it permit any Subsidiary to, lend money or
extend credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person except for Permitted Investments.

 

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SECTION 6.8                                   TRANSACTIONS WITH AFFILIATES.

 

Except as permitted in subsection (iv) of the definition of Permitted
Investments and customary compensation arrangements entered into in the ordinary
course of business, the Borrower will not, nor will it permit any Subsidiary to,
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder or
Affiliate other than on terms and conditions substantially as favorable as would
be obtainable in a comparable arm’s-length transaction with a Person other than
an officer, director, shareholder or Affiliate.

 

SECTION 6.9                                   OWNERSHIP OF SUBSIDIARIES;
RESTRICTIONS.

 

The Borrower will not, nor will it permit any Subsidiary to, create, form or
acquire any Subsidiaries, except for Domestic Subsidiaries which are joined (or
those who participate in a merger in which another entity survives and the
survivor joins) as Additional Credit Parties within thirty (30) days in
accordance with the terms hereof.  The Borrower will not sell, transfer, pledge
or otherwise dispose of any Capital Stock or other equity interests in any of it
Subsidiaries, nor will it permit any of its Subsidiaries to issue, sell,
transfer, pledge or otherwise dispose of any of their Capital Stock or other
equity interests, except in a transaction permitted by Section 6.6.

 

SECTION 6.10         FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.

 

The Borrower will not, nor will it permit any of its Subsidiaries to, change its
fiscal year or accounting policies unless permitted by GAAP or, with respect to
a Subsidiary, to change so as to be in conformity with the fiscal year of the
Borrower.  The Borrower will not, nor will it permit any Subsidiary to, amend,
modify or change its articles of incorporation (or corporate charter or other
similar organizational document) or bylaws (or other similar document) without
the prior written consent of the Required Lenders unless such amendment,
modification or change could not reasonably be expected to materially adversely
effect the interests of the Lenders hereunder.  The Borrower will not, nor will
it permit any of its Subsidiaries to, without the prior written consent of the
Administrative Agent, amend, modify, waive any default of or breach under,
cancel or terminate or fail to renew or extend or permit the amendment,
modification, waiver of any default of or breach under or cancellation or
termination of any of the Material Contracts unless such amendment,
modification, waiver, cancellation, termination or failure to renew or extend
could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.11         LIMITATION ON RESTRICTED ACTIONS.

 

The Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any

 

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renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Agreement
and the other Credit Documents, (ii) applicable law, (iii) any document or
instrument governing Indebtedness incurred pursuant to Sections 6.1(c); provided
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, or (iv) any Permitted Lien or
any document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.

 

SECTION 6.12         RESTRICTED PAYMENTS.

 

The Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except (a) to make dividends payable solely in the same class of
Capital Stock of such Person, (b) to make dividends or other distributions
payable to any Credit Party (directly or indirectly through Subsidiaries),
(c) as permitted by Section 6.13 and (d) so long as no Default or Event of
Default shall have occurred and be continuing, or would result therefrom, the
Borrower may repurchase shares of its Capital Stock during the term of this
Agreement in an amount, so long as (i) the Borrower can demonstrate, after
giving effect to such purchase (A) compliance on a Pro Forma Basis with the
financial covenants set forth in Section 5.9 hereof, as set forth in a
compliance certificate and (B) the Leverage Ratio of the Borrower after giving
effect to any such repurchase on a Pro Forma Basis shall not exceed 2.50 to
1.00.  In any event, the total amount of Capital Stock repurchased pursuant to
this Section 6.12 shall not exceed (i) $50,000,000 at such times as the Leverage
Ratio is greater than or equal to 1.75 to 1.00 and (ii) $75,000,000 at such
times as the Leverage Ratio is less than 1.75 to 1.00.

 

SECTION 6.13                            PREPAYMENTS OF INDEBTEDNESS, ETC.

 

The Borrower will not, nor will it permit any Subsidiary to, after the issuance
thereof, amend or modify (or permit the amendment or modification of) any of the
terms of any Subordinated Indebtedness if such amendment or modification would
add or change any terms in a manner adverse to the issuer of such Subordinated
Indebtedness, or shorten the final maturity or average life to maturity or
require any payment to be made sooner than originally scheduled or increase the
interest rate applicable thereto or change any subordination provision thereof.

 

SECTION 6.14                            SALE LEASEBACKS.

 

The Borrower will not, nor will it permit any Subsidiary to, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any Capital Lease or any “synthetic” lease or other off-balance
sheet financing lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired in excess of $2,500,000 in the aggregate
on an annual basis, (a) which the Borrower or any Subsidiary has sold or
transferred or is to sell or transfer to a Person which is not the Borrower or
any Subsidiary or (b) which the Borrower or any Subsidiary intends to use for
substantially the same purpose as the property which has been sold or is to be
sold or transferred by the Borrower or any Subsidiary to another Person in
connection with such lease.

 

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SECTION 6.15                            NO FURTHER NEGATIVE PLEDGES.

 

The Borrower will not, nor will it permit any Subsidiary to, enter into, assume
or become subject to any agreement prohibiting or otherwise restricting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation except (a) pursuant to
this Agreement and the other Credit Documents, (b) pursuant to applicable law,
(c) pursuant to any document or instrument governing Indebtedness incurred
pursuant to Sections 6.1(c); provided that any such restriction contained
therein relates only to the asset or assets constructed or acquired in
connection therewith, and (d) in connection with any Permitted Lien or any
document or instrument governing any Permitted Lien; provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.

 

ARTICLE VII
EVENTS OF DEFAULT

 

SECTION 7.1                                   EVENTS OF DEFAULT.

 

An Event of Default shall exist upon the occurrence of any of the following
specified events (each an “Event of Default”):

 

(A)           THE BORROWER SHALL FAIL TO PAY ANY PRINCIPAL ON ANY NOTE WHEN DUE
IN ACCORDANCE WITH THE TERMS THEREOF OR HEREOF; OR THE BORROWER SHALL FAIL TO
REIMBURSE THE ISSUING LENDER FOR ANY LOC OBLIGATIONS WHEN DUE IN ACCORDANCE WITH
THE TERMS HEREOF; OR THE BORROWER SHALL FAIL TO PAY ANY INTEREST ON ANY NOTE OR
ANY FEE OR OTHER AMOUNT PAYABLE HEREUNDER WHEN DUE IN ACCORDANCE WITH THE TERMS
THEREOF OR HEREOF AND ANY SUCH FAILURE SHALL CONTINUE UNREMEDIED FOR THREE (3)
BUSINESS DAYS (OR ANY GUARANTOR SHALL FAIL TO PAY ON THE GUARANTY IN RESPECT OF
ANY OF THE FOREGOING OR IN RESPECT OF ANY OTHER GUARANTY OBLIGATIONS
THEREUNDER); OR

 

(B)           ANY REPRESENTATION OR WARRANTY MADE OR DEEMED MADE HEREIN, IN THE
SECURITY DOCUMENTS OR IN ANY OF THE OTHER CREDIT DOCUMENTS OR WHICH IS CONTAINED
IN ANY CERTIFICATE, DOCUMENT OR FINANCIAL OR OTHER STATEMENT FURNISHED AT ANY
TIME UNDER OR IN CONNECTION WITH THIS AGREEMENT SHALL PROVE TO HAVE BEEN
INCORRECT, FALSE OR MISLEADING IN ANY MATERIAL RESPECT ON OR AS OF THE DATE MADE
OR DEEMED MADE; OR

 

(C)           (I) ANY CREDIT PARTY SHALL FAIL TO PERFORM, COMPLY WITH OR OBSERVE
ANY TERM, COVENANT OR AGREEMENT APPLICABLE TO IT CONTAINED IN SECTION 5.7(A),
SECTION 5.9 OR ARTICLE VI HEREOF; OR (II) ANY CREDIT PARTY SHALL FAIL TO COMPLY
WITH ANY OTHER COVENANT, CONTAINED IN THIS CREDIT AGREEMENT OR THE OTHER CREDIT
DOCUMENTS OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT AMONG ANY CREDIT PARTY,
THE ADMINISTRATIVE AGENT AND THE LENDERS OR EXECUTED BY ANY CREDIT PARTY IN
FAVOR OF THE ADMINISTRATIVE AGENT OR THE LENDERS (OTHER THAN AS DESCRIBED IN
SECTIONS 7.1(A) OR 7.1(C)(I) ABOVE), AND IN THE

 

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EVENT SUCH BREACH OR FAILURE TO COMPLY IS CAPABLE OF CURE, IS NOT CURED WITHIN
THIRTY (30) DAYS OF ITS OCCURRENCE; OR

 

(D)           ANY CREDIT PARTY OR ANY OF ITS SUBSIDIARIES SHALL (I) DEFAULT IN
ANY PAYMENT OF PRINCIPAL OF OR INTEREST ON ANY INDEBTEDNESS (OTHER THAN THE
NOTES) IN A PRINCIPAL AMOUNT OUTSTANDING OF AT LEAST $2,500,000 FOR ANY
INDIVIDUAL ITEM OF INDEBTEDNESS AND $5,000,000 IN THE AGGREGATE FOR ALL SUCH
INDEBTEDNESS FOR THE BORROWER AND ITS SUBSIDIARIES BEYOND THE PERIOD OF GRACE
(NOT TO EXCEED 10 DAYS), IF ANY, PROVIDED IN THE INSTRUMENT OR AGREEMENT UNDER
WHICH SUCH INDEBTEDNESS WAS CREATED; OR (II) DEFAULT IN THE OBSERVANCE OR
PERFORMANCE OF ANY OTHER AGREEMENT OR CONDITION RELATING TO ANY INDEBTEDNESS IN
A PRINCIPAL AMOUNT OUTSTANDING OF AT LEAST $2,500,000 FOR ANY INDIVIDUAL ITEM OF
INDEBTEDNESS AND $5,000,000 IN THE AGGREGATE FOR ALL SUCH INDEBTEDNESS FOR THE
BORROWER AND ITS SUBSIDIARIES OR CONTAINED IN ANY INSTRUMENT OR AGREEMENT
EVIDENCING, SECURING OR RELATING THERETO, OR ANY OTHER EVENT SHALL OCCUR OR
CONDITION EXIST, THE EFFECT OF WHICH DEFAULT OR OTHER EVENT OR CONDITION IS TO
CAUSE, OR TO PERMIT THE HOLDER OR HOLDERS OF SUCH INDEBTEDNESS OR BENEFICIARY OR
BENEFICIARIES OF SUCH INDEBTEDNESS (OR A TRUSTEE OR AGENT ON BEHALF OF SUCH
HOLDER OR HOLDERS OR BENEFICIARY OR BENEFICIARIES) TO CAUSE, WITH THE GIVING OF
NOTICE IF REQUIRED, SUCH INDEBTEDNESS TO BECOME DUE PRIOR TO ITS STATED
MATURITY; OR

 

(E)           (I) THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL COMMENCE ANY
CASE, PROCEEDING OR OTHER ACTION (A) UNDER ANY EXISTING OR FUTURE LAW OF ANY
JURISDICTION, DOMESTIC OR FOREIGN, RELATING TO BANKRUPTCY, INSOLVENCY,
REORGANIZATION OR RELIEF OF DEBTORS, SEEKING (X) TO HAVE AN ORDER FOR RELIEF
ENTERED WITH RESPECT TO IT OR (Y) TO ADJUDICATE IT A BANKRUPT OR INSOLVENT OR
(Z) REORGANIZATION, ARRANGEMENT, ADJUSTMENT, WINDING-UP, LIQUIDATION,
DISSOLUTION, COMPOSITION OR OTHER RELIEF WITH RESPECT TO IT OR ITS DEBTS, OR (B)
SEEKING APPOINTMENT OF A RECEIVER, TRUSTEE, CUSTODIAN, CONSERVATOR OR OTHER
SIMILAR OFFICIAL FOR IT OR FOR ALL OR ANY SUBSTANTIAL PART OF ITS ASSETS, OR THE
BORROWER OR ANY OF ITS SUBSIDIARIES SHALL MAKE A GENERAL ASSIGNMENT FOR THE
BENEFIT OF ITS CREDITORS; OR (II) THERE SHALL BE COMMENCED AGAINST THE BORROWER
OR ANY OF ITS SUBSIDIARIES ANY CASE, PROCEEDING OR OTHER ACTION OF A NATURE
REFERRED TO IN CLAUSE (I) ABOVE WHICH (A) RESULTS IN THE ENTRY OF AN ORDER FOR
RELIEF OR ANY SUCH ADJUDICATION OR APPOINTMENT OR (B) REMAINS UNDISMISSED,
UNDISCHARGED OR UNBONDED FOR A PERIOD OF 60 DAYS; OR (III) THERE SHALL BE
COMMENCED AGAINST THE BORROWER OR ANY OF ITS SUBSIDIARIES ANY CASE, PROCEEDING
OR OTHER ACTION SEEKING ISSUANCE OF A WARRANT OF ATTACHMENT, EXECUTION,
DISTRAINT OR SIMILAR PROCESS AGAINST ALL OR ANY SUBSTANTIAL PART OF ITS ASSETS
WHICH RESULTS IN THE ENTRY OF AN ORDER FOR ANY SUCH RELIEF WHICH SHALL NOT HAVE
BEEN VACATED, DISCHARGED, OR STAYED OR BONDED PENDING APPEAL WITHIN 60 DAYS FROM
THE ENTRY THEREOF; OR (IV) THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL TAKE
ANY ACTION IN FURTHERANCE OF, OR INDICATING ITS CONSENT TO, APPROVAL OF, OR
ACQUIESCENCE IN, ANY OF THE ACTS SET FORTH IN CLAUSE (I), (II), OR (III) ABOVE;
OR (V) THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL GENERALLY NOT, OR SHALL BE
UNABLE TO, OR SHALL ADMIT IN WRITING ITS INABILITY TO, PAY ITS DEBTS AS THEY
BECOME DUE; OR

 

(F)            ONE OR MORE JUDGMENTS OR DECREES SHALL BE ENTERED AGAINST THE
BORROWER OR ANY OF ITS SUBSIDIARIES INVOLVING IN THE AGGREGATE A LIABILITY (TO
THE EXTENT NOT PAID WHEN DUE OR COVERED BY INSURANCE) OF $1,000,000 OR MORE AND
ALL SUCH JUDGMENTS OR DECREES

 

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SHALL NOT HAVE BEEN PAID AND SATISFIED, VACATED, DISCHARGED, STAYED OR BONDED
PENDING APPEAL WITHIN 10 DAYS FROM THE ENTRY THEREOF; OR

 

(G)           (I) ANY PERSON SHALL ENGAGE IN ANY “PROHIBITED TRANSACTION” (AS
DEFINED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) INVOLVING ANY PLAN,
(II) ANY “ACCUMULATED FUNDING DEFICIENCY” (AS DEFINED IN SECTION 302 OF ERISA),
WHETHER OR NOT WAIVED, SHALL EXIST WITH RESPECT TO ANY PLAN OR ANY LIEN IN FAVOR
OF THE PBGC OR A PLAN (OTHER THAN A PERMITTED LIEN) SHALL ARISE ON THE ASSETS OF
THE BORROWER, OR ANY OF ITS SUBSIDIARIES OR ANY COMMONLY CONTROLLED ENTITY,
(III) A REPORTABLE EVENT SHALL OCCUR WITH RESPECT TO, OR PROCEEDINGS SHALL
COMMENCE TO HAVE A TRUSTEE APPOINTED, OR A TRUSTEE SHALL BE APPOINTED, TO
ADMINISTER OR TO TERMINATE, ANY SINGLE EMPLOYER PLAN, WHICH REPORTABLE EVENT OR
COMMENCEMENT OF PROCEEDINGS OR APPOINTMENT OF A TRUSTEE IS, IN THE REASONABLE
OPINION OF THE REQUIRED LENDERS, LIKELY TO RESULT IN THE TERMINATION OF SUCH
PLAN FOR PURPOSES OF TITLE IV OF ERISA, (IV) ANY SINGLE EMPLOYER PLAN SHALL
TERMINATE FOR PURPOSES OF TITLE IV OF ERISA, (V) THE BORROWER, ANY OF ITS
SUBSIDIARIES OR ANY COMMONLY CONTROLLED ENTITY SHALL, OR IN THE REASONABLE
OPINION OF THE REQUIRED LENDERS IS LIKELY TO, INCUR ANY LIABILITY IN CONNECTION
WITH A WITHDRAWAL FROM, OR THE INSOLVENCY OR REORGANIZATION OF, ANY
MULTIEMPLOYER PLAN OR (VI) ANY OTHER SIMILAR EVENT OR CONDITION SHALL OCCUR OR
EXIST WITH RESPECT TO A PLAN; AND IN EACH CASE IN CLAUSES (I) THROUGH (VI)
ABOVE, SUCH EVENT OR CONDITION, TOGETHER WITH ALL OTHER SUCH EVENTS OR
CONDITIONS, IF ANY, COULD HAVE A MATERIAL ADVERSE EFFECT; OR

 

(H)           THE GUARANTY OR ANY PROVISION THEREOF SHALL CEASE TO BE IN FULL
FORCE AND EFFECT OR ANY GUARANTOR OR ANY PERSON ACTING BY OR ON BEHALF OF ANY
GUARANTOR SHALL DENY OR DISAFFIRM, OR FAIL TO PERFORM, ANY GUARANTOR’S
OBLIGATIONS UNDER THE GUARANTY;

 

(I)            THERE SHALL OCCUR A CHANGE OF CONTROL; OR

 

(J)            ANY OTHER CREDIT DOCUMENT SHALL FAIL TO BE IN FULL FORCE AND
EFFECT OR TO GIVE THE ADMINISTRATIVE AGENT AND/OR THE LENDERS THE SECURITY
INTERESTS, LIENS, RIGHTS, POWERS AND PRIVILEGES PURPORTED TO BE CREATED THEREBY
(EXCEPT AS SUCH DOCUMENTS MAY BE TERMINATED BY THE ADMINISTRATIVE AGENT AND/OR
THE LENDERS OR NO LONGER IN FORCE AND EFFECT IN ACCORDANCE WITH THE TERMS
THEREOF, OTHER THAN THOSE INDEMNITIES AND PROVISIONS WHICH BY THEIR TERMS SHALL
SURVIVE).

 

SECTION 7.2                                   ACCELERATION; REMEDIES.

 

Upon the occurrence of an Event of Default, then, and in any such event, (a) if
such event is an Event of Default specified in Section 7.1(e) above,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and (b) if
such event is any other Event of Default, either or both of the following
actions may be taken:  (i) with the written consent of the Required Lenders, the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall

 

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immediately terminate; and (ii) the Administrative Agent may, or upon the
written request of the Required Lenders, the Administrative Agent shall, by
notice of default to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith and direct the Borrower to pay to the Administrative
Agent cash collateral as security for the LOC Obligations for subsequent
drawings under then outstanding Letters of Credit in an amount equal to the
maximum amount which may be drawn under Letters of Credit then outstanding,
whereupon the same shall immediately become due and payable.

 

ARTICLE VIII
THE ADMINISTRATIVE AGENT

 

SECTION 8.1                                   APPOINTMENT; NATURE OF
RELATIONSHIP.

 

Bank One, NA is hereby appointed by each of the Lenders as its contractual
representative hereunder and under each other Credit Document, and each of the
Lenders irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Credit Documents.  The Administrative Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article.  Notwithstanding the use of the defined term
“Administrative Agent,” it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any Lender
by reason of this Agreement or any other Credit Document and that the
Administrative Agent is merely acting as the contractual representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Credit Documents.  In its capacity as the Lenders’ contractual
representative, the Administrative Agent (i) does not hereby assume any
fiduciary duties to any of the Lenders, (ii) is a “representative” of the
Lenders within the meaning of the term “secured party” as defined in the Texas
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Credit Documents.  Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.

 

SECTION 8.2                                   POWERS.

 

The Administrative Agent shall have and may exercise such powers under the
Credit Documents as are specifically delegated to the Administrative Agent by
the terms of each thereof, together with such powers as are reasonably
incidental thereto.  The Administrative Agent shall have no implied duties to
the Lenders, or any obligation to the Lenders to take any action thereunder
except any action specifically provided by the Credit Documents to be taken by
the Administrative Agent.

 

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SECTION 8.3                                   GENERAL IMMUNITY.

 

Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable to the Borrower, the Lenders or any Lender for any
action taken or omitted to be taken by it or them hereunder or under any other
Credit Document or in connection herewith or therewith except to the extent such
action or inaction is determined in a final non-appealable judgment by a court
of competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person (IT BEING THE INTENTION OF THIS PROVISION THAT THERE
SHALL BE NO LIABILITY ARISING SOLELY OUT OF OR BY REASON OF THE ORDINARY
NEGLIGENCE OF ANY OF THE PARTIES BEING REIMBURSED).

 

SECTION 8.4                                   NO RESPONSIBILITY FOR LOANS,
RECITALS, ETC.

 

Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into,
or verify (a) any statement, warranty or representation made in connection with
any Credit Document or any borrowing hereunder; (b) the performance or
observance of any of the covenants or agreements of any obligor under any Credit
Document, including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered solely
to the Administrative Agent; (d) the existence or possible existence of any
Default or Event of Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Credit Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower or any guarantor of any of the Obligations
or of any of the Borrower’s or any such guarantor’s respective Subsidiaries. 
The Administrative Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrower to the
Administrative Agent at such time, but is voluntarily furnished by the Borrower
to the Administrative Agent (either in its capacity as Administrative Agent or
in its individual capacity).

 

SECTION 8.5                                   ACTING ON INSTRUCTIONS OF LENDERS.

 

The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and under any other Credit Document in
accordance with written instructions signed by the Required Lenders, and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders.  The Lenders hereby acknowledge that the
Administrative Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this Agreement or any
other Credit Document unless it shall be requested in writing to do so by the
Required Lenders.  The Administrative Agent shall be fully justified in failing
or refusing to take any action hereunder and under any other Credit Document
unless it shall first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.

 

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SECTION 8.6                                   EMPLOYMENT OF AGENTS AND COUNSEL.

 

The Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Credit Document by or through employees, agents,
and attorneys in fact and shall not be answerable to the Lenders, except as to
money or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys in fact selected by it with
reasonable care.  The Administrative Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Administrative Agent
and the Lenders and all matters pertaining to the Administrative Agent’s duties
hereunder and under any other Credit Document.

 

SECTION 8.7                                   RELIANCE ON DOCUMENTS; COUNSEL.

 

The Administrative Agent shall be entitled to rely upon any Note, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex, electronic
mail message, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and, in
respect to legal matters, upon the opinion of counsel selected by the
Administrative Agent, which counsel may be employees of the Administrative
Agent.  For purposes of determining compliance with the conditions specified in
Article IV, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the applicable date specifying its objection
thereto.

 

SECTION 8.8                                   ADMINISTRATIVE AGENT’S
REIMBURSEMENT AND INDEMNIFICATION.

 

The Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Revolving Commitments (or, if the Revolving
Commitments have been terminated, in proportion to their Revolving Commitments
immediately prior to such termination) (i) for any amounts not reimbursed by the
Borrower for which the Administrative Agent is entitled to reimbursement by the
Borrower under the Credit Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Credit
Documents (including, without limitation, for any expenses incurred by the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Credit Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Administrative Agent in connection with any dispute between the
Administrative Agent and any Lender or between two or more of the Lenders), or
the enforcement of any of the terms of the Credit Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Administrative Agent (IT

 

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BEING THE INTENTION OF THIS PROVISION THAT SUCH INDEMNIFICATION OBLIGATION WILL
BE APPLICABLE REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE ORDINARY
NEGLIGENCE OF ANY OF THE PARTIES BEING INDEMNIFIED) and (ii) any indemnification
required pursuant to Section 2.16 shall, notwithstanding the provisions of this
Section, be paid by the relevant Lender in accordance with the provisions
thereof.  The obligations of the Lenders under this Section shall survive
payment of the Obligations and termination of this Agreement.

 

SECTION 8.9                                   NOTICE OF DEFAULT.

 

The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or the Borrower
referring to this Agreement describing such Default or Event of Default and
stating that such notice is a “notice of default”.  In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders.

 

SECTION 8.10                            RIGHTS AS A LENDER.

 

In the event the Administrative Agent is a Lender, the Administrative Agent
shall have the same rights and powers hereunder and under any other Credit
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Administrative Agent, and the term
“Lender” or “Lenders” shall, at any time when the Administrative Agent is a
Lender, unless the context otherwise indicates, include the Administrative Agent
in its individual capacity.  The Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Credit Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person.  The Administrative Agent, in its
individual capacity, is not obligated to remain a Lender.

 

SECTION 8.11                            LENDER CREDIT DECISION.

 

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent, the Arranger or any other Lender and based on the
financial statements prepared by the Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Credit Documents.  Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Credit Documents.

 

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SECTION 8.12                            SUCCESSOR ADMINISTRATIVE AGENT.

 

The Administrative Agent may resign at any time by giving written notice thereof
to the Lenders and the Borrower, such resignation to be effective upon the
appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five days after the retiring
Administrative Agent gives notice of its intention to resign.  The
Administrative Agent may be removed at any time with or without cause by written
notice received by the Administrative Agent from the Required Lenders, such
removal to be effective on the date specified by the Required Lenders.  Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint, on behalf of the Borrower and the Lenders, a successor Administrative
Agent.  If no successor Administrative Agent shall have been so appointed by the
Required Lenders within thirty days after the resigning Administrative Agent’s
giving notice of its intention to resign, then the resigning Administrative
Agent may appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent.  Notwithstanding the previous sentence, the Administrative
Agent may at any time without the consent of the Borrower or any Lender, appoint
any of its Affiliates which is a commercial bank as a successor Administrative
Agent hereunder.  If the Administrative Agent has resigned or been removed and
no successor Administrative Agent has been appointed, the Lenders may perform
all the duties of the Administrative Agent hereunder and the Borrower shall make
all payments in respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders.  No successor
Administrative Agent shall be deemed to be appointed hereunder until such
successor Administrative Agent has accepted the appointment.  Any such successor
Administrative Agent shall be a commercial bank having capital and retained
earnings of at least $100,000,000.  Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the resigning or removed
Administrative Agent.  Upon the effectiveness of the resignation or removal of
the Administrative Agent, the resigning or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the Credit
Documents.  After the effectiveness of the resignation or removal of an
Administrative Agent, the provisions of this Article shall continue in effect
for the benefit of such Administrative Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent
hereunder and under the other Credit Documents.  In the event that there is a
successor to the Administrative Agent by merger, or the Administrative Agent
assigns its duties and obligations to an Affiliate pursuant to this Section,
then the term “Prime Rate” as used in this Agreement shall mean the prime rate,
base rate or other analogous rate of the new Administrative Agent.

 

SECTION 8.13                            ADMINISTRATIVE AGENT AND ARRANGER FEES.

 

The Borrower agrees to pay to the Administrative Agent and the Arranger, for
their respective accounts, the fees agreed to by the Borrower, the
Administrative Agent and the Arranger pursuant to the Fee Letter or as otherwise
agreed from time to time.

 

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SECTION 8.14                            DELEGATION TO AFFILIATES.

 

The Borrower and the Lenders agree that the Administrative Agent may delegate
any of its duties under this Agreement to any of its Affiliates.  Any such
Affiliate (and such Affiliate’s directors, officers, agents and employees) which
performs duties in connection with this Agreement shall be entitled to the same
benefits of the indemnification, waiver and other protective provisions to which
the Administrative Agent is entitled under this Agreement.

 

SECTION 8.15                            EXECUTION OF COLLATERAL DOCUMENTS.

 

The Lenders hereby empower and authorize the Administrative Agent to execute and
deliver to the Borrower on their behalf the Security Documents and all related
financing statements and any financing statements, agreements, documents or
instruments as shall be necessary or appropriate to effect the purposes of the
Security Documents.

 

SECTION 8.16                            COLLATERAL RELEASES.

 

The Lenders hereby empower and authorize the Administrative Agent to execute and
deliver to the Borrower on their behalf any agreements, documents or instruments
as shall be necessary or appropriate to effect any releases of Collateral or
subordinations of liens on the Collateral which shall be permitted by the terms
hereof or of any other Credit Document or which shall otherwise have been
approved by the Required Lenders (or, if required by the terms of this
Agreement, all of the Lenders) in writing.

 

SECTION 8.17                            DOCUMENTATION AGENT.

 

The Documentation Agent shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such.  Without limiting the foregoing, the Documentation Agent shall
not have or be deemed to have a fiduciary relationship with any Lender.  Each
Lender hereby makes the same acknowledgments with respect to the Documentation
Agent as it makes with respect to the Administrative Agent in Section 8.11.

 

ARTICLE IX
GUARANTY

 

SECTION 9.1                                   THE GUARANTY.

 

In order to induce the Lenders to enter into this Agreement and to extend credit
hereunder and in recognition of the direct benefits to be received by the
Guarantors from the Extensions of Credit hereunder, each of the Guarantors
hereby agrees with the Administrative Agent and the Lenders as follows: the
Guarantor hereby unconditionally and irrevocably jointly and severally
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, of any
and all Credit Party Obligations.  If any or all of the Credit Party Obligations
becomes due and payable hereunder, each Guarantor

 

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unconditionally promises to pay such indebtedness to the Administrative Agent
and the Lenders, on order, or demand, together with any and all reasonable
expenses which may be incurred by the Administrative Agent or the Lenders in
collecting any of the Credit Party Obligations.

 

Notwithstanding any provision to the contrary contained herein or in any other
of the Credit Documents, to the extent the obligations of a Guarantor shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).

 

SECTION 9.2                                   BANKRUPTCY.

 

Additionally, each of the Guarantors unconditionally and irrevocably guarantees
jointly and severally the payment of any and all indebtedness of the Borrower to
the Lenders whether or not due or payable by the Borrower upon the occurrence of
any of the events specified in Section 7.1(e), and unconditionally promises to
pay such Credit Party Obligations to the Administrative Agent for the account of
the Lenders, or order, on demand, in lawful money of the United States.  Each of
the Guarantors further agrees that to the extent that the Borrower or a
Guarantor shall make a payment or a transfer of an interest in any property to
the Administrative Agent or any Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to a Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.

 

SECTION 9.3                                   NATURE OF LIABILITY.

 

The liability of each Guarantor hereunder is exclusive and independent of any
security for or other guaranty of the indebtedness of the Borrower whether
executed by any such Guarantor, any other guarantor or by any other party, and
no Guarantor’s liability hereunder shall be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party, or
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the indebtedness of the Borrower, or (c)
any payment on or in reduction of any such other guaranty or undertaking, or (d)
any dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to the Administrative Agent or the Lenders on
the indebtedness which the Administrative Agent or such Lenders repay the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Guarantors waives
any right to the deferral or modification of its obligations hereunder by reason
of any such proceeding.

 

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SECTION 9.4                                   INDEPENDENT OBLIGATION.

 

The obligations of each Guarantor hereunder are independent of the obligations
of any other guarantor or the Borrower, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other guarantor or a Borrower and whether or not any other Guarantor
or the Borrower is joined in any such action or actions.

 

SECTION 9.5                                   AUTHORIZATION.

 

Each of the Guarantors authorizes the Administrative Agent and each Lender
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to (a) renew, compromise, extend, increase, accelerate or
otherwise change the time for payment of, or otherwise change the terms of the
indebtedness or any part thereof in accordance with this Agreement, including
any increase or decrease of the rate of interest thereon, (b) take and hold
security from any guarantor or any other party for the payment of this Guaranty
or the indebtedness and exchange, enforce waive and release any such security,
(c) apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine and (d)
release or substitute any one or more endorsers, guarantors, the Borrower or
other obligors.

 

SECTION 9.6                                   RELIANCE.

 

It is not necessary for the Administrative Agent or the Lenders to inquire into
the capacity or powers of the Borrower or the officers, directors, partners or
agents acting or purporting to act on their behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.

 

SECTION 9.7                                   WAIVER.

 

(A)           EACH OF THE GUARANTORS WAIVES ANY RIGHT (EXCEPT AS SHALL BE
REQUIRED BY APPLICABLE STATUTE AND CANNOT BE WAIVED) TO REQUIRE THE
ADMINISTRATIVE AGENT OR ANY LENDER TO (I) PROCEED AGAINST THE BORROWER, ANY
OTHER GUARANTOR OR ANY OTHER PARTY, (II) PROCEED AGAINST OR EXHAUST ANY SECURITY
HELD FROM THE BORROWER, ANY OTHER GUARANTOR OR ANY OTHER PARTY, OR (III) PURSUE
ANY OTHER REMEDY IN THE ADMINISTRATIVE AGENT’S OR ANY LENDER’S POWER
WHATSOEVER.  EACH OF THE GUARANTORS WAIVES ANY DEFENSE BASED ON OR ARISING OUT
OF ANY DEFENSE OF THE BORROWER, ANY OTHER GUARANTOR OR ANY OTHER PARTY OTHER
THAN PAYMENT IN FULL OF THE INDEBTEDNESS, INCLUDING WITHOUT LIMITATION ANY
DEFENSE BASED ON OR ARISING OUT OF THE DISABILITY OF THE BORROWER, ANY OTHER
GUARANTOR OR ANY OTHER PARTY, OR THE UNENFORCEABILITY OF THE INDEBTEDNESS OR ANY
PART THEREOF FROM ANY CAUSE, OR THE CESSATION FROM ANY CAUSE OF THE LIABILITY OF
THE BORROWER OTHER THAN PAYMENT IN FULL OF THE INDEBTEDNESS.  THE ADMINISTRATIVE
AGENT OR ANY OF THE LENDERS MAY, AT THEIR ELECTION, FORECLOSE ON ANY SECURITY
HELD BY THE ADMINISTRATIVE AGENT OR A LENDER BY ONE OR MORE JUDICIAL OR
NONJUDICIAL SALES (TO THE EXTENT SUCH SALE IS PERMITTED BY APPLICABLE LAW), OR
EXERCISE ANY OTHER RIGHT OR REMEDY THE ADMINISTRATIVE AGENT AND ANY LENDER MAY
HAVE

 

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AGAINST THE BORROWER OR ANY OTHER PARTY, OR ANY SECURITY, WITHOUT AFFECTING OR
IMPAIRING IN ANY WAY THE LIABILITY OF ANY GUARANTOR HEREUNDER EXCEPT TO THE
EXTENT THE INDEBTEDNESS HAS BEEN PAID.  EACH OF THE GUARANTORS WAIVES ANY
DEFENSE ARISING OUT OF ANY SUCH ELECTION BY THE ADMINISTRATIVE AGENT AND EACH OF
THE LENDERS, EVEN THOUGH SUCH ELECTION OPERATES TO IMPAIR OR EXTINGUISH ANY
RIGHT OF REIMBURSEMENT OR SUBROGATION OR OTHER RIGHT OR REMEDY OF THE GUARANTORS
AGAINST THE BORROWER OR ANY OTHER PARTY OR ANY SECURITY.

 

(B)           EACH OF THE GUARANTORS WAIVES ALL PRESENTMENTS, DEMANDS FOR
PERFORMANCE, PROTESTS AND NOTICES, INCLUDING WITHOUT LIMITATION NOTICES OF
NONPERFORMANCE, NOTICE OF PROTEST, NOTICES OF DISHONOR, NOTICES OF ACCEPTANCE OF
THIS GUARANTY, AND NOTICES OF THE EXISTENCE, CREATION OR INCURRING OF NEW OR
ADDITIONAL INDEBTEDNESS.  EACH GUARANTOR ASSUMES ALL RESPONSIBILITY FOR BEING
AND KEEPING ITSELF INFORMED OF THE BORROWER’S FINANCIAL CONDITION AND ASSETS,
AND OF ALL OTHER CIRCUMSTANCES BEARING UPON THE RISK OF NONPAYMENT OF THE
INDEBTEDNESS AND THE NATURE, SCOPE AND EXTENT OF THE RISKS WHICH SUCH GUARANTOR
ASSUMES AND INCURS HEREUNDER, AND AGREES THAT NEITHER THE ADMINISTRATIVE AGENT
NOR ANY LENDER SHALL HAVE ANY DUTY TO ADVISE SUCH GUARANTOR OF INFORMATION KNOWN
TO IT REGARDING SUCH CIRCUMSTANCES OR RISKS.

 

(C)           EACH OF THE GUARANTORS HEREBY AGREES IT WILL NOT EXERCISE ANY
RIGHTS OF SUBROGATION WHICH IT MAY AT ANY TIME OTHERWISE HAVE AS A RESULT OF
THIS GUARANTY (WHETHER CONTRACTUAL, UNDER SECTION 509 OF THE U.S. BANKRUPTCY
CODE, OR OTHERWISE) TO THE CLAIMS OF THE LENDERS AGAINST THE BORROWER OR ANY
OTHER GUARANTOR OF THE INDEBTEDNESS OF THE BORROWER OWING TO THE LENDERS
(COLLECTIVELY, THE “OTHER PARTIES”) AND ALL CONTRACTUAL, STATUTORY OR COMMON LAW
RIGHTS OF REIMBURSEMENT, CONTRIBUTION OR INDEMNITY FROM ANY OTHER PARTY WHICH IT
MAY AT ANY TIME OTHERWISE HAVE AS A RESULT OF THIS GUARANTY UNTIL SUCH TIME AS
THE LOANS HEREUNDER SHALL HAVE BEEN PAID AND THE COMMITMENTS HAVE BEEN
TERMINATED.  EACH OF THE GUARANTORS HEREBY FURTHER AGREES NOT TO EXERCISE ANY
RIGHT TO ENFORCE ANY OTHER REMEDY WHICH THE ADMINISTRATIVE AGENT AND THE LENDERS
NOW HAVE OR MAY HEREAFTER HAVE AGAINST ANY OTHER PARTY, ANY ENDORSER OR ANY
OTHER GUARANTOR OF ALL OR ANY PART OF THE INDEBTEDNESS OF THE BORROWER AND ANY
BENEFIT OF, AND ANY RIGHT TO PARTICIPATE IN, ANY SECURITY OR COLLATERAL GIVEN TO
OR FOR THE BENEFIT OF THE LENDERS TO SECURE PAYMENT OF THE INDEBTEDNESS OF THE
BORROWER UNTIL SUCH TIME AS THE LOANS HEREUNDER SHALL HAVE BEEN PAID AND THE
COMMITMENTS HAVE BEEN TERMINATED.

 

SECTION 9.8                                   LIMITATION ON ENFORCEMENT.

 

The Lenders agree that this Guaranty may be enforced only by the action of the
Administrative Agent acting upon the instructions of the Required Lenders and
that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders upon the terms of this Agreement.  The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee,
stockholder or other equity holder of the Guarantors.

 

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SECTION 9.9                                   CONFIRMATION OF PAYMENT.

 

The Administrative Agent and the Lenders will, upon request after payment of the
indebtedness and obligations which are the subject of this Guaranty and
termination of the commitments relating thereto, confirm to the Borrower, the
Guarantors or any other Person that the such indebtedness and obligations have
been paid and the commitments relating thereto terminated, subject to the
provisions of Section 9.2.

 

ARTICLE X
BENEFIT OF AGREEMENT; ASSIGNMENT; PARTICIPATIONS

 

SECTION 10.1                            SUCCESSORS AND ASSIGNS.

 

The terms and provisions of the Credit Documents shall be binding upon and inure
to the benefit of the Borrower and the Lenders and their respective successors
and assigns permitted hereby, except that (i) the Borrower shall not have the
right to assign its rights or obligations under the Credit Documents without the
prior written consent of each Lender, (ii) any assignment by any Lender must be
made in compliance with Section 10.3, and (iii) any transfer by participation
must be made in compliance with Section 10.2.  Any attempted assignment or
transfer by any party not made in compliance with this Section 10.1 shall be
null and void, unless such attempted assignment or transfer is treated as a
participation in accordance with Section 10.3(b).  The parties to this Agreement
acknowledge that clause (ii) of this Section 10.1 relates only to absolute
assignments and this Section 10.1 does not prohibit assignments creating
security interests, including, without limitation, (x) any pledge or assignment
by any Lender of all or any portion of its rights under this Agreement and any
Note to a Federal Reserve Bank or (y) in the case of a Lender which is an
Approved Fund, any pledge or assignment of all or any portion of its rights
under this Agreement and any Note to its trustee in support of its obligations
to its trustee; provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations
hereunder unless and until the parties thereto have complied with the provisions
of Section 10.3.  The Administrative Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 10.3; provided, however, that the
Administrative Agent may in its discretion (but shall not be required to) follow
instructions from the Person which made any Loan or which holds any Note to
direct payments relating to such Loan or Note to another Person.  Any assignee
of the rights to any Loan or any Note agrees by acceptance of such assignment to
be bound by all the terms and provisions of the Credit Documents.  Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Loan.

 

SECTION 10.2                            PARTICIPATIONS.

 

(A)           ANY LENDER MAY AT ANY TIME SELL TO ONE OR MORE BANKS OR OTHER
ENTITIES (“PARTICIPANTS”) PARTICIPATING INTERESTS IN ANY LOAN OWING TO SUCH
LENDER, ANY NOTE HELD

 

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BY SUCH LENDER, ANY COMMITMENT OF SUCH LENDER OR ANY OTHER INTEREST OF SUCH
LENDER UNDER THE CREDIT DOCUMENTS.  IN THE EVENT OF ANY SUCH SALE BY A LENDER OF
PARTICIPATING INTERESTS TO A PARTICIPANT, SUCH LENDER’S OBLIGATIONS UNDER THE
CREDIT DOCUMENTS SHALL REMAIN UNCHANGED, SUCH LENDER SHALL REMAIN SOLELY
RESPONSIBLE TO THE OTHER PARTIES HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS,
SUCH LENDER SHALL REMAIN THE OWNER OF ITS LOANS AND THE HOLDER OF ANY NOTE
ISSUED TO IT IN EVIDENCE THEREOF FOR ALL PURPOSES UNDER THE CREDIT DOCUMENTS,
ALL AMOUNTS PAYABLE BY THE BORROWER UNDER THIS AGREEMENT SHALL BE DETERMINED AS
IF SUCH LENDER HAD NOT SOLD SUCH PARTICIPATING INTERESTS, AND THE BORROWER AND
THE ADMINISTRATIVE AGENT SHALL CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH
LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND OBLIGATIONS UNDER THE CREDIT
DOCUMENTS.

 

(B)           EACH LENDER SHALL RETAIN THE SOLE RIGHT TO APPROVE, WITHOUT THE
CONSENT OF ANY PARTICIPANT, ANY AMENDMENT, MODIFICATION OR WAIVER OF ANY
PROVISION OF THE CREDIT DOCUMENTS OTHER THAN ANY AMENDMENT, MODIFICATION OR
WAIVER WITH RESPECT TO ANY LOAN OR COMMITMENT IN WHICH SUCH PARTICIPANT HAS AN
INTEREST WHICH WOULD REQUIRE CONSENT OF ALL OF THE LENDERS PURSUANT TO THE TERMS
OF SECTION 11.1 OR OF ANY OTHER CREDIT DOCUMENT.

 

(C)           THE BORROWER AGREES THAT EACH PARTICIPANT SHALL BE DEEMED TO HAVE
THE RIGHT OF SETOFF PROVIDED IN SECTION 11.6 IN RESPECT OF ITS PARTICIPATING
INTEREST IN AMOUNTS OWING UNDER THE CREDIT DOCUMENTS TO THE SAME EXTENT AS IF
THE AMOUNT OF ITS PARTICIPATING INTEREST WERE OWING DIRECTLY TO IT AS A LENDER
UNDER THE CREDIT DOCUMENTS, PROVIDED THAT EACH LENDER SHALL RETAIN THE RIGHT OF
SETOFF PROVIDED IN SECTION 11.6 WITH RESPECT TO THE AMOUNT OF PARTICIPATING
INTERESTS SOLD TO EACH PARTICIPANT.  THE LENDERS AGREE TO SHARE WITH EACH
PARTICIPANT, AND EACH PARTICIPANT, BY EXERCISING THE RIGHT OF SETOFF PROVIDED IN
SECTION 11.6, AGREES TO SHARE WITH EACH LENDER, ANY AMOUNT RECEIVED PURSUANT TO
THE EXERCISE OF ITS RIGHT OF SETOFF, SUCH AMOUNTS TO BE SHARED IN ACCORDANCE
WITH SECTION 11.2 AS IF EACH PARTICIPANT WERE A LENDER.  THE BORROWER FURTHER
AGREES THAT EACH PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF SECTIONS 2.15,
2.16 AND 2.17 TO THE SAME EXTENT AS IF IT WERE A LENDER AND HAD ACQUIRED ITS
INTEREST BY ASSIGNMENT PURSUANT TO SECTION 10.3, PROVIDED THAT (I) A PARTICIPANT
SHALL NOT BE ENTITLED TO RECEIVE ANY GREATER PAYMENT UNDER SECTION 2.15 OR 2.17
THAN THE LENDER WHO SOLD THE PARTICIPATING INTEREST TO SUCH PARTICIPANT WOULD
HAVE RECEIVED HAD IT RETAINED SUCH INTEREST FOR ITS OWN ACCOUNT, UNLESS THE SALE
OF SUCH INTEREST TO SUCH PARTICIPANT IS MADE WITH THE PRIOR WRITTEN CONSENT OF
THE BORROWER, AND (II) ANY PARTICIPANT NOT INCORPORATED UNDER THE LAWS OF THE
UNITED STATES OF AMERICA OR ANY STATE THEREOF AGREES TO COMPLY WITH THE
PROVISIONS OF SECTION 2.17 TO THE SAME EXTENT AS IF IT WERE A LENDER.

 

SECTION 10.3                            ASSIGNMENTS.

 

(A)           ANY LENDER MAY AT ANY TIME ASSIGN TO ONE OR MORE BANKS OR OTHER
ENTITIES (“PURCHASERS”) ALL OR ANY PART OF ITS RIGHTS AND OBLIGATIONS UNDER THE
CREDIT DOCUMENTS.  SUCH ASSIGNMENT SHALL BE SUBSTANTIALLY IN THE FORM OF
SCHEDULE 10.3 OR IN SUCH OTHER FORM AS MAY BE AGREED TO BY THE PARTIES THERETO. 
EACH SUCH ASSIGNMENT WITH RESPECT TO A PURCHASER WHICH IS NOT A LENDER OR AN
AFFILIATE OF A LENDER OR AN APPROVED FUND SHALL EITHER BE IN AN AMOUNT EQUAL TO
THE ENTIRE APPLICABLE COMMITMENT AND LOANS OF THE ASSIGNING LENDER OR  (UNLESS
EACH OF THE BORROWER AND THE ADMINISTRATIVE AGENT

 

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OTHERWISE CONSENTS) BE IN AN AGGREGATE AMOUNT NOT LESS THAN $5,000,000.  THE
AMOUNT OF THE ASSIGNMENT SHALL BE BASED ON THE COMMITMENT OR OUTSTANDING LOANS
(IF THE COMMITMENT HAS BEEN TERMINATED) SUBJECT TO THE ASSIGNMENT, DETERMINED AS
OF THE DATE OF SUCH ASSIGNMENT OR AS OF THE “TRADE DATE,” IF THE “TRADE DATE” IS
SPECIFIED IN THE ASSIGNMENT.

 

(B)           THE CONSENT OF THE BORROWER SHALL BE REQUIRED PRIOR TO AN
ASSIGNMENT BECOMING EFFECTIVE UNLESS THE PURCHASER IS A LENDER, AN AFFILIATE OF
A LENDER OR AN APPROVED FUND, PROVIDED THAT THE CONSENT OF THE BORROWER SHALL
NOT BE REQUIRED IF A DEFAULT HAS OCCURRED AND IS CONTINUING.  THE CONSENT OF THE
ADMINISTRATIVE AGENT SHALL BE REQUIRED PRIOR TO AN ASSIGNMENT BECOMING EFFECTIVE
UNLESS THE PURCHASER IS A LENDER WITH A REVOLVING COMMITMENT (IN THE CASE OF AN
ASSIGNMENT OF A REVOLVING COMMITMENT) OR IS A LENDER, AN AFFILIATE OF A LENDER
OR AN APPROVED FUND (IN THE CASE OF AN ASSIGNMENT OF ANY OTHER COMMITMENT OR
LOANS).  THE CONSENT OF THE ISSUING BANK SHALL BE REQUIRED PRIOR TO AN
ASSIGNMENT OF A REVOLVING COMMITMENT BECOMING EFFECTIVE UNLESS THE PURCHASER IS
A LENDER WITH A REVOLVING COMMITMENT.  ANY CONSENT REQUIRED UNDER THIS SECTION
10.3(B) SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.

 

(C)           UPON (I) DELIVERY TO THE ADMINISTRATIVE AGENT OF AN ASSIGNMENT,
TOGETHER WITH ANY CONSENTS REQUIRED BY SECTIONS 10.2(A) AND 10.2(B), AND (II)
PAYMENT OF A $3,500 FEE TO THE ADMINISTRATIVE AGENT FOR PROCESSING SUCH
ASSIGNMENT (UNLESS SUCH FEE IS WAIVED BY THE ADMINISTRATIVE AGENT), SUCH
ASSIGNMENT SHALL BECOME EFFECTIVE ON THE EFFECTIVE DATE SPECIFIED IN SUCH
ASSIGNMENT.  THE ASSIGNMENT SHALL CONTAIN A REPRESENTATION BY THE PURCHASER TO
THE EFFECT THAT NONE OF THE CONSIDERATION USED TO MAKE THE PURCHASE OF THE
COMMITMENT AND LOANS UNDER THE APPLICABLE ASSIGNMENT AGREEMENT CONSTITUTES “PLAN
ASSETS” AS DEFINED UNDER ERISA AND THAT THE RIGHTS AND INTERESTS OF THE
PURCHASER IN AND UNDER THE CREDIT DOCUMENTS WILL NOT BE “PLAN ASSETS” UNDER
ERISA.  ON AND AFTER THE EFFECTIVE DATE OF SUCH ASSIGNMENT, SUCH PURCHASER SHALL
FOR ALL PURPOSES BE A LENDER PARTY TO THIS AGREEMENT AND ANY OTHER CREDIT
DOCUMENT EXECUTED BY OR ON BEHALF OF THE LENDERS AND SHALL HAVE ALL THE RIGHTS
AND OBLIGATIONS OF A LENDER UNDER THE CREDIT DOCUMENTS, TO THE SAME EXTENT AS IF
IT WERE AN ORIGINAL PARTY THERETO, AND THE TRANSFEROR LENDER SHALL BE RELEASED
WITH RESPECT TO THE COMMITMENT AND LOANS ASSIGNED TO SUCH PURCHASER WITHOUT ANY
FURTHER CONSENT OR ACTION BY THE BORROWER, THE LENDERS OR THE ADMINISTRATIVE
AGENT.  IN THE CASE OF AN ASSIGNMENT COVERING ALL OF THE ASSIGNING LENDER’S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, SUCH LENDER SHALL CEASE TO BE A
LENDER HEREUNDER BUT SHALL CONTINUE TO BE ENTITLED TO THE BENEFITS OF, AND
SUBJECT TO, THOSE PROVISIONS OF THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
WHICH SURVIVE PAYMENT OF THE OBLIGATIONS AND TERMINATION OF THE APPLICABLE
AGREEMENT.  ANY ASSIGNMENT OR TRANSFER BY A LENDER OF RIGHTS OR OBLIGATIONS
UNDER THIS AGREEMENT THAT DOES NOT COMPLY WITH THIS SECTION 10.3 SHALL BE
TREATED FOR PURPOSES OF THIS AGREEMENT AS A SALE BY SUCH LENDER OF A
PARTICIPATION IN SUCH RIGHTS AND OBLIGATIONS IN ACCORDANCE WITH SECTION 10.2. 
UPON THE CONSUMMATION OF ANY ASSIGNMENT TO A PURCHASER PURSUANT TO THIS SECTION
10.3(C) THE TRANSFEROR LENDER, THE ADMINISTRATIVE AGENT AND THE BORROWER SHALL,
IF THE TRANSFEROR LENDER OR THE PURCHASER DESIRES THAT ITS LOANS BE EVIDENCED BY
NOTES, MAKE APPROPRIATE ARRANGEMENTS SO THAT NEW NOTES OR, AS APPROPRIATE,
REPLACEMENT NOTES ARE ISSUED TO SUCH TRANSFEROR LENDER AND NEW NOTES OR, AS
APPROPRIATE, REPLACEMENT NOTES, ARE ISSUED TO SUCH

 

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PURCHASER, IN EACH CASE IN PRINCIPAL AMOUNTS REFLECTING THEIR RESPECTIVE
COMMITMENTS, AS ADJUSTED PURSUANT TO SUCH ASSIGNMENT.

 

(D)           THE ADMINISTRATIVE AGENT, ACTING SOLELY FOR THIS PURPOSE AS AN
AGENT OF THE BORROWER, SHALL MAINTAIN AT ONE OF ITS OFFICES IN HOUSTON, TEXAS A
COPY OF EACH ASSIGNMENT AND ASSUMPTION DELIVERED TO IT AND A REGISTER FOR THE
RECORDATION OF THE NAMES AND ADDRESSES OF THE LENDERS, AND THE COMMITMENTS OF,
AND PRINCIPAL AMOUNTS OF THE LOANS OWING TO, EACH LENDER PURSUANT TO THE TERMS
HEREOF FROM TIME TO TIME (THE “REGISTER”).  THE ENTRIES IN THE REGISTER SHALL BE
CONCLUSIVE, AND THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS MAY TREAT
EACH PERSON WHOSE NAME IS RECORDED IN THE REGISTER PURSUANT TO THE TERMS HEREOF
AS A LENDER HEREUNDER FOR ALL PURPOSES OF THIS AGREEMENT, NOTWITHSTANDING NOTICE
TO THE CONTRARY.  THE REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE BORROWER
AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.

 

SECTION 10.4                            DISSEMINATION OF INFORMATION.

 

The Borrower authorizes each Lender to disclose to any Participant or Purchaser
or any other Person acquiring an interest in the Credit Documents by operation
of law (each a “Transferee”) and any prospective Transferee any and all
information in such Lender’s possession concerning the creditworthiness of the
Borrower and its Subsidiaries, including without limitation any information
contained in any Reports; provided that each Transferee and prospective
Transferee agrees in writing to be bound by Section 11.15 of this Agreement.

 

SECTION 10.5                            TAX TREATMENT.

 

If any interest in any Credit Document is transferred to any Transferee which is
not incorporated under the laws of the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section 2.17.

 

ARTICLE XI
MISCELLANEOUS

 

SECTION 11.1                            AMENDMENTS, WAIVERS AND RELEASE OF
COLLATERAL.

 

Neither this Agreement, nor any of the Notes, nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, supplemented, waived
or modified except in accordance with the provisions of this Section nor may any
Collateral be released except as specifically provided herein or in the Security
Documents or in accordance with the provisions of this Section 11.1.  The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Agreement or the
other Credit Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or

 

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(b) waive, on such terms and conditions as the Required Lenders may specify in
such instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, waiver, supplement,
modification or release shall:

 

(i)            reduce the amount or extend the scheduled date of maturity of any
Loan or Note or any installment thereon, or reduce the stated rate of any
interest or fee payable hereunder (other than interest at the Default Rate) or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender’s Commitment, in each case without the
written consent of each Lender directly affected thereby (it being understood
and agreed that changes to the financial definitions and financial covenants
herein shall only require the consent of the Required Lenders and waivers of
Events of Default, conditions precedent and mandatory prepayments of the Loans
required pursuant to Section 2.6(b) hereof shall not constitute increases in the
Commitment of any Lender), or

 

(ii)           amend, modify or waive any provision of this Section 11.1 or
reduce the percentage specified in the definition of Required Lenders, without
the written consent of all the Lenders, or

 

(iii)          amend, modify or waive any provision of Article VIII without the
written consent of the then Administrative Agent, or

 

(iv)          release a material portion of the Guarantors from their
obligations under the Guaranty without the written consent of all of the
Lenders, or

 

(v)           release a material portion of the Collateral (except in accordance
with the terms of the relevant Security Document), without the written consent
of all of the Lenders, or

 

(vi)          amend, modify or waive the Lender approval requirements of any
provision of the Credit Documents which at such time requires the consent,
approval or request of the Required Lenders or all Lenders, as the case may be,
without the written consent of the Required Lenders or of all of the Lenders, as
the case may be, and, provided, further, that no amendment, waiver or consent
affecting the rights or duties of the Administrative Agent or the Issuing Lender
under any Credit Document shall in any event be effective, unless in writing and
signed by the Administrative Agent and/or the Issuing Lender, as applicable, in
addition to the Lenders required hereinabove to take such action.

 

Any such waiver, any such amendment, supplement or modification and any such
release shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the other Credit Parties, the Lenders, the Administrative Agent and
all future holders of the Notes.  In the case of any waiver, the Borrower, the
other Credit Parties, the Lenders and the Administrative Agent shall be restored
to their former position and rights hereunder and under the outstanding

 

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Loans and Notes and other Credit Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.

 

Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9); provided,
however, that the Administrative Agent will provide written notice to the
Borrower of any such amendment, modification or waiver.  In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing Schedule 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; provided, however, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrower and
each Lender.

 

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.

 

SECTION 11.2                            NOTICES.

 

Except as otherwise provided in Article II, all notices, requests and demands to
or upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) when delivered by hand, (b) when
transmitted via telecopy (or other facsimile device) to the number set out
herein, (c) the day following the day on which the same has been delivered
prepaid to a reputable national overnight air courier service, or (d) the third
Business Day following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case, addressed as follows in the case
of the Borrower, the other Credit Parties and the Administrative Agent, and as
set forth on Schedule 11.2 in the case of the Lenders, or to such other address
as may be hereafter notified by the respective parties hereto and any future
holders of the Notes:

 

The Borrower and the other Credit Parties:

 

Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057
Attention:  Chief Financial Officer
Telecopier:  (713) 787-5083
Telephone:  (713) 787-0977

 

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with copies to:

 

Winstead, Sechrest & Minick P.C.
2400 Bank One Center
910 Travis Street
Houston, Texas 77002-5875
Attention:  Benny C. Pace
Telecopier:  (713) 650-2400
Telephone:   (713) 650-2739

 

The Administrative Agent:

 

Bank One, NA
Mail Code TX2-4260
910 Travis, 7th Floor
Houston, TX 77002
Attention:  Steve Krueger
Telecopier: 713-751-6199
Telephone:  (713) 751-3713

 

SECTION 11.3                            NO WAIVER; CUMULATIVE REMEDIES.

 

No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

 

SECTION 11.4                            SURVIVAL OF REPRESENTATIONS AND
WARRANTIES.

 

All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.

 

SECTION 11.5                            PAYMENT OF EXPENSES AND TAXES.

 

The Borrower agrees (a) to pay or reimburse the Administrative Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, negotiation, printing and execution of, and any
amendment, supplement or modification to, this Agreement and the other Credit
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, together with the reasonable fees and disbursements of counsel to
the Administrative Agent, (b) to pay or reimburse each Lender and

 

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the Administrative Agent for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the
Notes and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent and to
the Lenders (including reasonable allocated costs of in house legal counsel),
and (c) on demand, to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, the Credit Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender and the Administrative Agent and their
Affiliates and their respective officers, directors, employees, Administrative
Agents, and advisors harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of the Credit
Documents and any such other documents and the use, or proposed use, of proceeds
of the Loans (all of the foregoing, collectively, the “indemnified
liabilities”); provided, however, that the Borrower shall not have any
obligation hereunder to the Administrative Agent or any Lender or any other
indemnified person with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of the Administrative Agent or any such
Lender or any other such indemnified person, as determined by a court of
competent jurisdiction (IT BEING THE INTENTION OF THIS PROVISION THAT SUCH
INDEMNIFICATION OBLIGATION WILL BE APPLICABLE REGARDLESS OF WHETHER CAUSED IN
WHOLE OR IN PART BY THE ORDINARY NEGLIGENCE OF ANY OF THE PARTIES BEING
INDEMNIFIED).  The agreements in this Section 11.5 shall survive repayment of
the Loans, Notes and all other amounts payable hereunder.

 

SECTION 11.6                            ADJUSTMENTS; SET-OFF.

 

(A)           EACH LENDER AGREES THAT IF ANY LENDER (A “BENEFITED LENDER”) SHALL
AT ANY TIME RECEIVE ANY PAYMENT OF ALL OR PART OF ITS LOANS, OR INTEREST
THEREON, OR RECEIVE ANY COLLATERAL IN RESPECT THEREOF (WHETHER VOLUNTARILY OR
INVOLUNTARILY, BY SET-OFF, PURSUANT TO EVENTS OR PROCEEDINGS OF THE NATURE
REFERRED TO IN SECTION 7.1(E), OR OTHERWISE) IN A GREATER PROPORTION THAN ANY
SUCH PAYMENT TO OR COLLATERAL RECEIVED BY ANY OTHER LENDER, IF ANY, IN RESPECT
OF SUCH OTHER LENDER’S LOANS, OR INTEREST THEREON, SUCH BENEFITED LENDER SHALL
PURCHASE FOR CASH FROM THE OTHER LENDERS A PARTICIPATING INTEREST IN SUCH
PORTION OF EACH SUCH OTHER LENDER’S LOAN, OR SHALL PROVIDE SUCH OTHER LENDERS
WITH THE BENEFITS OF ANY SUCH COLLATERAL, OR THE PROCEEDS THEREOF, AS SHALL BE
NECESSARY TO CAUSE SUCH BENEFITED LENDER TO SHARE THE EXCESS PAYMENT OR BENEFITS
OF SUCH COLLATERAL OR PROCEEDS RATABLY WITH EACH OF THE LENDERS; PROVIDED,
HOWEVER, THAT IF ALL OR ANY PORTION OF SUCH EXCESS PAYMENT OR BENEFITS IS
THEREAFTER RECOVERED FROM SUCH BENEFITED LENDER, SUCH PURCHASE SHALL BE
RESCINDED, AND THE PURCHASE PRICE AND BENEFITS RETURNED, TO THE EXTENT OF SUCH
RECOVERY, BUT WITHOUT INTEREST.  THE BORROWER AGREES THAT EACH LENDER SO
PURCHASING A PORTION OF ANOTHER LENDER’S LOANS MAY EXERCISE ALL RIGHTS OF
PAYMENT (INCLUDING, WITHOUT LIMITATION,

 

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RIGHTS OF SET-OFF) WITH RESPECT TO SUCH PORTION AS FULLY AS IF SUCH LENDER WERE
THE DIRECT HOLDER OF SUCH PORTION.

 

(B)           IN ADDITION TO ANY RIGHTS AND REMEDIES OF THE LENDERS PROVIDED BY
LAW (INCLUDING, WITHOUT LIMITATION, OTHER RIGHTS OF SET-OFF), EACH LENDER SHALL
HAVE THE RIGHT, WITHOUT PRIOR NOTICE TO THE BORROWER, ANY SUCH NOTICE BEING
EXPRESSLY WAIVED BY THE BORROWER TO THE EXTENT PERMITTED BY APPLICABLE LAW, UPON
THE OCCURRENCE OF ANY EVENT OF DEFAULT, TO SETOFF AND APPROPRIATE AND APPLY ANY
AND ALL DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL OR FINAL), IN
ANY CURRENCY, AND ANY OTHER CREDITS, INDEBTEDNESS OR CLAIMS, IN ANY CURRENCY, IN
EACH CASE WHETHER DIRECT OR INDIRECT, ABSOLUTE OR CONTINGENT, MATURED OR
UNMATURED, AT ANY TIME HELD OR OWING BY SUCH LENDER OR ANY BRANCH OR AGENCY
THEREOF TO OR FOR THE CREDIT OR THE ACCOUNT OF THE BORROWER, OR ANY PART THEREOF
IN SUCH AMOUNTS AS SUCH LENDER MAY ELECT, AGAINST AND ON ACCOUNT OF THE
OBLIGATIONS AND LIABILITIES OF THE BORROWER TO SUCH LENDER HEREUNDER AND CLAIMS
OF EVERY NATURE AND DESCRIPTION OF SUCH LENDER AGAINST THE BORROWER, IN ANY
CURRENCY, ARISING HEREUNDER, UNDER THE NOTES OR UNDER ANY DOCUMENTS CONTEMPLATED
BY OR REFERRED TO HEREIN OR THEREIN, AS SUCH LENDER MAY ELECT, WHETHER OR NOT
SUCH LENDER HAS MADE ANY DEMAND FOR PAYMENT AND ALTHOUGH SUCH OBLIGATIONS,
LIABILITIES AND CLAIMS MAY BE CONTINGENT OR UNMATURED.  THE AFORESAID RIGHT OF
SET-OFF MAY BE EXERCISED BY SUCH LENDER AGAINST THE BORROWER OR AGAINST ANY
TRUSTEE IN BANKRUPTCY, DEBTOR IN POSSESSION, ASSIGNEE FOR THE BENEFIT OF
CREDITORS, RECEIVER OR EXECUTION, JUDGMENT OR ATTACHMENT CREDITOR OF THE
BORROWER, OR AGAINST ANYONE ELSE CLAIMING THROUGH OR AGAINST THE BORROWER OR ANY
SUCH TRUSTEE IN BANKRUPTCY, DEBTOR IN POSSESSION, ASSIGNEE FOR THE BENEFIT OF
CREDITORS, RECEIVER, OR EXECUTION, JUDGMENT OR ATTACHMENT CREDITOR,
NOTWITHSTANDING THE FACT THAT SUCH RIGHT OF SET-OFF SHALL NOT HAVE BEEN
EXERCISED BY SUCH LENDER PRIOR TO THE OCCURRENCE OF ANY EVENT OF DEFAULT.  EACH
LENDER AGREES PROMPTLY TO NOTIFY THE BORROWER AND THE ADMINISTRATIVE AGENT AFTER
ANY SUCH SET-OFF AND APPLICATION MADE BY SUCH LENDER; PROVIDED, HOWEVER, THAT
THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE VALIDITY OF SUCH SET-OFF
AND APPLICATION.

 

SECTION 11.7                            TABLE OF CONTENTS AND SECTION HEADINGS.

 

The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.

 

SECTION 11.8                            COUNTERPARTS.

 

This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.  A set of
the copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.

 

SECTION 11.9                            EFFECTIVENESS.

 

This Credit Agreement shall become effective on the date on which all of the
parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to

 

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the Administrative Agent pursuant to Section 11.2 or, in the case of the
Lenders, shall have given to the Administrative Agent written, telecopied or
telex notice (actually received) at such office that the same has been signed
and mailed to it.

 

SECTION 11.10                     SEVERABILITY.

 

Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

SECTION 11.11                     INTEGRATION.

 

This Agreement and the Notes represent the agreement of the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent, the Borrower or any Lender relative to the subject matter
hereof not expressly set forth or referred to herein or in the Notes.

 

SECTION 11.12                     GOVERNING LAW.

 

THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS.  WITH RESPECT TO USURY LAWS,
IF ANY, APPLICABLE TO THE LENDERS (AS SUCH LAWS MAY HEREAFTER BE IN EFFECT WHICH
ALLOW A HIGHER MAXIMUM NONUSURIOUS INTEREST RATE THAN SUCH LAWS NOW ALLOW AND TO
THE EXTENT ALLOWED THEREBY), THE PROVISIONS OF CHAPTER 346 OF THE TEXAS FINANCE
CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING
TRIPARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR THE NOTES.

 

SECTION 11.13                     CONSENT TO JURISDICTION AND SERVICE OF
PROCESS.

 

All judicial proceedings brought against the Borrower and/or any other Credit
Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the courts of the State of Texas and by execution and delivery of this
Agreement the Borrower and the other Credit Parties accept, for itself and in
connection with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any
final judgment rendered thereby in connection with this Agreement from which no
appeal has been taken or is available.  Each of the Borrower and the other
Credit Parties irrevocably agrees that all service of process in any such
proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in Section 11.2 or at such other
address of which the Administrative Agent shall have been

 

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notified pursuant thereto, such service being hereby acknowledged by the each of
the Borrower and the other Credit Parties to be effective and binding service in
every respect.  Each of the Borrower, the other Credit Parties, the
Administrative Agent and the Lenders irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens which it may now or hereafter have to the
bringing of any such action or proceeding in any such jurisdiction.  Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of any Lender to bring proceedings against the
Borrower or the other Credit Parties in the court of any other jurisdiction.

 

SECTION 11.14                     ARBITRATION.

 

(A)           NOTWITHSTANDING THE PROVISIONS OF SECTION 11.13 TO THE CONTRARY,
UPON DEMAND OF ANY PARTY HERETO, WHETHER MADE BEFORE OR WITHIN THREE (3) MONTHS
AFTER INSTITUTION OF ANY JUDICIAL PROCEEDING, ANY DISPUTE, CLAIM OR CONTROVERSY
ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT AND OTHER CREDIT
DOCUMENTS (“DISPUTES”) BETWEEN OR AMONG PARTIES TO THIS AGREEMENT SHALL BE
RESOLVED BY BINDING ARBITRATION AS PROVIDED HEREIN.  INSTITUTION OF A JUDICIAL
PROCEEDING BY A PARTY DOES NOT WAIVE THE RIGHT OF THAT PARTY TO DEMAND
ARBITRATION HEREUNDER.  DISPUTES MAY INCLUDE, WITHOUT LIMITATION, TORT CLAIMS,
COUNTERCLAIMS, DISPUTES AS TO WHETHER A MATTER IS SUBJECT TO ARBITRATION, CLAIMS
BROUGHT AS CLASS ACTIONS, CLAIMS ARISING FROM CREDIT DOCUMENTS EXECUTED IN THE
FUTURE, OR CLAIMS ARISING OUT OF OR CONNECTED WITH THE TRANSACTION REFLECTED BY
THIS AGREEMENT.

 

Arbitration shall be conducted under and governed by the Commercial Arbitration
Rules (the “Arbitration Rules”) of the American Arbitration Association (the
“AAA”) and Title 9 of the U.S. Code.  All arbitration hearings shall be
conducted in Houston, Texas.  A hearing shall begin within 90 days of demand for
arbitration and all hearings shall be concluded within 120 days of demand for
arbitration.  These time limitations may not be extended unless a party shows
cause for extension and then no more than a total extension of 60 days.  The
expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall
be applicable to claims of less than $1,000,000.  All applicable statutes of
limitation shall apply to any Dispute.  A judgment upon the award may be entered
in any court having jurisdiction.  Arbitrators shall be licensed attorneys
selected from the Commercial Financial Dispute Arbitration Panel of the AAA. 
The parties hereto do not waive applicable Federal or state substantive law
except as provided herein.  Notwithstanding the foregoing, this arbitration
provision does not apply to disputes under or related to Hedging Agreements.

 

(B)           NOTWITHSTANDING THE PRECEDING BINDING ARBITRATION PROVISIONS, THE
ADMINISTRATIVE AGENT, THE LENDERS, THE BORROWER AND THE OTHER CREDIT PARTIES
AGREE TO PRESERVE, WITHOUT DIMINUTION, CERTAIN REMEDIES THAT THE ADMINISTRATIVE
AGENT ON BEHALF OF THE LENDERS MAY EMPLOY OR EXERCISE FREELY, INDEPENDENTLY OR
IN CONNECTION WITH AN ARBITRATION PROCEEDING OR AFTER AN ARBITRATION ACTION IS
BROUGHT.  THE ADMINISTRATIVE AGENT ON BEHALF OF THE LENDERS SHALL HAVE THE RIGHT
TO PROCEED IN ANY COURT OF PROPER JURISDICTION OR BY SELF-HELP TO EXERCISE OR
PROSECUTE THE FOLLOWING REMEDIES, AS APPLICABLE (I) ALL RIGHTS TO FORECLOSE
AGAINST ANY REAL OR PERSONAL PROPERTY OR OTHER SECURITY BY EXERCISING A POWER OF
SALE GRANTED UNDER CREDIT DOCUMENTS OR UNDER APPLICABLE LAW OR BY JUDICIAL
FORECLOSURE

 

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AND SALE, INCLUDING A PROCEEDING TO CONFIRM THE SALE; (II) ALL RIGHTS OF
SELF-HELP INCLUDING PEACEFUL OCCUPATION OF REAL PROPERTY AND COLLECTION OF
RENTS, SET-OFF, AND PEACEFUL POSSESSION OF PERSONAL PROPERTY; (III) OBTAINING
PROVISIONAL OR ANCILLARY REMEDIES INCLUDING INJUNCTIVE RELIEF, SEQUESTRATION,
GARNISHMENT, ATTACHMENT, APPOINTMENT OF RECEIVER AND FILING AN INVOLUNTARY
BANKRUPTCY PROCEEDING, AND (IV) WHEN APPLICABLE, A JUDGMENT BY CONFESSION OF
JUDGMENT.  PRESERVATION OF THESE REMEDIES DOES NOT LIMIT THE POWER OF AN
ARBITRATOR TO GRANT SIMILAR REMEDIES THAT MAY BE REQUESTED BY A PARTY IN A
DISPUTE.

 

(C)           THE PARTIES HERETO AGREE THAT THEY SHALL NOT HAVE A REMEDY OF
PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER IN ANY DISPUTE AND HEREBY WAIVE
ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY HAVE NOW OR WHICH MAY
ARISE IN THE FUTURE IN CONNECTION WITH ANY DISPUTE WHETHER THE DISPUTE IS
RESOLVED BY ARBITRATION OR JUDICIALLY.

 

(D)           BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES
HERETO ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION RELATING TO ANY ARBITRATION
PROCEEDINGS CONDUCTED UNDER THE ARBITRATION RULES IN HOUSTON, TEXAS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE.

 

SECTION 11.15                     CONFIDENTIALITY.

 

The Administrative Agent and each of the Lenders agrees that it will not
disclose without the prior consent of the Borrower (other than to its employees,
affiliates, auditors, counsel or other Lenders hereunder) any information with
respect to the Credit Parties and their Subsidiaries which is furnished pursuant
to this Agreement, any other Credit Document or any documents contemplated by or
referred to herein or therein and which is designated by the Borrower to the
Lenders in writing as confidential or as to which it is otherwise reasonably
clear such information is not public except that any Lender may disclose any
such information (a) as has become generally available to the public other than
by a breach of this Section 11.15, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the National Association of Insurance Commissioners, the Federal Reserve Board,
the Federal Deposit Insurance Corporation, the OCC or any similar regulatory
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
any law, order, regulation or ruling applicable to such Lender, (d) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Article X, provided that such prospective transferee shall have been
made aware of this Section 11.15 and shall have agreed in writing to be bound by
its provisions as if it were a party to this Agreement, (e) to Gold Sheets and
other similar bank trade publications; such information to consist only of deal
terms and other information regarding the credit facilities evidenced by this
Credit Agreement customarily found in such publications or (f) to a Lender’s
representatives, (which shall include, without limitation, any other bank and
company affiliated with a Lender or the parent of a Lender) it being expressly
understood and agreed that such representatives shall be informed of the
confidential nature of the information, shall be required

 

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by such Lender to treat the information as confidential in accordance with the
terms and conditions hereof and such representative shall have agreed in writing
to be bound by this provision as if it were a party to this Agreement.

 

SECTION 11.16                     ACKNOWLEDGMENTS.

 

The Borrower and the other Credit Parties each hereby acknowledges that:

 

(A)           IT HAS BEEN ADVISED BY COUNSEL IN THE NEGOTIATION, EXECUTION AND
DELIVERY OF EACH CREDIT DOCUMENT;

 

(B)           NEITHER THE ADMINISTRATIVE AGENT NOR ANY LENDER HAS ANY FIDUCIARY
RELATIONSHIP WITH OR DUTY TO THE BORROWER OR ANY OTHER CREDIT PARTY ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT AND THE RELATIONSHIP BETWEEN
ADMINISTRATIVE AGENT AND LENDERS, ON ONE HAND, AND THE BORROWER AND THE OTHER
CREDIT PARTIES, ON THE OTHER HAND, IN CONNECTION HEREWITH IS SOLELY THAT OF
DEBTOR AND CREDITOR; AND

 

(C)           NO JOINT VENTURE EXISTS AMONG THE LENDERS OR AMONG THE BORROWER OR
THE OTHER CREDIT PARTIES AND THE LENDERS.

 

SECTION 11.17                     WAIVERS OF JURY TRIAL.

 

THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

SECTION 11.18                     INTEREST.

 

It is the intention of the parties hereto to conform strictly to usury laws
applicable to the Lenders.  Accordingly, if the transactions contemplated hereby
would be usurious under the applicable law (including the laws of the United
States of America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable notwithstanding the other provisions of this
Agreement), then, in that event, notwithstanding anything to the contrary in the
Notes, this Agreement or in any other Credit Document or agreement entered into
in connection with or as security for the Notes, it is agreed as follows:  (i)
the aggregate of all consideration which constitutes interest under law
applicable to the Lenders that is contracted for, taken, reserved, charged or
received under the Notes, this Agreement or under any of the other aforesaid
Credit Documents or agreements or otherwise in connection with the Notes shall
under no circumstances exceed the maximum amount allowed by such applicable law,
and any excess shall be credited by the Lenders on the principal amount of the
Indebtedness (or, if the principal amount of the Indebtedness shall have been
paid in full, refunded by the Lenders to the Borrower); and (ii) in the event
that the maturity of the Notes is accelerated by reason of an election of the
Lenders resulting from any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes

 

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interest under law applicable to the Lenders may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be cancelled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be credited by the Lenders on the principal amount of the Indebtedness (or, if
the principal amount of the Indebtedness shall have been paid in full, refunded
by the Lenders to the Borrower).  Without limiting the foregoing, all
calculations of the rate of interest taken, reserved, contracted for, charged,
received or provided for under the Note or any of the Credit Documents which are
made for the purpose of determining whether the interest rate exceeds the
Maximum Rate shall be made, to the extent allowed by law, by amortizing,
prorating, allocating and spreading in equal parts during the period of the full
stated term of the loan evidenced hereby, all interest at any time taken,
reserved, contracted for, charged, received or provided for under the Note or
any of the Credit Documents.

 

To the extent that Chapter 303 of the Texas Finance Code (Vernon’s Texas Civil
Statutes) is relevant to the Lenders for the purpose of determining the Maximum
Rate, the Lenders hereby elect to determine the applicable rate ceiling under
such Chapter by the indicated (weekly) rate ceiling from time to time in effect,
subject to the Lenders’ right subsequently to change such method in accordance
with the applicable law.

 

If, at any time, the applicable rate exceeds the Maximum Rate, the rate of
interest to accrue on the Notes (or on any of them) shall be limited to the
Maximum Rate, but any subsequent reductions in the applicable rate shall not
reduce the interest to accrue on the Notes (or on any of them) below the Maximum
Rate until the total amount of interest accrued on the Notes (or any of them)
equals the amount of interest which would have accrued if a varying rate per
annum equal to the applicable rate had at all times been in effect.  If at
maturity or final payment of the Notes (or any of them) the total amount of
interest paid or accrued on the Notes (or on any of them) under the foregoing
provisions is less than the total amount of interest which would have accrued if
a varying rate per annum equal to the applicable rate had at all times been in
effect, then the Borrower agrees, to the fullest extent permitted by law, to pay
to the Lender an amount equal to the difference between (a) the lesser of (i)
the amount of interest which would have accrued on the Notes (or on any of them)
if the Maximum Rate had at all times been in effect or (ii) the amount of
interest which would have accrued on the Notes (or on any of them) if a varying
rate per annum equal to the applicable rate had at all times been in effect, and
(b) the amount of interest accrued in accordance with the other provisions of
the Notes (or any of them).

 

SECTION 11.19                     AMENDMENT TO SECURITY AGREEMENT AND PLEDGE
AGREEMENT.

 

Each reference in the Security Agreement and in the Pledge Agreement to “North
Carolina” amended to read “Texas”.

 

SECTION 11.20                     AMENDMENT AND RESTATEMENT; RENEWAL NOTES.

 

This Agreement amends and restates in its entirety that certain Credit Agreement
dated as of December 11, 2000 executed by and among the Borrower, Wachovia Bank,
National Association (formerly First Union National Bank), as Administrative
Agent (“Wachovia”), and certain financial institutions therein set forth (the
“Existing Lenders”), as the may have been

 

96

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amended.  The Revolving Notes have been given in renewal, extension and
modification of the revolving credit facility previously provided to the
Borrower pursuant to such Loan Agreement and the Swingline Note has been given
in renewal, extension and modification of the swingline loans previously made to
the Borrower  pursuant to such Credit Agreement.  From and after the Closing
Date, (i) the Existing Lenders (other than the Lenders party hereto) shall have
no further commitment or obligation to the Borrower or any other Credit Party as
a Lender under the Credit Agreement and (ii) Wachovia shall cease to be
Administrative Agent and shall have no further obligation to the Borrower, the
other Credit Parties or the Existing Lenders in the capacity of Administrative
Agent.

 

SECTION 11.21                     SPECIAL PROVISIONS CONCERNING LOC DOCUMENTS.

 

Notwithstanding any other provision in any of the LOC Documents, whether now
existing or in the future, the parties hereto hereby agree as follows:

 

(A)           ALL LOC DOCUMENTS WILL BE SUBJECT TO THE PROVISIONS OF THIS
AGREEMENT NOTWITHSTANDING THE FACT THAT THEY ARE NOW EXISTING OR MAY BE EXECUTED
IN THE FUTURE.

 

(B)           FOR CONVENIENCE ONLY, THE LOC DOCUMENTS WILL BE STANDARD FORMS
USED BY THE ISSUING BANK; PROVIDED, HOWEVER, ALL TERMS AND PROVISIONS CONTAINED
THEREIN SHALL BE SUPERCEDED BY THE TERMS AND THE PROVISIONS OF THIS AGREEMENT
AND SHOULD THERE BE ANY CONFLICT BETWEEN THE TERMS AND PROVISIONS OF ANY OF THE
LOC DOCUMENTS AND THE TERMS AND PROVISIONS OF THIS AGREEMENT, THE TERMS AND
PROVISIONS OF THIS AGREEMENT SHALL CONTROL.

 

(C)           WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AS AN EXAMPLE,
ANY BREACH OR DEFAULT OF ANY OF THE TERMS OR PROVISIONS UNDER ANY OF THE LOC
DOCUMENTS SHALL NOT CONSTITUTE A DEFAULT UNDER ANY OF SAID LOC DOCUMENTS OR
UNDER THIS AGREEMENT UNLESS A DEFAULT OR AN EVENT OF DEFAULT HAS SPECIFICALLY
OCCURRED UNDER THE TERMS AND PROVISIONS OF THIS AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

97

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by its proper and duly authorized officers as of the day
and year first above written.

 

BORROWER:

CONSOLIDATED GRAPHICS, INC.,

 

a Texas corporation

 

 

 

 

 

By:

/s/ G. Christopher Colville

 

 

 

G. Christopher Colville,

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

 

 

 

GUARANTORS:

 

 

APPLE GRAPHICS, INC.,

 

a California corporation,

 

AMERICAN LITHOGRAPHERS, INC.,

 

a California corporation,

 

AUSTIN PRINTING COMPANY, INC.,

 

a Georgia corporation,

 

AUTOMATED GRAPHIC IMAGING/COPY

 

CENTER, INC., a District of Columbia corporation,

 

AGS CUSTOM GRAPHICS, INC.,

 

a Maryland corporation

 

AUTOMATED GRAPHIC SYSTEMS, INC.,

 

a Maryland corporation,

 

BRIDGETOWN PRINTING CO.,

 

an Oregon corporation,

 

BYRUM LITHOGRAPHING CO.,

 

an Ohio corporation,

 

CGML GENERAL PARTNER, INC.,

 

a Delaware corporation,

 

CGXMEDIA, INC.,

 

a Texas corporation

 

CHAS. P. YOUNG COMPANY,

 

a Texas corporation,

 

CHAS. P. YOUNG COMPANY, INC.,

 

a New York corporation,

 

CLEAR VISIONS, INC.,

 

a Texas corporation,

 

 

[signature pages continue]

 

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COLUMBIA COLOR, INC.,

 

a California corporation,

 

CONSOLIDATED CARQUEVILLE PRINTING

 

COMPANY, an Illinois corporation

 

CONSOLIDATED GRAPHICS CALIFORNIA,

 

a California corporation,

 

CONSOLIDATED GRAPHICS DEVELOPMENT

 

COMPANY, a Delaware corporation,

 

CONSOLIDATED GRAPHICS SERVICES,

 

INC., a Delaware corporation,

 

CONSOLIDATED GRAPHICS PROPERTIES, INC.,

 

a Texas corporation,

 

CONSOLIDATED GRAPHICS PROPERTIES II,

 

INC., a Texas corporation,

 

CONSOLIDATED PARAGRAPHICS, INC.,

 

a California corporation

 

COPY-MOR, INC. ,

 

an Illinois corporation,

 

COURIER PRINTING COMPANY,

 

a Tennessee corporation,

 

DIGITAL DIRECT, INC. ,

 

a Pennsylvania corporation,

 

DIRECT COLOR, INC. ,

 

a California corporation,

 

EAGLE PRESS, INC. ,

 

a California corporation,

 

EMERALD CITY GRAPHICS, INC. ,

 

a Washington corporation,

 

FITTJE BROS. PRINTING CO. ,

 

a Colorado corporation,

 

FREDERIC PRINTING COMPANY,

 

a Colorado corporation,

 

GARNER PRINTING COMPANY,

 

an Iowa corporation,

 

GEORGES & SHAPIRO LITHOGRAPH, INC. ,

 

a California corporation,

 

GEYER PRINTING COMPANY, INC. ,

 

a Pennsylvania corporation,

 

GILLILAND PRINTING, INC.

 

a Kansas corporation,

 

--------------------------------------------------------------------------------

 

 

GRAPHIC COMMUNICATIONS, INC. ,

 

a California corporation,

 

GRAPHIC TECHNOLOGY OF MARYLAND, INC. ,

 

a Maryland corporation,

 

GRAPHION, INC.,

 

a California corporation

 

GRITZ-RITTER GRAPHICS, INC.,

 

a Colorado corporation,

 

GROVER PRINTING COMPANY,

 

a Texas corporation,

 

GULF PRINTING COMPANY,

 

a Texas corporation,

 

H & N PRINTING & GRAPHICS, INC. ,

 

a Maryland corporation,

 

HEATH PRINTERS, INC.

 

a Washington corporation

 

HERITAGE GRAPHICS, INC. ,

 

a Texas corporation,

 

IMAGE SYSTEMS, INC. ,

 

a Wisconsin corporation,

 

IRONWOOD LITHOGRAPHERS, INC. ,

 

an Arizona corporation,

 

KEYS PRINTING COMPANY,

 

a South Carolina corporation,

 

LINCOLN PRINTING CORPORATION,

 

an Indiana corporation,

 

MARYLAND COMPOSITION.COM, INC. ,

 

a Maryland corporation,

 

MAXWELL GRAPHIC ARTS, INC. ,

 

a New Jersey corporation,

 

MCKAY PRESS, INC. ,

 

a Michigan corporation,

 

MERCURY PRINTING COMPANY, INC. ,

 

a Tennessee corporation,

 

MERCURY WEB PRINTING, INC. ,

 

a Kansas corporation,

 

METROPOLITAN PRINTING SERVICES, INC. ,

 

an Indiana corporation,

 

MOBILITY, INC. ,

 

a Virginia corporation,

 

MOUNT VERNON PRINTING COMPANY,

 

a Maryland corporation,

 

--------------------------------------------------------------------------------

 

 

MULTIPLE IMAGES PRINTING, INC.,

 

an Illinois corporation,

 

PICCARI PRESS, INC.,

 

a Pennsylvania corporation,

 

PRECISION LITHO, INC.,

 

a California corporation,

 

PRIDE PRINTERS, INC.,

 

a Massachusetts corporation,

 

PRINTING CORPORATION OF AMERICA,

 

a Maryland corporation,

 

PRINTING, INC. ,

 

a Kansas corporation,

 

RUSH PRESS, INC. ,

 

a California corporation,

 

S&S GRAPHICS, INC.,

 

a Maryland corporation

 

STORTERCHILDS PRINTING CO., INC.,

 

a Florida corporation,

 

SUPERB PRINTING COMPANY,

 

a Texas corporation,

 

SUPERIOR COLOUR GRAPHICS, INC.,

 

a Michigan corporation,

 

TEWELL WARREN PRINTING COMPANY,

 

a Colorado corporation,

 

THE ETHERIDGE COMPANY,

 

a Michigan corporation,

 

THE GRAPHICS GROUP, INC.,

 

a Texas corporation,

 

THE JARVIS PRESS, INC.,

 

a Texas corporation,

 

THE JOHN C. OTTO COMPANY, INC.,

 

a Massachusetts corporation,

 

THE PRINTERY, INC.,

 

a Wisconsin corporation,

 

THEO. DAVIS SONS, INCORPORATED,

 

a North Carolina corporation,

 

THOUSAND OAKS PRINTING AND

 

SPECIALTIES, INC., a California corporation,

 

TUCKER PRINTERS, INC.,

 

a Texas corporation,

 

--------------------------------------------------------------------------------

 

 

TULSA LITHO COMPANY,

 

an Oklahoma corporation,

 

TURSACK INCORPORATED,

 

a Pennsylvania corporation,

 

WALNUT CIRCLE PRESS, INC.,

 

a North Carolina corporation,

 

WEB GRAPHICS, INC.,

 

a Kansas corporation,

 

WENTWORTH CORPORATION,

 

a South Carolina corporation,

 

WESTERN LITHOGRAPH COMPANY,

 

a Texas corporation,

 

WESTLAND PRINTERS, INC.,

 

a Maryland corporation,

 

WETZEL BROTHERS, INC.,

 

a Wisconsin corporation,

 

WOODRIDGE PRESS, INC.,

 

a California corporation,

 

 

 

 

 

By:

/s/ G. Christopher Colville

 

 

 

G. Christopher Colville,

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

 

of each of the foregoing

 

 

 

 

 

 

SERCO FORMS, LLC,

 

a Kansas limited liability company

 

 

 

By:

WEB GRAPHICS, INC., a Kansas
corporation, and MERCURY WEB
PRINTING, INC., a Kansas corporation,
Members

 

 

 

 

 

 

By:

/s/ G. Christopher Colville

 

 

 

 

G. Christopher Colville,

 

 

 

Executive Vice President and

 

 

 

Chief Financial Officer

 

--------------------------------------------------------------------------------

 

 

CONSOLIDATED GRAPHICS MANAGEMENT,

 

LTD., a Texas limited partnership,

 

 

 

By:

CGML GENERAL PARTNER, INC., a Delaware corporation, sole general partner of
Consolidated Graphics Management, Ltd.

 

 

 

 

 

 

By:

/s/ G. Christopher Colville

 

 

 

 

G. Christopher Colville,

 

 

 

Executive Vice President and

 

 

 

Chief Financial Officer

 

 

 

 

 

CONSOLIDATED GRAPHICS DEVELOPMENT

 

LLC, a Delaware limited liability company

 

 

 

By:

 

CONSOLIDATED GRAPHICS
DEVELOPMENT COMPANY,
a Delaware corporation, Member

 

 

 

 

 

 

By:

/s/ G. Christopher Colville,

 

 

 

 

G. Christopher Colville,

 

 

 

Executive Vice President and

 

 

 

Chief Financial Officer

 

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ADMINISTRATIVE AGENT

BANK ONE, NA,

AND LENDERS:

as Administrative Agent and as a Lender

 

 

 

 

 

By:

/s/ Steven Krueger

 

 

Name:

Steven Krueger

 

 

Title:

FVP

 

 

--------------------------------------------------------------------------------

 

 

WELLS FARGO BANK TEXAS, NATIONAL

 

ASSOCIATION, as Syndication Agent and as

 

a Lender

 

 

 

 

 

By:

/s/ H. Michael Sultanik

 

 

Name:

H. Michael Sultanik

 

 

Title:

Vice President

 

 

--------------------------------------------------------------------------------

 

 

THE BANK OF TOKYO-MITSUBISHI, LTD.

 

 

 

 

 

By:

/s/ Joey Powell

 

 

Name:

Joey Powell

 

 

Title:

Assistant Vice President

 

 

 

 

By:

/s/ John M. Mearns

 

 

Name:

John M. Mearns

 

 

Title:

Vice President and Manager

 

 

--------------------------------------------------------------------------------

 

 

COMERICA BANK

 

 

 

 

 

By:

/s/ William S. Rogers

 

 

Name:

William S. Rogers

 

 

Title:

Vice President

 

 

--------------------------------------------------------------------------------

 

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Joseph L. Scooter, Jr.

 

 

Name:

Joseph L. Scooter, Jr.

 

 

Title:

Vice President

 

 

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RZB FINANCE LLC, CONNECTICUT OFFICE

 

 

 

 

 

By:

/s/ Christopher Hoedl

 

 

Name:

Christopher Hoedl

 

 

Title:

Vice President

 

 

 

 

 

 

By:

/s/ Elisabeth Hirst

 

 

Name:

Elisabeth Hirst

 

 

Title:

Assistant Vice President

 

 

--------------------------------------------------------------------------------

 

 

BANK HAPOALIM B.M.

 

 

 

 

 

By:

/s/ James P. Surless

 

 

Name:

James P. Surless

 

 

Title:

Vice President

 

 

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SOUTHWEST BANK OF TEXAS N.A.

 

 

 

 

 

By:

/s/ Laif Afseth

 

 

Name:

Laif Afseth

 

 

Title:

Sr. Vice President

 

 

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BANK OF AMERICA, N.A.

 

 

 

 

 

By:

/s/ Michael Chryssikos

 

 

Name:

Michael Chryssikos

 

 

Title:

Vice President

 

 

--------------------------------------------------------------------------------

 

 

SOUTHTRUST BANK

 

 

 

 

 

By:

/s/ Ron W. Pheiffer

 

 

Name:

Ron W. Pheiffer

 

 

Title:

Vice President

 

 

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