$55,900,000
RESTATED AND AMENDED CREDIT AGREEMENT
Dated as of March 12, 1999
by and among
EFTC CORPORATION, as Borrower
and
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
and
BANK ONE, COLORADO, N.A., as Agent
Arranged by
Bank One Capital Markets
TABLE OF CONTENTS
Page
Recitals 1
Agreement 1
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS 1
SECTION 1.1 Definitions. 1
SECTION 1.2 Accounting Terms and Determinations 24
ARTICLE II
COMMITMENT; AMOUNTS AND TERMS OF THE ADVANCES AND
LETTERS OF CREDIT 25
SECTION 2.1 Commitment 25
(a) Revolving Loans Commitment 25
(b) Term Loan Commitment 25
(c) Swing Loan Commitment 26
SECTION 2.2 Advances 27
SECTION 2.3 Making the Advances 27
(a) Request for Advance, Revolving Loans and Term Loan. 27
(b) Swing Loan Request 28
(c) Request for Advance Irrevocable 28
(d) Availability of Funds, Revolving Loans and Term Loan 29
(e) Advances by Agent 29
SECTION 2.4 Letters of Credit 30
(a) Letter of Credit Commitment 30
(b) Terms of Letters of Credit and Applications 30
(c) Renewals and Extensions 30
(d) Issued on Business Day 31
(e) Request for Letter of Credit 31
(f) Participations 31
(g) Notice of Draw 31
(h) Payment of Draw 32
(i) Participation in Draw 32
(j) Obligations of Banks 33
(k) Waiver of Liability; Indemnity 34
SECTION 2.5 Fees 35
(a) Commitment Fee 36
(b) Letter of Credit Fees 36
(c) Other Fees 36
SECTION 2.6 Reduction of the Revolving Loans Commitment 37
SECTION 2.7 Repayment 37
(a) Voluntary Repayment 37
(b) Installment Payments of Term Loan 37
(c) Mandatory Repayment 38
(d) Repayment of Swing Loans 38
(e) Application of Repayments 39
SECTION 2.8 Distribution of Payments by the Agent 39
SECTION 2.9 Promissory Notes 39
(a) The Revolving Notes 39
(b) Term Notes 40
(c) Swing Loan Note 40
SECTION 2.10 Pro Rata Treatment 40
SECTION 2.11 Interest 41
(a) Prime Rate Loans 41
(b) LIBOR Rate Loans 41
(c) Default Rate Interest 41
SECTION 2.12 Yield Protection 41
(a) Increased Costs 41
(b) Additional Interest 42
(c) Increased Capita 43
(d) Breakage Costs 43
SECTION 2.13 Conversion of Loans; Change of Interest Periods 43
SECTION 2.14 Illegality, Etc. 43
SECTION 2.15 Payments and Computations 44
SECTION 2.16 Effect of Letters of Credit on Revolving
Loans Commitment Utilization 45
SECTION 2.17 Cash Collateralization of Letters of Credit 45
SECTION 2.18 Borrowing Base 46
ARTICLE III
EFFECTIVENESS; CONDITIONS OF LENDING 46
SECTION 3.1 Conditions Precedent to Effectiveness of
Restated and Amended Credit Agreement 46
SECTION 3.2 Conditions Precedent to All Advances and
Issuance of All Letters of Credit 47
ARTICLE IV
REPRESENTATIONS AND WARRANTIES48
SECTION 4.1 Representations and Warranties of the Borrower 48
(a) Corporate Existence 48
(b) Powers, Etc. 48
(c) Authorization; No Conflict 49
(d) Approvals 49
(e) Enforceability 49
(f) Financial Statements 49
(g) Litigation 50
(h) Federal Reserve Regulations 50
(i) Investment Company Act 50
(j) ERISA 50
(k) Compliance with Laws 51
(l) Payment of Debts and Taxes 52
(m) Indebtedness, Guaranties 52
(n) Material Agreements 52
(o) Properties, Inventory and Equipment 53
(p) Financial Condition 53
(q) Insurance 54
(r) Full Disclosure 54
(s) No Default 54
(t) Status of Loans as Senior Debt 55
(u) Swap Obligations 55
ARTICLE V
COVENANTS OF THE BORROWER 55
SECTION 5.1 Affirmative Covenants 55
(a) Use of Proceeds 55
(b) Reporting and Notice Requirements 55
(c) Maintenance of Existence, Etc. 58
(d) Compliance With Laws 58
(e) Insuranc 58
(f) Material Agreements 58
(g) Obligations and Taxes 59
(h) Maintaining Records; Access to
Properties and Inspections 59
(i) Environmental and Safety Matters 59
(j) Deposit Balances 60
(k) Interest Rate Protection 60
(l) Surveys 60
(m) Audit of Accounts Receivable and Inventory 61
(n) Further Assurances 61
SECTION 5.2 Negative Covenants 62
(a) Financial Covenants 62
(b) Prohibition of Fundamental Changes 64
(c) Limitation on Liens 64
(d) Debt 64
(e) Guarantees 64
(f) Investments, Loans, Advances, etc. 65
(g) Sales of Assets 65
(h) Transactions with Affiliates 66
(i) Modification of Certain Documents; Performance of
Material Agreements 66
(j) Dividends 66
(k) Accounting 66
(l) Subordinated Debt 67
(m) Change of Address; Business Name(s) 67
ARTICLE VI
EVENTS OF DEFAULT 69
SECTION 6.1 Events of Default 69
(a) Payments under the Agreement and the Notes 69
(b) Representations and Warranties 70
(c) Other Loan Instrument Obligations 70
(d) Other Debt 70
(e) Insolvency 71
(f) Judgments 71
(g) Termination of Certain Loan Instruments 71
(h) Collateral Liens 72
SECTION 6.2 Bank's Rights Upon an Event of Default 72
ARTICLE VII
THE AGENT 72
SECTION 7.1 Appointment and Powers 72
SECTION 7.2 Limitation on Agent's Liability 73
SECTION 7.3 Defaults 73
SECTION 7.4 Rights as a Bank 74
SECTION 7.5 Indemnification 74
SECTION 7.6 Non-Reliance on Agent and Other Banks 74
SECTION 7.7 Execution and Amendment of Loan Instruments
on Behalf of the Banks 75
SECTION 7.8 Resignation of the Agent 75
ARTICLE VIII
MISCELLANEOUS 76
SECTION 8.1 Amendments; Waivers 76
SECTION 8.2 Notices, Etc. 77
SECTION 8.3 Remedies 78
SECTION 8.4 Costs, Expenses and Taxes 78
SECTION 8.5 Right of Set-off 79
SECTION 8.6 Binding Effect 79
SECTION 8.7 Indemnity 79
SECTION 8.8 Consent to Exclusive Jurisdiction 80
SECTION 8.9 Waiver of Jury Trial and Certain Damages 80
SECTION 8.10 Governing Law 80
SECTION 8.11 Inconsistent Provisions 81
SECTION 8.12 Sharing of Recoveries 81
SECTION 8.13 Assignments and Participations 81
(a) Assignments 81
(b) Participations 83
SECTION 8.14 Survival of Representations and Warranties 84
SECTION 8.15 Counterparts 84
Schedules
Schedule I Banks
Schedule 2.1 Banks; Address; Commitment Percentages
Schedule 4.1(a) Borrower's and Guarantors' Capital Structure and Shareholders
Schedule 4.1(b) Borrower's and Guarantors' Business Names and Jurisdictions
where Qualified to do Business
Schedule 4.1(d) Approvals
Schedule 4.1(f) Financial Disclosures
Schedule 4.1(g) Litigation
Schedule 4.1(j) ERISA Disclosures
Schedule 4.1(m) Indebtedness; Guaranties
Schedule 4.1(n) Material Agreements
Schedule 4.1(o) Real Property; Inventory; Liens
Schedule 4.1(q) Insurance
Exhibits
Exhibit A-1 Form of Revolving Note
Exhibit A-2 Form of Term Note
Exhibit A-3 Form of Swing Loan Note
Exhibit B-1 Form of Request for Advance
Exhibit B-2 Form of Request for Letter of Credit
Exhibit B-3 Form of Interest Period/Conversion Notice
Exhibit B-4 Form of Borrowing Base Certificate
Exhibit B-5 Form of Compliance Certificate
Exhibit C Form of Guaranty
Exhibit D Form of Pledge and Security Agreement
Exhibit E Form of Security Agreement and Assignment
Exhibit F-1 Form of Deed of Trust
Exhibit F-2 Form of Collateral Assignment of Leases
Exhibit F-3 Landlord's Waiver and Consent
Exhibit F-4 Consent to Assignment of Contracts
Exhibit G-1 Form of Borrower's Omnibus Certificate
Exhibit G-2 Form of Guarantor's Omnibus Certificate
Exhibit H-1 Form of Opinion of Counsel to Borrower
Exhibit H-2 Form of Opinion of Counsel to Guarantors
Exhibit H-3 Form of Opinion of Local Counsel
Exhibit I Form of Notice of Assignment
CREDIT AGREEMENT
Dated as of September 30,1997
As Restated and Amended as of March 12, 0000
XXXX CORPORATION, a Colorado corporation, (the "Borrower"), the BANKS
listed on the attached Schedule I, as revised from time to time (collectively
the "Banks" and individually the "Bank") ; and BANK ONE, COLORADO, N.A., as
letter of credit issuing bank and in its capacity as agent for the Banks
hereunder(in such capacity, the "Agent") agree that the Credit Agreement among
them dated as of September 30, 1997 shall be restated and amended, effective
subject to the conditions to effectiveness set forth in Section 3.01, as of the
Restated Agreement Date, to read in its entirety as follows:.
Recitals
Pursuant and subject to the terms and conditions of this
Agreement, the Banks will make available to the Borrower (a) until September 30,
2000, a Senior Secured Revolving Line of Credit in the maximum amount of up to
$40,000,000.00 which shall include the issuance of Bank letters of credit up to
$5,000,000 and Swing Loans up to $2,500,000, and (b) until September 30, 2002, a
Senior Secured Term Loan of $15,900,000. Payment by the Borrower of the amounts
due hereunder will be secured by liens on and security interests in the real and
personal property of the Borrower.
Agreement
In consideration of the covenants contained herein the Parties
hereby agree as follows:
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Definitions.
As used in this Agreement, the terms identified in this
Section 1.1 shall have the meanings specified below.
"Account Receivable" means any account (as such term is
defined in the Uniform Commercial Code as adopted in the State of Colorado) or
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other right to payment for goods sold or services rendered of the Borrower and
its Subsidiaries.
"Advance" means an advance of funds by the Bank to the
Borrower as a Loan pursuant to a Request for Advance as provided in Section 2.2.
"Affiliate" means a Person that controls, is controlled by or
is under common control with another Person. For purposes hereof, "control"
means the practical power to direct the activities of a Person.
"Agent" means Bank One, Colorado, N.A., as agent for and
representative (within the meaning of Section 9-105(m) of the Uniform Commercial
Code) of the Banks under the Loan Instruments, and any successor Agent appointed
pursuant to Section 7.8.
"Agreement" means this Credit Agreement dated as of September
30, 1997 between the Borrower and the Banks, together with all schedules and
exhibits hereto, and all modifications, amendments, supplements, renewals and
extensions hereof in the manner provided herein.
"Airhub Services" means, Airhub Services Group, LLC, a
Kentucky limited liability company, which is a wholly-owned subsidiary of the
Borrower and its Affiliates.
"AlliedSignal Acquisition" means the purchase of certain
assets and assumption of certain liabilities by the Borrower as provided for
under the AlliedSignal Acquisition Agreements.
"AlliedSignal Acquisition Agreements" means collectively the
License Agreement and the Master Agreement Regarding Asset Purchase and Related
Transactions by and between AlliedSignal Avionics, Inc.,
AlliedSignal Inc. and the Borrower dated as of July 15, 1997.
"Applicable Law" means,(a) all applicable common law and
principles of equity and (b) all applicable provisions of all (i) constitutions,
statutes, rules, regulations and orders of governmental bodies, (ii) approvals
of Government Authorities and (iii) orders, decisions, judgements and decrees of
all courts (whether at law or in equity or admiralty) and arbitrators.
"Applicable Margin" means such percentage for the Type of Loan
as set forth in the following table opposite the applicable ratio of Total Debt
to Trailing Four Quarter EBITDA determined as of the fiscal quarter immediately
preceding such period:
--------------------- ----------------- ------------------- ------------------ ------------------ ------------------
Greater Than or Less Than Revolving Revolving Term Loan LIBOR Term Loan Prime +
Equal to Loan LIBOR Base Loan Base Rate +
Rate + Prime +
--------------------- ----------------- ------------------- ------------------ ------------------ ------------------
4.00x - 2.500% 0.750% 2.500% 0.750%
--------------------- ----------------- ------------------- ------------------ ------------------ ------------------
3.50x 4.00x 2.250% 0.625% 2.250% 0.625%
--------------------- ----------------- ------------------- ------------------ ------------------ ------------------
3.00x 3.50x 2.000% 0.500% 2.000% 0.500%
--------------------- ----------------- ------------------- ------------------ ------------------ ------------------
2.50x 3.00x 1.750% 0.250% 1.750% 0.250%
--------------------- ----------------- ------------------- ------------------ ------------------ ------------------
- 2.50x 1.500% 0.0% 1.500% 0.0%
--------------------- ----------------- ------------------- ------------------ ------------------ ------------------
The ratio of Total Debt to Trailing Four Quarter EBITDA shall be computed by the
Borrower and such ratio and the Applicable Margin for each Type of Loan will be
set forth in the Compliance Certificate furnished under Section 5.1(b)(iv). The
Applicable Margin shall be subject to adjustment, if necessary, on the earlier
of (a) five (5) days after the delivery of the Compliance Certificate for the
applicable fiscal quarter and (b) a date fifty (50) days after the end of each
fiscal quarter of the Borrower ("Margin Adjustment Date"). Any change in the
Applicable Margin shall apply to all Loans outstanding of any Type as of the
Margin Adjustment Date. If the Borrower fails to furnish the Compliance
Certificate and the financial statements fifty (50) days after the end of any
fiscal quarter, the Applicable Margin shall be for the relevant fiscal quarter
Revolving Term Loan
Loan
LIBOR Base Rate LIBOR + 2.50%
+ 2.50% or
or Prime + 0.75%
Prime + 0.75%
The foregoing notwithstanding, 0.25% shall be added to the Applicable Margin
from the Restated Agreement Date until the Margin Adjustment Date for the Fiscal
Quarter ending June 30, 1999.
"Arranger" shall mean Bank One Capital Markets, an affiliate
of Bank One, Colorado, N.A.
"Authorized Signatory" means such Person or Persons as may be
designated from time to time in the most recent certificate delivered to the
Bank by the Borrower as being authorized to execute and deliver certificates or
other documents required or permitted to be executed and delivered to the Bank
by the Borrower or other Persons pursuant to this Agreement or any other Loan
3
Instrument, and in any case shall include the President and the Chief Financial
Officer of the Borrower.
"Bank" and "Banks" means (a) the Agent and any Person listed
on the signature pages hereof following the Agent and (b) any Person that has
been assigned any or all of the rights or obligations of a Bank pursuant to
Section 8.13.
"Borrower" means EFTC Corporation, a Colorado corporation.
"Borrower's Account" means a demand deposit account maintained
by the Borrower with the Agent.
"Borrower Loan Instruments" means, the Loan Instruments to
which the Borrower is a party.
"Borrower's Omnibus Certificate" means a certificate from the
Borrower substantially in the form of Exhibit G-1 hereto.
"Borrower's Real Property" has the meaning given thereto in
Section 4.1(o).
"Borrowing Base" shall have the meaning specified in Section
2.18.
"Borrowing Base Certificate" shall mean a certificate to be
provided to the Bank by the Borrower from time to time in accordance with
Section 2.18 substantially in the form of Exhibit B-4 hereto.
"Business Day" means a day of the year other than Saturday or
Sunday on which banks are not authorized to close in Denver, Colorado and, if
the applicable Business Day relates to any LIBOR Rate Loans, on which dealings
are carried on in the London interbank market.
"Capital Expenditures" means amounts paid or indebtedness
incurred by the Borrower or any of its Subsidiaries in connection with the
acquisition, purchase or lease by such Borrower or any of its Subsidiaries of
capital assets that would be required to be capitalized (including the
applicable amount in respect of capitalized interest) and which amounts would be
shown as such capital expenditures on the consolidated statement of cash flow of
such Person in accordance with GAAP, provided, however, Capital Expenditures
shall not include (i) amounts paid with insurance proceeds or the proceeds of a
condemnation award within twelve (12) months after receipt by the Borrower or
its Subsidiaries, as the case may be, in connection with the purchase of capital
assets to replace the capital assets destroyed in the casualty loss giving rise
to such insurance proceeds or taken in the condemnation proceeding giving rise
to such condemnation proceeds, as the case may be and(ii) capital assets
purchased or otherwise acquired by the Borrower or any of its Subsidiaries in
connection with an investment, acquisition or purchase that requires the prior
approval or waiver by the Required Banks under this Agreement.
4
"Change in Control" means (a) the acquisition by any Person,
or two or more Persons acting in concert, including without limitation any
acquisition effected by means of a merger or consolidation, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of (i) in the case of
mutual funds the ownership interests of which are at all times held by the
general investing public and the investments of which are (and prior to the
Effective Date have been) at all times solely passive in nature, for each mutual
fund and its Affiliates collectively, 50% or more of the outstanding shares of
voting stock of the Borrower and (ii) in all other cases, 20% or more of the
outstanding shares of voting stock of the Borrower, and (b) during any period of
25 consecutive months, commencing on January 1, 1999, the ceasing of those
individuals (the "Continuing Directors") who (i) were directors of the Borrower
on the first day of each such period or (ii) subsequently became directors of
the Borrower and whose election or initial nomination for election subsequent to
that date was approved by a majority of the Continuing Directors then on the
board of directors of the Borrower, to constitute a majority of the board of
directors of the Borrower.
"Circuit Test" means, Circuit Test, Inc., a Florida
corporation, that is a wholly-owned subsidiary of the Borrower.
"Circuit Test International" means Circuit Test International,
L.C., a Florida limited liability company, that is wholly-owned by the Borrower
and its Affiliates.
"CMLTD" means, with respect to the Borrower or any Guarantor,
all principal amounts due and payable by the Borrower or such Guarantor during
the then-current month and during the following eleven months with respect to
Debt of such Person other than accounts payable, accrued expenses and income
taxes payable.
"Code" means the Internal Revenue Code of 1986, as amended,
and as the same may be supplemented, modified, amended or restated from time to
time, and the rules and regulations promulgated thereunder, or any corresponding
or succeeding provisions of applicable law.
"Collateral" shall mean all rights and interests of the
Borrower and of the Guarantors which are subject to the Collateral Documents.
5
"Collateral Documents" means the Deeds of Trust, the Security
Agreements, the Guaranties, the Landlord Consent and Waiver, the Collateral
Assignments of Leases, and the Pledge Agreement.
"Commitment" means, with respect to each Bank, such Bank's
obligation to make Loans pursuant to the Revolving Loan Commitment and Term Loan
Commitment.
"Commitment Fee" has the meaning specified in Section 2.5(a)
hereof.
"Compliance Certificate" means, a certificate substantially in
the form of Exhibit B-5.
"Convert," "Conversion" and "Converted" each refers to a
conversion of a Loan of one Type into a Loan of another Type pursuant to Section
2.13 or 2.14.
"CTLLC Acquisition" means, CTLLC Acquisition Corp., a Florida
corporation, that is a wholly-owned subsidiary of the Borrower.
"Current Electronics" means, Current Electronics, Inc., an
Oregon corporation, that is a wholly-owned subsidiary of the Borrower.
"Debt" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations to pay the deferred purchase price of property or services,
(iv) obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (v) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above.
"Deed of Trust" and "Deeds of Trust" mean, respectively, any
mortgage, deed of trust or other collateral security document pertaining to
non-leasehold interests in real property executed by the Borrower or any
Guarantor from time to time in favor of the Agent (on behalf of the
Banks)supporting or securing any of the Obligations, including the Deeds of
Trust substantially in the form of Exhibit F-1 hereto from the Borrower and
certain of the Guarantors, as the same may be supplemented, modified, amended or
restated from time to time in the manner provided therein.
6
"Default" means any event or state of affairs that, with the
giving of notice or the passage of time (or both) would constitute an Event of
Default.
"Default Rate" means an interest rate per annum equal to three
percent (3%) above the Prime Rate in effect with respect to Loans at the time of
occurrence of any Event of Default.
"Disposition" means any sale, assignment, transfer or other
disposition (including a ground lease or other long term obligation which under
GAAP is the equivalent of a sale of such asset) or any asset (whether now owned
or hereafter acquired) of any Person, other than inventory in the ordinary
course of business.
"Dollars," "dollars" and "$" means lawful money of the United
States of America.
"Draw" shall mean any payment by the Issuing Bank to a
beneficiary of a Letter of Credit pursuant to the terms of a Letter of Credit.
"EBITDA" means with respect to the Borrower on a consolidated
basis, in a twelve-month period, an amount equal to earnings (determined in
accordance with GAAP) before deduction of interest expenses, taxes, depreciation
expenses and amortization, provided, however, the following non-recurring
charges or write-offs shall not be deducted from earnings for the fourth Fiscal
Quarter of 1998 (i) the charge for the Greeley Plant Closing in an amount not to
exceed $9,250,000, (ii) Tucson Plant inventory write-down in an amount not to
exceed $1,000,000, (iii) increase in Inventory reserves in an amount not to
exceed $1,900,000, (iv) reversal of certain capitalized costs in an amount not
to exceed $500,000, (v) accrual for employee health insurance expenses in an
amount not to exceed $640,000, and (vi) a reserve for a certain pricing dispute
with AlliedSignal arising out of AlliedSignal's Florida facility in an amount
not to exceed $600,000.
"Effective Date" means September 30, 1997.
"Eligible Account Receivable" means all Accounts Receivable of
the Borrower and its Subsidiaries which are subject to a first and prior Lien in
favor of the Agent on behalf of the Banks pursuant to the Collateral Documents
(reduced by the amount of any refund, rebate, allowance, discount or other
concession to the account debtor in connection therewith in excess of
$250,000.00 in the aggregate) except for the following:
(i) Accounts Receivable with respect to which the account
debtor is an Affiliate of the Borrower or any Guarantor, or a
7
director, officer, employee or agent of the Borrower or any
Guarantor;
(ii) Accounts Receivable with respect to which goods are
placed on consignment, guaranteed sale, "sale or return" or
other terms by reason of which the payment of the account
debtor may be conditional;
(iii) Accounts Receivable which are subject to dispute,
counterclaim or set off; (iv) Accounts Receivable with respect
to which the goods have not been shipped or the services
rendered to the account debtor that are not subject to a "xxxx
and hold" letter agreement satisfactory to legal counsel for
the Agent;
(v) Accounts Receivable from account debtors whose financial
condition or creditworthiness of such account debtor is
unacceptable under the credit policy of the Borrower, which
credit policy shall be consistent with prudent industry
practice;
(vi) Accounts Receivable which are not due and payable within
60 days after their invoice date;
(vii) Accounts Receivable which are more than 60 days past
their due date;
(viii) That portion of Eligible Accounts Receivable owed by a
single account debtor that exceeds (a) fifty percent (50%) of
total Eligible Accounts Receivable for an account debtor rated
BBB- by Standard & Poor's and Baa3 by Xxxxx'x Investor
Services, Inc., or higher ("Investment Grade Accounts
Receivable") and (b) twenty five percent (25%) for
non-Investment Grade Accounts Receivable;
(ix) Accounts Receivable owing from a single account debtor if
twenty-five percent (25%) of its Accounts Receivable with the
Borrower and all Guarantors is more than 60 days past due;
(x) Accounts Receivable from account debtors which do not
maintain their principal place of business in the United
States, unless they are supported by an irrevocable letter of
credit from a banking institution in the United States
acceptable to the Agent in its sole discretion;
(xi) Accounts Receivable from an account debtor which has
filed, or which has had filed against it, and is pending, a
petition in bankruptcy or an application for relief under any
8
provision of any state or federal bankruptcy, insolvency or
debtor-relief statute; or which has had appointed, and
continues to be appointed, a trustee, custodian or receiver
for the assets of such account debtor; or which has made, and
is pending, an assignment for the benefit of creditors or has
become, and remains, insolvent or has failed, and continues to
fail, generally to pay its debts (including its employee
payroll) as such debts become due;
(xii) Accounts Receivable with respect to which the account
debtor is the United States, or any department or agency
thereof (other than such Accounts Receivable in which the
Banks have been granted an enforceable assignment in
compliance with the provisions of 41 U.S.C. Section 15); and
(xiii) Accounts Receivable which are not subject to a Lien in
favor of the Agent, or which are subject to a Lien in favor of
a Person other than the Agent, whether or not such Lien is
junior to the Lien of the Agent other than Liens imposed by
any Governmental Authority for taxes, assessments or charges
not yet due or which are being contested in good faith and
with due diligence and with respect to which adequate
reserves, determined in the reasonable discretion of the
Agent, have been established and Liens which do not materially
and adversely affect the Banks' rights and interests in such
Accounts Receivable, the Collateral, or the collectibility of
the Accounts Receivable.
"Eligible Inventory" means Inventory of the Borrower and its
Subsidiaries subject to a first and prior Lien in favor of the Agent on behalf
of the Banks pursuant to the Collateral Documents, except for the following:
(i) any portion of Inventory consisting of work-in-process
that is not subject to an enforceable purchase order or
purchase agreement;
(ii) Inventory which is not subject to a Lien in favor of the
Bank or which is subject to a Lien in favor of a Person other
than the Banks, whether or not such Lien is junior to the Lien
of the Banks other than Liens imposed by any Governmental
Authority for taxes, assessments or charges not yet due or
which are being contested in good faith and with due diligence
and with respect to which adequate reserves, determined in the
reasonable discretion of the Agent, have been established and
Liens which do not materially and adversely affect the Banks'
rights and interests in such Inventory or the Collateral;
9
(iii) Finished goods that do not meet the specifications of
the purchase order for such goods;
(iv) Inventory situated at a premises leased by the Borrower
or a Subsidiary for which there is no valid landlord waiver,
mortgagees waiver or warehouseman's or bailee's agreement, if
appropriate, in form and substance acceptable to the Agent in
its sole discretion, provided, however, that the Agent may, in
its sole discretion, waive the requirement for such waivers
and agreements;
(v) Inventory produced in violation of the Fair Labor
Standards Act and in particular the provisions of that statute
contained in 29 U.S.C. ss.215(a)(i);
(vi) Inventory which is deemed to be obsolete, unsaleable,
damaged and unfit for further processing in accordance with
GAAP, provided that, if the Agent reasonably disagrees with
the valuation of such inventory it may, once annually, at
Borrower's expense, require a collateral audit to establish
the value of such;
(vii) Inventory which is not located in the United States; and
(viii) Inventory subject to a deposit and a repurchase
obligation by Borrower pursuant to In-Plant Store Agreements
between Borrower and each of Avnet Electronics Marketing, a
group of Avnet, Inc., TTI, Inc. and Atlas, Inc. or any other
Person.
"Environmental Claim" means: (a) any responsibility, liability
or unlawful act or omission under any Environmental Law (whether alleged or
otherwise); (b) any tortious act or omission or breach of contract pertaining to
any Environmental Substance (whether alleged or otherwise); or (c) any other
violation or claim under any Environmental Law or in respect of any Hazardous
Materials (whether alleged or otherwise).
"Environmental and Safety Laws" means any and all federal,
state, local and foreign statutes, laws, regulations, ordinances, codes and
similar provisions having the force or effect of law, all judicial and
administrative orders and determinations, all contractual obligations and common
law concerning public health or safety, worker health or safety or pollution of
protection of the environment, including without limitation those relating to
any emissions, discharges or releases of Hazardous Materials to ambient air,
surface water, ground water or land, or otherwise relating to the manufacture,
10
processing, distribution, use, treatment, storage, disposal, transport, control,
clean-up or handling of Hazardous Materials.
"Equipment" means the Borrower's equipment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and as the same may be supplemented, modified, amended or
restated from time to time, and the rules and regulations promulgated
thereunder, or any corresponding or succeeding provisions of applicable law.
"ERISA Affiliate" and "ERISA Affiliates" shall mean,
respectively, any one or more of any trade, business, person or persons that
together with the Borrower would be deemed to be a single employer within the
meaning of Section 4001(b)(1) of ERISA.
"ERISA Effect" means any material and adverse effect on (a)
any Plan, (b) the assets and properties of any Plan or (c) any funding or other
liability of any one or more of the Borrower or any ERISA Affiliate in respect
of any Plan (individually or in the aggregate).
"ERISA Event" means any (a) "accumulated funding deficiency"
(whether or not waived), "prohibited transaction," "reportable event" (other
than any event for which the 30-day notice requirement has been waived by
regulation), "disqualification," "partial withdrawal," involuntary "partial
termination" or "termination," "insolvency," "reorganization" or the imposition
of any "penalty" or "withdrawal liability" in respect of any Plan under (and as
such words and phrases are defined in" ERISA or the Code, as applicable), (b)
any other violation of ERISA, the Code or any other applicable law in respect of
any Plan (whether asserted or otherwise), (c) supplement or amendment to or
modification or restatement of any Plan that could have or has had an ERISA
Effect, or (d) imposition, increase or other adverse change in any funding
obligation or other liability of any one or more of the Borrower or any ERISA
Affiliate in respect of any Plan or to the Pension Benefit Guaranty Corporation
(individually or in the aggregate).
"Event of Default" shall have the meaning assigned thereto in
Section 6.1 hereof.
"Excess Cash Flow" means, for any fiscal period, the excess of
(a) EBITDA over (b) the sum of (i) Consolidated Fixed Charges for such
period,(ii) Capital Expenditures actually made during such period, (iii) cash
taxes for such period, and (iv) optional prepayments of principal of the Term
Loan made during such period.
11
"Federal Funds Rate" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day that is a Business Day, the average of quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Fees" means the Commitment Fee, the Letter of Credit Fees and
the Amendment Fee.
"Fixed Charges" means, as of any date of determination, the
following, determined with respect to the immediately preceding four fiscal
quarters of the Borrower and the Guarantors for which financial statements have
been delivered pursuant to Section 5.1, the sum of (a) CMLTD and (b) Interest
Expense for such period. There shall be included in the computation of Fixed
Charges for any period the pro-forma effect for such period of the financial
results of Current Electronics and Circuit Test for such period to the extent
that such financial results were included in the computation of EBITDA.
"GAAP" means generally accepted accounting principals applied
in the United States and practices which are recognized as such by the American
Institute of Certified Public Accountants or successor organization.
"Governmental Authorities" means any federal, state, county,
municipal, local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Greeley Plant Closing" means the discontinuance of business
operations by the Borrower from its manufacturing facility located at 000 Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
"Guarantee" and "Guarantees" mean a guarantee, endorsement,
contingent agreement to purchase or furnish funds for the payment or maintenance
of, or otherwise to be or become contingently liable under or with respect to,
any indebtedness (including Debt) or other obligations of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
other equity interests in any Person, or an agreement to purchase, sell or lease
(as lessee or lessor) real or personal property or services primarily for the
purpose of enabling a debtor to make payment of its obligations or an agreement
to assure a creditor against loss, and including, without limitation, causing a
bank to issue a letter of credit for the benefit of another Person.
12
"Guarantor" and "Guarantors" means, respectively, any one or
more of Current, Circuit Test, Airhub Services, Circuit Test International,
CTLLC Acquisition and RM Electronics.
"Guarantor Omnibus Certificate" means a certificate to be
provided to the Bank by each of the Guarantors, each substantially in the form
of Exhibit G-2 hereto.
"Guaranty" and "Guaranties" means, the Guaranty from each of
the Guarantors to the Bank substantially in the form of Exhibit C-1 hereto, as
the same may be supplemented, modified, amended or restated from time to time in
the manner provided therein.
"Hazardous Materials" means, collectively, any polychlorinated
biphenyls, petroleum or petroleum derived substance, friable asbestos, and any
toxic or otherwise hazardous waste, material or substance, including, without
limitation, all substances with respect to which liability or standards of
conduct may be imposed pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, the
Resource Conservation and Recovery Act of 1976, as amended from time to time, or
any other Environmental and Safety Law.
"Interest Expense" means, with respect to the Borrower, for
any fiscal year, the interest payable by the Borrower during such fiscal year in
cash. Expressly excluded from the definition of "Cash Interest Expense" is any
interest expense imputed to the Borrower by the Borrower's independent
accountants for GAAP accounting purposes, for purposes of federal or state
taxation, or for any other purposes.
"Interest Period" means, for each LIBOR Rate Loan, the period
commencing on the date of the Advance thereof or the date of the Conversion of
any Prime Rate Loan into such a LIBOR Rate Loan and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period selected by
the Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be 1, 3 or 6 months as the Borrower may, upon notice
received by the Bank not later than 10:00 a.m. (Denver, Colorado time) on the
third Business Day prior to the first day of such Interest Period, select;
provided, however, that:
(i) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided, that if such extension
13
would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business
Day; and
(ii) no Interest Period applicable to a Term Loan or portion
thereof shall extend beyond any date upon which is due any
scheduled principal payment in respect of the Term Loans
unless the aggregate principal amount of Term Loans
represented by Prime Rate Loans or LIBOR Rate Loans having
Interest Periods that will expire on or before such date,
equals or exceeds the amount of such principal payment; and
(iii) no Interest Period for any Term Loan shall extend beyond
September 30, 2002 and no Interest Period for any Revolving
Loan shall extend beyond September 30, 2000.
"Interest Period/Conversion Notice" means a notice from the
Borrower to the Bank substantially in the form of Exhibit B-3 concerning
Conversions of Types of Advances, or concerning Interest Period elections.
"Interest Rate Protection Agreement" means any interest rate
protection agreement, future, option swap, cap or collar agreement or other
arrangement designed to fix interest rates or other wise hedge against
fluctuations in interest rates.
"Inventory" means all raw materials, work in process, finished
goods, merchandise, parts and supplies of every kind and description of the
Borrower, and of the Guarantors, and goods held for sale or lease or furnished
under contracts of service in which the Borrower or any Guarantor now has or
hereafter acquires any right, whether held by the Borrower or others, and all
documents of title, warehouse receipts, bills of lading, and all other documents
of every type covering all or any part of the foregoing. Inventory includes
inventory temporarily out of the Borrower's or any Guarantor's custody or
possession.
"Issuing Bank" means Bank One, Colorado, N.A. in its capacity
as issuer of one or more Letters of Credit hereunder.
"Landlord Waiver and Consent" means the Landlord Waiver and
Consent pertaining to the lessor's interest the leasehold estates held by the
Borrower or its Subsidiaries in the form of Exhibit F-2 hereto.
"Letter of Credit" and "Letters of Credit" means one or more
letters of credit issued by the Bank for the account of the Borrower as provided
in Section 2.4 hereto.
"Letter of Credit Fees" shall have the meaning specified in
Section 2.5(b).
"Letter of Credit Rate" means, the percentage set forth below
in the following table opposite the applicable ratio of Total Debt to Trailing
Four Quarter EBITDA determined as of the fiscal quarter immediately preceding
such period:
14
------------------------------ --------------------------- ------------------------------
Greater Than or Equal to Less Than Letter of Credit Rate
------------------------------ --------------------------- ------------------------------
4.00x - 2.500%
------------------------------ --------------------------- ------------------------------
3.50x 4.00x 2.250%
------------------------------ --------------------------- ------------------------------
3.00x 3.50x 2.000%
------------------------------ --------------------------- ------------------------------
2.50x 3.00x 1.750%
------------------------------ --------------------------- ------------------------------
- 2.50x 1.500%
------------------------------ --------------------------- ------------------------------
The ratio of Total Debt to Trailing Four Quarter EBITDA shall be computed by the
Borrower and such ratio and the Letter of Credit Rate for the fiscal quarter
will be set forth in the Compliance Certificate furnished under Section
5.1(b)(iv). The Letter of Credit Rate shall be subject to adjustment, if
necessary, on the earlier of (a) five (5) days after delivery of the Compliance
Certificate for the applicable fiscal quarter and (b) a date fifty (50) days
after the end of each fiscal quarter of the Borrower. If the Borrower fails to
furnish the Compliance Certificate and financial statements fifty (50) days
after the end of any fiscal quarter, the Letter of Credit Rate shall be 2.500%
for the relevant fiscal quarter.
"Letter of Credit Sublimit" means $5,000,000.
"LIBOR Base Rate" means, for any Interest Period for any LIBOR
Rate Loan, the offered rate for U.S. Dollar deposits of not less than
$1,000,000.00 as of 11:00 A.M. City of London, England time two London Business
Days prior to the first date of each Interest Period as shown on the display
designated as "British Bankers Assoc, Interest Settlement Rates" on the Telerate
System ("Telerate"), Page 3750 or Page 3740, or such other page or pages as may
replace such pages on Telerate for the purpose of displaying such rate.
Provided, however, that if such offered rate is not available on Telerate then
such offered rate shall be calculated by the Agent by a substantially similar
methodology as that theretofore used to determine such offered rate in Telerate.
"London Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions are generally authorized or obligated by law or
executive order to close in the City of London, England.
15
"LIBOR Rate" means, for any LIBOR Rate Loan for any Interest
Period therefor, a rate per annum (expressed as a decimal, rounded upwards, if
necessary, to the nearest 1/100,000 of 1%) determined by the Agent to be equal
to the sum of (a) the LIBOR Base Rate for such Advance for such Interest Period,
plus (b) the Applicable Margin. The LIBOR Base Rate shall be adjusted
automatically as to all LIBOR Rate Loans outstanding as of the effective date of
any change in the Reserve Requirement.
"LIBOR Rate Loan" means a Loan which bears interest as
provided in Section 2.11(b).
"Lien" means any mortgage, deed of trust, lien, chattel
mortgage, conditional sale contract, pledge, charge, security interest or
encumbrance of any kind whatsoever.
"Loan" and "Loans" means, respectively, all funds Advanced by
the Banks to the Borrower pursuant to Requests for Advance submitted by the
Borrower to the Agent, all Swing Loans, all Draws under Letters of Credit, and
all other amounts paid or otherwise advanced by the Issuing Bank on behalf of
the Borrower pursuant hereto or pursuant to any other Loan Instrument, which
Loans will be evidenced by the Notes.
"Loan Instrument" and "Loan Instruments" means, respectively,
any one or more of this Agreement, the Notes, the Requests for Advance, the
Requests for Letter of Credit, the Letters of Credit, the Guaranties, the
Collateral Documents, and the various other deeds of trust, mortgages,
assignments, instruments and other documents creating or evidencing the Banks'
interest in any collateral securing or intended to secure anyone's obligations
under any of the foregoing, and all waivers, consents, agreements,
representations and warranties, reports, statements, certificates, schedules and
other documents executed by the requisite Person(s) pursuant to or in connection
with any of the foregoing and accepted or delivered by the Agent (whether prior
to, on or from time to time after the Effective Date), as each may be
supplemented, modified, amended or restated from time to time in the manner
provided therein.
"Material Adverse Effect" means any material and adverse
effect, whether individually or in the aggregate, upon (a) the assets, business,
operations, properties or condition, financial or otherwise, of the Borrower and
its wholly owned Subsidiaries, taken as a whole, (b) the ability of the Borrower
to make payment as and when due of all or any part of the Obligations, or (c)
the Collateral.
"Material Agreements" means all agreements of the Borrower
which are included in the Collateral, and all other agreements and contracts
(written or oral, now existing or hereafter entered into) to which the Borrower
16
is a party, or by which the Borrower, or the Collateral is bound, the
nonperformance of which by the Borrower, or by the Borrower's counter parties
thereto would have a Material Adverse Effect on the Borrower which Material
Agreements in effect on the date hereof are identified in Schedule 4.1(n)
hereto.
"Maturity Date" means, (a) with respect to the Revolving
Loans, the first to occur of (i) the Revolving Loans Scheduled Maturity Date and
(ii) the date on which the due date of the Loans has been accelerated and
payment demanded by the Bank by reason of an Event of Default pursuant to
Article VI; and (b) with respect to the Term Loans, the first to occur of (iii)
the Term Loans Scheduled Maturity Date and (iv) the date on which the due date
of the Loans has been accelerated and payment demanded by the Agent by reason of
an Event of Default pursuant to Article VI.
"Maximum Revolving Credit Amount" means the lesser of (y)
$40,000,000.00 and (z) the Borrowing Base in effect from time to time, as such
$40,000,000.00 may be reduced by the Borrower pursuant to Section 2.6.
"Xxxxxxx Subordinated Notes" means the promissory note or
promissory notes issued by the Borrower to Xxxxxxx X. Xxxxxxx in the aggregate
face amount of $15,000,000 due December 31, 2002 that are subordinated to the
Revolving Loans, Term Loans and Swing Line Loans on terms and conditions
satisfactory to the Agent.
"Multiemployer Plan" of any Person shall mean a multiemployer
plan defined as such in Section 3(37) of ERISA to which contributions have been
made by such Person or any ERISA Affiliate of such Person and which is covered
by Title IV of ERISA.
"Net Income (or Deficit)" means, for any computation period,
with respect to the Borrower on a consolidated basis, cumulative net income (or
a deficit) earned during such period as determined in accordance with GAAP,
provided, however, for purposes of calculating the Minimum Net Income and
Maximum Net Deficit covenants at Section 5.2(a)(vi and vii), the following
non-recurring charges or write-offs shall not be deducted from earnings for the
fourth Fiscal Quarter of 1998 (i) the charge for the Greeley Plant Closing. in
an amount not to exceed $9,250,000, (ii) Tucson Plant inventory write-down in an
amount not to exceed $1,000,000, (iii) increase in Inventory reserves in an
amount not to exceed $1,900,000, (iv) reversal of certain capitalized costs in
an amount no to exceed $500,000, (v) accrual for employee health insurance
expenses in an amount not to exceed $640,000, and (vi) a reserve for a certain
17
pricing dispute with AlliedSignal arising out of AlliedSignal's Florida facility
in an amount not to exceed $600,000.
"Net Proceeds" means the proceeds received by the Borrower in
cash from the sale, lease, assignment or other disposition of any asset or
property (other than sales of assets in the ordinary course of business, which,
for purposes of this definition, shall not include any disposition of assets in
which the total consideration received or receivable is in excess of $500,000),
net of (a) reasonable and customary fees, costs, commissions and expenses,
including attorneys' fees, incurred in connection with such sale, lease,
assignment or other disposition and payable by or on behalf of the seller or the
transferor of the assets to which sale or disposition relates, and (b) the
amount of all foreign, Federal, state and local taxes payable as a direct
consequence of such sale, lease, assignment or other disposition. For this
purpose, all proceeds of insurance paid on account of the loss of or damage to
any such asset or property, or group of assets or properties, and awards of
compensation for any such asset or property, or group of properties, taken by
condemnation or eminent domain shall be deemed to be Net Proceeds (provided
that, in the case of proceeds from insurance paid with respect to any loss or
damage to any asset, such proceeds, or any portion thereof, shall not constitute
Net Proceeds if the Agent has received notice from the Borrower of its intention
to use such proceeds or portion thereof at the time of such loss or damage, and
such proceeds or portion thereof are in fact so used within six months after the
occurrence of such loss or damage to repair, restore or replace such assets).
With respect to the issuance or sale of equity securities, Net Proceeds means
the cash proceeds of such issuance or sale net of attorneys' fees, accountants'
fees, underwriters' fees, discounts and commissions and other expenses actually
incurred in connection with such sale or issuance. Net Proceeds do not include
the proceeds from the exercise of (A) warrants issued to Xxxxxxx X. Xxxxxxx in
connection with the Xxxxxxx Subordinated Notes and (B) stock options issued
pursuant to an employee stock option plan described in the Borrower's proxy
statements.
"Net Worth" means the net worth of a Person, determined in
accordance with GAAP.
"Notes" means, collectively, the Revolving Notes, the Term
Notes and the Swing Loan Notes.
"Obligations" means the obligations of the Borrower to repay
the balance of the Loans outstanding hereunder, together with accrued and unpaid
interest thereon, fees payable hereunder,
18
and all other amounts payable or obligations to be performed by the Borrower
hereunder or under any other Loan Instrument or under any Permitted Swap
Obligations for which the counterparty is a Bank.
"Permitted Lien" means:
(a) Liens imposed by any Governmental Authority for taxes, assessments or
charges not yet due or which are being contested in good faith and
with due diligence and with respect to which adequate reserves have
been established;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's, or
other like Liens arising in the ordinary course of business not yet
delinquent or which are being contested in good faith and with due
diligence and with respect to which adequate reserves have been
established;
(c) Liens (other than Liens imposed by ERISA) consisting of pledges or
deposits under workers' compensation, unemployment insurance and other
social security legislation;
(d) easements, rights-of-way, zoning restrictions and other similar
encumbrances of record on real property incurred in the ordinary
course of business which, in the aggregate, are not material in dollar
amount, and which do not in any case interfere with the ordinary
conduct of the business of the Borrower or any Guarantor;
(e) Liens existing on the date hereof and disclosed in Schedule 4.1(p)
hereto;
(f) purchase money security interests securing payment by the Borrower or
any Guarantor of a portion of the purchase price of any asset,
provided that (i) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition thereof, (ii) such Lien
attaches solely to the property so acquired in such transaction, (iii)
the principal amount of the debt secured thereby does not exceed 100%
of the cost of such property, and (iv) the aggregate principal
outstanding of such purchase money security interest Liens shall not
at any one time exceed $2,500,000;
(g) Liens, deposits or pledges to secure the non-delinquent performance of
bids, tenders, contracts(other than contracts for the payment of
money), leases (permitted under this Agreement), public or statutory
19
obligations, surety, stay, appeal, indemnity, performance or other
similar bonds, or other similar obligations arising in the ordinary
course of business;
or
(h) any attachment or judgment Lien either in existence less than 30
calendar days after the entry thereof, or with respect to which
execution has been stayed, or with respect to which payment in full
above any deductible is covered by insurance.
"Permitted Swap Obligations" means all obligations (contingent
or otherwise) of the Borrower or any Subsidiary existing or arising under Swap
Contracts with one or more creditworthy parties as the swap counterparty,
provided that such obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments or assets held or reasonably
anticipated by such Person and not for the purpose of speculation. For the
purposes of this definition, the term "creditworthy party" means any Bank, any
Affiliate of any Bank or any third party having a credit rating from Standard &
Poor's and Xxxxx'x Investor Services, Inc. not less than that of the Bank with
the lowest credit rating. All Swap Contracts with counterparties who are not
Banks will be unsecured.
"Person" means any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, limited
liability partnership, trust, unincorporated organization or government (or any
agency, instrumentality or political subdivision thereof).
"Plan" of a Person shall mean an employee benefit or other
plan established or maintained by such Person or any ERISA Affiliate of such
Person and which is covered by Title IV of ERISA, other than a Multiemployer
Plan of such Person.
"Pledge Agreement" means the Pledge and Security Agreement of
the Borrower pertaining to its interests and its other personal property
substantially in the form of Exhibit D hereto.
"Prime Rate" means, for any Interest Period or any other
period, a fluctuating interest rate per annum as shall be in effect from time to
time as announced publicly by the Agent in Denver, Colorado, from time to time,
as the Agent's prime rate. Such rate will not necessarily be the lowest interest
rate charged by the Agent for loans to its customers. The Prime Rate shall
change on each day on which the Agent announces a change in such Prime Rate.
20
"Prime Rate Loan" means an Advance or a Draw which bears
interest as provided in Section 2.11(a).
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the fifth decimal) at
such time of such Bank's Commitment divided by the combined Commitments of all
Banks.
"Real Property" shall mean Borrower's Real Property.
"Record" means the grid attached to a Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Loan referred to in such
Note.
"Regulations D, T, U and X" mean, respectively, Regulations D,
T, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to the Banks, any
change enacted or adopted after the date of this Agreement in United States
federal or state law or regulations or any foreign law or regulations
(including, without limitation, Regulation D) or the adoption or publication
after the date of this Agreement of any interpretations, directives or requests
(whether or not having the force of law) applying to a class of banks, including
the Banks, by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Request for Advance" means a written request by the Borrower
to the Agent for an Advance of funds as a Loan hereunder, which written request
will be in the form of Exhibit B-1 hereto.
"Request for Letter of Credit" means a written request by the
Borrower for the issuance of a Letter of Credit for the account of the Borrower
hereunder, which written request will be in the form of Exhibit B-2 hereto.
"Required Banks" means, at any particular time, those Banks
having 66 2/3% of the Loans or, if there are no Loans outstanding, at least 66
2/3% of the Commitments.
"Requirement of Law" means, as to any Person, any law
(statutory or common), ordinance, treaty, code, rule or regulation or
determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its assets to which the
Person or any of assets is subject.
21
"Reserve Requirement" means, for any Interest Period for any
LIBOR Rate Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion dollars
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the LIBOR Base Rate is to be determined
as provided in the definition of "LIBOR Base Rate" in this Section 1.1, or (ii)
any category of extensions of credit or other assets which includes LIBOR Rate
Loans.
"Restated Agreement Date" means March 12, 1999.
"Revolving Loans" means all Advances of funds by the Banks to
the Borrower pursuant to the Revolving Loans Commitment, and all Draws under
Letters of Credit, which Loans will be evidenced by the Revolving Note.
"Revolving Loans Commitment" means the commitment of the Banks
to Advance Revolving Loans and Swing Loans to the Borrower or to issue Letters
of Credit for the account of the Borrower from time to time in the aggregate
amount of $40,000,000.00 as provided in Section 2.1.
"Revolving Loans Scheduled Maturity Date" means September 30,
2000.
"Revolving Note" means the promissory notes in the aggregate
principal amount of $40,000,000.00 made by the Borrower and payable to the
order of the Banks, substantially in the form of Exhibit A-1 hereto, as
the same may be supplemented, modified, amended or restated from time to time
in the manner provided herein.
"Revolving Note Record" means a Record with respect to a
Revolving Note.
"Secured Party" has the meaning ascribed to such term in the
Security Agreements, Pledge Agreements and the Deeds of Trust.
"Security Agreement" means a Security Agreement and Assignment
from certain Guarantors substantially in the form of Exhibit E hereto.
"Security Interest" means the Liens created, or purported to
be created, by the Loan Instruments.
22
"Senior Debt" means the Loans.
"Subordinated Debt" means (i) the Xxxxxxx Subordinated Notes
and (ii) any other Debt of the Borrower that is subordinated on terms and
conditions, and that is subject to other terms and conditions, satisfactory in
form and substance to the Required Banks.
"Subsidiary" or "Subsidiaries" of a Person means, any
corporation, association, partnership, limited liability company, joint venture
or other business entity of which more than 50% of the voting stock, membership
interests or other equity interest (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof. Unless
the context otherwise clearly requires, references herein to a "Subsidiary"
refers to a Subsidiary of the Borrower.
"Summary Excess Inventory Report" means a report of the excess
inventory prepared by the Borrower or any Guarantor, by division, in the
ordinary course of business.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or xxxx option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency option or any
other, similar transaction (including any option to enter into any of the
foregoing) or any combination of the foregoing, and, unless the context
otherwise clearly requires, any master agreement relating to or governing any or
all of the foregoing.
"Swing Loan" means an amount advanced by the Swing Loan Lender
pursuant to Section 2.2 hereof.
"Swing Loan Commitment" means the commitment of the Swing Loan
Lender to Advance Swing Loans to the Borrower from time to time as provided in
Section 2.1.
"Swing Loan Lender" means Bank One, Colorado, N.A.
"Swing Loan Note" means any promissory note in the form of
Exhibit A-3.
"Term Loan" means the Advance of funds by the Banks to the
Borrower pursuant to the Term Loan Commitment, which Loans will be evidenced by
the Term Notes.
23
"Term Loan Commitment" means the commitment of each Bank to
Advance the Term Loan to the Borrower in a single Advance, as provided in
Section 2.1.
"Term Note" means the promissory notes in the aggregate
principal amount of $20,000,000 evidencing the Term Loan, made by the Borrower
and payable to the order of the Banks, substantially in the form of Exhibit A-2
hereto, as the same may be supplemented, modified, amended or restated from time
to time in the manner provided herein.
"Term Loan Record" means a Record with respect to a Term Loan.
"Term Loan Scheduled Maturity Date" means September 30, 2002.
"Total Debt" means, at any time, the Debt of the Borrower and
Subsidiaries on a consolidated basis for the purposes of calculating the
financial covenants in Section 5.2(a), the Applicable Margin and the Letter of
Credit Rate at such time.
"Trailing Four Quarter EBITDA" means, with respect to the
Borrower, the EBITDA for the immediately preceding four fiscal quarters of the
Borrower.
"Type" means a type of Advance, being a Prime Rate Loan or a
LIBOR Rate Loan, as the case may be.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect from time to time in the State of Colorado.
SECTION 1.2 Accounting Terms and Determinations . Except as otherwise
expressly provided herein, all accounting terms used herein shall be
24
interpreted, all calculations for purposes of determining compliance with the
terms of this Agreement shall be made, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Agent hereunder shall be prepared in accordance with GAAP applied for all
periods to the extent practicable on a basis consistent with that used in the
preparation of the financial statements identified in Section 4.1(f), so as to
fairly present the financial condition and results of operations of the
applicable Person.
ARTICLE II COMMITMENT; AMOUNTS AND TERMS OF THE ADVANCES AND
LETTERS OF CREDIT
SECTION 2.1 Commitment . Each Bank severally agrees, on the terms and subject to
the conditions contained in this Agreement and the Loan Instruments, to make
Loans to the Borrower for the account of the Borrower in accordance with the
provisions of this Section 2.1.
(a)Revolving Loans Commitment . Pursuant to the Revolving
Loans Commitment, from the Effective Date until the first to
occur of the Revolving Loans Scheduled Maturity Date and the
Maturity Date, each Bank severally agrees to Advance funds to
the Borrower as Revolving Loans and issue for the account of
the Borrower Letters of Credit up to the maximum face amount
of the Letter of Credit Sublimit, provided, however, that at
no time shall the Banks be required to Advance Revolving Loans
to the Borrower or to issue Letters of Credit for the account
of the Borrower if, after such Advance or issuance of such
Letter of Credit the sum of the principal amount of Revolving
Loans outstanding plus the face amount of Letters of Credit
outstanding is in excess of the Maximum Revolving Credit
Amount; and provided further, that no Bank shall be required
to Advance Revolving Loans and participate in Letters of
Credit in an aggregate amount exceeding the Bank's Revolving
Loan Commitment as described on Schedule 2.1. All Draws
honored by the Banks shall constitute Revolving Loans. Subject
to the terms of this Agreement, the Borrower may borrow, repay
and reborrow funds Advanced to the Borrower as Revolving
Loans.
(b)Term Loan Commitment . Pursuant to the Term Loan
Commitment, each Bank severally Advanced, on the Effective
Date, a Term Loan to the Borrower, in a single Advance, in a
principal amount not exceeding the Bank's Term Loan Commitment
as described on Schedule 2.1. Upon payment in full of the Term
Loans Advanced on September 30, 1997 (the "Initial Term
Loans"), each Bank severally agrees to Advance, subject to the
terms and conditions of Amendment No. 2 to the Credit
Agreement, a Term Loan to the Borrower, in a single Advance,
in a principal amount not exceeding the Bank's Term Loan
Commitment as described on Schedule 2.1 ("Advances under
Amendment No. 2 to the Credit Agreement"). The Advances under
Amendment No. 2 to the Credit Agreement shall be on the same
terms and conditions as the initial Term Loans and shall be
25
governed by the terms and conditions of this Credit Agreement
and the Loan Instruments.
(c)Swing Loan Commitment .
(i) Pursuant to the Swing Loan Commitment and subject to the
terms and conditions of this Agreement, the Swing Loan Lender
agrees to make, from time to time from the Effective Date to
the first to occur of the Revolving Loans Scheduled Maturity
Date or the Maturity Date, one or more Swing Loans to the
Borrower in an aggregate unpaid principal amount not to exceed
the lesser of (a) the Revolving Loans Commitment at such time
minus the sum of the aggregate unpaid principal amount of all
Revolving Loans and Swing Loans outstanding at such time and
the aggregate amount of the Letters of Credit outstanding at
such time and (b) $2,500,000.
(ii) Upon demand made to all of the Banks by the Swing Loan
Lender, which demand may be made before or after an Event of
Default, each Bank (other than the Swing Loan Lender) shall
irrevocably and unconditionally purchase from the Swing Loan
Lender, without recourse or warranty, an undivided interest
and participation in the Swing Loans then outstanding, by
paying to the Swing Loan Lender, without reduction or
deduction of any kind, including but not limited to reductions
or deductions for set-off, recoupment or counterclaim, in
Dollars immediately available to the Swing Loan Lender, an
amount equal to such Bank's Pro Rata Share of the principal
amount of all Swing Loans then outstanding, and thereafter,
except as otherwise provided in the second succeeding
sentence, the Banks' respective interests in such Swing Loans,
and the remaining interest of the Swing Loan Lender in such
Swing Loans, shall in all respects be treated as Revolving
Loans under this Agreement, but such Swing Loans shall
continue to be evidenced by the Swing Note, and shall continue
to be due and payable by the Borrower in accordance with
Section 2.7(d). If any Bank does not pay any amount which it
is required to pay forthwith upon the Swing Loan Lender's
demand therefor, the Swing Loan Lender shall be entitled to
recover such amount on demand from such Bank, together with
interest thereon, at the Federal Funds Rate for the first
three Business Days, and thereafter at the Prime Rate, for
each day from the date of such demand, if made prior to 2:00
p.m. (Denver, Colorado time) on any Business Day, and if made
thereafter on any Business Day, or made on any day that is not
a Business Day, from the next Business Day following the date
of such demand, until the date such amount is paid to the
26
Swing Loan Lender by such Bank. If such Bank does not pay such
amount forthwith upon the Swing Loan Lender's demand therefor,
and until such time as such Bank makes the required payment,
the Swing Loan Lender's remaining interest in the applicable
Swing Loan shall continue to include the amount of such unpaid
participation obligation.
SECTION 2.2 Advances .
(a) The Banks agree, on the terms and conditions set forth
herein, (a) to make Advances to the Borrower of Revolving Loans (as
LIBOR Rate Loans or as Prime Rate Loans) from time to time on any
Business Day from and after the Effective Date through the first to
occur of the Revolving Loans Scheduled Maturity Date and the Maturity
Date, (b) to make have made an Advance to the Borrower of the Term Loan
(as a LIBOR Rate Loan or a Prime Rate Loan) in a single Advance on the
Effective Date September 30, 1997 and each LIBOR Rate Loan shall be in
an amount not less than $1,000,000 or in integral multiples of $250,000
in excess thereof, and each Prime Rate Loan shall be in an amount not
less than $500,000 or in integral multiples of $100,000 in excess
thereof, except that an Advance of a Prime Rate Loan may be in an
amount equal to the entire unused Revolving Loans Commitment. The total
number of individual LIBOR Rate Loan Advances outstanding at any time
shall not exceed three (3) for the Revolving Loans and one (1) for the
Term Loan.
(b) Pursuant to the Swing Loan Commitment, from the Effective
Date until the first to occur of the Revolving Loans Scheduled Maturity
Date or the Maturity Date, the Swing Loan Lender agrees to make Swing
Loan Advances in an amount not less than $50,000 or in integral
multiples of $10,000 in excess thereof. All Swing Loan Advances shall
be made as Prime Rate Loans. All Swing Loans shall be credited to the
Borrower's Account.
SECTION 2.3 Making the Advances .
(a)Request for Advance, Revolving Loans and Term Loan. Each
Revolving Loan and Term Loan Advance shall be made after
delivery by the Borrower to the Agent of a Request for
Advance, duly executed by an Authorized Signatory, delivered
to the Agent (i) in the case of a Prime Rate Loan, not later
than 11:00 a.m.(Denver, Colorado time) on the Business Day
which is the date of the proposed Advance and (ii) in the case
of a LIBOR Rate Loan, not later than 11:00 a.m. (Denver,
Colorado time) on the third Business Day prior to the date of
the proposed Advance. The Request for Advance shall specify
(i) the date and amount of the Advance, (ii) whether a
27
Revolving Loan or Term Loan is requested, (iii) the Type of
Advance requested, and (iv) if a LIBOR Rate Loan is requested,
the initial Interest Period therefor. Promptly upon receipt of
such Request for Advance, the Agent shall notify the Banks
thereof and of their Pro Rata Share of such proposed Advance.
Not later than 2:00 p.m. (Denver, Colorado time) on the date
of such Advance, subject to fulfillment of the applicable
conditions set forth in Article III, the Agent will make such
Advance available to the Borrower in same day funds by
depositing such funds in the Borrower's Account.
(b)Swing Loan Request . Each Swing Loan Advance shall be made
after notice by the Borrower to the Swing Loan Lender ("Notice
of Swing Loan Request"). Each Notice of Swing Loan Request
shall be by telephone, telex or telecopier, confirmed
immediately in writing, specifying therein the requested (a)
date of such Swing Loan, (b) amount of such Swing Loan and (c)
the maturity of such Swing Loan (which maturity shall be no
later than the seventh Business Day after the requested date
of such Advance). Each Notice of Swing Loan Request shall
constitute a representation and warranty by the Borrower as of
the time of such notice that the conditions specified in
Sections 3.1 and 3.2 have been fulfilled at such time. The
Swing Loan Lender will make such Swing Loan Advance available
to the Borrower in the same day funds by depositing such funds
in the Borrower's Account (i) not later than the close of
business on the date of such notice if such notice is given
not later than 2:00 pm. (Denver, Colorado time) on the date of
the proposed Swing Loan Advance, or (ii) not later than the
close of business on the date after such notice if such notice
is given later than 2:00 p.m. (Denver, Colorado time) on the
date of the proposed Swing Loan Advance. Within the limits of
the Swing Loan Commitment, the Borrower may borrow under this
Section 2.3, repay pursuant to Section 2.7 and reborrow under
this Section 2.3.
(c) Request for Advance Irrevocable . Each Request for Advance
from the Borrower to the Agent shall be irrevocable and
binding on the Borrower. In the case of any request for a
LIBOR Rate Loan the Borrower shall indemnify the Banks against
any loss, cost or expense incurred by the Banks as a result of
any failure to fulfill on or before the date specified in such
notice for such Advance the applicable conditions set forth in
28
Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Banks to fund the
Advance when the Advance, as a result of such failure, is not
made on such date.
(d) Availability of Funds, Revolving Loans and Term Loan . Not
later than 2:00 p.m.(Denver, Colorado time)on the proposed day
of the Advance of any Revolving Loan, each of the Banks will
make available to the Agent, at its address referred to in
Section 8.2, in immediately available funds, the amount of
such Bank's Pro Rata Share of the requested Revolving Loan.
Upon receipt from each Bank of such amount and upon receipt of
the documents required by Sections 3.1 and 3.2 and the
satisfaction of the other conditions set forth therein, to the
extent applicable, the Agent will make available to the
Borrower the aggregate amount of such Revolving Loan made
available to the Agent by the Banks. The failure or refusal of
any Bank to make available to the Agent at the aforesaid time
and place the amount of its Pro Rata Share of the requested
Revolving Loan shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent
the amount of such other Bank's Pro Rata Share of any
requested Revolving Loan Advance.
(e) Advances by Agent . The Agent may, unless notified to the
contrary by any Bank prior to an Advance, reasonably assume
that such Bank has made available to the Agent on such day the
amount of such Bank's Pro Rata Share of the Revolving Loan to
be made on such day, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available
to the Borrower a corresponding amount. If any Bank makes
available to the Agent such amount on a date after such day of
Advance, such Bank shall pay to the Agent on demand an amount
equal to the product of (a) the Federal Funds Rate each day
included in such period, times (b) the amount of such Bank's
Pro Rata Share of such Revolving Loan, times (c) a fraction,
the numerator of which is the number of days that elapse from
and including such day of Advance to the date on which the
amount of such Bank's Pro Rata Share of such Revolving Loan
shall become immediately available to the Agent, and the
denominator of which is 360. A statement of the Agent
submitted to such Bank with respect to any amounts owing under
this paragraph shall be prima facie evidence of the amount due
and owing to the Agent by such Bank. If the amount of such
Bank's Pro Rata Share of such Revolving Loan is not made
within three (3) Business Days following such Advance, the
29
Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per
annum applicable to such Revolving Loan.
SECTION 2.4 Letters of Credit .
(a)Letter of Credit Commitment . Upon the terms and subject to
the conditions of this Agreement, the Issuing Bank shall, from
time to time during the period from the Effective Agreement
Date through the tenth Business Day preceding the Maturity
Date, issue one or more Letters of Credit for the account of
the Borrower; provided, that the aggregate principal amount of
all Letters of Credit shall not exceed at any time the lesser
of (A) the aggregate amount of the Revolving Loans Commitment
at such time minus the aggregate unpaid principal amount of
all Revolving Loans outstanding at such time and (B) the
Letter of Credit Sublimit.
(b)Terms of Letters of Credit and Applications . Applications
for each Letter of Credit shall be in a form and shall contain
such terms as shall be reasonably satisfactory to the Issuing
Bank. Each Letter of Credit that is issued, extended or
renewed shall be in a form and contain such terms as shall be
reasonably satisfactory to the Issuing Bank. Each such Letter
of Credit shall be subject to the Uniform Customs and Practice
for Documentary Credits (1993 Revision),International Chamber
of Commerce Publication No. 500 or any successor version.
(c)Renewals and Extensions . Each Letter of Credit shall be
denominated only in Dollars and shall expire on or before the
first anniversary of the issuance thereof (provided, that, any
Letter of Credit may include terms that provide for the
automatic renewal thereof for successive one-year periods so
long as such terms include a provision whereby the Issuing
Bank shall be entitled to elect that any such renewal shall
not occur if the conditions set forth in Sections 3.1 and 3.2
could not be fulfilled at such time, and the Issuing Bank
shall give notice of such election to the beneficiary thereof)
and in any event not later than the fifth Business Day
preceding the Maturity Date. Any extension of the expiry date,
or automatic renewal, of a Letter of Credit to a date beyond
the first anniversary of the issuance thereof shall constitute
an "issuance" of such Letter of Credit for all purposes hereof
on, in the case of any such extension, the date on which such
extension shall have been granted and, in the case of any such
30
automatic renewal, on the tenth Business Day preceding the
last day on which the Issuing Bank is entitled to give notice
of its election that any such renewal shall not occur.
(d)Issued on Business Day . Letters of Credit shall be issued
only on a Business Day, and shall be used for the corporate
purposes of the Borrower or the Subsidiaries.
(e)Request for Letter of Credit . The Borrower shall request
the issuance of a Letter of Credit by furnishing to the Agent
and the Issuing Bank a Request for Letter of Credit or such
other notice as shall be reasonably satisfactory to the
Issuing Bank. The Request for Letter of Credit shall, among
other things, specify the date of the requested issuance of
the Letter of Credit. Subject to approval of the form and
terms of the Letter of Credit as requested and to the other
terms and conditions hereof, the Issuing Bank will issue the
Letter of Credit and make delivery thereof to the Borrower or
as the Borrower shall have instructed the Issuing Bank, on the
date of requested issuance, provided that the Issuing Bank
will not be required to issue the Letter of Credit prior to
(i) the close of business on the second Business Day after it
has received the Request for Letter of Credit, if the Request
for Letter of Credit is received by 11:00 a.m. (Denver,
Colorado time) of the date of receipt, or (ii) the close of
business on the third Business Day after it has received the
Request for Letter of Credit, if the Request for Letter of
Credit is received on or after 11:00 a.m. (Denver, Colorado
time) of the date of receipt.
(f) Participations. Upon the date of issuance of a Letter of
Credit, the Issuing Bank shall be deemed to have granted to
each Bank (other than the Issuing Bank), and each Bank (other
than the Issuing Bank) shall be deemed to have acquired from
the Issuing Bank without further action by any party hereto, a
participation in such Letter of Credit and any Draw that may
at any time be made thereunder, to the extent of such Bank's
Pro Rata Share thereof.
(g) Notice of Draw. The Issuing Bank shall promptly notify the
Borrower of its receipt of each Draw request with respect to a
Letter of Credit, stating the date and amount of the Draw
requested thereby and the date and amount of each Draw
disbursed pursuant to such request. The failure of the Issuing
Bank to give, or delay in giving, any such notice shall not
release or diminish the obligations hereunder of the Borrower
in respect of such Draw.
31
(h) Payment of Draw. The Borrower shall, on the day it
receives notice of each Draw, if such notice is received prior
to 11:00 a.m. (Denver, Colorado time) on such day, and on the
Business Day following the day it receives such notice, if
such notice is received after 11:00 a.m. (Denver, Colorado
time) on such day, reimburse such Draw by paying to the
Issuing Bank in immediately available funds the amount of the
payment made by the Issuing Bank with respect to such Draw,
together with interest thereon at a rate per annum equal to
the Letter of Credit Rate as in effect from time to time until
the day such reimbursement is made if such Draw is not
reimbursed on the day notice is received. In the event that
the Borrower shall fail to make any such payment when due and
for so long as such failure shall be continuing, the Issuing
Bank may give notice of such failure to the Agent and each
Bank, which notice shall include the amount of such Bank's Pro
Rata Share of such Draw, whereupon each such Bank (other than
the Issuing Bank) shall promptly remit such amount to the
Agent for the account of the Issuing Bank as provided in
Section 2.4(i).
(i) Participation in Draw. Each Bank (other than the Issuing
Bank) shall, in the event it receives the notice from the
Issuing Bank pursuant to Section 2.4(g) at or before 12:00
noon (Denver Time) on any Business Day, fund its participation
in any unreimbursed Draw by remitting to the Agent, no later
than 2:00 p.m. (Denver, Colorado Time) on such day, in
immediately available funds, its Pro Rata Share of the
reimbursement obligation in respect of each Draw. The Agent
shall, in the event it receives such funds from such Bank at
or before 2:00 p.m. (Denver, Colorado Time) on any day, no
later than 4:00 p.m. (Denver, Colorado Time) on such day, make
available the amount thereof to the Issuing Bank, in
immediately available funds. Any amount payable by any Bank to
the Agent for the account of the Issuing Bank under this
Section 2.4(i), and any amount payable by the Agent to the
Issuing Bank under this Section 2.4(i), shall bear interest
for each day from the date due (and including such day if paid
after 2:00 p.m. (Denver, Colorado Time), in the case of any
such payment by a Bank to the Agent, or 4:00 p.m. (Denver,
Colorado Time), in the case of any such payment by the Agent
to the Issuing Bank, on such day) in accordance with this
Section 2.4(i) until the date it is received by the
32
Issuing Bank at a rate equal to the Federal Funds Rate until
(and including) the third Business Day after the date due and
thereafter at the Prime Rate. Each Bank shall, upon the demand
of the Issuing Bank, reimburse the Issuing Bank, to the extent
the Issuing Bank has not been reimbursed by the Borrower after
demand therefor, for the reasonable costs and expenses
(including reasonable legal fees) incurred by it (other than
as a result of its willful misconduct or gross negligence) in
connection with the collection of amounts due under, the
administration of, and the preservation and enforcement of any
rights conferred by, the Letters of Credit or the performance
of the Issuing Bank's obligations under this Agreement in
respect thereof (other than its obligation to make Loans in
its capacity as a Bank), to the extent of such Bank's Pro Rata
Share (as of the time such costs and expenses are incurred) of
the amount of such costs and expenses. The Issuing Bank shall
refund any costs and expenses reimbursed by such Bank that are
subsequently recovered from the Borrower in an amount equal to
such Bank's Pro Rata Share thereof.
(j) Obligations of Banks. The obligation of each Bank to make
available to the Issuing Bank the amounts set forth in this
Section 2.4 shall be absolute, unconditional and irrevocable
under any and all circumstances without reduction for any
set-off or counterclaim of any nature whatsoever, and may not
be terminated, suspended or delayed for any reason whatsoever,
shall not be subject to any qualification or exception and
shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Instruments;
(ii) the existence of any claim, set off, defense or other
right which the Borrower or any Subsidiary may have at any
time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Agent, the Issuing Bank,
any Bank or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions
33
(including any underlying transaction between the
Borrower or any Subsidiary and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the
Loan Instrument; or
(v) the occurrence of any Default.
(k) Waiver of Liability; Indemnity.
(i) Without affecting any rights the Banks may have under
Applicable Law, the Borrower agrees that none of the Banks,
the Issuing Bank, the Agent or their respective officers or
directors shall be liable or responsible for, and the
obligations of the Borrower to the Banks, the Issuing Bank and
the Agent hereunder shall not in any manner be affected by:
(A) the use that may be made of any Letter of Credit or the
proceeds thereof by the beneficiary thereof or any other
Person or any acts or omissions of such beneficiary or any
other Person; (B) the validity or genuineness of documents
presented in connection with any Draw, or of any endorsements
thereon, even if such documents should, in fact, prove to be
in any or all respects, invalid, fraudulent or forged; or (C)
any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit or any other action
taken or omitted to be taken by any Person under or in
connection with any Letter of Credit, except that the Borrower
shall have a claim against the Issuing Bank and the Issuing
Bank shall be liable to the Borrower, in each case to the
extent and only to the extent of any damages suffered by the
Borrower that are caused by (1) the Issuing Bank's willful
misconduct or gross negligence (as determined by a court of
competent jurisdiction) in determining whether documents
presented under any Letter of Credit issued by the Issuing
Bank complied with the terms of such Letter of Credit or (2)
the Issuing Bank's willful failure (as determined by a court
of competent jurisdiction) to pay
34
under such Letter of Credit after the presentation to it of
documents strictly complying with the terms and conditions of
such Letter of Credit. In furtherance and not in limitation of
the foregoing, in determining whether to pay under any Letter
of Credit, the Issuing Bank shall not have any obligation
relative to the other Banks other than to determine that any
documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to comply
on their face with the requirements of such Letter of Credit,
regardless of any notice or information to the contrary. Any
action taken or omitted to be taken by the Issuing Bank under
or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful
misconduct, shall not create for the Issuing Bank any
resulting liability to any Bank.
(ii) In addition to any other amounts payable under this
Agreement, the Borrower agrees to protect, indemnify, pay and
hold the Issuing Bank harmless from and against any and all
claims, costs, charges and expenses (including reasonable
attorneys' fees) which the Issuing Bank may incur or be
subject to as a consequence, direct or indirect, of the
issuance of, or payment of any Draw under, any Letter of
Credit, other than as a result of the gross negligence or
willful misconduct of the Issuing Bank as determined by a
court of competent jurisdiction.
(iii) The Issuing Bank shall not be responsible for:
(A) the validity, accuracy, genuineness
or legal effect of any document
submitted by any party in connection
with the issuance of Letters of
Credit,
(B) the validity of any instrument
transferring or assigning or
purporting to transfer or assign a
Letter of Credit or the rights or
benefits thereunder or proceeds
thereof in whole or in part,
(C) errors, omissions, interruptions or
delays in transmissions or delivery
of any messages, by mail, cable,
telecopy, telex or otherwise,
(D) the misapplication by the
beneficiary of any Letter of Credit
of the proceeds of any Draw under
such Letter of Credit, and
(E) any consequence arising from causes
beyond the control of the Issuing
Bank, including, without limitation,
any governmental acts.
SECTION 2.5 Fees.
35
(a) Commitment Fee. The Borrower agrees to pay to the Agent a
commitment fee (the "Commitment Fee") on the average daily
unused portion of the Revolving Loans Commitment at the rate
of one-half of one percent (.375%) per annum, payable in
arrears on the last day of each fiscal quarter of the
Borrower, and payable on the Maturity Date. The Commitment Fee
payable with respect to the Revolving Loans will be calculated
for the period from the Effective Date through the first to
occur of the Revolving Loans Scheduled Maturity Date and the
Maturity Date, and shall be based upon the amount by which the
daily average of the aggregate principal amount of Revolving
Loans and Swing Loans outstanding and face amount of Letters
of Credit outstanding is less than $40,000,000.00 or such
lesser amount as may have been established by the Borrower
pursuant to Section 2.6.
(b) Letter of Credit Fees. Upon issuance, extension or renewal
of each Letter of Credit, the Borrower will promptly pay the
Issuing Bank, in advance,
(i) with respect to, standby Letters of Credit a fee equal to
the product of the Letter of Credit Rate, then in effect,
times the aggregate face amount of the Letter of Credit, and
(ii) with respect to documentary Letters of Credit a fee equal
to the product of .50% times the Letter of Credit Rate, then
in effect, times the aggregate face amount of the Letter of
Credit.
A portion of such fee equal to 0.25% of such face amount to
be for the account of the Issuing Bank and the remainder
shall be distributed to each Bank in accordance with its Pro
Rata Share. Such fee will not be refunded if the Letter of
Credit is terminated by agreement prior to the date of
expiration thereof, or if a Draw occurs under the Letter of
Credit. The Borrower will also pay the Issuing Bank, for its
own account, its usual and customary issuance, modification,
negotiation, transfer and similar processing and
administration fees and charges for documentary letters of
credit as are in effect from time to time.
(c) Other Fees. The Borrower shall pay certain Underwriting,
Administrative and other fees as required by the letter
agreement ("Fee Letter") among the Borrower, the Arranger and
the Agent dated June 24, 1997.
36
SECTION 2.6 Reduction of the Revolving Loans Commitment.
The Borrower shall have the right at any time, upon at least
three (3) Business Days' notice to the Agent, to terminate in whole or reduce in
part the unused portion of the Revolving Loans Commitment, provided that each
partial reduction of the Revolving Loans Commitment shall be in the amount of
not less than $1,000,000 or an integral multiple thereof. Any such termination
or reduction of the Commitment shall be irrevocable and permanent. Promptly
after receiving such notice from the Borrower, the Agent will notify the Banks
of the substance thereof. The Revolving Loans Commitments of the Banks shall be
reduced pro rata pursuant to the notice or, as the case may be, terminated.
SECTION 2.7 Repayment.
(a) Voluntary Repayment. The Borrower may repay the principal
amount of the Loans at any time, at its election, (i) in the
case of a Prime Rate Loan, on any Business Day, without prior
notice, and (ii) in the case of LIBOR Rate Loans, upon not
less than three (3) Business Days prior notice to the Agent,
subject to Breakage Costs provided for in Section 2.12. Any
such voluntary repayment of the Loans shall be in the
principal amount of not less than (y) $500,000 for Prime Rate
Loans and in integral multiples of $100,000 thereafter and
(z)$1,000,000 for LIBOR Rate Loans and in integral multiples
of $250,000 thereafter. Any voluntary repayment of the Term
Loan shall be accompanied by payment of all accrued but unpaid
interest applicable to the principal amount of the Term Loan
so repaid.
(b) Installment Payments of Term Loan. The Borrower will repay
the Term Loan in quarterly installment payments of principal,
commencing on March 31, 1998 and on the last day of each
quarter thereafter, in accordance with the following:
Repayment Quarterly
Date Principal
Payment Amount
March 31, 1998 $675,000
June 30, 1998 $675,000
September 30, 1998 $875,000
December 31, 1998 $875,000
March 31, 1999 $875,000
June 30, 1999 $875,000
September 30, 1999 $1,070,000
December 31, 1999 $1,070,000
March 31, 2000 $1,070,000
June 30, 2000 $1,070,000
September 30, 2000 $1,070,000
December 31, 2000 $1,200,000
March 31, 2001 $1,200,000
June 30, 2001 $1,200,000
September 30, 2001 $1,200,000
December 31, 2001 $1,250,000
March 31, 2002 $1,250,000
June 30, 2002 $1,250,000
September 30, 2002 $1,250,000
37
(c) Mandatory Repayment.
(i) The Borrower will repay the Loans in full on demand upon
the acceleration of the due date of any of the Loans by the
Agent pursuant to Article VI hereof.
(ii) Within not more than five (5) Business Days after
notice by the Agent to the Borrower that the principal
amount of Revolving Loans and face amount of Letters of
Credit outstanding exceed the Borrowing Base, the Borrower
will repay the applicable Loan in an amount sufficient to
eliminate the excess.
(iii) The Borrower shall pay to the Agent Net Proceeds within
not more than five (5) Business Days after the Borrower shall
receive Net Proceeds from (x) Dispositions, (y) any equity
securities issuance or sale, or (z) insurance recoveries and
condemnation and eminent domain awards. Collateral shall be
released from the liens of the Collateral Documents upon any
Disposition of such Collateral, provided that (i) no Event of
Default has occurred and (ii) the Borrower shall have made the
mandatory repayment required under the terms of this Section
2.7.
(iv) On or before the fifth Business Day following the
Borrower's delivery of the Compliance Certificate for the
fiscal year ending December 31, 1998 and annually thereafter
the Borrower will pay to the Agent 50% of the Excess Cash
Flow.
(d) Repayment of Swing Loans. Swing Loans shall be paid in
full by the Borrower on or before the seventh Business Day
after the date of the Swing Loan Advance. Swing Loan
38
repayments shall be made by the Borrower directly to the Swing
Loan Lender. Such repayments shall be for the account of the
Swing Loan Lender. Outstanding Swing Loans may be repaid from
the proceeds of Revolving Loans Advances. Any repayment of a
Swing Loan shall be in a minimum amount of $50,000 or integral
multiples of $10,000 in excess thereof(or such lesser amount
as may be agreed to by the Swing Loan Lender).
(e) Application of Repayments. All voluntary Loan repayments
received by the Agent from the Borrower will be applied to the
Revolving Loans and Term Loans as the Borrower shall instruct
the Agent in writing concurrently with the payment, and in the
absence of such written instructions, will be applied first to
repayment of the Revolving Loans. All mandatory Loan
repayments will be applied to reduce the Term Loans until the
Term Loans are paid in full, then to the repayment of the
Revolving Loans. All repayments of the Term Loans will be
applied to the installment payments due with respect to the
Term Loans in inverse order of maturity.
SECTION 2.8 Distribution of Payments by the Agent.
The Agent shall promptly distribute to each Bank its Pro Rata Share of
each payment received by the Agent under the Loan Instruments for the account of
the Banks by credit to an account of such Bank at the Agent's Office or by wire
transfer to an account of such Bank.
Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks under the Loan Instruments
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent in its sole discretion may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date a corresponding amount with respect to
the amount then due such Bank. If and to the extent the Borrower shall not have
so made such payment in full to the Agent and the Agent shall have so
distributed to any Bank a corresponding amount, such Bank shall, on demand,
repay to the Agent the amount so distributed together with interest thereon, for
each day from the date such amount is distributed to such Bank until the date
such Bank repays such amount to the Agent at the Prime Rate.
SECTION 2.9 Promissory Notes.
(a) The Revolving Notes. The Revolving Loans shall be
evidenced by promissory notes of the Borrower in substantially
the form of Exhibit A-1 hereto (each a "Revolving Note")and
completed with appropriate insertions. One Revolving Note
shall be payable to the order of each Bank in a principal
amount equal to such Bank's Revolving Loans Commitment or, if
different, the outstanding amount of all Revolving Loans made
(or held) by such Bank, plus interest accrued thereon, as set
forth below. The Borrower irrevocably authorizes each Bank to
make or cause to be made, at or about the time of an Advance
of any Revolving Loan or at the time of receipt of any payment
of principal on such Bank's Revolving Note, an appropriate
notation on such Revolving Note Record reflecting the making
of such Revolving Loan or (as the case may be) the receipt of
such payment. The outstanding amount of the Revolving Loans
set forth on such Bank's Revolving Note Record shall be prima
facie evidence of the principal amount
thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount shall
not affect the obligation of the Borrower hereunder or under
any Revolving Note to make payments of principal of or
interest on any Revolving Note when due.
39
(b) Term Notes. The Term Loans shall be evidenced by
promissory notes of the Borrower in substantially the form of
Exhibit A-2 hereto (each a "Term Note")and completed with
appropriate insertions. One Term Note shall be payable to the
order of each Bank in a principal amount equal to such Bank's
Term Loan Commitment and representing the obligation of the
Borrower to pay to such Bank such principal amount or, if
less, the outstanding amount of such Bank's Term Loan
Commitment, plus interest accrued thereon, as set forth below.
The Borrower irrevocably authorizes each Bank to make or cause
to be made a notation on such Bank's Term Note Record
reflecting the original principal amount of such Bank's Term
Loan Commitment and, at or about the time of such Banks'
receipt of any principal payment on such Bank's Term Note, an
appropriate notation on such Bank's Term Note Record
reflecting such payment. The aggregate unpaid amount set forth
on such Bank's Term Note Record shall be prima facie evidence
of the principal amount thereof owing and unpaid to such Bank,
but the failure to record, or any error in so recording, any
such amount on such Bank's Term Note Record shall not affect
the obligation of the Borrower hereunder or under any Term
Note to make payments of principal of and interest on any Term
Note when due.
(c) Swing Loan Note. The Swing Loans shall be evidenced by
promissory notes of the Borrower in substantially the form of
Exhibit A-3 hereto (each a "Swing Loan Note"), dated the
Effective Date and completed with appropriate insertions.
SECTION 2.10 Pro Rata Treatment. Except to the extent otherwise
provided herein, (a) Loans shall be made by the Banks pro rata in accordance
with their respective Commitments, (b) Loans of the Banks shall be converted and
continued pro rata in accordance with their respective amounts of Loans of the
Type and, in the case of LIBOR Rate Loans, having the Interest Period being so
converted or continued, (c) each reduction in the Revolving Loans Commitment and
the Term Loan Commitment shall be
made pro rata in accordance with the respective amounts thereof and (d) each
payment of the principal of or interest on the Loans, reimbursement of a Draw
under Letters of Credit or of Commitment or Letter of Credit Fees shall be made
for the account of the Banks pro rata in accordance with their respective
amounts thereof then due and payable.
40
SECTION 2.11 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date of the Advance thereof or the date
of the Draw comprising such Loan until such principal amount has been repaid in
full, at the following rates per annum:
(a) Prime Rate Loans. During such periods as such Loan is a
Prime Rate Loan, at a rate per annum equal at all times to the
Prime Rate plus Applicable Margin or the Default Rate,
whichever is applicable. Prime Rate Interest plus the
Applicable Margin shall be payable monthly in arrears, on the
first day of each month. Interest accruing at the Default Rate
shall be payable on demand.
(b) LIBOR Rate Loans. During such periods as such Loan is a
LIBOR Rate Loan, at a rate per annum during the Interest
Period for such Loan equal to the LIBOR Rate plus the
Applicable Margin or the Default Rate, whichever is
applicable. LIBOR Rate interest plus the Applicable Margin
will be payable on termination of the Interest Period
applicable to the Loan, and, if such Interest Period is longer
than 3 months, then every 3 months. Interest accruing at the
Default Rate shall be payable on demand.
(c) Default Rate Interest. Subject to the provisions of
Section 6.2, all outstanding Loans will bear interest at the
Default Rate during all periods when an Event of Default has
occurred and remains outstanding hereunder.
SECTION 2.12 Yield Protection. In order to protect the yield of the
Banks in connection with the Advances to be made hereunder, the Borrower agrees
as follows.
(a) Increased Costs. If, due to either (i) the
introduction of or any change in or in the
interpretation of any law or regulation, or (ii) the
compliance with any guideline or request from any
central bank or other governmental authority (whether
or not having the force of law), there shall be any increase
in the cost to the Banks of agreeing to make or making,
funding or maintaining LIBOR Rate Loans, then the Borrower
shall from time to time, upon demand by a Bank, pay to such
Bank additional amounts sufficient to compensate the Bank for
such increased cost. A certificate as to the amount of such
increased cost, shall be submitted to the Borrower by Agent.
Such certificate shall show in reasonable detail the Bank's
computations of its increased costs. Notwithstanding the
foregoing, there shall be no duplication of costs to the
Borrower as the result of the application of Section 2.12(b).
Such certificate of increased costs shall be conclusive and
binding for all purposes, absent manifest error.
41
(b) Additional Interest. The Borrower shall pay to the Banks,
so long as the Banks shall be required under regulations of
the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency liabilities (as such
term is defined in Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time),
additional interest on the unpaid principal amount of each
LIBOR Rate Loan, from the date of the Advance thereof until
the principal amount thereof is paid in full, at an interest
rate per annum equal at all times to the remainder obtained by
subtracting (i) the LIBOR Rate for the Interest Period for
such Loan from (ii) the rate obtained by dividing such LIBOR
Rate by a percentage equal to 100% minus the reserve
percentage applicable during such Interest Period (or if more
than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest
Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for the Banks with respect
to liabilities or assets consisting of or including
Eurocurrency liabilities having a term equal to such Interest
Period, payable on each date on which interest is payable on
such Loan. Such additional interest shall be determined by the
Agent and notified to the Borrower.
42
(c) Increased Capital. If a Bank determines that compliance
with any law or regulation or any guideline or request from
any central bank or other governmental authority (whether or
not having the force of law) affects or would affect the
amount of capital required or expected to be maintained by the
Bank or any corporation controlling the Bank and that the
amount of such capital is increased by or based upon the
existence of the Bank's commitment to lend hereunder and other
commitments of this type, then, upon demand by the Bank, the
Borrower shall immediately pay to the Bank, from time to time
as specified by the Bank, additional amounts sufficient to
compensate the Bank or such corporation in the light of such
circumstances, to the extent that the Bank reasonably
determines such increase in capital to be allocable to the
existence of the Bank's commitment to lend hereunder. A
certificate as to such amounts submitted to the Borrower by
the Agent or a Bank, shall be conclusive and binding for all
purposes, absent manifest error. Such certificate shall show
in reasonable detail the Agent's or the Bank's computations.
(d) Breakage Costs. If any payment of principal of any LIBOR
Rate Loan is made other than on the last day of the Interest
Period for such Loan as a result of acceleration of the
maturity of the Loans and the Notes pursuant to Section 6.2 or
for any other reason, the Borrower shall, upon demand, pay to
the Bank any amounts required to compensate the Bank for
additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by the Bank
to fund or maintain such Advance.
SECTION 2.13 Conversion of Loans; Change of Interest Periods. At any
time, with respect to Prime Rate Loans, and at any time not less than three (3)
Business Days prior to the end of the then current Interest Period for any LIBOR
Rate Loan, the Borrower may elect, by delivery to the Bank of an Interest
Period/Conversion Notice in the form of Exhibit B-3 duly executed by an
Authorized Signatory, to Convert the Type of Advance or, with respect to LIBOR
Rate Loans, to select an Interest Period for such Advance as permitted herein.
If the Borrower fails to select the duration of any Interest Period for any
LIBOR Rate Loan in the foregoing manner, such Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Loan.
SECTION 2.14 Illegality, Etc.
(a) Notwithstanding any other provision of this Agreement, if
the Agent or a Bank shall notify the Borrower that the
introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful,
for a Bank to perform its obligations hereunder to make LIBOR
Rate Loans or to fund LIBOR Rate Loans hereunder, (i) the
obligation of the Bank to make, or to Convert Loans into LIBOR
Rate Loans shall be suspended until the Bank shall notify the
Borrower that the circumstances causing such suspension no
longer exist and (ii) the Borrower shall prepay in full all
LIBOR Rate Loans of the Bank then outstanding, together with
interest accrued thereon, either on the last day of the
Interest Period thereof if the Banks may lawfully continue to
maintain LIBOR Rate Loans to such day, or immediately, if the
Banks may not lawfully continue to maintain LIBOR Rate Loan,
unless the Borrower, within five (5) Business Days of notice
from the Bank, Converts all LIBOR Rate Loans of the Bank then
outstanding into Prime Rate Loans in accordance with Section
2.13.
(b) If, with respect to any LIBOR Rate Loan, a Bank notifies
the Borrower that the LIBOR Rate for any Interest Period for
such Advance will not adequately reflect the cost to the Bank,
in the Bank's reasonable judgement, of making, funding or
maintaining such LIBOR Rate Loan for such Interest Period,
such LIBOR Rate Loan will automatically, on the last day of
the then existing Interest Period therefor, Convert into a
Prime Rate Loan, and the obligation of the Bank to make, or to
Convert Advances into, LIBOR Rate Loans shall be suspended
until the Bank shall notify the Borrower that the
circumstances causing such suspension no longer exist. Upon
receipt of such notice, the Borrower may revoke any Request
for Advance or Interest Period/ Conversion Notice then
submitted by it. If the Borrower does not revoke such request
or notice, the Bank shall make, convert or continue the Loan,
as proposed by the Borrower, in the amount specified in the
applicable request or notice submitted by the
Borrower, but such Loan shall be made, converted or continued
as a Prime Rate Loan instead of a LIBOR Rate Loan.
43
SECTION 2.15 Payments and Computations.
(a) The Borrower shall make each payment under any Loan
Instrument not later than 12:00 noon (Denver, Colorado time)
on the day when due in Dollars to the Agent at its address
referred to in Section 8.2 in same day funds.
(b) The Borrower hereby authorizes the Agent, if and to the
extent payment is not made when due, subject to the expiration
of applicable grace periods, under any Loan Instrument, to
charge from time to time against the Borrower's Account or any
or all other accounts of the Borrower with the Agent any
amount so due.
(c) All computations of interest and of Fees shall be made by
the Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but
excluding the last day) occurring in the period for which such
interest or Commitment Fees are payable. Each determination by
the Agent of an interest rate hereunder shall be conclusive
and binding for all purposes, absent manifest error, on the
Borrower and the Banks.
(d) Whenever any payment under any Loan Instrument shall be
stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the
computation of payment of interest or the Commitment Fee, as
the case may be; provided, however, if such extension would
cause payment of interest on or principal of LIBOR Rate Loans
to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
44
SECTION 2.16 Effect of Letters of Credit on Revolving Loans Commitment
Utilization. For purposes of determining whether any additional Advances may be
made to the Borrower under the Revolving Loans Commitment, or whether any
additional Letters of Credit may be issued for the account of the Borrower, and
for purposes of establishing the unused portion of the Revolving Loans
Commitment in order to calculate the Commitment Fee, the
face amount of each Letter of Credit shall be added to the outstanding principal
amount of all outstanding Revolving Loans to determine whether any portion of
the Maximum Revolving Credit Amount then in effect remains unutilized.
SECTION 2.17 Cash Collateralization of Letters of Credit. If the due
date for payment of the Loans is accelerated by the Banks pursuant to Section
6.2, the Borrower will immediately deliver to the Issuing Bank in immediately
available funds an amount equal to the undrawn amount of all Letters of Credit
outstanding. Such funds shall be maintained in a blocked interest bearing
account at the Issuing Bank. By such delivery, the Borrower will pledge such
funds to the Issuing Bank and grant to the Issuing Bank a security interest in
such funds, and in all interest which may be earned thereon while held by the
Issuing Bank, to secure payment of all Draws under any such Letters of Credit.
Upon expiration of each Letter of Credit, the Issuing Bank will refund to the
Borrower a portion of such funds in an amount equal to the undrawn amount of the
expiring Letter of Credit. Upon expiration of the last outstanding Letter of
Credit, the Issuing Bank will refund to the Borrower all remaining funds so
delivered to the Issuing Bank, and all interest earned thereon while such funds
were held by the Issuing Bank, less all Draws.
45
SECTION 2.18 Borrowing Base. Not later than the initial Advance or
initial issuance of a Letter of Credit, and thereafter not later than 25 days
after the conclusion of each month, the Borrower will deliver to the Agent a
Borrowing Base Certificate, in the form of Exhibit B-4, duly executed by an
Authorized Signatory, which Borrowing Base Certificate will set forth the
information contained therein as of the end of the preceding month. The Banks
will have the right to request and the Borrower will promptly provide reasonable
additional information concerning the information set forth in the Borrowing
Base Certificate. Within five (5) days after receipt of the Borrowing Base
Certificate, the amount set forth therein as the Borrowing Base shall become the
Borrowing Base under this Agreement unless prior to the end of such period the
Banks shall have given notice to the Borrower that a different amount is
effective as the Borrowing Base. The Borrowing Base so established shall remain
effective until the Bank elects to redetermine the Borrowing Base, subject to
the terms of this Agreement, whether based upon the next monthly Borrowing Base
Certificate submitted by the Borrower to the Bank, or at any other time, in the
Bank's sole discretion. For purposes of determining the applicable Borrowing
Base, (i) Eligible Accounts Receivable shall be valued at eighty percent (80%)
of the amount thereof and (ii) Eligible Inventory
shall be valued at fifty percent(50%) of the amount thereof. The value of
Eligible Inventory shall be determined on a first in, first out basis, and shall
be the cost thereof except for finished goods, which will be valued at the
lesser of cost or wholesale sale price thereof.
ARTICLE III
EFFECTIVENESS; CONDITIONS OF LENDING
SECTION 3.1 Conditions Precedent to Effectiveness of Restated and
Amended Credit Agreement. This Restated and Amended Credit Agreement shall
become effective as of the Restated Agreement Date as of the date the Agent
shall have received the Restated and Amended Credit Agreement, executed and
delivered by the Borrower and the Banks and each of the following conditions
precedent, in the judgement of the Agent, shall have been satisfied:
(a) The Waiver to Credit Agreement dated March 12, 1999,
shall have become effective,
(b) A Reaffirmation of Guaranty, in form and substance satisfactory to
the Agent, shall have been executed and delivered to the Agent by all
of the Guarantors, and
(c) The Borrower shall have paid all of the reasonable costs and
expenses, including filing and recording fees, incurred by the Agent in
connection with the preparation, execution and delivery of this
Restated and Amended Credit Agreement and any other documents or
instruments which may be delivered in connection herewith, including
without limitation, the reasonable fees and expenses of Xxxxx, Xxxxxx &
Xxxxxx LLP, counsel for the Agent.
46
SECTION 3.2 Conditions Precedent to All Advances and Issuance of All
Letters of Credit. The obligation of the Banks to make each Advance (including
the initial Advance) and to issue each Letter of Credit shall be subject to the
satisfaction (or written waiver by the Required Banks in their sole discretion)
of the following further conditions precedent that on the date of such Advance:
(a) the following statements shall be true:
(i) Except as provided in Section 3.2(a)(ii), the
representations and warranties contained in Section 4.1
of this Agreement and in the Guaranties, are correct on and as
of the date of such Advance, before and after giving effect to
such Advance and to the application of the proceeds therefrom,
or before and after issuance of such Letter of Credit, as the
case may be, as though made on and as of such date,
(ii) The information contained in the Schedules to this
Agreement is correct, except that the Borrower may amend such
Schedules at the time of a Request for Advance if such
amendment to the Schedule does not disclose an Event of
Default or a Material Adverse Effect,
(iii) No event has occurred and is continuing, or would result
from such Advance or from the application of the proceeds
therefrom, or would result from the issuance of such Letter of
Credit, which constitutes a Default or an Event of Default
hereunder, and
(iv) No change shall have occurred in the financial condition
or business of the Borrower or any Guarantor which would
constitute a Material Adverse Effect; and
(b) the Agent shall have received a Request for Advance or a
Request for Letter of Credit, as applicable, with respect to
the Advance or Letter of Credit and such other approvals,
opinions or documents as the Agent may reasonably request.
47
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) Corporate Existence. The Borrower is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Colorado. Each of Current, Circuit
Test and CT LLC Acquisition is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of its incorporation. Airhub Services
and CT International are limited liability companies duly
incorporated, validly existing and in good standing under
the laws of Kentucky and Florida, respectively. The capital
structure and shareholders of the Borrower and the
Guarantors are set forth in Schedule 4.1(a).
(b) Powers, Etc. The Borrower and each of the Guarantors (a)
has the power and authority to carry on its business as now
conducted and to own or hold under lease the assets and
properties it purports to own or hold under lease; (b) is duly
qualified, licensed or registered to transact its business and
is in good standing in every jurisdiction in which failure to
be so qualified, licensed or registered could have a Material
Adverse Effect; (c) has the power and authority to execute and
deliver this Agreement and each of the other Loan Instruments
to which it is or will be a party and to perform all of its
obligations hereunder and thereunder; and (d) conducts its
business under the names (and only the names) set forth in
Schedule 4.1(b) hereto; and (e) is qualified to do business in
each of the states listed on Schedule 4.1(b).
48
(c) Authorization; No Conflict. The execution, delivery and
performance by the Borrower of each Loan Instrument to which
it is or will be a party are within the Borrower's powers,
have been duly authorized by all necessary corporate action,
and do not contravene (i) the Borrower's Articles of
Incorporation or Bylaws, (ii) any law or judgement, order,
writ, injunction, decree or consent of any court binding on or
affecting the Borrower, (iii) any contract to which the
Borrower is a party, or by which the Borrower or its
properties are bound; and (iv) do not result in or require the
creation of any lien, security interest or other charge or
encumbrance (other than pursuant hereto) upon or with respect
to any of its properties. The execution, delivery and
performance by each of the Guarantors of each Loan Instrument
to which such Person is or will be a party are within the such
Person's respective corporate powers, have been duly
authorized by all necessary corporate or limited liability
company, as applicable, action by such Person, and do not
contravene (i) such Person's articles of incorporation or
by-laws, or (ii) any law or any contractual restriction
binding on or affecting such Person, and do not result in or
require the creation of any lien, security interest or other
charge or encumbrance (other than pursuant hereto) upon or
with respect to any of such Person's properties.
(d) Approvals. No authorization or approval or other action
by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due
execution, delivery and performance by the Borrower or the
Guarantors of any Loan Instrument to which any such Person is
or will be a party except as indicated in Schedule 4.1(d), all
of which have been duly obtained and are in full force and
effect.
(e) Enforceability. This Agreement is, and each other Loan
Instrument to which the Borrower will be a party when
delivered hereunder will be, the legal, valid and binding
obligation of the Borrower enforceable against the Borrower in
accordance with its terms. Each Loan Instrument to which each
Guarantor will be a party when delivered hereunder will be the
legal, valid and binding obligation of each such Person,
enforceable against such Persons, respectively, in accordance
with its terms.
(f) Financial Statements. The unaudited consolidated balance
sheets of the Borrower and the Guarantors as at September 30,
1998, and the related consolidated statements of income and
retained earnings of the Borrower and the Guarantors for the
fiscal quarter then ended, fairly present the financial
condition of the Borrower and the Guarantors as at such date
and the results of the operations of the Borrower and the
Guarantors for the period ended on such date, all in
accordance with Regulation S-X promulgated under the
Securities Exchange Act of 1934, and since September 30, 1998,
there has been no material adverse change in such condition or
operations except as disclosed in Schedule 4.1(f) hereto.
49
(g) Litigation. Except as set forth in Schedule 4.1(g) hereto,
there is no pending, or to the Borrower's knowledge,
threatened action or proceeding affecting the Borrower or any
of its properties or business activities or any of the
Guarantors or their respective properties or business
activities, before any court, governmental agency or
arbitrator, in which there is a reasonable possibility of a
Material Adverse Effect or which purports to affect the
legality, validity or enforceability of this Agreement or any
Loan Instrument to which the Borrower or any Guarantor will be
a party.
(h) Federal Reserve Regulations. None of the Advances to be
provided to the Borrower hereunder will be used in violation
of Regulations T, U or X. The Borrower is not engaged in the
business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying
Margin Stock (within the meaning of Regulations T, U and X).
No part of the proceeds of any extension of credit hereunder,
whether directly or indirectly, and whether immediately,
incidentally or ultimately, will be used (i) to purchase or
carry Margin Stock or to extend credit to others for the
purpose of purchasing or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose, or (ii) for
any purpose which entails a violation of, or which is
inconsistent with, the provisions of the Regulations of the
Board of governors of the Federal Reserve system, including
Regulations T, U or X.
(i) Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
(j) ERISA.
(i) The Borrower and Guarantors neither maintain nor
contribute to any Employee Benefit Plan or Multiemployer Plan
other than those specified in Schedule 4.1(j).
(ii) The Borrower and the Guarantors are in compliance in
all material respects with all applicable provisions of
ERISA and the Code with respect to all Employee Benefit
Plans. Each Employee Benefit Plan that is intended to be
qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so
qualified, and each trust related to such Plan has been
determined to be exempt from federal income tax under
Section 501(a) of the Code. The actuarial present value of
all accumulated benefit obligations under each Plan, as
disclosed in the most recent actuarial report with respect
to such Plan, do not exceed the fair market value of the
assets of such Plan. No material liability has been insured
by the Borrower, any Guarantor or any of their ERISA
Affiliates which remains unsatisfied for any taxes,
penalties or other amount (other than contributions in the
ordinary course) with respect to any Employee Benefit Plan
or any Multiemployer Plan, and to the best knowledge of the
Borrower no such material liability is expected to be
incurred.
(iii) The Borrower and the Guarantors have not (a) engaged in
a nonexempt prohibited transaction described in Section 406 of
ERISA or Section 4975 of the Code; (b) incurred any liability
to the Pension Benefit Guaranty Corporation which remains
outstanding other than the payment of premiums and there are
no premium payments which are due and unpaid; (c) failed to
make a required contribution or payment to a Multiemployer
Plan; or (d) failed to make a required installment or other
required payment under Section 412 of the Code.
(iv) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan or Multiemployer Plan
maintained or contributed to by the Borrower or any Guarantor.
(v) No material proceeding, claim (other than routine claims
for benefits) lawsuit and/or investiga tion is existing or, to
the Borrower's knowledge, threatened concerning or involving
any Employee Benefit Plan or Multiemployer Plan maintained or
contributed to by the Borrower or any Guarantor.
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(k) Compliance with Laws. The Borrower and the Guarantors are
in compliance with all applicable laws, ordinances, treaties,
rules, regulations and orders of, and all applicable
restrictions imposed by, all Governmental Authorities in
respect of the conduct of their respective businesses and the
ownership of their respective properties, except such
noncompliance as would not, individually or in the aggregate,
have a Material Adverse Effect on the Borrower or a
Guarantor's Adverse Effect on any Guarantor.
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(l) Payment of Debts and Taxes.
(i) The Borrower and each Guarantor: (a) has filed
all required federal and material state and local tax
returns with appropriate taxing authorities respecting
its operations, assets and properties; and (b) has paid or
caused to be paid all taxes shown on those returns to the
extent due, and has paid all tax or other assessments imposed
by Governmental Authorities, except in either case taxes which
are being contested in good faith and for which adequate bonds
or other sureties as required by law have been posted by the
Borrower or Guarantor.
(ii) The Borrower and each Guarantor is current in its payment
of Debts (other than Debt in an aggregate amount not to exceed
$1,000,000.00) and performance of material obligations under
Material Agreements (other than taxes) except those being
contested in good faith.
(m) Indebtedness, Guaranties.
(i) Schedule 4.1(m), Part I contains a complete and accurate
list of all Debt of the Borrower and each of the Guarantors,
whether individual, joint, several or otherwise, and whether
fixed or contingent, including commitments, lines of credit
and other credit availabilities, identifying with respect to
each the respective parties, amounts and maturities.
(ii) Schedule 4.1(m), Part II contains a complete and accurate
list of all guarantees or other surety arrangements or
undertakings of the Borrower and each of the Guarantors for
obligations of any other Person (except for negotiable
instruments endorsed for collection or deposit in the ordinary
course of business), whether individual, joint, several or
otherwise, identifying with respect to each of the parties,
amounts and maturities.
(n) Material Agreements. Except as set forth in Schedule
4.1(n), and except for the Loan Instruments, the Borrower and
the Guarantors are not a party to any Material Agreements. The
Borrower and each Guarantor is in material compliance with all
Material Agreements and has not received any notices from
counter parties thereto asserting violations of any such
Material Agreements by the Borrower or any Guarantor or
asserting rights to terminate or modify any of such Material
Agreements.
(o) Properties, Inventory and Equipment. The Borrower
owns or leases the real property identified in Part I
of Schedule 4.1(o) (the "Borrower's Real Property") and owns
the Equipment and Inventory in the states identified in
Schedule 4.1(o). The Guarantors own or lease the real property
identified in Part II of Schedule 4.1(o) (the "Guarantors'
Real Property") and own the Equipment and Inventory in the
states identified in Schedule 4.1(o). The Borrower's Equipment
and Inventory is located in the states set forth in Part I of
Schedule 4.1(o). The Guarantors' Equipment and Inventory is
located in the states listed in Part II of Schedule 4.1(o).
The Borrower has good, marketable and insurable title to, or
valid leasehold interests in, all of Borrower's owned Real
Property and good title to Borrower's Equipment and the other
assets of the Borrower, free and clear of all Liens, other
than the Liens identified in Part III of Schedule 4.1(o) and
other Permitted Liens. The Guarantors have good, marketable
and insurable title to, or valid leasehold interests in, all
of Guarantors' Real Property and good title to Guarantors'
Equipment and the other assets of the Guarantors, free and
clear of all Liens, other than the Liens identified in Part IV
of Schedule 4.1(o) and other Permitted Liens.
52
(p) Financial Condition. Neither the Borrower nor any
Guarantor is entering into the arrangements contem plated by
this Agreement and the other Loan Instruments with actual
intent to hinder, delay or defraud either present or future
creditors of the Borrower or any Guarantor. On and as of the
date of execution hereof by the Borrower, and on and as of the
date of each Advance hereunder by the Banks, on a pro forma
basis after giving effect to the transactions contemplated by
the Loan Instruments and to all indebtedness (including Debt)
incurred or to be created in connection herewith:
(i) the present fair saleable value of the assets of the
Borrower and each Guarantor, respectively, (on a going concern
basis) will exceed the probable liability of the Borrower and
each Guarantor, respectively, on its indebtedness (including
Debt and contingent obligations);
(ii) the Borrower and each Guarantor, respectively, has not
incurred, nor does Borrower intend to or believe it will
incur, nor will Borrower permit any Guarantor to incur
indebtedness (including Debt and contingent obligations)
beyond its ability to pay such indebtedness as such
indebtedness matures (taking into account the timing and
amounts of cash to be received from any source, and of
amounts to be payable on or in respect of such
indebtedness); and the amount of cash available to the
Borrower and Guarantors after taking into account all other
anticipated uses of funds is anticipated to be sufficient to
pay all such amounts on or in respect of its respective
indebtedness (including Debt and contingent liabilities)
when such amounts are required to be paid; and
(iii) the Borrower and each Guarantor will have sufficient
capital with which to conduct its present and proposed
business, and the assets of the Borrower and each Guarantor,
respectively, do not constitute unreasonably small capital
with which to conduct its present or proposed business.
53
(q) Insurance. The Borrower and each of the Guarantors
currently maintains with financially sound and reputable
insurers insurance concerning its assets and business, with
such deductibles and retentions and having coverages against
risks, losses or damages as are customarily carried by
reputable companies in the same or similar businesses, such
insurance being in amounts no less than those amounts which
are customary for such companies under similar circumstances,
which third-party insurance coverages are identified in
Schedule 4.1(q).
(r) Full Disclosure. No representation or warranty contained
in this Agreement or in any other Loan Instrument to which the
Borrower is a party, or in any other document furnished from
time to time by the Borrower to the Bank pursuant to this
Agreement, contains any untrue statement of a material fact or
omits to state any material fact necessary to make the
statements herein or therein not misleading in any material
respect as of the date made or deemed to be made. Except as
may be set forth herein or in any of the Schedules hereto,
there is no fact known to the Borrower which has had, or is
reasonably expected to have, a Material Adverse Effect.
(s) No Default. No Default or Event of Default has occurred
and is continuing.
54
(t) Status of Loans as Senior Debt. All Debt of the Borrower
to the Banks and the Agent in respect of the Loans constitutes
"Senior Debt" or "Senior Indebtedness" (or the analogous term
used therein) under the terms of the Xxxxxxx Subordinated
Notes or of any other instrument evidencing or pursuant to
which there is issued indebtedness which purports to be
Subordinate Debt of the Borrower.
(u) Swap Obligations. Neither the Borrower nor any of its
Subsidiaries has incurred any outstanding obligations under
any Swap Contracts, other than Permitted Swap Obligations. The
Borrower has undertaken its own independent assessment of its
consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks
associated with such matters and has not relied on any swap
counterparty or any Affiliate of any swap counterparty in
determining whether on not to enter into any Swap Contract.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.1 Affirmative Covenants. So long as any of the Notes shall
remain unpaid or any Letter of Credit remains outstanding, or the Banks shall
have any Commitment hereunder, or any obligation of the Borrower or any
Guarantor hereunder or under any Loan Instrument has not been fully performed,
the Borrower will, unless the Required Banks shall otherwise consent in writing:
(a) Use of Proceeds. Subject to compliance by the Borrower
with all of the terms and conditions hereof, use the Advances
exclusively to perform its obligations under the Circuit Test,
Inc Agreement and the Allied Signal Agreement and for any
corporate purpose of the Borrower or any Guarantor. Letters of
Credit issued hereunder may be for any corporate purpose of
the Borrower or any Guarantor.
(b) Reporting and Notice Requirements. Provide to each
Bank:
(i) as soon as available, and in any event within 90 days
after the end of each fiscal year of the Borrower, audited
consolidated statements of income, retained earnings and cash
flow for the Borrower and the Guarantors for such fiscal year
and the related audited consolidated balance sheets of the
Borrower and the Guarantors as of the end of such fiscal year,
setting forth in comparative form the corresponding
consolidated figures for such fiscal year and the prior fiscal
year, each accompanied by a report of the Borrower's
independent public accountants (who shall be a nationally
recognized firm or otherwise satisfactory to the Agent), which
reports shall state that such consolidated financial
statements fairly present the consolidated financial condition
and results of operations of the Borrower in accordance with
GAAP without material qualification;
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(ii) simultaneously with the delivery of the annual financial
statements referred to in Section 5.1(b)(i) above, a report of
the independent auditors who audited such statements stating
that, in connection with their audit of such statements (and
without conducting any procedures other than those customarily
conducted in a year-end audit), such auditors have obtained no
knowledge of any condition or event which constitutes a
Default or Event of Default hereunder, or if such auditors
have obtained knowledge of any such condition or event,
specifying in such report each such condition or event of
which they have knowledge and the nature and status thereof;
provided, however, that such auditors shall not be liable to
the Banks by reason of any failure to obtain knowledge of any
condition or event which constitutes a Default or Event of
Default that would not be disclosed in the course of their
audit examination;
(iii) as soon as available, and in any event within 90 days
after the end of each fiscal year of the Borrower, a
consolidated budget for the Borrower and the Guarantors for
the following fiscal year, and an operating plan for the
Borrower and the Guarantors for the then current fiscal year
and the two following fiscal years, in a form and at a level
of detail reasonably acceptable to the Agent;
(iv) within 45 days after the conclusion of each fiscal
quarter of the Borrower, a Compliance Certificate signed by
the chief executive officer or chief financial officer of
the Borrower, in the form of Exhibit B-5, (i) to the effect
that no Default or Event of Default is in existence,
(ii)setting forth in reasonable detail the computations
necessary to demonstrate compliance by the Borrower with the
financial covenants set forth in Section 5.2(a), (iii) the
computations in reasonable detail of the Total Debt to
Trailing Four Quarter EBITDA ratio referred to in the
definitions of Applicable Margin and Letter of Credit Rate
and (iv)(if applicable) reconciliations to reflect any
relevant changes in GAAP since the Effective Date.
(v) as soon as available, and in any event within 45 days
after the end of each fiscal quarter, (A) a Form 10-Q filed by
the Borrower with the Securities and Exchange Commission; and
(B) a backlog summary report in form and substance reasonably
satisfactory to the Agent;
(vi) within 30 days after the end of each month, (A) a
Borrowing Base Certificate; (B) a listing and aging of all
Accounts Receivable of the Borrower and the Guarantors; (C) an
inventory summary report and (D) a Summary Excess Inventory
Report, with all of the foregoing in form and substance and at
a level of detail reasonably acceptable to the Agent;
(vii) promptly upon receipt thereof, copies of all "management
letters" received by the Borrower from the Borrower's
independent accountants;
(viii) as soon as possible, and in any event within 35 days
after the Borrower knows or has reason to know thereof, notice
of any ERISA Event;
(ix) promptly upon the occurrence thereof, notice of any
Default or Event of Default describing the same in reasonable
detail, together with a report concerning the steps which the
Borrower is taking or will take to remedy such Default or
Event of Default;
(x) promptly on the occurrence thereof, notice of any Material
Adverse Effect describing the same in reasonable detail,
together with a report concerning the steps which the Borrower
is taking or will take to eliminate such Material Adverse
Effect;
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(xi) promptly after receipt of written request from the Agent
or the Required Banks, such other information concerning the
Borrower or any of the Guarantors, and concerning their
respective businesses, operations, assets or financial
condition (including accounts payable listings and agings,
fixed asset schedules and information concerning leases) as
the Agent or Required Banks may reasonably request; provided
that so long as no Event of Default has occurred, such request
for information shall be limited to one request per month and
(xii) promptly upon the occurrence thereof, notice of all
changes in the articles of incorporation or by laws of the
Borrower or any of the Guarantors, or in the following
executive officers of the Borrower or Guarantors, Xxxx
Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xx. or Xxxxxx Xxxxxxxxxx; and
(xiii) promptly after the furnishing thereof to the
shareholders of the Borrower copies of all financial
statements, reports and proxy statements so furnished; and
(xiv) promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or
other regular reports which the Borrower or any of its
Subsidiaries files with the Securities and Exchange
Commission.
57
(c) Maintenance of Existence, Etc. Except as provided in
Section 5.2(b), maintain its corporate existence and cause
each Guarantor to maintain its corporate existence, and
maintain and cause each Guarantor to maintain their respective
material rights, privileges and franchises.
(d) Compliance With Laws. Comply and cause each Guarantor to
comply in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over each
such Person or their respective business, except where the
failure to comply would not have a Material Adverse Effect.
(e) Insurance.
(i) Maintain the third-party insurance identified in Schedule
4.1(q), provided, however, that in no event shall such
insurance be for an amount less than the
the replacement cost of the assets so insured.
(ii) Without limiting the obligations of the Borrower under
this Section 5.1(e), in the event the Borrower fails to
maintain the insurance required by the foregoing provisions of
this Section 5.1(e), then the Banks may, but shall have no
obligation to, procure insurance covering the interests of the
Banks, in such amounts and against such risks as the Banks
shall deem appropriate, and the Borrower will reimburse the
Banks in respect of any premiums paid by the Banks as provided
in Section 8.4.
(f) Material Agreements. Perform, and cause Guarantors to
perform, all of each such Person's obligations under the
Material Agreements in substantial compliance with all terms
and conditions thereof.
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(g) Obligations and Taxes. Pay and cause Guarantors to pay
each such Person's Debt in excess of $1,000,000 and other
obligations in accordance with their terms and pay and
discharge promptly all Federal and material State and local
taxes, and all material governmental assessments and charges
or levies imposed upon any such Person or upon such Person's
income or profits or in respect of its assets or business, or
in any event before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might give rise to a
Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required
so long as the validity or amount thereof shall be contested
in good faith by appropriate proceedings and the Borrower or
such Guarantor, as applicable, shall have set aside on its
books adequate reserves in accordance with GAAP with respect
thereto.
(h) Maintaining Records; Access to Properties and
Inspections. Maintain, and cause all Guarantors to maintain,
all financial records in accordance with GAAP and permit,
and cause all Guarantors to permit, after two weeks notice
unless an Event of Default has occurred, any Bank employees
or other representatives approved by the Borrower (which
approval shall not be unreasonably withheld) designated by
the Agent or the Required Banks to visit and inspect the
properties of the Borrower or of any Guarantor, and to
inspect their respective financial and business records and
make extracts therefrom and copies thereof, all at
reasonable times and in a manner so as not to unreasonably
disrupt the operations of the Borrower or of such Guarantors
and as often as reasonably requested, and permit, and cause
Guarantors to permit, any such employees or representatives
to discuss the affairs, finances and condition of the
Borrower and Guarantors with the officers and other
representatives thereof, including the Borrower's
independent accountants if a representative of the Borrower
is present and if the Agent has notified the Borrower not
less than 24 hours prior to such meeting of the issues that
will be discussed.
(i) Environmental and Safety Matters.
(i) Comply and cause Guarantors to comply with all
Environmental and Safety Laws applicable to the Borrower and
the Guarantors, respectively, in all material respects.
(ii) Keep its properties and facilities and cause Guarantors
to keep their facilities and properties free from any Liens
arising under any applicable Environmental and Safety Laws.
(iii) If the Banks at any time have reason to believe that
any property or facility owned or operated by the Borrower
or any Guarantor has been or may be operated in violation of
any Environmental or Safety Laws applicable thereto or
contaminated with any Hazardous Materials in excess of
levels allowed by Environmental or Safety Laws or subject to
any government-imposed obligation to conduct any
environmental investigation or clean-up, any of which in the
good faith judgement of the Banks may impair in any material
respect the ability of the Borrower or any Guarantor to
satisfy any obligations of the Borrower hereunder or under
any Loan Instrument, the Borrower shall, upon the written
request of the Banks, at the Borrower's sole cost and
expense, conduct such investigation or study, through
retention of a consulting firm reasonably satisfactory to
the Banks, as is necessary in the good faith judgment of the
Banks to demonstrate that no such impairment could
reasonably be expected to have a Material Adverse Effect.
59
(j) Deposit Balances. Maintain, and cause the Guarantors to
maintain, their respective primary operating, payroll and
investment deposit account balances with the Bank One,
Colorado, N.A. or its Affiliates, except for accounts
maintained in locations where the Agent and its Affiliates
have no bank.
(k) Interest Rate Protection. The Borrower will maintain in
full force and effect in accordance with the terms thereof,
Interest Rate Protection Agreements in form and substance
satisfactory to the Agent with respect to a notional principal
amount not less than outstanding balance of the Term Loan.
(l) Surveys. In the event that the Borrower has not completed
the issuance or sale of its equity securities in an amount in
excess of $20,000,000 by December 31, 1997, the Borrower, at
its expense shall provide to the Agent, on or before March 31,
1998, a current ALTA/ACSM survey of the real property
described in the Deeds of Trust prepared by a surveyor
acceptable to the Agent showing the legal description of the
land, the location of all improvements thereon, the location
of any recorded easements or other restrictions affecting the
land, the flood plain status of the land and a description and
the date of the map or maps reviewed.
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(m) Audit of Accounts Receivable and Inventory.
(A) At the request of the Agent or the
Required Banks, no more often than
annually, so long as there is no Event
of Default, the Borrower shall permit,
and cause the Guarantors to permit, the
Agent or representatives of the Agent to
conduct during regular business hours a
field examination and inspection of the
Collateral, in scope and detail
satisfactory to the Agent, including the
Eligible Accounts Receivable and the
Eligible Inventory and to audit and copy
all of the Borrower's and the
Guarantors' financial books, records,
journals and other records and data
relating to the Collateral to the
extent that the Agent deems
necessary in regard to the Banks'
rights under the Loan Instruments.
(B) Borrower shall promptly pay or
reimburse the Agent for the actual
cost of all field examinations and
audits including all out of pocket
expenses for travel, food and
lodging.
(n) Further Assurances. Execute and deliver such further
documents and do such other acts and things as the Banks may
reasonably request in order to effect fully the purposes of
this Agreement and each of the other Loan Instruments and to
provide for payment of the Loans and all other amounts due
hereunder within the scope of this Agreement.
(o) Additional Pledges and Guarantors. Within ten
(10) Business Days after any Person becomes an
Affiliate of the Borrower,
(a) The Borrower shall grant to the Agent on behalf of the
Banks, a pledge of 100% of the shares of capital stock of such
Person pursuant to a Pledge Agreement and execute and deliver
to the Agent such Pledge Agreement, stock certificates and
stock powers relating to such shares and such opinions of
counsel and such other Loan Instruments and documentation as
the Agent may request.
(b) Such Person shall execute and deliver to the Agent a
Guaranty, Security Agreement and Deed of Trust and such
opinions of counsel and such other Loan Instruments and
documentation as the Agent may request.
(c) Borrower, at its expense, shall provide to the Agent
(i)Title insurance as provided under Section 3.1(a)(x) with
respect to such Person's owned real property, (ii) Uniform
Commercial Code Financing Statements as provided under Section
3.1(a)(ix), (iii) Phase I Environmental Assessments of such
Person's owned real property as provided under Section
3.1(a)(xviii) and (iv) such other documentation as the Agent
may request to effect the purposes of this Agreement and the
Loan Instruments.
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SECTION 5.2 Negative Covenants. So long as any of the Notes shall
remain unpaid or any Letter of Credit remains outstanding, or the Banks shall
have any Commitment hereunder, or any obligation of the Borrower or any
Guarantor hereunder or under any Loan Instrument has not been fully performed,
the Borrower will not, unless the Required Banks shall otherwise consent in
writing:
(a) Financial Covenants.
(i) Maximum Total Debt to EBITDA Ratio. As of the
end of any Fiscal Quarter fail to maintain on a
consolidated basis a ratio of (y)Total Debt to (z)
EBITDA of not greater than
Measured as of the Maximum Ratio
Fiscal Quarter ending
December 31, 1998 3.50
March 31, 1999 3.50
June 30, 1999 4.10
September 30, 1999 3.50
December 31, 1999 3.00
March 31, 2000 2.75
June 30, 2000 2.50
September 30, 2000 2.25
December 31, 2000 and thereafter 2.00
(ii) Minimum Fixed Charge Coverage Ratio. Fail to
maintain Trailing Four Quarter EBITDA to Fixed Charges
of not less than
Measured as of the Maximum Ratio
Fiscal Quarter ending
December 31, 1998 1.75
March 31, 1999 1.50
June 30, 1999 1.40
September 30, 1999 1.65
December 31, 1999 1.75
March 31, 2000 1.75
June 30, 2000 2.00
September 30, 2000 2.00
December 31, 2000 and thereafter 2.00
(iii) Minimum EBITDA to Interest Expense. As of the end of any
Fiscal Quarter fail to maintain on a consolidated basis a
ratio of (y) EBITDA to (z) Interest Expense of not less than
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Measured as of the Maximum Ratio
Fiscal Quarter ending
December 31, 1998 3.50
March 31, 1999 3.00
June 30, 1999 2.80
September 30, 1999 3.25
December 31, 1999 3.50
March 31, 2000 3.75
June 30, 2000 4.00
September 30, 2000 4.00
December 31, 2000 and thereafter 4.00
(iv) Minimum Net Worth. For fiscal year end December 31, 1998
and thereafter, fail to maintain a minimum Net Worth of the
Borrower and all Subsidiaries on a consolidated basis in an
amount equal to $93,000,000.00 plus (a) 75% of Net Income
determined quarterly (no adjustments shall be made for Net
Deficits), (b) 100% of the Net Proceeds of any issuance or
sale of equity securities of the Borrower or any Affiliate of
the Borrower, and (c) 100% of the equity value, determined in
accordance with GAAP, of any acquisition that must be
consented to by the Required Banks in order to comply with
Section 5.2(n) of the Credit Agreement.
(v) Maximum Annual Capital Expenditures. For each fiscal year
identified below, make Capital Expenditures for the Borrower
and all Subsidiaries on a consolidated basis in excess of the
following:
Measured as of the
fiscal year ending Maximum Amount
FYE 12/31/98 $22,500,000
FYE 12/31/99 $15,000,000
FYE 12/21/00 $16,500,000
FYE 12/31/01 $20,250,000
(vi) Minimum Net Income. Fail to earn Net Income for two (2)
consecutive Fiscal Quarters.
(vii) Maximum Net Deficit. Have a Net Deficit in excess of
$350,000 in any Fiscal Quarter.
(b) Prohibition of Fundamental Changes. Effect, or
permit to be effected with respect to any Guarantor,
any transaction of merger, consolidation, recapitaliza tion,
reorganization, liquidation or dissolution except any
Subsidiary may merge, consolidate or reorganize with, or
liquidate and transfer its assets to,(i) the Borrower,
provided that the Borrower is the continuing or surviving
corporation or (ii) any Subsidiary provided that if any
transaction shall be between a Guarantor and a Subsidiary, the
Guarantor shall be the continuing or surviving corporation,
and except for any such transactions if the Borrower survives
and there is no Default or Event of Default or Material
Adverse Effect. Nothing herein shall prohibit any sales or
purchases of assets that are contemplated by the AlliedSignal
Acquisition Agreements.
63
(c) Limitation on Liens. Create or suffer to exist, or permit
any Guarantor to create or suffer to exist, any Liens on any
assets of any such Person, except for (A) Permitted Liens and
(B) purchase money Liens in an aggregate amount of
$5,000,000.00 for assets acquired by such Persons, provided
that any such purchase money Liens are limited to the asset(s)
acquired.
(d) Debt. Create, incur or suffer to exist, or permit any
Guarantor to create, incur or suffer to exist, any Debt
except, (i) Debt hereunder, (ii) intercompany Debt (iii) Debt
of such Persons in effect on the date hereof as reflected in
the financial statements identified in Section 4.1(f), (iv)
Debt consisting of trade payables incurred in the ordinary
course of business and (v) other Debt in the aggregate
principal amount of $2,500,000.00, of which purchase money
security interest Liens may not exceed $2,500,000.00.
(e) Guarantees. Create or become liable, directly or
indirectly, or permit any Guarantor to create or become
liable, directly or indirectly, with respect to any guarantee
of the obligation of any other Person except, (i) guarantees
resulting from the endorsement of instruments for collection
in the ordinary course of business,(ii) guarantees in effect
on the date hereof and disclosed in the financial statements
identified in Section 4.1(f), (iii) the Guaranties of the
Guarantors in favor of the Bank as contemplated hereby and
(iv) guarantees of performance or obligations of any
Subsidiary by the Borrower, if such Obligations were directly
incurred or maintained by the Borrower would not violate any
provision of any Loan Instrument.
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(f) Investments, Loans, Advances, etc. The Borrower shall not
directly or indirectly purchase or otherwise acquire, hold or
invest in the securities of any Person, acquire control of any
Person, make loans or advances or enter into any agreement or
other arrangement for the purpose of providing funds or credit
to any Person (other than guaranties permitted hereunder), or
enter into any partnership, joint venture or other entity or
business arrangement with or make any equity investment in any
Person, or offer or agree to do so, and will not permit any
Guarantor to do so except for: (i) loans or advances between
the Borrower and any wholly owned Subsidiary; (ii) securities
issued or guarantied by the United States of America; (iii)
except as provided in Section 5.1(j), and except for deposit
accounts for payment of ordinary course of business expenses
by the Borrower and Guarantors, with respect to which no
limits concerning the deposit bank apply, deposits in domestic
commercial banks that have, or are members of a group of
domestic commercial banks that has, consolidated total assets
of not less than one billion dollars, or investments in the
certificates of deposit, commercial paper or other permissible
market rate instruments offered by any such bank, the holding
company of any such bank or subsidiary of any such holding
company; (iv) normal business banking accounts in federally
insured institutions in amounts not exceeding the limits of
such insurance; (v) commercial paper or other short-term debt
securities rated not less than "A" or its equivalent by
Standard & Poor's Corporation or Xxxxx'x Investors Service,
Inc.; (vi) investments constituting Permitted Swap Obligations
or payments or advances under Swap Contracts relating to
Permitted Swap Obligations; and (vii) other investments not
exceeding $500,000 in the aggregate at any one time in Persons
that are not Affiliates of the Borrower or any Guarantor.
(g) Sales of Assets. Make any Disposition of assets of the
Borrower, or permit any Guarantor to make any Disposition of
assets of such Guarantor other than (i) sales of inventory in
the ordinary course of business or (ii) Dispositions of
obsolete or surplus equipment or other assets or (iii) up to
$1,000,000 in fair market value of other Dispositions each
fiscal year or (iv) Dispositions provided for under the
AlliedSignal Acquisition Agreement or (v) Dispositions of its
assets to the Borrower or a Subsidiary.
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(h) Transactions with Affiliates. Except for transactions
existing on the Effective Date, enter into or permit any
Subsidiary to enter into any transaction or series of
transactions, whether or not related or in the ordinary course
of business of the Borrower, with any Affiliate of the
Borrower or any Subsidiary (except for transactions between
the Borrower and its Subsidiaries and between wholly owned
subsidiaries of the Borrower and a Subsidiary), other than
pursuant to the reasonable requirements of the Borrower's or
such Subsidiaries's business and on terms and conditions no
less favorable to the Borrower or any Subsidiary than would be
obtainable by the Borrower or any Subsidiary at the time in a
comparable arm's-length transaction with a Person not an
Affiliate of the Borrower or any Subsidiary.
(i) Modification of Certain Documents; Performance of Material
Agreements. Amend its articles of incorporation or bylaws in a
manner adverse to the Bank; or amend, modify, cancel,
terminate, waive any default under or breach of, in any manner
any Material Agreement other than in the ordinary course of
business or permit any Guarantor to do any of the foregoing;
or enter into any new agreement that is inconsistent with the
obligations of the Borrower or Guarantor under any Loan
Instrument to which such Person is a party, without the prior
written consent of the Required Banks, which consent shall not
be unreasonably withheld. The Borrower further agrees that it
will not be in default under, or otherwise fail to perform and
will not permit any Guarantor to be in default under or
otherwise fail to perform all of its material obligations
under any of the Material Agreements to which any such Person
is a party.
(j) Dividends. Declare or pay or permit any Guarantor to
declare or pay cash or stock dividends or other distributions
with respect to the Borrower's stock or Guarantor's stock,
except that any Guarantor may declare and pay dividends and
make distributions to the Borrower.
(k) Accounting. Change, or permit any Guarantor to change its
respective fiscal years or accounting
methods or practices (except to conform to changes in GAAP).
If any preparation of the financial statements referred to in
Section 4.1(f), hereafter occasioned by the promulgation of
rules, regulations, pronouncements and opinions by or required
by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) result in a
material change in the method of calculation of financial
covenants, standards or terms found in this Agreement, the
Borrower will, and will cause each Guarantor to, enter into
good faith negotiations with the Bank in order to amend such
provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating the Borrower's
consolidated financial condition shall be the same after such
changes as if such changes had not been made. Unless and until
such provisions have been so amended, the provisions of this
agreement shall govern and the financial covenants hereunder
shall be calculated using GAAP as in effect prior to such
changes.
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(l) Subordinated Debt. The Borrower shall not, and shall not
permit any Subsidiary, to amend, waive, terminate or otherwise
modify any Subordinated Debt or any Subordinated Debt loan
instrument, or directly or indirectly, voluntarily prepay,
defease or in substance defease, purchase, redeem, retire or
otherwise acquire, any Subordinated Debt or other Debt.
(m) Change of Address; Business Name(s). Except upon not less
than 30 days prior written notice to the Agent, change or
permit any Guarantor to change the address at which the
Borrower or such Guarantor maintains its chief executive
offices and principal place of business; nor conduct its
business activities under any names other than those set forth
Schedule 4.1(b) hereto unless the Borrower notifies the Agent
of any such new name not less than 30 days prior to beginning
use of such new name, except that no more than seven days
notice shall be required in the case of a new name resulting
from an acquisition of a business or assets by the Borrower.
(n) Purchase of Assets. Except to the extent permitted under
Section 5.2(f) and (o), neither the Borrower nor any
Affiliate shall, by means of any transaction, or any series
of related transactions, consummated on or after the
Effective Date (a) acquire any going business or all or
substantially all of the assets of any Person or division or
line of business thereof, whether through purchase of
assets, merger or otherwise, or (b) directly or indirectly
acquire the securities of a corporation, partnership
interest, notes, debentures or other securities of any other
Person.
(o) Outsource Transactions. Sections 5.2(f) and 5.2(n)
notwithstanding, the Borrower may, without the prior written
consent of the Banks, acquire from an electronics
manufacturing services customer of the Borrower (or from a
Person that is to become such a customer in connection with
such acquisition or an affiliate of either, referred to herein
as an "Outsource Customer"), inventory, intellectual property,
and other real and personal property that is to contribute all
or a portion of the means of producing products for such
Outsource Customer (an "Outsource Transaction"), subject to
the following conditions:
(i) The Outsource Customer or its Affiliate's public debt
shall be rated BBB or higher by Standard & Poors and Baaa or
higher by Xxxxx'x Investor Services or in the best judgement
of the Borrower, the financial equivalent thereto;
(ii) Total consideration (current and deferred) paid for all
inventory, intellectual property, and other real and personal
property acquired by the Borrower pursuant to an Outsource
Transaction shall not exceed $10,000,000 in the aggregate for
any individual Outsource Transaction;
(iii) A purchase agreement providing for the purchase of
inventory by the Outsource Customer from the Borrower must be
executed and delivered by the Borrower and the Outsource
Customer at the time the agreements encompassing the Outsource
Transaction are executed or otherwise consummated;
(iv) Each such purchase agreement with an Outsource Customer
shall provide (a) for the repurchase by the Outsource Customer
of all inventory purchased by the Borrower that has not been
used or consumed by the Borrower such purchase to be effected
by the second
67
anniversary of the date the inventory purchase agreement, the
repurchase obligation shall be at a purchase price not less
than the Borrower's original purchase price of the inventory
and shall include other commercially reasonable terms and
conditions;
(v) Borrower shall assign to the Agent its rights under the
such inventory purchase agreement with the Outsource Customer
the Outsource Customer's inventory repurchase obligations and
related product liability, trademark and patent infringement
warranties and indemnities;
(vi) Borrower shall provide Agent with twenty (20) days prior
written notice of its intention to enter into an Outsource
Transaction, such notice shall include a description of the
parties to the transaction, the terms and conditions of the
transaction, including the purchase price and the closing date
of the transaction, and written certification to the Agent
that the proposed Outsource Transaction complies with the
terms of this Section 5.2(o) and all other applicable terms of
the Credit Agreement;
(vii) Borrower shall promptly provide to the Agent such other
information regarding the transaction as the Agent may
request;
(viii) Borrower shall execute and deliver such Collateral
Documents, assignments and other documents the Agent, in form
and substance satisfactory to the Agent, as the Agent may
request to grant to the Agent on behalf of the Banks a
security interest in the real and personal property acquired
by the Borrower in connection with an Outsource Transaction;
(ix) All Capital Expenditures made in connection with an
Outsource Transaction shall be included in the calculation of
the Maximum Annual Capital Expenditure financial covenant
provided for at Section 5.2(a)(v);
(x) The consummation of an Outsource Transaction shall
not constitute an Event of Default; and
(xi) Section 5.2(d)(v) notwithstanding, the Borrower shall not
assume any Debt of an Outsource Customer or any other party in
connection with an Outsource Transaction.
Any and all Outsource Transactions that do not comply with the
conditions described in this Section 5.2(o) shall require the
prior written consent of the Required Banks provided for in
Section 8.1.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1 Events of Default. Each of the following events shall
constitute an Event of Default hereunder:
(a) Payments under the Agreement and the Notes. The Borrower
shall fail to pay any principal of, or interest on, the Notes
when the same become due and payable or the Borrower shall
fail to pay any Fees or other amount due the Bank from the
Borrower hereunder and such failure, in the case of a payment
other than a payment of principal shall continue for five (5)
Business Days.
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(b) Representations and Warranties. Any representa tion or
warranty made by the Borrower or any of the Guarantors (or any
of their respective officers, if applicable) under or in
connection with any Loan Instrument shall prove to have been
incorrect in any material respect when made.
(c) Other Loan Instrument Obligations. (i) The Borrower shall
fail to perform or observe any term, covenant or agreement
contained in Section 5.2, or (ii) the Borrower shall fail to
perform or observe any term, covenant or agreement contained
in any Loan Instrument to which it is a party (other than any
such failures addressed by subsections (a), (b) and (c)(i)
above in this Section 6.1) and such failure continues
unremedied for a period of 15 days after the Borrower receives
notice or otherwise has actual knowledge thereof, or (iii) any
Guarantor shall fail to perform or observe any term, covenant
or agreement contained in any Loan Instrument to which they
are a party, and such failure under clause (i), (ii) or (iii)
continues unremedied for a period of 15 Business Days after
the chief executive officer, chief financial officer,
controller or treasurer of any such Person receives notice or
otherwise has actual knowledge thereof.
(d) Other Debt. The Borrower or any Guarantor shall fail to
pay any principal of or premium or interest on any Debt which
is outstanding in a principal amount of at least $1,000,000 in
the aggregate (but excluding Debt evidenced by the Notes) of
such Person, when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand
or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared
to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof.
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(e) Insolvency. The Borrower or any of the Guarantors shall
generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted
by or against the Borrower or any of the Guarantors seeking
to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for
any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by
it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall
occur; or Borrower or any Guarantor shall take any corporate
action to authorize any of the actions set forth above in
this subsection (e).
(f) Judgments. Any non-interlocutory judgment or order for the
payment of money which is not covered by existing insurance in
excess of $1,000,000 shall be rendered against the Borrower or
any Guarantor and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in
effect.
(g) Termination of Certain Loan Instruments. Any provision of
this Agreement, the Notes, the Deeds of Trust, the Security
Agreements, the Guaranties, the Pledge Agreement or the
Collateral Assignment of Leases shall for any reason cease to
be valid and binding on the Borrower or Guarantors (as the
case may be), or the Borrower or any of the Guarantors shall
so state in writing.
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(h) Collateral Liens. The Deeds of Trust, Security Agreements,
Pledge Agreement or Collateral Assignment of Leases shall,
after delivery thereof pursuant hereto, for any reason (other
than pursuant to the terms thereof) cease to create a valid
and perfected first priority security interest in any of the
collateral purported to be covered thereby.
(i) Change of Control. A Change of Control shall occur.
SECTION 6.2 Bank's Rights Upon an Event of Default. Upon
the occurrence and during the continuation of any Event of
Default the Agent (i) may, by notice to the Borrower, declare the
obligation of the Banks to make Advances and to issues Letters of
Credit to be terminated, whereupon the same shall forthwith
terminate, (ii) may, by notice to the Borrower, declare the
Notes, all accrued interest on the Loans and all other amounts
payable under this Agreement, the Notes and any other Loan
Instrument to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest,
or further notice of any kind, all of which are hereby expressly
waived by the Borrower, (iii) with respect to outstanding Letters
of Credit as to which drafts or demands for payment have not been presented,
may, by notice to the Borrower, require the Borrower to provide cash collateral
in the face amount of such Letters of Credit in accordance with Section 2.17
hereof and (iv) may exercise the Banks rights and remedies under the Loan
Instruments and such other rights and remedies as may be available to the Banks
at law or in equity; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower or any of the
Guarantors under the Federal Bankruptcy Code, (A) the obligation of the Banks to
make Advances and to issue Letters of Credit shall automatically be terminated
and (B) the Advances, the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.1 Appointment and Powers. Each Bank hereby irrevocably
appoints and authorizes Bank One, Colorado, N.A., and Bank One, Colorado, N.A.
hereby agrees, to act as the agent for and representative (within the meaning of
Section 9-105(m) of the Uniform Commercial Code) of such Bank under the Loan
Instruments with such powers as are delegated to the Agent and the Secured Party
by the terms thereof, together with such other powers as are reasonably
incidental thereto. The Agent's duties shall be purely ministerial and it shall
have no duties or responsibilities except those expressly set forth in the Loan
Instruments. The Agent shall not be required under any circumstances to take any
action that, in its judgment, (a) is contrary to any provision of the Loan
Instruments or Applicable Law or (b) would expose it to any Liability or expense
against which it has not been indemnified to its satisfaction. The Agent shall
not, by reason of its serving as the Agent, be a trustee or other fiduciary for
any Bank.
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SECTION 7.2 Limitation on Agent's Liability. Neither the
Agent nor any of its directors, officers, employees or agents
shall be liable or responsible for any action taken or omitted to
be taken by it or them under or in connection with the Loan
Instruments, except for its or their own gross negligence,
willful misconduct or knowing violations of law. The Agent shall
not be responsible to any Bank for (a) any recitals, statements,
representations or warranties contained in the Loan Instruments
or in any certificate or other document referred to or provided
for in, or received by any of the Banks under, the Loan Instruments, (b) the
validity, effectiveness or enforceability of the Loan Instruments or any such
certificate or other document, (c) the value or sufficiency of the Collateral or
(d) any failure by the Borrower or other parties to the Loan Instruments to
perform any of their obligations under the Loan Instruments. The Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact so long as the
Agent was not grossly negligent in selecting or directing such agents or
attorneys-in-fact. The Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
telecopier, telegram or cable) believed by it to be genuine and correct and to
have been signed or given by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. As to any matters not expressly provided for by
the Loan Instruments, the Agent shall in all cases be fully protected in acting,
or in refraining from acting, under the Loan Instruments in accordance with
instructions signed by the Required Banks, and such instructions of the Required
Banks and any action taken or failure to act pursuant thereto shall be binding
on all of the Banks.
SECTION 7.3 Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of a Default (other than the non-payment to it of principal of
or interest on Loans or fees) unless the Agent has received notice from a Bank
or the Borrower specifying such Default and stating that such notice is a
"Notice of Default." In the event that the Agent has knowledge of such a
non-payment or receives such a notice of the occurrence of a Default, the Agent
shall give prompt notice thereof to the Banks. In the event of any Default, the
Agent shall (a) in the case of a Default that constitutes an Event of Default,
take any or all of the actions referred to in Section 6.2 if so directed by the
Required Banks and (b) in the case of any Default, take such other action with
respect to such Default as shall be reasonably directed by the Required Banks.
Unless and until the Agent shall have received such directions, in the event of
any Default, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable in the best interests of the Banks.
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SECTION 7.4 Rights as a Bank. Each Person acting as the Agent that is
also a Bank shall, in its capacity as a Bank, have the same rights and powers
under the Loan Instruments as any other Bank and may exercise the same as though
it were not acting as the Agent, and the term "Bank" or "Banks" shall include
such Person in its individual capacity. Each Person acting as the Agent (whether
or not such Person is a Bank) and its Affiliates may (without having to account
therefor to any Bank) accept deposits from, lend money to and generally engage
in any kind of banking, trust or other business with the Borrower and other
parties to the Loan Instruments and their Affiliates as if it were not acting as
the Agent, and such Person and its Affiliates may accept fees and other
consideration from the Borrower and other parties to the Loan Instruments and
their Affiliates for services in connection with the Loan Instruments or
otherwise without having to account for the same to the Banks.
SECTION 7.5 Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Borrower and other parties to the Loan
Instruments under the Loan Instruments), ratably on the basis of the respective
principal amounts of the Loans outstanding made by the Banks (or, if no Loans
are at the time outstanding, ratably on the basis of their respective
Commitments), for any and all Liabilities, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Agent
(including the costs and expenses that the Borrower and other parties to the
Loan Instruments are obligated to pay under the Loan Instruments) in any way
relating to or arising out of the Loan Instruments or any other documents
contemplated thereby or referred to therein or the transactions contemplated
thereby or the enforcement of any of the terms thereof or of any such other
documents, provided that no Bank shall be liable for any of the foregoing to the
extent they arise from gross negligence, willful misconduct or knowing
violations of law by the Agent.
SECTION 7.6 Non-Reliance on Agent and Other Banks. Each Bank agrees
that it has made and will continue to make, independently and without reliance
on the Agent or any other Bank, and based on such documents and information as
it deems appropriate, its own credit analysis of the Borrower, its own
evaluation of the Collateral and its own decision to enter into the Loan
Instruments and to take or refrain from taking any action in connection
therewith. The Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower or other parties to the Loan
Instruments of the Loan Instruments or any other document referred to or
provided for therein or to inspect the properties or books of the Borrower or
any Subsidiary thereof or the Collateral. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agent under the Loan Instruments, the Agent shall have no obligation to provide
any Bank with any information concerning the business, status or condition of
the Borrower or any other party to the Loan Instruments or any Subsidiary
thereof, the Loan Instruments or the Collateral that may come into the
possession of the Agent or any of its Affiliates.
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SECTION 7.7 Execution and Amendment of Loan Instruments on Behalf of
the Banks. Each Bank hereby authorizes the Agent to (a) execute and deliver, in
the name of and on behalf of such Bank, (i) the Security Agreements, the
Guaranty Agreements, the Deeds of Trust and the Pledge Agreement, (ii) all
Uniform Commercial Code financing and continuation statements and other
documents the filing or recordation of which are, in the determination of the
Agent, necessary or appropriate to create, perfect or maintain the existence or
perfected status of the Security Interest and (iii) any other Loan Instrument
requiring execution by or on behalf of such Bank, and (b) release Collateral
from the Security Interest to the extent that such Collateral has been disposed
of in accordance with Section 5.2(g). The Agent shall consent to any amendment
of any term, covenant, agreement or condition of the Security Agreements, the
Guaranty Agreements, the Deeds of Trust and the Pledge Agreement, or to any
waiver of any right thereunder, if, but only if, the Agent is directed to do so
in writing by the Required Banks; provided, however, that (i) the Agent shall
not be required to consent to any such amendment or waiver that affects its
rights or duties and (ii) the Agent shall not, unless directed to do so in
writing by each Bank, (A) consent to any assignment by any Bank of any of its
rights or obligations under any such agreement or (B) release any Collateral
from the Security Interest, except as specified in clause (b) above.
SECTION 7.8 Resignation of the Agent. The Agent may at any time give
notice of its resignation to the Banks and the Borrower. Upon receipt of any
such notice of resignation, the Required Banks may, with the consent of the
Borrower which shall not be unreasonably withheld, appoint a successor Agent. If
no successor Agent shall have been so appointed by the Required Banks and shall
have accepted such appointment within 30 days after the resigning Agent's giving
of notice of resignation, then the resigning Agent may, on behalf of the Banks
and after consultation with the Borrower, appoint a successor Agent. Upon the
acceptance by any Person of its appointment as a successor Agent, (a) such
Person shall thereupon succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the resigning Agent and the resigning
Agent shall be discharged from its duties and obligations as Agent under the
Loan Instruments and (b) the resigning Agent shall promptly transfer all
Collateral within its possession or control to the possession or control of the
successor Agent and shall execute and deliver such notices, instructions and
assignments as may be necessary or desirable to transfer the rights of the Agent
with respect to the Collateral to the successor Agent. After any resigning
Agent's resignation as Agent, the provisions of this Article VII shall continue
in effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Agent.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Amendments; Waivers. Any term, covenant, agreement or
condition of the Borrower Loan Instruments may be amended, and any right under
the Borrower Loan Instruments may be waived, if, but only if, such amendment or
waiver is in writing and is signed by (a) in the case of an amendment or waiver
with respect to the Borrower Loan Instruments referred to in Section 7.7(a), the
Agent, (b) in the case of an amendment or waiver with respect to any other
Borrower Loan Instrument, the Required Banks and, if the amendment or waiver
would affect the rights and duties of the Agent, by the Agent, and(c) in the
case of an amendment with respect to any Borrower Loan Instrument, by the
Borrower; provided, however, that no amendment or waiver shall be effective,
unless in writing and signed by each Bank affected thereby, to the extent it (i)
changes the amount of such Bank's Commitment, (ii) reduces the principal of or
the rate of interest on such Bank's Loans or Note, the amount of such Bank's
Letter of Credit Participations or any fees payable to such Bank hereunder,
(iii) postpones any date fixed for any reduction of the Revolving Loan
Commitments or any payment of principal of or interest on such Bank's Loans,
Note, Letter of Credit Participations or any fees payable to such Bank
hereunder, (iv) except as provided in this Agreement, releases any Collateral
from the Security Interest, or (v) amends Section 2.10, this Section 8.1, the
definition of "Required Banks" contained in Section 1.1 or any other provision
of this Agreement requiring the consent or other action of all of the Banks.
Unless otherwise specified in such waiver, a waiver of any right under the
Borrower Loan Instruments shall be effective only in the specific instance and
for the specific purpose for which given. No election not to exercise, failure
to exercise or delay in exercising any right, nor any course of dealing or
performance, shall operate as a waiver of any right of the Agent or any Bank
under the Borrower Loan Instruments or Applicable Law, nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right of the Agent or any Bank under the
Borrower Loan Instruments or Applicable Law.
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SECTION 8.2 Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telecopier, telegraphic, telex or
cable communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered,
if to the Borrower, at its address at:
EFTC Corporation
0000 Xxxxx Xxxxxx
Horizon Terrace 0xx Xxxxx
Xxxxxx, Xxxxxxxx
Attn: Xxxxxx X. Xxxxxxxxxx
Vice President and CFO
Telecopy: (000)000-0000
with a copy to:
Xxxxxx Xxxxxx Xxxxxxx, Esq.
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopy: (000)000-0000
and if to the Agent, at its address at:
Bank One, Colorado, N.A.
0000 Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx,
Vice President
Telecopy: (000) 000-0000
with a copy to:
Xxx X. Xxxxxx XX, Esq.
Xxxxx, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx 00xx Xxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
or, as to each Party, at such other address as shall be designated by such Party
in a written notice to the other Party. All such notices and communications
shall, when telecopied, telegraphed, telexed or cabled, be effective when
telecopied, delivered to the telegraph company, confirmed by telex answerback or
delivered to the cable company, respectively, or when personally delivered. Any
notice, if mailed and properly addressed with first class postage prepaid,
return receipt requested, shall be deemed given three Business Days after
deposit in the U.S. mail. Except that notices to the Banks pursuant to the
provisions of Article II shall not be effective until received by the Bank.
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SECTION 8.3 Remedies. The remedies provided in the Loan Instruments are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.4 Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Instruments and the other documents to be delivered under the Loan
Instruments, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and responsibilities under the
Loan Instruments. The Borrower further agrees to pay on demand all reasonable
costs and expenses, if any (including reasonable counsel, consultants and
appraisers fees and expenses), in connection with the enforcement (whether
through negotiations, legal proceedings or otherwise) of the Loan Instruments
and the other documents to be delivered under the Loan Instruments, including,
without limitation, reasonable counsel, consultants and appraisers fees and
expenses in connection with the enforcement of rights under this Section 8.4,
expressly including all such costs and expenses incurred by the Agent and the
Banks in connection with or during the pendency of any bankruptcy or insolvency
proceedings involving the Borrower or any Guarantor. In addition, the Borrower
shall pay any and all stamp and other taxes payable or determined to be payable
in connection with the execution,
delivery, filing and recording of the Loan Instruments and the other documents
to be delivered under the Loan Instruments, and agrees to save the Bank harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.
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SECTION 8.5 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default the Banks are hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Banks to
or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under any Loan Instrument,
whether or not the Banks shall have made any demand under such Loan Instrument
and although such obligations may be unmatured. The Banks agree promptly to
notify the Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Banks under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which the Banks may have.
SECTION 8.6 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Banks and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Banks. Any assignment of rights or interests herein by the
Borrower without such prior written consent of the Bank will be void and
ineffective. It is expressly agreed that the Banks may transfer interests herein
to other lending institutions by way of assignment or participation agreement as
an to the extent permitted by Section 8.13.
SECTION 8.7 Indemnity. The Borrower agrees to indemnify the Agent and
the Banks, and their respective directors, officers, employees and agents for,
and hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them arising out of or by reason of any
investigation or litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to the extensions of
credit hereunder or any actual or proposed use by the Borrower of the proceeds
of any extensions of credit hereunder or the past, present or future business
activities of the Borrower including, without limitation, the reasonable fees
and disbursements of counsel incurred in connection with any such investigation
or litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses that are determined pursuant to a final,
non-appealable order of a court of competent jurisdiction to have resulted
solely from the gross negligence or willful misconduct of the Person to be
indemnified).
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SECTION 8.8 Consent to Exclusive Jurisdiction. Any legal action or
other proceeding with respect to this Agreement or any other Loan Instrument
shall be brought exclusively in the courts of competent jurisdiction of the
State of Colorado or of the United States located in the City and County of
Denver, and by execution and delivery of this Agreement, each of the Borrower
and the Banks consents, for itself and in respect of its property, to the
exclusive jurisdiction of those courts. Each of the Borrower and the Banks
irrevocably waives any objection, including 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 action or proceeding in such jurisdiction in respect
of this Agreement or any other Loan Instrument. The Borrower and the Banks each
waive personal service of any summons, complaint or other process which may be
made by any other means permitted by Colorado law.
SECTION 8.9 Waiver of Jury Trial and Certain Damages. Each of the
Borrower and the Banks hereby waives, to the extent permitted by applicable law,
trial by jury in any litigation in any court with respect to, in connection
with, or arising out of this Agreement or any other Loan Instrument or the
validity, protection, interpretation, collection or enforcement thereof; and the
Borrower hereby waives, to the extent permitted by applicable law, the right to
interpret set off or counterclaim or cross-claim in connection with any such
litigation, irrespective of the nature of set off, counterclaim or cross-claim
except to the extent that the failure so to assert a set off, counterclaim or
cross-claim would permanently preclude the prosecution of or recovery upon the
same. Notwithstanding anything contained in this Agreement or any other Loan
Instrument to the contrary, no claim may be made by the Borrower against the
Banks for any lost profits or any special, indirect or consequential damages in
respect of any breach or wrongful conduct (other than willful misconduct
constituting actual fraud) in connection with, arising out of or in any way
related to the transactions contemplated hereunder or under any other Loan
Instrument, or any act, omission or event occurring in connection therewith; and
the Borrower hereby waives, releases and agrees not to xxx upon any such claim
for any such damages. The Borrower agrees that this Section 8.9 is a specific
and material aspect of this Agreement and acknowledges that the Bank would not
extend to the Borrower the credit provided for herein if this Section 8.9 were
not part of this Agreement.
SECTION 8.10 Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of
Colorado, without giving effect to any conflict of law or choice of law
provision or rule (whether of the State of Colorado or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Colorado.
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SECTION 8.11 Inconsistent Provisions. In the event of any inconsistency
or conflict between the terms of this Agreement and the terms of any other Loan
Instrument, the provisions of this Agreement will be controlling.
SECTION 8.12 Sharing of Recoveries. Each Bank agrees that, if, for any
reason, including as a result of (a) the exercise of any right of counterclaim,
set-off, banker's lien or similar right, (b) its claim in any applicable
bankruptcy, insolvency or other similar law being deemed secured by a Debt owed
by it to the Borrower and any Guarantor, including a claim deemed secured under
Section 506 of the Bankruptcy Code, or (c) the allocation of payments by the
Agent or the Borrower or any Guarantor in a manner contrary to the provisions of
Section 2.10, such Bank shall receive payment of a proportion of the aggregate
amount due and payable to it hereunder as principal of or interest on the Loans
or fees that is greater than the proportion received by any other Bank in
respect of the aggregate of such amounts due and payable to such other Bank
hereunder, then the Bank receiving such proportionately greater payment shall
purchase Participations (which it shall be deemed to have done simultaneously
upon the receipt of such payment) in the rights of the other Banks hereunder so
that all such recoveries with respect to such amounts due and payable hereunder
(net of costs of collection) shall be pro rata; provided that if all or part of
such proportionately greater payment received by the purchasing Bank is
thereafter recovered by or on behalf of the Borrower or any Guarantor from such
Bank, such purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such Bank to the extent of such recovery,
but without interest (unless the purchasing Bank is required to pay interest on
the amount recovered to the Person recovering such amount, in which case the
selling Bank shall be required to pay interest at a like rate). The Borrower
expressly consents to the foregoing arrangements and agrees that any holder of a
participation in any rights hereunder so purchased or acquired pursuant to this
Section 8.12 shall, with respect to such participation, be entitled to all of
the rights of a Bank under Sections 2.10, 7.4, 7.5 and 7.7 (subject to any
condition imposed on a Bank hereunder with respect thereto) and may exercise any
and all rights of set-off with respect to such participation as fully as though
the Borrower were directly indebted to the holder of such participation for
Loans in the amount of such participation.
SECTION 8.13 Assignments and Participations.
(a) Assignments.
(i) The Borrower may not assign any of its rights or
obligations under the Borrower Loan Instruments without the
prior written consent of (A) in the case of the Borrower Loan
Instruments referred to in Section 7.7(a), the Agent and (B)
in the case of any of the other Borrower Loan Instruments, the
Issuing Bank and each Bank, and no assignment of any such
obligation shall release such Borrower therefrom unless the
Agent, the Issuing Bank and each Bank, as applicable, shall
have consented to such release in a writing specifically
referring to the obligation from which such Borrower is to be
released.
(ii) Each Bank may from time to time assign any or all of its
rights and obligations under the Borrower Loan Instruments to
one or more Persons; provided that, except in the case of the
grant of a security interest to a Federal Reserve Bank (which
may be made without condition or restriction), no such
assignment shall be effective unless (A) the assignment is
consented to by the Borrower (unless an Event of Default
exists) the Issuing Bank and the Agent, such consents not to
be unreasonably withheld, (B) in the case of a partial
assignment, the assignment shall involve the assignment of not
less than $5,000,000 of the assignor Bank's Commitment and
there shall at no time be more than five Banks and the
assignment is consented to by the Borrower, such consent not
to be unreasonably withheld, (C) a Notice of Assignment in the
form of Exhibit I with respect to the assignment, duly
executed by the assignor and the assignee, shall have been
given to the Borrower, the Issuing Bank and the Agent, (D)
except in the case of an assignment by the Bank that is the
Agent, the Agent shall have been paid an assignment fee
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of $3,500, (E) unless otherwise agreed to by each of the
Banks, such assignment is made on or after the general
syndication of the credit facility provided for herein is
completed, as specified by the Agent and (F) in the case of an
assignment of any Revolving Loan, Revolving Loan Commitment,
Term Loan or Letter of Credit Participation to any assignee,
the assignment shall include a pro rata portion of all of the
Revolving Loans, Revolving Loan Commitments, Term Loan and
Letter of Credit Participations of the assignor Bank. Upon any
effective assignment, the assignor shall be released from the
obligations so assigned and, in the case of an assignment of
all of its Loans and Commitment, shall cease to be a Bank. In
the event of any effective assignment by a Bank, the Borrower
shall issue new Notes to the assignee Bank (against, other
than in the case of a partial assignment, receipt of the
existing Note of the assignor Bank). Notwithstanding the
foregoing, no Bank may assign any of its rights and
obligations under the Borrower Loan Instruments prior to the
date on which the general syndication or the credit facility
provided for herein is completed, as specified by the Agent.
Nothing in this Section 8.13 shall limit the right of any Bank
to assign its interest in the Loans and its Notes to a Federal
Reserve Bank as collateral security under Regulation A of the
Board of Governors of the Federal Reserve System, but no such
assignment shall release such Bank from it obligations
hereunder.
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(b) Participations. Each Bank may from time to time sell or
otherwise grant participations in any or all of its rights
and obligations under the Borrower Loan Instruments. In the
event of any such grant by a Bank of a participation, such
Bank's obligations under the Loan Instruments to the other
parties thereto shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, and
the Borrower, the Issuing Bank, the Agent and the other
Banks may continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations
thereunder. A Bank may not grant to any holder of a
participation the right to require such Bank to take or omit
to take any action under the Loan Documents, except that a
Bank may grant to any such holder the right to require such
holder's consent to (i) reduce the principal of or the rate
of interest on such Bank's Loans, Note or the amount of such
Bank's Letter of Credit Participations or any fees payable
to such Bank hereunder, (ii) postpone any date fixed for any
reduction of the Revolving Loan Commitments or any payment
of principal of or interest on such Bank's Loans, Note or
the amount of such Bank's Letter of Credit Participations or
any fees payable to such Bank hereunder, (iii) permit any
Loan Party to assign any of its obligations under the Loan
Instruments to any other Person or (iv) release any
Collateral from the Security Interest except as required or
contemplated by the Loan Instruments. Each holder of a
participation in any rights under the Borrower Loan
Instruments, if and to the extent the applicable
participation agreement so provides, shall, with respect to
such participation, be entitled to all of the rights of a
Bank as fully as though it were a Bank under Sections 2.10,
2.12, 8.1 and 8.7 (subject to any conditions imposed on a
Bank hereunder with respect thereto) and may exercise any
and all rights of set-off with respect to such participation
as fully as though the Borrower were directly indebted to
the holder of such participation for Loans in the amount of
such participation; provided, however, that no holder of a
participation shall be entitled to any amounts that would
otherwise be payable to it with respect to its participation
under Section 2.10 or 2.12 unless (x) such amounts are
payable in respect of Regulatory Changes that are enacted,
adopted or issued after the date the applicable
participation agreement was executed or (y) such amounts
would have been payable to the Bank that granted such
participation if such participation had not been granted.
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SECTION 8.14 Survival of Representations and Warranties. All
representations and warranties of the Borrower contained in this Agreement or of
any of its subsidiaries contained in any other Loan Instrument shall survive
delivery of the Notes and the making of the Loans and the issuance of the
Letters of Credit.
SECTION 8.15 Counterparts. This Agreement and any amendment hereof may
be executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving the Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
SECTION 8.16 Reference to Credit Agreement. From and after the Restated
Agreement Date, each reference in the Credit Agreement to "this Credit
Agreement", "hereof" or words of like import, and all other writings of every
kind and nature, shall be deemed to mean the Credit Agreement as modified and
amended by this Restated and Amended Credit Agreement.
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(Signatures appear on the next page)
IN WITNESS WHEREOF, the parties hereto have caused this
Restated and Amended Credit Agreement to be executed by their respective duly
authorized officers, as of the date first above written.
EFTC CORPORATION BANK ONE, COLORADO, N.A.
as Agent and as a Bank
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxxx Xxxxx X. Xxxxxxx
Vice President and CFO Vice President
NATIONAL BANK OF CANADA MITSUI LEASING CAPITAL
CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, Xx. By: /s/ R. Xxxxx Xxxxxx
Xxxxxx X. Xxxxxxx, Xx. R. Xxxxx Xxxxxx
Vice President Senior Vice President
By: /s/ Xxxxxxx X. Xxxxx KEYBANK NATIONAL ASSOCIATION
Xxxxxxx X. Xxxxx
Vice President
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Assistant Vice President
