EXHIBIT 10.H
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CREDIT AGREEMENT
Dated as of January 10, 2001
among
MENTOR GRAPHICS CORPORATION,
BANK OF AMERICA, N.A.,
as Agent,
THE BANK OF NOVA SCOTIA,
as Documentation Agent,
FLEET NATIONAL BANK, N.A.,
as Syndication Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
BANC OF AMERICA SECURITIES, LLC
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS ............................................................................. 1
1.01 Certain Defined Terms ............................................................... 1
1.02 Other Interpretive Provisions ....................................................... 11
1.03 Accounting Principles ............................................................... 11
1.04 Designation of Unrestricted Subsidiaries ............................................ 11
ARTICLE II THE CREDITS ............................................................................ 12
2.01 Amounts and Terms of Commitments .................................................... 12
2.02 Loan Accounts ....................................................................... 12
2.03 Procedure for Borrowing ............................................................. 12
2.04 Conversion and Continuation Elections ............................................... 13
2.05 Voluntary Termination or Reduction of Commitments ................................... 14
2.06 Optional Prepayments ................................................................ 14
2.07 Repayment ........................................................................... 14
2.08 Interest ............................................................................ 14
2.09 Fees ................................................................................ 14
2.10 Computation of Fees and Interest .................................................... 15
2.11 Payments by the Company ............................................................. 15
2.12 Payments by the Banks to the Agent .................................................. 15
2.13 Sharing of Payments, Etc ............................................................ 16
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY ................................................ 16
3.01 Taxes ............................................................................... 16
3.02 Illegality .......................................................................... 17
3.03 Increased Costs and Reduction of Return ............................................. 17
3.04 Funding Losses ...................................................................... 18
3.05 Inability to Determine Rates ........................................................ 18
3.06 Reserves on Offshore Rate Loans ..................................................... 18
3.07 Certificates of Banks ............................................................... 18
3.08 Delay ............................................................................... 18
3.09 Substitution of Banks ............................................................... 19
3.10 Survival ............................................................................ 19
ARTICLE IV CONDITIONS PRECEDENT ................................................................... 19
4.01 Conditions of Initial Loans ......................................................... 19
4.02 Conditions to All Borrowings ........................................................ 20
4.03 Additional Condition Precedent of Initial Loans ..................................... 20
ARTICLE V REPRESENTATIONS AND WARRANTIES .......................................................... 20
5.01 Corporate Existence and Power ....................................................... 20
5.02 Corporate Authorization; No Contravention ........................................... 21
5.03 Governmental Authorization .......................................................... 21
5.04 Binding Effect ...................................................................... 21
5.05 Litigation .......................................................................... 21
5.06 No Default .......................................................................... 21
5.07 ERISA Compliance .................................................................... 21
5.08 Use of Proceeds; Margin Regulations ................................................. 22
5.09 Title to Properties ................................................................. 22
5.10 Taxes ............................................................................... 22
5.11 Financial Condition ................................................................. 22
5.12 Environmental Matters ............................................................... 22
5.13 Regulated Entities .................................................................. 22
TABLE OF CONTENTS (continued)
Page
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5.14 No Burdensome Restrictions .................................................... 23
5.15 Copyrights, Patents, Trademarks and Licenses, etc ............................. 23
5.16 Subsidiaries .................................................................. 23
5.17 Insurance ..................................................................... 23
5.18 Swap Obligations .............................................................. 23
5.19 Full Disclosure ............................................................... 23
ARTICLE VI AFFIRMATIVE COVENANTS ............................................................ 23
6.01 Financial Statements .......................................................... 23
6.02 Certificates; Other Information ............................................... 24
6.03 Notices ....................................................................... 24
6.04 Preservation of Corporate Existence, Etc ...................................... 25
6.05 Maintenance of Property ....................................................... 25
6.06 Insurance ..................................................................... 25
6.07 Payment of Obligations ........................................................ 25
6.08 Compliance with Laws .......................................................... 25
6.09 Compliance with ERISA ......................................................... 26
6.10 Inspection of Property and Books and Records .................................. 26
6.11 Environmental Laws ............................................................ 26
6.12 Use of Proceeds ............................................................... 26
ARTICLE VII NEGATIVE COVENANTS .............................................................. 26
7.01 Limitation on Liens ........................................................... 26
7.02 Disposition of Assets ......................................................... 27
7.03 Consolidations and Mergers .................................................... 28
7.04 Loans and Investments ......................................................... 29
7.05 Limitation on Indebtedness .................................................... 29
7.06 Transactions with Affiliates .................................................. 30
7.07 Use of Proceeds ............................................................... 30
7.08 Contingent Obligations ........................................................ 31
7.09 Lease Obligations ............................................................. 31
7.10 Restricted Payments ........................................................... 31
7.11 ERISA ......................................................................... 32
7.12 Change in Business ............................................................ 32
7.13 Accounting Changes ............................................................ 32
7.14 Financial Covenants ........................................................... 32
ARTICLE VIII EVENTS OF DEFAULT .............................................................. 33
8.01 Event of Default .............................................................. 33
8.02 Remedies ...................................................................... 34
8.03 Rights Not Exclusive .......................................................... 34
ARTICLE IX THE AGENT ........................................................................ 34
9.01 Appointment and Authorization; "Agent" ........................................ 34
9.02 Delegation of Duties .......................................................... 35
9.03 Liability of Agent ............................................................ 35
9.04 Reliance by Agent ............................................................. 35
9.05 Notice of Default ............................................................. 35
9.06 Credit Decision ............................................................... 35
9.07 Indemnification of Agent ...................................................... 36
9.08 Agent in Individual Capacity .................................................. 36
9.09 Successor Agent ............................................................... 36
9.10 Withholding Tax ............................................................... 36
9.11 Documentation or Syndication Agent; Lead Managers ............................. 37
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TABLE OF CONTENTS (continued)
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ARTICLE X MISCELLANEOUS ...................................................................... 37
10.01 Amendments and Waivers ......................................................... 37
10.02 Notices ........................................................................ 38
10.03 No Waiver; Cumulative Remedies ................................................. 38
10.04 Costs and Expenses ............................................................. 38
10.05 Company Indemnification ........................................................ 38
10.06 Payments Set Aside ............................................................. 39
10.07 Successors and Assigns ......................................................... 39
10.08 Assignments, Participations, etc ............................................... 39
10.09 Confidentiality ................................................................ 40
10.10 Set-off ........................................................................ 40
10.11 Automatic Debits of Fees ....................................................... 40
10.12 Notification of Addresses, Lending Offices, Etc ................................ 40
10.13 Counterparts ................................................................... 40
10.14 Severability ................................................................... 40
10.15 No Third Parties Benefited ..................................................... 41
10.16 Governing Law and Jurisdiction ................................................. 41
10.17 Waiver of Jury Trial ........................................................... 41
10.18 Entire Agreement ............................................................... 41
SCHEDULES
Schedule 2.01 Commitments and Pro Rata Shares
Schedule 5.05 Litigation
Schedule 5.07 ERISA
Schedule 5.12 Environmental Matters
Schedule 5.15 Intellectual Property Matters
Schedule 5.16 Subsidiaries and Equity Investments
Schedule 5.17 Insurance Matters
Schedule 7.01 Permitted Liens
Schedule 7.02 Permitted Asset Dispositions
Schedule 7.04 Permitted Investments
Schedule 7.05 Permitted Indebtedness
Schedule 7.08 Contingent Obligations
Schedule 10.02 Offshore and Domestic Lending Offices, Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Opinion of Borrower's Counsel
Exhibit E Form of Assignment and Acceptance Agreement
Exhibit F Form of Promissory Note
Exhibit G Form of Subordination Agreement
Exhibit H Form of Notice of Designation of Unrestricted Subsidiary
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CREDIT AGREEMENT
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This CREDIT AGREEMENT is entered into as of January 10, 2001, among
Mentor Graphics Corporation, an Oregon corporation (the "Company"), the several
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financial institutions from time to time party to this Agreement (collectively,
the "Banks"; individually, a "Bank"), The Bank of Nova Scotia, as documentation
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agent, Fleet National Bank, N.A., as syndication agent, and Bank of America,
N.A., as administrative agent for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a
revolving credit facility upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
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1.01 Certain Defined Terms. The following terms have the following
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meanings:
"Acquisition" means any transaction or series of related transactions
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for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of
any line of business or division of a Person, (b) the acquisition of in
excess of 50% of the capital stock, partnership interests, membership
interests or equity of any Person, or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary)
provided that the Company or the Subsidiary is the surviving entity.
"Affiliate" means, as to any Person, any other Person which, directly
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or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities,
membership interests, by contract, or otherwise.
"Agent" means BofA in its capacity as administrative agent for the
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Banks hereunder, and any successor administrative agent arising under
Section 9.09.
"Agent-Related Persons" means BofA and any successor administrative
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agent arising under Section 9.09, together with their respective Affiliates
(including, in the case of BofA, the Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for payments set forth on
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Schedule 10.02 or such other address as the Agent may from time to time
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specify.
"Agreement" means this Credit Agreement.
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"Applicable Margin" means, for any day, with respect to any Base Rate
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Loan or Offshore Rate Loan, the applicable margin (on a per annum basis)
set forth on the pricing grid attached as Annex I in accordance with the
parameters for calculation and adjustment of such applicable margin also
set forth on Annex I.
"Arranger" means Banc of America Securities, LLC.
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"Assignee" has the meaning specified in subsection 10.08(a).
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"Attorney Costs" means and includes all fees and
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disbursements of any law firm or other external counsel, the allocated
cost of internal legal services and all disbursements of internal
counsel.
"Bank" has the meaning specified in the introductory clause hereto.
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"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
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X.X.X.xx. 101, et seq.).
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1
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
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above the latest Federal Funds Rate; and (b) the rate of interest in effect
for such day as publicly announced from time to time by BofA as its prime
rate. (The prime rate is a rate set by BofA based upon various factors
including BofA's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate.) Any change in
the prime rate announced by BofA shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
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Rate.
"BofA" means Bank of America, N.A., a national banking association.
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"Borrowing" means a borrowing hereunder consisting of Loans of the
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same Type made to the Company on the same day by the Banks under Article
II, and, other than in the case of Base Rate Loans, having the same
Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under
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Section 2.03.
"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in New York City, San Francisco, California,
or Portland, Oregon, are authorized or required by law to close and, if the
applicable Business Day relates to any Offshore Rate Loan, means such a day
on which dealings are carried on in the applicable offshore dollar
interbank market.
"Capital Adequacy Regulation" means any guideline, request or
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directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"Cash Equivalents" means:
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(a) securities issued or fully guaranteed or insured by the
United States Government or any agency thereof having maturities of
not more than 12 months from the date of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or
bankers' acceptances, having in each case a tenor of not more than 12
months, issued by (i) any U.S. commercial bank or any commercial bank
organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (but
including, in any event, Singapore), or a political subdivision of
any such country, in each case having combined capital and surplus of
not less than $100,000,000 and whose short-term securities are rated
at least A-1 by Standard & Poor's Corporation ("S&P") or at least P-1
by Xxxxx'x Investor Service, Inc. ("Moody's"), or (ii) any Bank;
(c) taxable and tax-exempt commercial paper of an issuer rated
at least A-l by S&P or at least P-l by Moody's and in either case
having a tenor of not more than 270 days;
(d) medium term notes of an issuer rated at least AA by S&P or
at least Aa2 by Moody's and having a remaining term of not more than
12 months after the date of acquisition by the Company or its
Subsidiaries;
(e) municipal notes and bonds which are rated at least SP-2 or
AA by S&P or at least MIG-2 or Aa by Moody's with tenors of not more
than 12 months;
(f) investments in taxable or tax-exempt money market funds with
assets greater than $500,000,000 and whose assets have average
maturities less than or equal to 180 days and are rated at least A-l
by S&P or at least P-l by Moody's;
(g) money market preferred instruments of an issuer rated at
least A-1 by S&P or at least P-1 by Moody's with tenors of not more
than 12 months; or
(h) other similar investments, subject to the Majority Banks'
prior written approval.
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"Change of Control" means (a) any "person" (as such term is used in
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subsections 13(d) and 14(d) of the Exchange Act) or group of persons on or
after the Closing Date is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the
Company's then-outstanding voting securities, or (b) the existing directors
for any reason cease to constitute a majority of the Company's board of
directors. "Existing directors" means (x) individuals constituting the
Company's board of directors on the Closing Date, and (y) any subsequent
director whose election by the board of directors or nomination for
election by the Company's shareholders was approved by a vote of at least a
majority of the directors then in office, which directors either were
directors on the Closing Date or whose election or nomination for election
was previously so approved.
"Closing Date" means the date on which all conditions precedent set
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forth in Section 4.01 are satisfied or waived by all Banks (or, in the case
of subsection 4.01(e), waived by the Person entitled to receive such
payment).
"Code" means the Internal Revenue Code of 1986, and regulations
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promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in Section
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2.01.
"Compliance Certificate" means a certificate substantially in the
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form of Exhibit C.
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"Consolidated Current Liabilities" means, at any time of
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determination, all amounts which would, in accordance with GAAP, be
included under current liabilities on a consolidated balance sheet of the
Company and its Subsidiaries, but in any event including all outstanding
Loans, at such time.
"Consolidated Tangible Net Worth" means, at any time of
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determination, in respect of the Company and its Subsidiaries, determined
on a consolidated basis, total assets (exclusive of goodwill, trademarks,
trade names, organization expense, treasury stock, unamortized debt
discount and premium, deferred charges (other than deferred tax assets) and
other like intangibles) minus total liabilities (including accrued and
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deferred income taxes), at such time, all as determined in accordance with
GAAP.
"Contingent Obligation" means, as to any Person, any direct or
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indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease, dividend,
letter of credit or other obligation (the "primary obligations") of another
Person (the "primary obligor"), including any obligation of that Person (i)
to purchase, repurchase or otherwise acquire such primary obligations or
any security therefor, (ii) to advance or provide funds for the payment or
discharge of any such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net
worth or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof
(each, a "Guaranty Obligation"); (b) with respect to any Surety Instrument
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issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to purchase
any materials, supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered, or (d) in
respect of any Swap Contract. The amount of any Contingent Obligation
shall, in the case of Guaranty Obligations, be deemed equal to the stated
or determinable amount of the primary obligation at the time of such
determination in respect of which such Guaranty Obligation is made or, if
not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof at the time of such determination, and in the
case of other Contingent Obligations other than in respect of Swap
Contracts, shall be equal to the maximum reasonably anticipated liability
in respect thereof and, in the case of Contingent Obligations in respect of
Swap Contracts, shall be equal to the Swap Termination Value at the time of
such determination.
"Contractual Obligation" means, as to any Person, any provision of
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any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument, document
or agreement to which such Person is a party or by which it or any of its
property is bound.
"Conversion/Continuation Date" means any date on which, under Section
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2.04, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
3
"Default" means any event or circumstance which, with the giving of
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notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of the United
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States.
"EBITDA" means, with respect to the Company and its Subsidiaries on a
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consolidated basis for any rolling four-quarter period, net income for such
period plus, to the extent deducted in computing such net income, the sum
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of (a) income tax expense, (b) interest expense, (c) depreciation and
amortization expense, and (d) non-cash merger and Acquisition-related
charges recorded on and after the Closing Date of up to $50,000,000 in the
aggregate, all as determined in accordance with GAAP.
"Eligible Assignee" means (a) a commercial bank organized under the
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laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; and (c) a Person
that is primarily engaged in the business of commercial banking and that is
(i) a Subsidiary of an Initial Bank or Eligible Assignee, (ii) a Subsidiary
of a Person of which an Initial Bank or Eligible Assignee is a Subsidiary,
or (iii) a Person of which an Initial Bank or Eligible Assignee is a
Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
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Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, including for
release or injury to the environment.
"Environmental Laws" means all federal, state or local laws,
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statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental, health,
safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of 1974,
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and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
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incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
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Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which could reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA in excess of
$1,000,000, other than PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the
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definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified
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in Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
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regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and any
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Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
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weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if for any
4
relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as
determined by the Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.09(a).
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"FRB" means the Board of Governors of the Federal Reserve System,
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and any Governmental Authority succeeding to any of its principal
functions.
"Further Taxes" means any and all present or future taxes, levies,
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assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including, without limitation, net income taxes and franchise
taxes), and all liabilities with respect thereto, imposed by any
jurisdiction on account of amounts payable or paid pursuant to Section
3.01.
"GAAP" means generally accepted accounting principles set forth
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from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination.
"Governmental Authority" means any nation or government, any state
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or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other
entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Guaranty Obligation" has the meaning specified in the definition
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of "Contingent Obligation."
"Indebtedness" of any Person means, without duplication, (a) all
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indebtedness for borrowed money; (b) all obligations issued, undertaken
or assumed as the deferred purchase price of property or services
(other than trade payables entered into in the ordinary course of
business on ordinary terms); (c) all non-contingent reimbursement or
payment obligations with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all
obligations with respect to capital leases; (g) all indebtedness
referred to in clauses (a) through (f) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in
clauses (a) through (g) above. Provided, Indebtedness shall not include
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sales of Permitted Receivables sold pursuant to Permitted Receivables
Purchase Facilities and indemnification, recourse or repurchase
obligations thereunder. For all purposes of this Agreement, the
Indebtedness of any Person shall include all recourse Indebtedness of
any partnership or joint venture in which such Person is a general
partner or a joint venturer.
"Indemnified Liabilities" has the meaning specified in Section
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10.05.
"Indemnified Person" has the meaning specified in Section 10.05.
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"Independent Auditor" has the meaning specified in subsection
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6.01(a).
"Initial Bank" means a Bank party to this Agreement on the Closing
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Date.
"Insolvency Proceeding" means, with respect to any Person, (a) any
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case, action or proceeding with respect to such Person before any court
or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or
relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
5
"Interest Payment Date" means, as to any Loan other than a Base
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Rate Loan, the last day of each Interest Period applicable to such Loan
and, as to any Base Rate Loan, the last Business Day of each calendar
quarter, provided, however, that if any Interest Period for an Offshore
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Rate Loan exceeds three months, the date that falls three months after
the beginning of such Interest Period and after each Interest Payment
Date thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
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commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the Company in its Notice
of Borrowing or Notice of Conversion/Continuation;
provided that:
--------
(i) if any Interest Period would otherwise end on
a day that is not a Business Day, that Interest Period
shall be extended to the following Business Day unless,
in the case of an Offshore Rate Loan, the result of
such extension would be to carry such Interest Period
into another calendar month, in which event such
Interest Period shall end on the preceding Business
Day;
(ii) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such
Interest Period; and
(iii) no Interest Period for any Loan shall extend
beyond January 16, 2004.
"IRS" means the Internal Revenue Service, and any Governmental
---
Authority succeeding to any of its principal functions under the Code.
"Joint Venture" means a partnership, limited liability company,
-------------
joint venture or other similar legal arrangement (whether created by
contract or conducted through a separate legal entity) now or hereafter
formed by the Company or any of its Subsidiaries with another Person in
order to conduct a common venture or enterprise with such Person.
"Lending Office" means, as to any Bank, the office or offices of
--------------
such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on Schedule
--------
10.02, or such other office or offices as such Bank may from time to
-----
time notify the Company and the Agent.
"Leverage Ratio" means, as of any date of determination, the ratio
--------------
of (a) total consolidated liabilities of the Company and its
Subsidiaries on such date to (b) Consolidated Tangible Net Worth on
such date, in each case as determined in accordance with GAAP.
"Lien" means any security interest, mortgage, deed of trust,
----
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease or the
interest of a purchaser of Permitted Receivables under any Permitted
Receivables Purchase Facility.
"Loan" means an extension of credit by a Bank to the Company under
----
Article II, and may be a Base Rate Loan or an Offshore Rate Loan (each,
a "Type" of Loan).
----
"Loan Documents" means this Agreement, any Notes, any
--------------
Subordination Agreement, the Fee Letter and all other documents
delivered to the Agent or any Bank in connection herewith.
"Majority Banks" means at any time at least two Banks then holding
--------------
not less than 51% of the then aggregate unpaid principal amount of the
Loans, or, if no such principal amount is then outstanding, at least
two Banks then holding not less than 51% of the Commitments.
6
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in,
-----------------------
or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole; (b) a material impairment of the ability
of the Company to perform under any Loan Document and to avoid any
Event of Default; or (c) a material impairment of the rights of or
benefits available to the Banks or the Agent under any Loan Document.
"Material Subsidiary" means any Subsidiary which, for any period,
-------------------
has revenues or assets equal to or greater than five percent (5%) of
the consolidated revenues or assets of the Company and its
Subsidiaries, taken as a whole, but in any event shall not include any
Unrestricted Subsidiary.
"Multiemployer Plan" means a "multiemployer plan", within the
------------------
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"Net Issuance Proceeds" means, as to any issuance of debt or
---------------------
equity by any Person, cash proceeds and non-cash proceeds received or
receivable by such Person in connection therewith, net of commissions,
underwriting discounts and reasonable out-of-pocket costs and expenses
paid or incurred in connection therewith in favor of any Person not an
Affiliate of such Person.
"Note" means a promissory note executed by the Company in favor of
----
a Bank pursuant to subsection 2.02(b), in substantially the form of
Exhibit F.
---------
"Notice of Borrowing" means a notice in substantially the form of
-------------------
Exhibit A.
---------
"Notice of Conversion/Continuation" means a notice in
---------------------------------
substantially the form of Exhibit B.
---------
"Obligations" means all advances, debts, liabilities, obligations,
-----------
covenants and duties arising under any Loan Document owing by the
Company to any Bank, the Agent, or any Indemnified Person, whether
direct or indirect (including those acquired by assignment), absolute
or contingent, due or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect to
-------------
Offshore Rate Loans comprising part of the same Borrowing:
(i) the rate of interest per annum determined by the Agent to be
the rate of interest per annum appearing on Dow Xxxxx page 3750 (as
defined below) for Dollar deposits in the approximate amount of the
Offshore Rate Loan to be made, continued or converted by BofA and
having a maturity comparable to such Interest Period, at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of
such Interest Period, subject to clause (ii) below; or
(ii) if for any reason the rate is not available as provided in
the preceding clause (i) of this definition, the "Offshore Rate"
-------------
instead means the rate of interest per annum determined by the Agent to
be the arithmetic mean (rounded upward to the nearest 1/16th of 1%) of
the rates of interest per annum notified to the Agent by BofA as the
rate of interest at which Dollar deposits in the approximate amount of
the Offshore Rate Loan to be made, continued or converted by BofA, and
having a maturity comparable to such Interest Period, would be offered
to major banks in the London interbank market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period. As used in this definition, "Dow
---
Xxxxx Page 3750" means the display designated as "3750" on the Dow
---------------
Xxxxx Market Service (formerly known as the Telerate Service) or any
replacement page thereof or successor thereto.
"Offshore Rate Loan" means a Loan that bears interest based on the
------------------
Offshore Rate.
"Organization Documents" means, (i) for any corporation, the
----------------------
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation and (ii) for any Person not a corporation,
the partnership agreement, operating agreement and/or such other
documents which govern such Person.
7
"Other Taxes" means any present or future stamp, court or
-----------
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection 10.08(d).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation, or any
----
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
------------
ERISA) subject to Title IV of ERISA which the Company sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described
in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in Section 7.01.
---------------
"Permitted Investments" means:
---------------------
(a) securities issued or fully guaranteed or insured by the
United States Government or any agency thereof having maturities
of not more than three years from the date of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or
bankers' acceptances, having in each case a tenor of not more than
three years, issued by any U.S. commercial bank or any commercial
bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and
Development (but including, in any event, Singapore), or a
political subdivision of any such country, in each case having
combined capital and surplus of not less than $100,000,000 and
whose short-term securities are rated at least A-2 by Standard &
Poor's Corporation ("S&P") or at least P-2 by Xxxxx'x Investor
Service, Inc. ("Moody's");
(c) taxable and tax-exempt commercial paper of an issuer rated
at least A-2 by S&P or at least P-2 by Moody's and in either case
having a tenor of not more than 270 days;
(d) medium term notes of an issuer rated at least AA by S&P or
at least Aa2 by Moody's and having a remaining term of not more
than three years after the date of acquisition by the Company or
its Subsidiaries;
(e) municipal notes and bonds which are rated at least SP-2 or
AA by S&P or at least MIG-2 or Aa by Moody's with tenors of not
more than three years;
(f) investments in taxable or tax-exempt money market funds
with assets greater than $500,000,000 and whose assets have
average maturities less than or equal to 180 days and are rated at
least A-2 by S&P or at least P-2 by Moody's;
(g) money market preferred instruments of an issuer rated at
least A-2 by S&P or at least P-2 by Moody's with tenors of not
more than three years; or
(h) other similar investments, subject to the Majority Banks'
prior written approval.
"Permitted Receivables" shall mean all obligations of any obligor
---------------------
(whether now existing or hereafter arising) under a contract for sale
of goods or services by the Company or any of its Subsidiaries,
including any obligation of such obligor (whether now existing or
hereafter arising) to pay interest, finance charges or amounts with
respect thereto, and, with respect to any of the foregoing receivables
or obligations, (a) all of the interest of the Company or any of its
Subsidiaries in the goods (including returned goods) the sale of which
gave rise to such receivable or obligation after the passage of title
thereto to any obligor, (b) all other Liens and property subject
thereto from time to time purporting to secure payment of such
receivables or obligations, and (c) all guarantees, insurance, letters
of credit and other agreements or arrangements of whatever character
from time to time supporting or securing payment of any such
receivables or obligations.
8
"Permitted Receivables Purchase Facility" shall mean any agreement
---------------------------------------
of the Company or any of its Subsidiaries providing for sales,
transfers or conveyances of Permitted Receivables purporting to be
sales (and considered sales under GAAP) that do not provide, directly
or indirectly, for recourse against the seller of such Permitted
Receivables (or against any of such seller's Affiliates) by way of a
guaranty or any other support arrangement, with respect to the amount
of such Permitted Receivables (based on the financial condition or
circumstances of the obligor thereunder), other than such limited
recourse as is reasonable given market standards for transactions of a
similar type, taking into account such factors as product performance
and product acceptance.
"Permitted Swap Obligations" means all obligations (contingent or
--------------------------
otherwise) of the Company or any Subsidiary existing or arising under
Swap Contracts, provided that each of the following criteria is
satisfied: (a) 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 by such Person, or changes in the value of securities issued by
such Person in conjunction with a securities repurchase program not
otherwise prohibited hereunder, and not for purposes of speculation or
taking a "market view;" and (b) such Swap Contracts do not contain (i)
any provision ("walk-away" provision) exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions
to the defaulting party, or (ii) any provision creating or permitting
the declaration of an event of default, termination event or similar
event upon the occurrence of an Event of Default hereunder (other than
an Event of Default under subsection 8.01(a)).
"Person" means an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3)
----
of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the percentage
--------------
equivalent (expressed as a decimal, rounded to the ninth decimal place)
at such time of such Bank's Commitment divided by the combined
Commitments of all Banks (or, if all Commitments have been terminated,
the aggregate principal amount of such Bank's Loans divided by the
aggregate principal amount of the Loans then held by all Banks).
"Reference Bank" means BofA.
--------------
"Replacement Bank" has the meaning specified in Section 3.09.
----------------
"Reportable Event" means, any of the events set forth in Section
----------------
4043(c) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory
------------------
or common), treaty, 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 property or to which the
Person or any of its property is subject.
"Responsible Officer" means the chief financial officer, the chief
-------------------
operating officer or the treasurer of the Company, or any other officer
having substantially the same authority and responsibility; or, with
respect to compliance with financial covenants, any of the above
officers or the chief accounting officer of the Company, or any other
officer having substantially the same authority and responsibility.
"Returned Account" means an account receivable purchased under a
----------------
Permitted Receivables Purchase Facility which is for any reason
returned by the purchaser thereof for repurchase, refund or replacement
by the seller thereof in accordance with the terms of the Permitted
Receivables Purchase Facility.
"Revolving Termination Date" means the earlier to occur of:
--------------------------
(a) January 16, 2004; and
(b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement.
9
"SEC" means the Securities and Exchange Commission, or any Governmental
---
Authority succeeding to any of its principal functions.
"Subordination Agreement" has the meaning specified in subsection 7.05(g).
----------------------
"Subsidiary" 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 interests (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, but in any event shall not include any Unrestricted
Subsidiary other than for purposes of Sections 6.01, 7.07 and 7.14(b). Unless
the context otherwise clearly requires, references herein to a "Subsidiary"
refer to a Subsidiary of the Company.
"Surety Instruments" means all letters of credit (including standby and
------------------
commercial), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.
"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 swap, cross-currency rate swap,
swaption, 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.
"Swap Termination Value" means, in respect of any one or more Swap
----------------------
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined by the Company
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Swap Contracts (which may include any Bank).
"Taxes" means any and all present or future taxes, levies, assessments,
-----
imposts, duties, deductions, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of each Bank and the
Agent, respectively, taxes imposed on or measured by its net income by the
jurisdiction (or any political subdivision thereof) under the laws of which such
Bank or the Agent, as the case may be, is organized or maintains a lending
office.
"TNW Buffer" means, as of the last day of any fiscal quarter, the
----------
difference between (a) the actual Consolidated Tangible Net Worth of the Company
and its Subsidiaries on such date, minus (b) the minimum Consolidated Tangible
Net Worth of the Company and its Subsidiaries required on such date under
subsection 7.14(b).
"Type" has the meaning specified in the definition of "Loan."
----
"Unfunded Pension Liability" means the excess of a Plan's benefit
--------------------------
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
------------ ---
"Unrestricted Subsidiary" shall mean any Subsidiary designated as such by
-----------------------
the Company in accordance with Section 1.04.
"Wholly-Owned Subsidiary" means any corporation in which (other than
-----------------------
directors' qualifying shares required by law or other de minimis shares owned by
third parties as required by law) 100% of the capital stock of each class having
ordinary voting power, and 100% of the capital stock of every other class, in
each case, at the time as of which any determination is being made, is owned,
beneficially and of record, by the Company, or by one or more of the other
Wholly-Owned Subsidiaries, or both.
"Wilsonville Facility" means the Company's principal facility and
--------------------
headquarters located in Wilsonville, Oregon, and does not include any vacant
land owned by the Company in Wilsonville, Oregon.
10
1.02 Other Interpretive Provisions.
-----------------------------
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding," and
the word "through" means "to and including."
(c) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(d) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(e) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way of
consent, approval or waiver shall be deemed modified by the phrase "in its/their
sole discretion."
(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
1.03 Accounting Principles.
---------------------
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of the Company.
(c) If the Company or the Majority Banks notify the Agent that the
Company or the Majority Banks, as the case may be, desire to amend any covenant
in Article VII or any definition relating thereto to eliminate the effect of any
change in GAAP occurring after the Closing Date on the operation of any such
covenant, then the Company's compliance with such covenant shall be determined
in accordance with GAAP as in effect immediately prior to such change in GAAP
until either such notice is withdrawn or such covenant or related definition is
amended in a manner reasonably satisfactory to the Company and the Majority
Banks.
1.04 Designation of Unrestricted Subsidiaries.
----------------------------------------
(a) The Company, at its option, may from time to time designate
any Subsidiary as an "Unrestricted Subsidiary" for purposes hereof in accordance
with the following: (i) any Subsidiary that is not a Material Subsidiary may be
designated by the Company as an Unrestricted Subsidiary in its sole discretion;
(ii) any Materia Subsidiary may be designated by the Company as an Unrestricted
Subsidiary only with the prior written consent of the Majority Banks; provided,
--------
however, no Subsidiary may be designated as an Unrestricted Subsidiary if (A)
-------
immediately after giving effect to any such designation, the aggregate revenues
or aggregate assets of all Unrestricted Subsidiaries shall exceed 15% of the
aggregate revenues or aggregate
11
assets of the Company, its Subsidiaries and its Unrestricted Subsidiaries,
taken as a whole or (B) any Default or Event of Default then exists or would
result from any such designation.
(b) Whenever the Company desires to designate a Subsidiary as an
Unrestricted Subsidiary, the Company shall provide to the Agent a Notice of
Designation of Unrestricted Subsidiary (a "Notice of Designation") in
---------------------
substantially the form of Exhibit H-1 signed by a Responsible Officer. Subject
-----------
to the preceding subsection (a), any designation by the Company of an
Unrestricted Subsidiary shall become effective (i) in the case of any Subsidiary
that is not a Material Subsidiary, three Business Days after the Agent's receipt
of a completed Notice of Designation in respect of such Subsidiary, and (ii) in
the case of any Material Subsidiary, upon the written consent of the Majority
Banks. In the case of the preceding clause (ii), the Majority Banks shall use
good-faith efforts to consent to or deny the Company's request to designate a
Material Subsidiary as an Unrestricted Subsidiary within 30 days of the Agent's
receipt of a completed Notice of Designation in respect of such Material
Subsidiary.
ARTICLE II
THE CREDITS
-----------
2.01 Amounts and Terms of Commitments. Each Bank severally agrees, on the
--------------------------------
terms and conditions set forth herein, to make loans to the Company from time to
time on any Business Day during the period from the Closing Date to the
Revolving Termination Date, in an aggregate amount not to exceed at any time
outstanding the amount set forth opposite the name of such Bank on Schedule 2.01
-------------
(such amount as the same may be reduced under Section 2.05 or as a result of one
or more assignments under Section 10.08, the Bank's "Commitment"); provided,
---------- --------
however, that, after giving effect to any Borrowing, the aggregate principal
-------
amount of all outstanding Loans shall not at any time exceed the combined
Commitments. Within the limits of each Bank's Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under this Section
2.01, prepay under Section 2.06 and reborrow under this section 2.01.
2.02 Loan Accounts.
-------------
(a) The Loans made by each Bank shall be evidenced by one or more
loan accounts or records maintained by such Bank in the ordinary course of
business. The loan accounts or records maintained by the Agent and each Bank
shall be conclusive absent manifest error of the amount of the Loans made by the
Banks to the Company and the interest and payments thereon. Any failure so to
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Company hereunder to pay any amount owing with respect to
the Loans.
(b) Upon the request of any Bank made through the Agent, the Loans
made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall endorse on the schedules annexed
to its Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect thereto.
Each such Bank is irrevocably authorized by the Company to endorse its Note(s)
and each Bank's record shall be conclusive absent manifest error; provided,
--------
however, that the failure of a Bank to make, or an error in making, a notation
-------
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note to such Bank.
2.03 Procedure for Borrowing.
----------------------
(a) Each Borrowing shall be made upon the Company's irrevocable
written notice delivered to the Agent in the form of a Notice of Borrowing
(which notice must be received by the Agent prior to 9:00 a.m. (San Francisco
time)) (i) three Business Days prior to the requested Borrowing Date, in the
case of Offshore Rate Loans, and (ii) on the requested Borrowing Date, in the
case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an aggregate
minimum amount of $10,000,000, in the case of Offshore Rate Loans,
or $5,000,000, in the case of Base Rate Loans, or any multiple of
$1,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) the Type of Loans comprising the Borrowing; and
12
(D) in the case of Offshore Rate Loans, the duration of the
Interest Period applicable to such Loans included in such notice. If the
Notice of Borrowing fails to specify the duration of the Interest Period
for any Borrowing comprised of Offshore Rate Loans, such Interest Period
shall be three months.
(b) The Agent will promptly notify each Bank of its receipt of any Notice
of Borrowing and of the amount of such Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each Borrowing
available to the Agent for the account of the Company at the Agent's Payment
Office by 11:00 a.m. (San Francisco time) on the Borrowing Date requested by the
Company in funds immediately available to the Agent. The proceeds of all such
Loans will then be made available to the Company by the Agent at such office by
crediting the account of the Company on the books of BofA with the aggregate of
the amounts made available to the Agent by the Banks and in like funds as
received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent shall otherwise
consent, there may not be more than six (6) different Interest Periods in
effect.
2.04 Conversion and Continuation Elections.
-------------------------------------
(a) The Company may, upon irrevocable written notice to the Agent in
accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans,
or as of the last day of the applicable Interest Period, in the case of any
other Type of Loans, to convert any such Loans (or any part thereof in an
amount not less than $10,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $10,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
--------
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $10,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation to be
received by the Agent not later than 9:00 a.m. (San Francisco time) (i) three
Business Days in advance of the Conversion/Continuation Date, if the Loans
are to be converted into or continued as Offshore Rate Loans, and (ii) on the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
(D) other than in the case of conversions into Base Rate Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to Offshore
Rate Loans, (i) the Company has failed to select timely a new Interest Period to
be applicable to such Offshore Rate Loans, or (ii) any Default or Event of
Default then exists, the Company shall be deemed to have elected to convert such
Offshore Rate Loans into Base Rate Loans effective as of the expiration date of
such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Company, the
Agent will promptly notify each Bank of the details of any automatic conversion.
All conversions and continuations shall be made ratably according to the
respective outstanding principal amounts of the Loans with respect to which the
notice was given held by each Bank.
(e) Unless the Majority Banks otherwise consent, during the existence of a
Default or Event of Default, the Company may not elect to have a Loan converted
into or continued as an Offshore Rate Loan.
13
(f) After giving effect to any conversion or continuation of Loans, unless
the Agent shall otherwise consent, there may not be more than six (6) different
Interest Periods in effect.
2.05 Voluntary Termination or Reduction of Commitments. The Company may,
-------------------------------------------------
upon not less than five Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
amount of $10,000,000 or any multiple of $5,000,000 in excess thereof; unless,
------
after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the then-outstanding principal amount of the Loans would
exceed the amount of the combined Commitments then in effect. Once reduced in
accordance with this Section, the Commitments may not be increased. Any
reduction of the Commitments shall be applied to each Bank according to its Pro
Rata Share. All accrued commitment fees to, but not including the effective date
of any reduction or termination of Commitments, shall be paid on the effective
date of such reduction or termination.
2.06 Optional Prepayments. Subject to Section 3.04, the Company may, at any
--------------------
time or from time to time, (a) in the case of Offshore Rate Loans, upon not less
than three Business Days' irrevocable notice to the Agent, ratably prepay Loans
in whole or in part, in minimum amounts of $10,000,000 or any multiple of
$1,000,000 in excess thereof, or (b) in the case of Base Rate Loans, upon
irrevocable notice to the Agent given no later than 9:00 a.m. (San Francisco
time) on the date of prepayment, ratably prepay Loans in whole or in part, in
minimum amounts of $5,000,000 or any multiple of $1,000,000 in excess thereof.
Such notice of prepayment shall specify the date and amount of such prepayment
and the Type(s) of Loans to be prepaid. The Agent will promptly notify each Bank
of its receipt of any such notice, and of such Bank's Pro Rata Share of such
prepayment. If such notice is given by the Company, the Company shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
3.04.
2.07 Repayment. The Company shall repay to the Banks on the Revolving
---------
Termination Date the aggregate principal amount of Loans outstanding on such
date.
2.08 Interest.
--------
(a) Each Loan shall bear interest on the outstanding principal
amount thereof from the applicable Borrowing Date at a rate per annum equal
to the Offshore Rate or the Base Rate, as the case may be (and subject to the
Company's right to convert to other Types of Loans under Section 2.04), plus the
Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any prepayment
of Offshore Rate Loans under Section 2.06 for the portion of the Offshore Rate
Loans so prepaid and upon payment (including prepayment) in full thereof and,
during the existence of any Event of Default, interest shall be paid on demand
of the Agent at the request or with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, if any
amount of principal of or interest on any Loan, or any other amount payable
hereunder or under any other Loan Document is not paid in full when due (whether
at stated maturity, by acceleration, demand or otherwise), the Company agrees to
pay interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Base Rate plus the
Applicable Margin, plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Company shall pay such Bank interest at the highest rate
permitted by applicable law.
2.09 Fees.
----
(a) Arrangement, Agency Fees. The Company shall (i) pay an
------------------------
arrangement fee to the Arranger for the Arranger's own account, (ii) pay an
agency fee to the Agent for the Agent's own account, and (iii) pay a
participation fee to the Agent for the account of each Lender, in each case, as
required by the letter agreement ("Fee Letter") among the Company, the Arranger
----------
and Agent dated October 25, 2000.
(b) Commitment Fees. The Company shall pay to the Agent for the
---------------
account of each Bank a commitment fee on the average daily unused portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
14
Business Day of each calendar quarter based upon the daily utilization for that
quarter as calculated by the Agent, equal to the applicable "Commitment Fee" set
forth on the pricing grid attached as Annex I in accordance with the parameters
for calculation and adjustment of such Commitment Fee also set forth on Annex I.
Such commitment fee shall accrue from the Closing Date to the Revolving
Termination Date and shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter commencing on March 30, 2001 through the
Revolving Termination Date, with the final payment to be made on the Revolving
Termination Date; provided that, in connection with any reduction or termination
--------
of Commitments under Section 2.05, the accrued commitment fee calculated for the
period ending on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly payment
date. The commitment fees provided in this subsection shall accrue at all times
after the above-mentioned commencement date, including at any time during which
one or more conditions in Article IV are not met.
(c) Utilization Fees. The Company shall pay to the Agent for the
----------------
account of each Bank a utilization fee on the actual daily utilized portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization for that
quarter, as calculated by the Agent, at a rate per annum equal to the applicable
"Utilization Fee" set forth on the pricing grid attached as Annex I for each day
during such quarter on which utilization of the combined Commitments equals or
exceeds 33% at the close of the Agent's business on such day (or the close of
the Agent's business on the next preceding Business Day in the case of a
Saturday or Sunday or other day not a Business Day). For purposes of calculating
utilization under this subsection, the Commitments shall be deemed utilized to
the extent of the aggregate principal amount of Loans then outstanding. Such
utilization fee shall accrue from and after the Closing Date and shall be due
and payable quarterly in arrears on the last Business Day of each calendar
quarter commencing on March 30, 2001; provided that, in connection with any
--------
reduction or termination of Commitments under Section 2.05, the accrued
utilization fee calculated for the period ending on such date shall also be paid
on the date of such reduction or termination, with the following quarterly
payment being calculated on the basis of the period from such reduction or
termination date to such quarterly payment date. The utilization fees provided
in this subsection shall accrue at all times after the above-mentioned
commencement date.
2.10 Computation of Fees and Interest.
--------------------------------
(a) All computations of interest for Base Rate Loans when the
Base Rate is determined by BofA's prime rate shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Banks in the absence of manifest
error. The Agent will, at the request of the Company or any Bank, deliver to the
Company or the Bank, as the case may be, a statement showing the quotations used
by the Agent in determining any interest rate and the resulting interest rate.
2.11 Payments by the Company.
-----------------------
(a) All payments to be made by the Company shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Company shall be made to the Agent for the account
of the Banks at the Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 11:00 a.m. (San Francisco time) on
the date specified herein. The Agent will promptly distribute to each Bank its
Pro Rata Share (or other applicable share as expressly provided herein) of such
payment in like funds as received. Any payment received by the Agent later than
11:00 a.m. (San Francisco time) shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount distributed to such Bank, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Bank
until the date repaid.
15
2.12 Payments by the Banks to the Agent.
----------------------------------
(a) Unless the Agent receives notice from a Bank on or prior to
the Closing Date or, with respect to any Borrowing after the Closing Date, at
least one Business Day prior to the date of such Borrowing, that such Bank will
not make available as and when required hereunder to the Agent for the account
of the Company the amount of that Bank's Pro Rata Share of the Borrowing, the
Agent may assume that each Bank has made such amount available to the Agent in
immediately available funds on the Borrowing Date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent any Bank shall
not have made its full amount available to the Agent in immediately available
funds and the Agent in such circumstances has made available to the Company such
amount, that Bank shall on the Business Day following such Borrowing Date make
such amount available to the Agent, together with interest at the Federal Funds
Rate for each day during such period. A notice of the Agent submitted to any
Bank with respect to amounts owing under this subsection (a) shall be
conclusive, absent manifest error. If such amount is so made available, such
payment to the Agent shall constitute such Bank's Loan on the date of Borrowing
for all purposes of this Agreement. If such amount is not made available to the
Agent on the Business Day following the Borrowing Date, the Agent will notify
the Company of such failure to fund and, upon demand by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing. Such payment by the Company to the Agent shall be
without prejudice to the Company's rights, if any, against the Bank which failed
to fund.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a Loan
on such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.13 Sharing of Payments, Etc. If, other than as expressly provided
------------------------
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; provided, however, that if all or
-------- -------
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.10) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
3.01 Taxes.
-----
(a) Any and all payments by the Company to each Bank or the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or withhold
any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so
that, after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section), such Bank or the Agent, as the case may be, receives and
retains an amount equal to the sum it would have received and retained had
no such deductions or withholdings been made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance
with applicable law; and
16
(iv) the Company shall also pay to each Bank or the Agent
for the account of such Bank, at the time interest is paid, Further Taxes
in the amount that the respective Bank specifies as necessary to preserve
the after-tax yield the Bank would have received if such Taxes, Other Taxes
or Further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold harmless each Bank
and the Agent for the full amount of i) Taxes, ii) Other Taxes, and iii) Further
Taxes in the amount that the respective Bank specifies as necessary to preserve
the after-tax yield the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank or the Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by the Company
of Taxes, Other Taxes or Further Taxes, the Company shall furnish to each Bank
or the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to such Bank or the Agent.
(e) If the Company is required to pay any amount to any Bank or
the Agent pursuant to subsection (b) or (c) of this Section, then such Bank
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue, if such change in
the sole judgment of such Bank is not otherwise disadvantageous to such Bank.
3.02 Illegality.
----------
(a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to the Company through
the Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any
Offshore Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 3.04, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loan. If the Company is
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Bank, in the amount of
such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section, the
affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.03 Increased Costs and Reduction of Return.
---------------------------------------
(a) If any Bank determines that, due to either (i) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the Offshore
Rate) in or in the interpretation of any law or regulation or (ii) the
compliance by that Bank 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 such Bank of agreeing to make or making,
funding or maintaining any Offshore Rate Loans, then the Company shall be liable
for, and shall from time to time, upon demand (with a copy of such demand to be
sent to the Agent), pay to the Agent for the account of such Bank, additional
amounts as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Bank (or its Lending Office) or any corporation controlling the Bank with
any Capital Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Bank or any corporation
17
controlling the Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and such Bank's desired
return on capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Bank to the Company through the Agent, the
Company shall pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for such increase.
3.04 Funding Losses. The Company shall reimburse each Bank and hold each
--------------
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert a
Loan after the Company has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment in
accordance with any notice delivered under Section 2.06;
(d) the prepayment (including pursuant to Section 2.06) or other
payment (including after acceleration thereof) of an Offshore Rate Loan on a day
that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under the proviso of subsection
2.04(a) of any Offshore Rate Loan to a Base Rate Loan on a day that is not the
last day of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section and
under subsection 3.03(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
3.05 Inability to Determine Rates. If the Agent determines that for any
----------------------------
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to subsection 2.08(a) for
any requested Interest Period with respect to a proposed Offshore Rate Loan does
not adequately and fairly reflect the cost to the Banks of funding such Loan,
the Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans, as the case may
be, hereunder shall be suspended until the Agent revokes such notice in writing.
Upon receipt of such notice, the Company may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted by it. If the Company does not
revoke such Notice, the Banks shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the applicable notice
submitted by the Company, but such Loans shall be made, converted or continued
as Base Rate Loans instead of Offshore Rate Loans.
3.06 Reserves on Offshore Rate Loans. The Company shall pay to each Bank,
-------------------------------
as long as such Bank shall be required under regulations of the FRB to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as "Eurocurrency liabilities"),
additional costs on the unpaid principal amount of each Offshore Rate Loan equal
to the actual costs of such reserves allocated to such Loan by the Bank (as
determined by the Bank in good faith, which determination shall be conclusive
absent manifest error), payable on each date on which interest is payable on
such Loan, provided the Company shall have received at least 15 days' prior
written notice (with a copy to the Agent) of such additional interest from the
Bank. If a Bank fails to give notice 15 days prior to the relevant Interest
Payment Date, such additional interest shall be payable 15 days from receipt of
such notice.
3.07 Certificates of Banks. Any Bank claiming reimbursement or compensation
---------------------
under this Article III shall deliver to the Company (with a copy to the Agent) a
certificate setting forth in reasonable detail the amount payable to the Bank
hereunder and such certificate shall be conclusive and binding on the Company in
the absence of manifest error.
3.08 Delay. Failure or delay on the part of any Bank to demand compensation
-----
under this Article III shall not constitute a waiver of such Bank's right to
demand such compensation; provided, that no Bank shall be entitled to
--------
compensation under this Article III for any increased costs or reductions
incurred or suffered with respect to any date unless such Bank shall have
notified
18
the Company not more than 90 days after the later of (a) such date and (b) the
date on which such Bank shall have become aware of such costs or reductions.
3.09 Substitution of Banks. Upon the receipt by the Company from any Bank
---------------------
(an "Affected Bank") of a claim for compensation under Section 3.03 or if the
-------------
Company is required to pay any amount to any Affected Bank or the Agent for the
account of an Affected Bank pursuant to subsection 3.01(b) or 3.01(c) and such
Affected Bank has not changed the jurisdiction of its Lending Office so as to
eliminate such additional payment by the Company within 30 days after a request
by the Company to effect such change, the Company may: (i) request the Affected
Bank to use its best efforts to obtain a replacement bank or financial
institution satisfactory to the Company (which shall, in any event, be an
Eligible Assignee) to acquire and assume all or a ratable part of all of such
Affected Bank's Loans and Commitment (a "Replacement Bank"); (ii) request one or
----------------
more of the other Banks to acquire and assume all or part of such Affected
Bank's Loans and Commitment; or (iii) designate a Replacement Bank. Any such
designation of a Replacement Bank under clause (i) or (iii) or of an existing
Bank under clause (ii) shall be subject to the prior written consent of the
Agent (which consent shall not be unreasonably withheld or delayed), and shall
be effected in accordance with all requirements for an assignment set forth in
Section 10.08 hereof. Without limiting the generality of the foregoing, the
Company agrees to pay to each Affected Bank any amounts arising under Section
3.04 by virtue of such Affected Bank's replacement on a date other than the last
day of an Interest Period, with respect to any Offshore Rate Loans then
outstanding.
3.10 Survival. The agreements and obligations of the Company in this
--------
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.01 Conditions of Initial Loans. The obligation of each Bank to make its
---------------------------
initial Loan hereunder is subject to the condition that the Agent shall have
received on or before the Closing Date all of the following, in form and
substance reasonably satisfactory to the Agent and each Bank, and in sufficient
copies for each Bank:
(a) Credit Agreement and Notes. This Agreement and the Notes, if
--------------------------
any, executed by each party thereto;
(b) Resolutions; Incumbency.
-----------------------
(i) Copies of the resolutions of the board of
directors of the Company authorizing the transactions contemplated hereby,
certified as of the Closing Date by the Secretary or an Assistant Secretary
of the Company; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company certifying the names and true signatures of the
officers of the Company authorized to execute and deliver this Agreement,
and all other Loan Documents to be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the following
-------------------------------------
documents:
(i) the articles of incorporation and the bylaws of
the Company as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of the Company as of the Closing Date; and
(ii) a status certificate for the Company from the
Secretary of State of Oregon and certificates of foreign qualification and
good standing of the Company in California, New Jersey, Alabama, Texas and
Colorado in each case, as of a recent date, together with a bring-down
certificate by facsimile, dated the Closing Date;
(d) Legal Opinions. An opinion of Xxxx Xxxxx, Vice President and
--------------
General Counsel of the Company substantially in the form of Exhibit D-1 and of
Xxxxxx & Xxxxxxx substantially in the form of Exhibit D-2, each addressed to the
Agent and the Banks;
(e) Payment of Fees. Evidence of payment by the Company of all
---------------
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of BofA to the extent invoiced
prior to or on the Closing Date; including any such costs, fees and expenses
arising under or referenced in Sections 2.09 and 10.04;
19
(f) Certificate. A certificate signed by a Responsible Officer, dated
-----------
as of the Closing Date, stating that:
(i) the representations and warranties contained in Article V are
true and correct on and as of such date, as though made on and as of such
date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing; and
(iii) there has occurred since December 31, 1999, no event or
circumstance that has resulted or could reasonably be expected to result in
a Material Adverse Effect;
(g) Evidence reasonably satisfactory to the Agent that all amounts
owing under the Credit Agreement dated as of February 6, 1998, among the
Company, the lenders party thereto and BofA, as administrative agent, have been
paid in full and all commitments to lend thereunder terminated;
(h) A completed Compliance Certificate for the fiscal quarter ended
September 30, 2000; and
(i) Other Documents. Such other approvals, opinions, documents or
---------------
materials as the Agent or any Bank may reasonably request.
4.02 Conditions to All Borrowings. The obligation of each Bank to make any
----------------------------
Loan to be made by it (including its initial Loan) or to continue or convert any
Loan under Section 2.04 is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or Conversion/Continuation
Date:
(a) Notice of Borrowing or Conversion/Continuation. The Agent shall
----------------------------------------------
have received (with, in the case of any Loan on the Closing Date, a copy for
each Bank) a Notice of Borrowing or a Notice of Conversion/Continuation, as
applicable;
(b) Continuation of Representations and Warranties. The representations
----------------------------------------------
and warranties in Article V shall be true and correct in all material respects
on and as of such Borrowing Date or Conversion/Continuation Date with the same
effect as if made on and as of such Borrowing Date or Conversion/Continuation
Date (except to the extent such representations and warranties expressly refer
to an earlier date, in which case they shall be true and correct as of such
earlier date); and
(c) No Existing Default. No Default or Event of Default shall exist or
-------------------
shall result from such Borrowing or continuation or conversion.
Each Notice of Borrowing and Notice of Conversion/Continuation submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of each such notice and as of each Borrowing Date or
Conversion/Continuation Date, as applicable, that the conditions in this Section
4.02 are satisfied.
4.03 Additional Condition Precedent of Initial Loans. Without limiting the
-----------------------------------------------
operation of the preceding Sections 4.01 and 4.02, the obligation of each Bank
to make its initial Loan hereunder is subject to the additional condition
precedent that the Agent shall have received prior to the initial Borrowing Date
a completed certificate of a Responsible Officer of the Company which complies
with the requirements of the second proviso of subsection 6.02(c).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Agent and each Bank that:
5.01 Corporate Existence and Power. The Company and each of its Material
-----------------------------
Subsidiaries:
(a) is an entity duly organized, validly existing and, if applicable in
such jurisdiction, in good standing under the laws of the jurisdiction of its
incorporation or other establishment;
(b) has (i) the power and authority and (ii) all governmental licenses,
authorizations, consents and approvals, in each case, to own its assets, carry
on its business and to execute, deliver, and perform its obligations under the
Loan Documents to which it is a party;
20
(c) is duly qualified as a foreign corporation or other entity and is
licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license; and
(d) is in compliance with all Requirements of Law; except, in each case
referred to in clause (b)(ii), clause (c) or clause (d), to the extent that the
failure to do so is not reasonably expected to have a Material Adverse Effect.
5.02 Corporate Authorization; No Contravention. The execution, delivery and
-----------------------------------------
performance by the Company of this Agreement and each other Loan Document to
which the Company is party, have been duly authorized by all necessary corporate
action, and do not and will not:
(a) contravene the terms of any of the Company's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which the Company is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Company or its property is subject; or
(c) violate any Requirement of Law;
except, in each case referred to in the foregoing clauses (b) and (c),
where the conflict, breach, contravention, creation or violation would not
reasonably be expected to have a Material Adverse Effect.
5.03 Governmental Authorization. No approval, consent, exemption,
--------------------------
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company of
this Agreement or any other Loan Document.
5.04 Binding Effect. This Agreement and each other Loan Document to which
--------------
the Company is a party constitute the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
5.05 Litigation. Except as specifically disclosed in Schedule 5.05, there
---------- -------------
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
5.06 No Default. No Default or Event of Default exists or would result from
----------
the incurring of any Obligations by the Company. As of the Closing Date, neither
the Company nor any Subsidiary is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect,
or that would, if such default had occurred after the Closing Date, create an
Event of Default under subsection 8.01(e).
5.07 ERISA Compliance. Except as specifically disclosed in Schedule 5.07:
---------------- -------------
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable federal or state
law, except to the extent that the failure to comply is not reasonably expected
to have a Material Adverse Effect. Each Plan which is intended to qualify under
Section 401(a) of the Code has received or has applied for when due and not been
denied a favorable determination letter from the IRS and to the best knowledge
of the Company, nothing has occurred which would cause the loss of such
qualification. The Company and each ERISA Affiliate has made or duly provided
for all required contributions to any Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.
21
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Company nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
5.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
-----------------------------------
be used solely for the purposes set forth in and permitted by Section 6.12 and
Section 7.07. Neither the Company nor any Subsidiary is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock. To the extent that the Company
uses Loan proceeds to acquire shares of its own stock which is Margin Stock, the
Company intends to cause such acquired shares to be retired.
5.09 Title to Properties. The Company and each Subsidiary have good record
-------------------
and marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. As of
the Closing Date, the real and personal property of the Company and its Material
Subsidiaries is subject to no Liens, other than Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have filed all Federal and
-----
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. To the best knowledge of the Company, there is no proposed
tax assessment against the Company or any Subsidiary that would, if made, have a
Material Adverse Effect.
5.11 Financial Condition.
-------------------
(a) The unaudited consolidated balance sheets of the Company and its
Subsidiaries as of September 30, 2000, and the related consolidated statements
of operations and cash flows for the fiscal quarter ended on that date:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except for the absence of footnotes
and as otherwise expressly noted therein and subject to ordinary, good
faith year end audit adjustments; and
(ii) fairly present the financial condition of the Company and its
Subsidiaries as of the date thereof and results of operations for the
period covered thereby.
(b) The audited financial statements of the Company at December 31,
1999, reflect or disclose all material Indebtedness and other liabilities of the
Company and its consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent Obligations.
(c) Since December 31, 1999, there has been no Material Adverse Effect.
5.12 Environmental Matters. The Company conducts in the ordinary course of
---------------------
business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Company has reasonably concluded that, except as specifically
disclosed in Schedule 5.12, such Environmental Laws and Environmental Claims are
-------------
not, individually or in the aggregate, reasonably expected to have a Material
Adverse Effect.
5.13 Regulated Entities. None of the Company, any Person controlling the
------------------
Company, or any Subsidiary, is an "Investment Company" within the meaning of the
Investment Company Act of 1940. The Company is not subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
22
5.14 No Burdensome Restrictions. Neither the Company nor any Subsidiary is
--------------------------
a party to or bound by any Contractual Obligation, or subject to any restriction
in any Organization Document, or any Requirement of Law, which could reasonably
be expected to have a Material Adverse Effect.
5.15 Copyrights, Patents, Trademarks and Licenses, etc. Except as disclosed
-------------------------------------------------
on Schedule 5.15, the Company or its Subsidiaries own or are licensed or
-------------
otherwise have the right to use all of the patents, trademarks, service marks,
trade names, copyrights, contractual franchises, authorizations and other rights
that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of
the Company, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Company or any Subsidiary infringes upon any rights held by any
other Person. Except as specifically disclosed in Schedule 5.05, no claim or
-------------
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
5.16 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries
------------
other than those specifically disclosed in part (a) of Schedule 5.16 hereto and
-------------
has no material equity investments in any other corporation or entity other than
those specifically disclosed in part (b) of Schedule 5.16.
-------------
5.17 Insurance. Except as specifically disclosed in Schedule 5.17, the
--------- -------------
properties of the Company and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Company or such Subsidiary operates.
5.18 Swap Obligations. Neither the Company nor any of its Subsidiaries has
----------------
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company 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 to enter into any Swap Contract.
5.19 Full Disclosure. None of the representations or warranties made by the
---------------
Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
6.01 Financial Statements. The Company shall deliver to the Agent and
--------------------
each Bank, in form and detail reasonably satisfactory to the Agent and the
Majority Banks:
(a) as soon as available, but not later than 100 days after the end of
each fiscal year, a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidated statements of operations and cash flows for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of a nationally-recognized independent public
accounting firm ("Independent Auditor") which report shall state that such
consolidated financial statements present fairly the financial position for the
periods indicated in conformity with GAAP consistently applied. Such opinion
shall not be qualified or limited because of a restricted or limited examination
by the Independent Auditor of any material portion of the Company's or any
Material Subsidiary's records; and
(b) as soon as available, but not later than 50 days after the end of
each of the first three fiscal quarters of each fiscal year, a copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of such quarter and the related consolidated statements of operations
and cash flows for the period commencing on the first day and ending on the last
day of such quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP
23
(subject to the absence of footnotes and ordinary, good faith year-end audit
adjustments), the financial position and the results of operations of the
Company and the Subsidiaries.
6.02 Certificates; Other Information. The Company shall furnish to the
-------------------------------
Agent and each Bank:
(a) concurrently with the delivery of the financial statements referred
to in subsections 6.01(a) and (b), a Compliance Certificate executed by a
Responsible Officer;
(b) promptly, but in no event later than 10 days of filing the same,
copies of all financial statements and reports that the Company sends to its
shareholders, and copies of all financial statements and regular, periodical or
special reports (including Forms 10K, 10Q and 8K) that the Company or any
Subsidiary may make to, or file with, the SEC;
(c) not later than 20 days after the end of each calendar month, a
certificate of a Responsible Officer of the Company certifying (i) the aggregate
dollar amount of Returned Accounts for the Company and its Subsidiaries for such
calendar month, measured on a consolidated basis, (ii) the aggregate dollar
amount of accounts receivable (after reserves have been deducted) of the Company
and its Subsidiaries, measured on a consolidated basis, as of the last day of
such calendar month, (iii) the aggregate dollar amount of accounts receivable
(after reserves have been deducted) of the Company and its Subsidiaries that are
90 days or more past due, measured on a consolidated basis, as of the last day
of such calendar month, and (iv) the aggregate dollar amount of accounts
receivable (after reserves have been deducted) of the Company and its
Subsidiaries that are 90 days or more past due expressed as a percentage of the
aggregate dollar amount of accounts receivable (after reserves have been
deducted) of the Company and its Subsidiaries, in each case, measured on a
consolidated basis, as of the last day of such calendar month; provided,
--------
however, that unless and until a Borrowing has occurred hereunder, the Company
-------
shall be under no obligation to deliver the monthly certificates required under
this subsection 6.02(c); provided, further, however, that it shall be an
-------- ------- -------
additional condition precedent to the initial Borrowing hereunder that the
Company deliver to the Agent a certificate of a Responsible Officer of the
Company certifying retroactively the information required under the preceding
clauses (i) through (iv) for each calendar month ended from the Closing Date
through the initial Borrowing Date;
(d) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary as the Agent, at
the request of any Bank, may from time to time reasonably request.
Reports required to be delivered pursuant to subsections 6.01(a) or (b)
or 6.02(b) shall be deemed to have been delivered on the date on which the
Company posts such reports on the Company's website on the Internet at the
website address listed on Schedule 10.02 hereof or when such report is posted on
--------------
the Securities and Exchange Commission's website at xxx.xxx.xxx.; provided that
--------
(x) the Company shall deliver paper copies of such reports to the Agent or any
Bank who requests the Company to deliver such paper copies until written request
to cease delivering paper copies is given by the Agent or such Bank, (y) the
Company shall notify by facsimile or by electronic mail the Agent and each Bank
of the posting of any such reports, and (z) in every instance the Company shall
provide paper copies of the Compliance Certificates required by subsection
6.02(a) to the Agent and each of the Banks. Except for such Compliance
Certificates, the Agent shall have no obligation to request the delivery or to
maintain copies of the reports referred to above, and in any event shall have no
responsibility to monitor compliance by the Company with any such request for
delivery, and each Bank shall be solely responsible for requesting delivery to
it or maintaining its copies of such reports.
6.03 Notices. The Company shall promptly notify the Agent and each Bank:
-------
(a) of the occurrence of any Default or Event of Default;
(b) as soon as a Responsible Officer becomes aware thereof, of any
matter that could reasonably be expected to result in a Material Adverse Effect,
including (i) breach or non-performance of, or any default under, a Contractual
Obligation of the Company or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Company or any Subsidiary
and any Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Material Subsidiary; including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent and each Bank a copy of any notice with respect
to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event;
24
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by the
Company or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan
subject to Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension Liability; and
(d) upon the request from time to time (but not more frequently
than once each fiscal quarter unless a Default or an Event of Default exists) of
the Agent, the Swap Termination Values, together with a description of the
method by which such values were determined, relating to any then-outstanding
Swap Contracts to which the Company or any of its Subsidiaries is party.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under subsection 6.03(a) shall describe with particularity any and all clauses
or provisions of this Agreement or other Loan Document that have been breached
or violated, but the reasonable failure to identify all such clauses or
provisions shall not, of itself, constitute a failure to comply with subsection
6.03(a).
6.04 Preservation of Corporate Existence, Etc. The Company shall, and
----------------------------------------
shall cause each Material Subsidiary to:
(a) except as otherwise permitted by this Agreement, preserve
and maintain in full force and effect its corporate existence and good standing
under the laws of its state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business except
(i) in connection with transactions permitted by Section 7.03 and sales of
assets permitted by Section 7.02 or (ii) where such failure to preserve or
maintain could not reasonably be expected to result in a Material Adverse
Effect;
(c) use reasonable efforts, in the ordinary course of business,
to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.05 Maintenance of Property. The Company shall, and shall cause each
-----------------------
Subsidiary to, maintain and preserve all of its material property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted, except as permitted by Section 7.02. The Company and each
Subsidiary shall use the standard of care typical in the industry in the
operation and maintenance of its facilities.
6.06 Insurance. The Company shall maintain, and shall cause each Material
---------
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
6.07 Payment of Obligations. Unless the same are being contested in good
----------------------
faith by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Company or such Subsidiary, the Company shall, and
shall cause each Material Subsidiary to, pay and discharge as the same shall
become due and payable, all their respective obligations and liabilities,
including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets;
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property not otherwise permitted hereunder; and
(c) all indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
6.08 Compliance with Laws. The Company shall comply, and shall cause each
--------------------
Material Subsidiary to comply, in all material respects with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business
25
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.09 Compliance with ERISA. The Company shall, and shall cause each of
---------------------
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code, except in each case to the extent
that any failure to maintain such compliance or qualification or to make such
contributions could not reasonably be expected to have a Material Adverse
Effect.
6.10 Inspection of Property and Books and Records. The Company shall
--------------------------------------------
maintain and shall cause each Material Subsidiary to maintain adequate books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company or such Material
Subsidiary. The Company shall permit, and shall cause each Material Subsidiary
to permit, representatives and independent contractors of the Agent or any Bank
to visit and inspect any of their respective properties, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants at such reasonable times during normal business hours and as often
as may be reasonably necessary upon reasonable advance notice to the Company
and, in the case of any discussion with independent public accountants of the
Company or any Material Subsidiary, upon providing the Company's representatives
with a reasonable opportunity to participate in and/or be present at any such
discussion; provided, however, when an Event of Default exists the Agent or any
-------- -------
Bank may do any of the foregoing at the expense of the Company and at any time
during normal business hours without advance notice (except that the Company's
representatives shall be given a reasonable opportunity to participate in and/or
be present at any discussions with independent public accountants of the Company
or any Material Subsidiary).
6.11 Environmental Laws. The Company shall, and shall cause each
------------------
Subsidiary to, conduct its operations and keep and maintain its property in
compliance, in all material respects, with all Environmental Laws.
6.12 Use of Proceeds. The Company shall use the proceeds of the Loans for
---------------
working capital, acquisitions, share repurchases and other general corporate
purposes not in contravention of any Requirement of Law or of any Loan Document.
ARTICLE VII
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, unless the Majority
Banks waive compliance in writing:
7.01 Limitation on Liens. The Company shall not, and shall not suffer or
-------------------
permit any Material Subsidiary to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
---------------
(a) any Lien existing on property of the Company or any Subsidiary on
the Closing Date and set forth in Schedule 7.01 either (i) securing Indebtedness
-------------
outstanding on such date or (ii) which does not otherwise secure Indebtedness;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, levies, imposts, assessments or other
governmental charges which are not delinquent or remain payable without penalty,
or to the extent that non-payment thereof is permitted by Section 6.07, provided
that no notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
26
(f) Liens on the property of the Company or its Subsidiary securing
(i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, (ii) contingent obligations on
surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $20,000,000;
(h) easements, rights-of-way, zoning or use restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(i) Liens on assets acquired by the Company or any Subsidiary or on
any assets of Persons which become Subsidiaries, in each case, which assets or
Persons are acquired after the date of this Agreement, provided, however, that
-------- -------
such Liens existed at the time such assets were acquired by the Company or any
Subsidiary or such Persons became Subsidiaries and were not created in
anticipation thereof;
(j) purchase money security interests on any property acquired,
constructed or held by the Company or its Subsidiaries in the ordinary course of
business, securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property; provided that (i) any
-------- ----
such Lien attaches to such property concurrently with or within 30 days after
the acquisition or construction thereof, (ii) such Lien attaches solely to the
property so acquired or constructed 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 principal amount of the Indebtedness secured by any and
all such purchase money security interests shall not at any time exceed
$10,000,000;
(k) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
permitted hereunder;
(l) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution;
(m) Liens consisting of pledges of cash collateral or government
securities to secure on a xxxx-to-market basis Permitted Swap Obligations only,
provided that (i) the counterparty to any Swap Contract relating to any such
Permitted Swap Obligation is under a similar requirement to deliver similar
collateral from time to time to the Company or the Subsidiary party thereto on a
xxxx-to-market basis; and (ii) the aggregate value of such collateral so pledged
by the Company and the Subsidiaries together in favor of any counterparty does
not at any time exceed $10,000,000.
(n) Liens securing Refinancing Indebtedness (as defined in subsection
7.05(f)) which was originally secured by a Lien permitted by this Section 7.01,
provided that such Lien does not apply to any other property or assets of the
--------
Company or any Subsidiary other than the proceeds of the property or assets
subject to such Lien;
(o) Liens pursuant to Permitted Receivables Purchase Facilities
permitted by the terms hereof;
(p) other non-consensual Liens arising in the ordinary course of
business the existence or enforcement of which would not result in a Material
Adverse Effect; and
(q) other Liens securing Indebtedness and obligations in an aggregate
principal amount at any time outstanding not exceeding $5,000,000, provided that
--------
any such Lien shall not encumber cash (other than to the extent such cash
constitutes proceeds of the property subject to any such Lien), inventory or
accounts receivable.
7.02 Disposition of Assets. The Company shall not, and shall not suffer or
---------------------
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any property (including accounts and notes receivable, with or without recourse)
or enter into any agreement to do any of the foregoing, except:
27
(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) dispositions of inventory or equipment by the Company or any
Subsidiary to the Company or any Subsidiary pursuant to reasonable business
requirements;
(d) dispositions of Permitted Receivables pursuant to Permitted
Receivables Purchase Facilities; provided that (i) for those Permitted
--------
Receivables having a final maturity date which is less than 12 months after the
date such obligations arise, the value of such accounts receivable so sold by
the Company and its Subsidiaries shall not exceed $50,000,000 at any time
outstanding, and (ii) the value of all Permitted Receivables (whether or not
having a final maturity date which is less than 12 months after the date such
obligations arise) so sold by the Company and its Subsidiaries shall not exceed
$100,000,000 at any time outstanding; and provided, further, however, that no
-------- ------- -------
dispositions of any Permitted Receivables shall be permitted at any time that
any of the following circumstances exist: (A) Returned Accounts for the Company
and its Subsidiaries for any calendar month shall have exceeded $10,000,000 in
the aggregate, measured on a consolidated basis, (B) accounts receivable (after
reserves have been deducted) of the Company and its Subsidiaries that are 90
days or more past due shall be greater than 10% of accounts receivable (after
reserves have been deducted) of the Company and its Subsidiaries, in each case,
measured on a consolidated basis, (C) the TNW Buffer measured as of the last day
of any fiscal quarter shall be less than 50% of the TNW Buffer measured as of
the last day of the fiscal quarter immediately preceding such fiscal quarter,
(D) if after giving effect to such disposition, the Company would not be in pro
forma compliance with the financial covenants set forth in subsections 7.14(a)
through (d), measured as of the last day of the fiscal quarter then most
recently ended for which a Compliance Certificate has been delivered to the
Agent and the Banks pursuant to subsection 6.02(b), or (E) any Event of Default
then exists or would result from such disposition;
(e) the sale of the Wilsonville Facility for fair market value (as
determined in good faith at the time of such sale by the board of directors of
the Company); provided that no Default or Event of Default then exists or would
--------
result from such sale;
(f) the sale of any property listed on Schedule 7.02 for fair market
-------------
value (as determined in good faith at the time of such sale by the board of
directors of the Company or the applicable Subsidiary, as the case may be);
provided that no Default or Event of Default then exists or would result from
--------
such sale;
(g) dispositions not otherwise permitted hereunder which are made for
fair market value; provided, that (i) at the time of any disposition, no Event
--------
of Default shall exist or shall result from such disposition, (ii) the aggregate
net book value of all assets so sold by the Company and its Subsidiaries,
together, shall not exceed in any fiscal year $10,000,000, and (iii) any such
disposition made pursuant to this subsection (g) shall not be of accounts
receivable of the Company or any of its Subsidiaries; and
(h) dispositions to the extent permitted under Section 7.03.
7.03 Consolidations and Mergers. The Company shall not, and shall not
--------------------------
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary may merge with the Company, provided that the
--------
Company shall be the continuing or surviving corporation, or with any one or
more Subsidiaries, provided that if any transaction shall be between a
--------
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation;
(b) any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise), to the Company or a Wholly-Owned
Subsidiary;
(c) the Company or any Subsidiary may merge with any Person in an
Acquisition so long as (i) the Company or such Subsidiary shall be the
continuing or surviving entity, provided that in any such merger involving the
--------
Company, the Company shall be the surviving entity, (ii) such Acquisition is
otherwise permitted hereunder and (iii) immediately before and after giving
effect to such merger no Default or Event of Default shall exist; and
(d) any Subsidiary may merge with any Person pursuant to a
disposition of such Subsidiary or the assets of such Subsidiary, in each case,
permitted under Section 7.02.
28
7.04 Loans and Investments. The Company shall not purchase or acquire, or
---------------------
suffer or permit any Subsidiary to purchase or acquire, for cash or property, or
make any commitment therefor for cash or property, any capital stock, equity
interest, or any obligations or other securities of, or any interest in, any
Person, or make or commit to make any Acquisitions, or make or commit to make
any advance, loan, extension of credit or capital contribution to or any other
investment in, any Person including any Affiliate of the Company (together,
"Investments"), except for:
-----------
(a) Investments held by the Company or any Subsidiary in the form of
Cash Equivalents or short term marketable securities or Permitted Investments;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
ordinary course of business;
(c) Investments by the Company in any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries in the Company or
another of its Wholly-Owned Subsidiaries;
(d) Investments incurred in order to consummate Acquisitions
otherwise permitted herein, provided that (i) the cash consideration given for
--------
any such Acquisition, together with the cash consideration given for all prior
Acquisitions undertaken by the Company and its Subsidiaries after the Closing
Date, shall not exceed $50,000,000 in any fiscal year, (ii) such Acquisitions
are undertaken in accordance with all applicable Requirements of Law, and (iii)
the prior, effective written consent or approval to such Acquisition of the
board of directors or equivalent governing body of the acquiree is obtained;
(e) Subject to clause (i) in subsection 7.04(d) above, Investments
incurred in order to consummate Acquisitions otherwise permitted herein for
which all or a portion of the consideration given for any such Acquisition is
common stock of the Company or any Subsidiary, provided that (i) such
--------
Acquisitions are undertaken in accordance with all applicable Requirements of
Law and (ii) the prior, effective written consent or approval to such
Acquisition of the board of directors or equivalent governing body of the
acquiree is obtained (notwithstanding this clause (ii), if all of the
consideration given for any such Acquisition is common stock of the Company or
any Subsidiary, then the prior, effective written consent or approval to such
Acquisition of the board of directors or equivalent governing body of the
acquiree shall not be required hereby);
(f) Investments constituting Permitted Swap Obligations or payments
or advances under Swap Contracts relating to Permitted Swap Obligations;
(g) Investments permitted under subsections 7.10(b) and (c);
(h) Investments incurred in order to consummate Acquisitions not
otherwise permitted herein subject to the prior written consent of the Majority
Banks;
(i) loans made by the Company or any Subsidiary in the ordinary
course of business to a person not an Affiliate of the Company in an aggregate
principal amount not exceeding $15,000,000 at any time outstanding for all such
loans;
(j) loans made by the Company or any Subsidiary to employees in the
ordinary course of business consistent with past practice in principal amounts
not exceeding $2,500,000 in the aggregate at any time outstanding and not more
than $500,000 to any individual employee; and
(k) other Investments not exceeding $30,000,000 in any fiscal year as
to all such Investments in the aggregate; provided that if all such Investments
--------
permitted by this subsection (k) exceed $15,000,000 in the aggregate in any
fiscal year, then the $50,000,000 limitation set forth in the preceding
subsection (d) shall be reduced for such fiscal year by the amount of such
excess; and
(l) Investments of the Company or its Subsidiaries outstanding on the
Closing Date and identified on Schedule 7.04.
7.05 Limitation on Indebtedness. The Company shall not, and shall not
--------------------------
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 7.08;
29
(c) Indebtedness existing on the Closing Date and set forth in
Schedule 7.05;
-------------
(d) Indebtedness secured by Liens permitted by subsection
7.01(i), (j), (k) and (m);
(e) Indebtedness incurred in connection with leases permitted
pursuant to Section 7.09;
(f) extensions, renewals or refinancings of Indebtedness
permitted under this Section 7.05, so long as (i) such Indebtedness (the
"Refinancing Indebtedness") is in an aggregate principal amount not greater than
------------------------
the aggregate principal amount of the Indebtedness being extended, renewed or
refinanced plus the amount of any premiums required to be paid therefor and fees
and expenses associated therewith, (ii) such Refinancing Indebtedness has a
later or equal final maturity and a longer or equal weighted average life as the
Indebtedness being extended, refinanced or renewed, (iii) the interest rate
applicable to such Refinancing Indebtedness shall not exceed a market rate (as
determined in good faith by the board of directors of the Company or the
relevant Subsidiary, as the case may be) as of the time of such extension,
renewal or refinancing, (iv) if the Indebtedness being extended, renewed or
refinanced is subordinated to the Obligations, such Refinancing Indebtedness is
subordinated to the Obligations to the same extent as the Indebtedness being
extended, renewed or refinanced and (v) at the time of and after giving effect
to such extension, renewal or refinancing, no Default or Event of Default shall
exist;
(g) Indebtedness incurred by the Company or any Subsidiary as
consideration given for an Acquisition permitted hereunder (i) in an aggregate
principal amount at any time outstanding not to exceed $10,000,000 plus (ii) any
----
additional Indebtedness that is subordinated to the Obligations pursuant to a
subordination agreement in substantially the form of Exhibit G (a "Subordination
--------- -------------
Agreement"), with such changes as the Agent or the Majority Banks may reasonably
---------
request or desire;
(h) Indebtedness incurred by the Company or any Subsidiary
pursuant to Permitted Receivables Purchase Facilities permitted hereunder; and
(i) other unsecured Indebtedness in an aggregate principal amount
outstanding not exceeding $10,000,000 at any time.
7.06 Transactions with Affiliates. Except as otherwise expressly
----------------------------
permitted hereunder, the Company shall not, and shall not suffer or permit any
Subsidiary to, enter into any transaction with any Affiliate of the Company,
except upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person not an Affiliate of the Company or such Subsidiary; provided, that the
--------
loans permitted by subsection 7.04(j) and the Company's or any Subsidiary's
employee relocation program as in effect on the Closing Date, as such programs
may be amended or otherwise modified after the Closing Date in the ordinary
course of business, shall not be subject to the application of this Section
7.06.
7.07 Use of Proceeds.
---------------
(a) The Company shall not, and shall not suffer or permit any
Subsidiary to, use any portion of the Loan proceeds, directly or indirectly,
otherwise than in connection with the purchase of shares of its own stock for
retirement, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, in each case, in violation of Regulation T, U or X of the FRB,
or (iv) to acquire any security in any transaction that is subject to Section
13(d) or 14(d) of the Exchange Act.
(b) The Company shall not, directly or indirectly, use any
portion of the Loan proceeds (i) knowingly to purchase Ineligible Securities
from the Arranger during any period in which the Arranger makes a market in such
Ineligible Securities, (ii) knowingly to purchase during the underwriting or
placement period Ineligible Securities being underwritten or privately placed by
the Arranger, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Arranger and issued by or for
the benefit of the Company or any Affiliate of the Company. The Arranger is a
registered broker-dealer and permitted to underwrite and deal in certain
Ineligible Securities; and "Ineligible Securities" means securities which may
---------------------
not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. (S) 24, Seventh), as
amended.
(c) The Company shall not, and shall not suffer or permit any
Subsidiary to, use any portion of the Loan proceeds in excess of $10,000,000,
directly or indirectly, to satisfy, in whole or in part, any limited recourse
obligations arising under any Permitted Receivables Purchase Facility.
30
7.08 Contingent Obligations. The Company shall not, and shall not
---------------------
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course
of business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its Subsidiaries
existing as of the Closing Date and listed in Schedule 7.08;
-------------
(d) Contingent Obligations with respect to Surety Instruments
incurred in the ordinary course of business;
(e) Guaranty Obligations by the Company of Indebtedness and other
obligations of a Subsidiary, or by any Subsidiary of the Indebtedness and other
obligations of the Company or any other Subsidiary, provided that, in each case,
--------
such Indebtedness and other obligations are otherwise permitted hereunder; and
(f) Contingent Obligations under the Company's or any
Subsidiary's employee relocation plan as in effect on the Closing Date, as such
plans may be amended or otherwise modified after the Closing Date in the
ordinary course of business; and
(g) Contingent Obligations in respect of any bond or credit
enhancement posted or otherwise provided by or on behalf of the Company in
connection with the appeal by the Company of any judgment, order, decree or
arbitration award entered against the Company relating to the ongoing patent
litigation between the Company and Cadence Design Systems, Inc., provided that
the aggregate principal amount of such bond(s) or credit enhancement(s) shall
not at any time exceed $20,000,000.
7.09 Lease Obligations. The Company shall not, and shall not suffer or
-----------------
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(a) operating leases existing on or entered into by the Company
or any Subsidiary after the Closing Date in the ordinary course of business and
reported in the Company's consolidated financial statements in accordance with
GAAP, provided that payments in respect of all such operating leases, together
--------
with all payments in respect of capital leases permitted under clause (c) of
this Section, do not exceed $30,000,000 in the aggregate in any fiscal year;
(b) leases entered into by the Company or any Subsidiary after
the Closing Date pursuant to sale-leaseback transactions (i) permitted under
subsection 7.02(g) and (ii) in connection with a sale of the Wilsonville
Facility permitted under subsection 7.02(e);
(c) capital leases, other than those permitted under clause (b)
of this Section, entered into by the Company or any Subsidiary after the Closing
Date to finance the acquisition of equipment; provided that the aggregate annual
--------
rental payments for all such capital leases, together with all payments in
respect of operating leases permitted under clause (a) of this Section, shall
not exceed $30,000,000 in the aggregate in any fiscal year; and
(d) leases entered into by Persons which become Subsidiaries
after the date of this Agreement, provided that such leases existed at the time
--------
the respective Persons became Subsidiaries and were not created in anticipation
thereof.
7.10 Restricted Payments. The Company shall not declare or make any
-------------------
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its capital
stock, or purchase, redeem or otherwise acquire for value any shares of its
capital stock or any warrants, rights or options to acquire such shares, now or
hereafter outstanding; except that:
(a) the Company may declare and make dividend payments or other
distributions payable solely in its common stock;
(b) so long as no Default or Event of Default exists or would
result therefrom, the Company may purchase, redeem or otherwise acquire shares
of its common stock or warrants or options to acquire any such shares pursuant
to any employee stock option or purchase plan; provided that all such purchases,
--------
redemptions or other acquisitions otherwise permitted under this clause (b) do
not exceed $15,000,000 in the aggregate in any fiscal year; and
(c) so long as no Default or Event of Default exists or would
result therefrom, the Company may otherwise purchase, redeem or acquire shares
of its common stock or warrants or options to acquire any such shares; provided
--------
that all such
31
purchases, redemptions or other acquisitions otherwise permitted under this
clause (c) do not exceed (i) $180,000,000 in the aggregate and (ii) 20,100,000
shares (as such number may be adjusted for stock dividends and stock splits
occurring after the Closing Date). For the sake of clarity, the parties hereto
acknowledge and agree that whenever assets or property other than cash is given
for any purchase, redemption or other acquisition otherwise permitted under this
clause (c), the value of such purchase, redemption or other acquisition shall be
equal to the net book value at such time of such non-cash assets or property for
purposes of determining the Company's compliance with the $180,000,000
limitation set forth in the preceding clause (i) .
7.11 ERISA. The Company shall not, and shall not suffer or permit any
-----
of its ERISA Affiliates to engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan or engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA which has
resulted or could reasonably be expected to result in liability of the Company
in an aggregate amount in excess of $5,000,000.
7.12 Change in Business. The Company shall not, and shall not suffer
------------------
or permit any Material Subsidiary to, engage in any material line of business
substantially different from design automation and reasonably related lines of
business.
7.13 Accounting Changes. The Company shall not make any significant
------------------
change in accounting treatment or reporting practices, except as required by
GAAP, or change the fiscal year of the Company.
7.14 Financial Covenants.
-------------------
(a) Adjusted Quick Ratio. The Company shall not as of the end of
--------------------
any fiscal quarter suffer or permit its ratio (determined in respect of the
Company and its Subsidiaries on a consolidated basis) of (i) cash plus the value
----
(valued in accordance with GAAP) of all Cash Equivalents plus net current
----
accounts receivable (valued in accordance with GAAP), other than cash, Cash
Equivalents and net current accounts receivable subject to a Lien securing
Indebtedness, to (ii) Consolidated Current Liabilities (other than liabilities
secured by a Lien on cash, Cash Equivalents or net current accounts receivable),
to be less than 1.10 to 1.00.
(b) Minimum Tangible Net Worth. As long as cumulative stock
--------------------------
repurchases and cash Acquisitions by the Company and its Subsidiaries are less
than $150,000,000 (less the amount of all stock repurchases by the Company and
----
its Subsidiaries occurring in the fourth fiscal quarter of 2000) in the
aggregate after December 31, 2000, the Company shall not permit Consolidated
Tangible Net Worth as of the end of any fiscal quarter to be less than (i) the
greater of (A) 90% of Consolidated Tangible Net Worth as of December 31, 2000
(calculated without giving effect to any stock repurchases by the Company and
its Subsidiaries occurring in the fourth fiscal quarter of 2000), and (B)
$200,000,000, plus (ii) 50% of consolidated net income (before non-cash merger
----
and acquisition related expense) earned in each quarterly accounting period
beginning with the quarter ended March 31, 2001 (to the extent such number is
positive), plus (iii) 100% of the Net Issuance Proceeds of any new equity the
----
Company issues after December 31, 2000, minus any acquisition-related write-offs
-----
taken within 90 days of the applicable Acquisition for Acquisitions financed
with the issuance of the stock, minus (iv) up to $230,000,000 (less the amount
----- ----
of all stock repurchases by the Company and its Subsidiaries occurring in the
fourth fiscal quarter of 2000) for (A) the repurchase of stock, (B) the
capitalization of intangible assets and (C) write-offs taken within 90 days of
the applicable Acquisition, in each case, resulting from cash Acquisitions
consummated after December 31, 2000; provided, however, if at any time after
--------- -------
December 31, 2000, the cumulative stock repurchases and cash Acquisitions by the
Company and its Subsidiaries equals or exceeds $150,000,000 (less the amount of
----
all stock repurchases by the Company and its Subsidiaries occurring in the
fourth fiscal quarter of 2000), then the "Minimum Tangible Net Worth" covenant
set forth in this subsection 7.14(b) shall be recalculated (and applied
retroactively) so that the percentage in clause (i) (A) above will be 95%, the
dollar amount in clause (i)(B) above will be $218,000,000 and the percentage in
clause (ii) above will be 75%.
(c) Leverage Ratio. The Company shall not as of the end of any
--------------
fiscal quarter suffer or permit its Leverage Ratio to be greater than 1.10 to
1.00.
(d) Minimum Cash and Accounts Receivable. The Company shall not
------------------------------------
as of the end of any fiscal quarter suffer or permit its ratio (determined on a
consolidated basis) of (i) cash plus the value (valued in accordance with GAAP)
----
of all Cash Equivalents plus 75% of net current accounts receivable (valued in
----
accordance with GAAP) owing by account obligors located in the United States,
other than cash, Cash Equivalents and net current accounts receivable subject to
a Lien securing Indebtedness, to (ii) the then outstanding principal amount of
the Loans, to be less than 1.25 to 1.00.
For the avoidance of doubt, (i) Unrestricted Subsidiaries shall
not be included in the calculation of any of the financial measures set forth in
the preceding clauses (a), (c) or (d), and (ii) Permitted Receivables sold
pursuant to any Permitted Receivables Purchase Facility permitted hereunder
shall not be included in the calculation of any of the financial measures set
forth in the preceding clauses (a) through (d).
32
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
8.01 Event of Default. Any of the following shall constitute an "Event
---------------- -----
of Default":
----------
(a) Non-Payment. The Company fails to pay, (i) when and as
-----------
required to be paid herein, any amount of principal of any Loan, or (ii) within
five days after the same becomes due, any interest, fee or any other amount
payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by
--------------------------
the Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) Specific Defaults. The Company fails to perform or observe
-----------------
any term, covenant or agreement contained in any of Section 6.01, 6.03(a) or
6.12 or in Article VII; or
(d) Other Defaults. The Company fails to perform or observe any
--------------
other term or covenant contained in this Agreement or any other Loan Document,
and such default shall continue unremedied for a period of 30 days after the
earlier of (i) the date upon which a Responsible Officer knew of such failure or
(ii) the date upon which written notice thereof is given to the Company by the
Agent or any Bank; or
(e) Cross-Acceleration. (i) The Company or any Material
------------------
Subsidiary (A) fails to make any payment in respect of any Indebtedness or
Contingent Obligation (other than in respect of Swap Contracts), having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $10,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure, or (B) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure if the effect of such failure, event or condition under
the preceding clauses (A) or (B) is to cause such Indebtedness to be declared to
be due and payable prior to its stated maturity, or such Contingent Obligation
to become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (1) any event of default under such Swap
Contract as to which the Company or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (2) any Termination Event (as so defined) as
to which the Company or any Subsidiary is an Affected Party (as so defined),
and, in either event, the Swap Termination Value owed by the Company or such
Subsidiary as a result thereof is greater than $10,000,000; or
(f) Insolvency; Voluntary Proceedings. The Company or any
---------------------------------
Material Subsidiary (i) ceases or fails to be solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
-----------------------
Proceeding is commenced or filed against the Company or any Material Subsidiary,
or any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Company's or any Material
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Company or any Material Subsidiary admits
the material allegations of a petition against it in any Insolvency Proceeding,
or an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company or any Material Subsidiary
acquiesces in the appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or other similar Person
for itself or a substantial portion of its property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
-----
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Company under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$10,000,000; (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds $10,000,000; or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $10,000,000; or
33
(i) Monetary Judgments. One or more non-interlocutory judgments,
------------------
non-interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of $20,000,000 or more, and the same shall remain
unsatisfied, unvacated and unstayed pending appeal for a period of 10 days after
the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or
----------------------
decree is entered against the Company or any Subsidiary which has a Material
Adverse Effect, and 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; or
(k) Change of Control. There occurs any Change of Control; or
-----------------
(l) Adverse Change. There occurs a Material Adverse Effect; or
--------------
(m) Invalidity of Subordination Provisions. Any Subordination
--------------------------------------
Agreement or the subordination provisions of any agreement or instrument
governing any Indebtedness which is subordinated to the Indebtedness hereunder
is for any reason revoked, invalidated or otherwise breached by the Company or
any Subsidiary, or otherwise ceases to be in full force and effect as a result
of any act or omission of the Company or any Subsidiary, or the Company or any
Subsidiary otherwise contests in any manner the validity or enforceability
thereof or denies that it has any further liability or obligation thereunder.
8.02 Remedies. If any Event of Default occurs, the Agent shall, at the
--------
request of, or may, with the consent of, the Majority Banks,
(a) declare the commitment of each Bank to make Loans to be
terminated, whereupon such commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
provided, however, that upon the occurrence of any event specified in subsection
-------- -------
(f) or (g) of Section 8.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or any
Bank.
8.03 Rights Not Exclusive. The rights provided for in this Agreement
--------------------
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
---------
9.01 Appointment and Authorization; "Agent". Each Bank hereby
-------------------------------------
irrevocably (subject to Section 9.09) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
34
9.02 Delegation of Duties. The Agent may execute any of its duties
--------------------
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall (i)
------------------
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
9.04 Reliance by Agent.
-----------------
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Banks as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
9.05 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks, unless the Agent shall
have received written notice from a Bank or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its receipt
of any such notice. The Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Majority Banks in
accordance with Article VIII; provided, however, that unless and until the Agent
--------- -------
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the
---------------
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and credit worthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and credit worthiness of the Company. Except for notices,
reports and other documents expressly herein required to be furnished to the
Banks by the Agent, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or credit
worthiness of the Company which may come into the possession of any of the
Agent-Related Persons.
35
9.07 Indemnification of Agent. Whether or not the transactions contemplated
------------------------
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however, that no Bank shall be liable
-------- -------
for the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse the Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. BofA and its Affiliates may make loans
----------------------------
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
9.09 Successor Agent. The Agent may, and at the request of the Majority
---------------
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Majority Banks shall appoint from among the
Banks a successor agent for the Banks which successor agent shall be approved by
the Company. If no successor agent is appointed prior to the effective date of
the resignation of the Agent, the Agent may appoint, after consulting with the
Banks and the Company, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Majority Banks appoint a successor agent as provided for above.
9.10 Withholding Tax.
---------------
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly completed
and executed copies of IRS Form W-8BEN before the payment of any interest
in the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Bank,
two properly completed and executed copies of IRS Form W-8ECI before the
payment of any interest is due in the first taxable year of such Bank and
in each succeeding taxable year of such Bank during which interest may be
paid under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form W-8BEN and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Company to such Bank, such Bank agrees to notify the
Agent of the percentage amount in which it is no
36
longer the beneficial owner of Obligations of the Company to such Bank. To the
extent of such percentage amount, the Agent will treat such Bank's IRS Form
W-8BEN as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form W-8ECI with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of the Company to such
Bank, such Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify the Agent fully for all amounts paid, directly
or indirectly, by the Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
9.11 Documentation or Syndication Agent; Lead Managers. None of the Banks
-------------------------------------------------
identified on the facing page or signature pages of this Agreement as a
"documentation agent," "syndication agent" or "lead manager" shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Banks as such. Without limiting the
foregoing, none of the Banks so identified as a "documentation agent,"
"syndication agent" or "lead manager" shall have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
-------------
10.01 Amendments and Waivers. No amendment or waiver of any provision of
----------------------
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Company and acknowledged by the Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
-------- -------
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Banks and the Company and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 8.02);
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or (subject to clause (ii) of the proviso below) any fees or other
amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section, or Section 2.13, or any provision herein
providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
-------- -------
writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other
37
Loan Document, and (ii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed by the parties thereto.
10.02 Notices.
-------
(a) All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Company by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on Schedule 10.02, and
--------------
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on Schedule 10.02; or, as directed to the Company or the Agent, to such
--------------
other address as shall be designated by such party in a written notice to the
other parties, and as directed to any other party, at such other address as
shall be designated by such party in a written notice to the Company and the
Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or IX to the Agent shall not be effective until
actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Company. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice and the Agent and the Banks shall not have any liability to
the Company or other Person on account of any action taken or not taken by the
Agent or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans shall not be affected in any way or
to any extent by any failure by the Agent and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the Agent
and the Banks of a confirmation which is at variance with the terms understood
by the Agent and the Banks to be contained in the telephonic or facsimile
notice.
10.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay
------------------------------
in exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
10.04 Costs and Expenses. The Company shall:
-------------------------------------
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent) within
thirty (30) calendar days after demand (subject to subsection 4.01(e)) for all
reasonable costs and expenses incurred by BofA (including in its capacity as
Agent) in connection with its due diligence in respect of, the development,
preparation, delivery, administration, syndication and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
BofA (including in its capacity as Agent) with respect thereto; and
(b) pay or reimburse the Agent, the Arranger and each Bank within
five Business Days after demand (subject to subsection 4.01(e)) for all costs
and expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
10.05 Company Indemnification. Whether or not the transactions contemplated
-----------------------
hereby are consummated, the Company shall indemnify, defend and hold the
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
------------------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
settlement costs, charges, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time (including at any time
following repayment of the Loans and the termination, resignation or replacement
of the Agent or replacement of any Bank) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, with respect to any demand, claim,
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement or the Loans
or the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
-----------------------
provided, that the Company shall have no obligation hereunder to any Indemnified
--------
Person with
38
respect to Indemnified Liabilities resulting solely from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this Section
shall survive payment of all other Obligations.
10.06 Payments Set Aside. To the extent that the Company makes a payment to
------------------
the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
10.07 Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
10.08 Assignments, Participations, etc.
--------------------------------
(a) Any Bank may, with the written consent of the Company at all
times other than during the existence of a Default or an Event of Default and
the Agent, which consents shall not be unreasonably withheld, at any time assign
and delegate to one or more Eligible Assignees (provided that no written consent
of the Company or the Agent shall be required in connection with any assignment
and delegation by a Bank to an Eligible Assignee that is an Affiliate of such
Bank) (each an "Assignee") all, or any ratable part of all, of the Loans, the
--------
Commitments and the other rights and obligations of such Bank hereunder, in a
minimum amount of $5,000,000; provided, however, that the Company and the Agent
-------- -------
may continue to deal solely and directly with such Bank in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Company and the Agent by
such Bank and the Assignee; (ii) such Bank and its Assignee shall have delivered
to the Company and the Agent an Assignment and Acceptance in the form of Exhibit
-------
E ("Assignment and Acceptance") and (iii) the assignor Bank or Assignee has paid
- -------------------------
to the Agent a processing fee in the amount of $3,500.
(b) From and after the date that the Agent notifies the assignor Bank
that it has received (and provided its consent with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank under
the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the
Agent that it has received an executed Assignment and Acceptance and payment of
the processing fee, (and provided that it consents to such assignment in
accordance with subsection 10.08(a)), the Company shall, if requested by the
Agent or any Bank, execute and deliver to the Agent new Notes evidencing such
Assignee's assigned Loans and Commitment and, if the assignor Bank has retained
a portion of its Loans and its Commitment, replacement Notes in the principal
amount of the Loans retained by the assignor Bank (such Notes to be in exchange
for, but not in payment of, the Notes held by such Bank). Immediately upon each
Assignee's making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Bank
pro tanto.
--- -----
(d) Any Bank may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Company (a "Participant") participating
-----------
interests in any Loans, the Commitment of that Bank and the other interests of
that Bank (the "originating Bank") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Bank's obligations under this
-------- -------
Agreement shall remain unchanged, (ii) the originating Bank shall remain solely
responsible for the performance of such obligations, (iii) the Company and the
Agent shall continue to deal solely and directly with the originating Bank in
connection with the originating Bank's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Bank shall transfer or grant
any participating interest under which the Participant has rights to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment, consent or waiver
would require unanimous consent of the Banks as described in the first proviso
----- -------
to Section 10.01. In the case of any such participation, the Participant shall
be entitled to the benefit of Sections 3.01, 3.03 and 10.05 (provided that the
Participant shall not be entitled to receive any greater payment under Sections
3.01 or 3.03 than the originating Bank would have been entitled to receive with
respect to the participation sold to such Participant and the Participant shall
not be entitled to indemnification for Attorney Costs of counsel selected solely
by and representing the interests only of the Participant) as though
39
it were also a Bank hereunder, and if amounts outstanding under this Agreement
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss. 203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
10.09 Confidentiality. Each Bank agrees to take and to cause its Affiliates
---------------
to take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Company and provided to it by the Company or any Subsidiary, or by the Agent
on the Company's or such Subsidiary's behalf, under this Agreement or any other
Loan Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Company or any Subsidiary; except to
the extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, however, that any Bank may disclose such
-------- -------
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process (provided that such Bank shall use its good faith efforts to
give the Company notice of such subpoena or other court process); (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party (provided that the Agent or such Bank shall use its good
faith efforts to provide notice to the Company of such litigation or
proceeding); (E) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document; (F) to such
Bank's independent auditors and other professional advisors; (G) to any
Participant or Assignee, actual or potential, provided that such Person agrees
in writing to be subject to the provisions of this Section 10.09; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or such Affiliate; and (I)
to its Affiliates.
10.10 Set-off. In addition to any rights and remedies of the Banks provided
-------
by law, if an Event of Default exists or the Loans have been accelerated, each
Bank is authorized at any time and from time to time, without prior notice to
the Company, any such notice being waived by the Company 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 by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of the Company against any and all Obligations owing to such Bank, now or
hereafter existing, irrespective of whether or not the Agent or such Bank shall
have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Bank agrees promptly to notify
the Company and the Agent after any such set-off and application made by such
Bank; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.
10.11 Automatic Debits of Fees. With respect to any commitment fee,
------------------------
utilization fee, arrangement fee, or other fee, or any other cost or expense
(including Attorney Costs) due and payable to the Agent, BofA or the Arranger
under the Loan Documents, the Company hereby irrevocably authorizes BofA to
debit any deposit account of the Company with BofA in an amount such that the
aggregate amount debited from all such deposit accounts does not exceed such fee
or other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in BofA's sole discretion) and
such amount not debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.
10.12 Notification of Addresses, Lending Offices, Etc. Each Bank shall
-----------------------------------------------
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in any number of
------------
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.14 Severability. The illegality or unenforceability of any provision of
------------
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
40
10.15 No Third Parties Benefited. This Agreement is made and entered
--------------------------
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons and the Indemnified Persons, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
10.16 Governing Law and Jurisdiction.
------------------------------
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT
THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OREGON OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF
CALIFORNIA OR OREGON, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE COMPANY, THE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY, THE AGENT 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 DOCUMENT
RELATED HERETO. THE COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY CALIFORNIA LAW.
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH
--------------------
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE
BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with the other Loan
----------------
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
[Signature pages follow.]
41
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in San Francisco, California, by
their proper and duly authorized officers as of the day and year first above
written.
MENTOR GRAPHICS CORPORATION
By: Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Treasurer
By: Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: Vice President, General Counsel
and Secretary
BANK OF AMERICA, N.A.,
as Agent and as a Bank
By: Xxxxx XxXxxxx
-------------------------------
Name: Xxxxx XxXxxxx
Title: Managing Director
BNP PARIBAS
By: Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: Assistant Vice President
By: Xxxxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Assistant Vice President
FLEET NATIONAL BANK, N.A.
By: Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
THE BANK OF NOVA SCOTIA
By: Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Director
THE FUJI BANK, LIMITED
By: Xxxxxxxx Xxxxxx
Name: Xxxxxxxx Xxxxxx
Title: Senior Vice President & Group
Head
ANNEX I
PRICING GRID
------------
(in basis points)
---------------------------------------------------------------------------------------------------------------------
EBITDA (x) Leverage **** .90 Leverage *** .90
----------------------------------------------------------------------------------------
x** $70MM $100MM x* x** $70MM $100MM x*
$70MM ****x** ****x** $125MM $70MM ****x** ****x** $125MM
$100MM $125MM $100MM $125MM
---------------------------------------------------------------------------------------------------------------------
Commitment Fee 35.0 30.0 25.0 20.0 42.5 35.0 30.0 27.5
---------------------------------------------------------------------------------------------------------------------
Utilization Fee 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5
---------------------------------------------------------------------------------------------------------------------
Offshore Rate Loan Spread 137.5 100.0 75.0 50.0 175.0 150.0 112.5 87.5
---------------------------------------------------------------------------------------------------------------------
Offshore Rate Spread 150.0 112.5 87.5 62.5 187.5 162.5 125.0 100.0
(Utilization * 33%)
---------------------------------------------------------------------------------------------------------------------
Base Rate Loan Spread 12.5 0.0 0.0 0.0 50.0 25.0 0.0 0.0
---------------------------------------------------------------------------------------------------------------------
The Leverage Ratio and EBITDA used to compute the Commitment Fee,
Utilization Fee and the Applicable Margin shall be the Leverage Ratio and EBITDA
set forth in the Compliance Certificate most recently delivered by the Company
to the Agent pursuant to Section 6.02(a) of the Credit Agreement; changes in the
Commitment Fee, the Utilization Fee and the Applicable Margin resulting from a
change in the Leverage Ratio or EBITDA shall become effective on the date of
delivery by the Company to the Agent of a new Compliance Certificate and
accompanying financial statements pursuant to Section 6.02(a). If the Company
shall fail to deliver a Compliance Certificate within the number of days after
the end of any fiscal quarter or fiscal year as required pursuant to Section
6.02(a) (without giving effect to any grace period), the Commitment Fee,
Utilization Fee and the Applicable Margin from the first day after the date on
which such Compliance Certificate was required to be delivered to the Agent
until the day on which the Company delivers to the Agent a Compliance
Certificate and accompanying financial statements shall conclusively equal the
highest Commitment Fee, Utilization Fee and Applicable Margin set forth above.
Notwithstanding the foregoing, during the period from the Closing Date until the
earlier of (i) the date of the Agent's receipt of a Compliance Certificate and
accompanying financial statements for the fiscal year ended December 31, 2000,
and (ii) 100 calendar days after the end of such fiscal year, the Commitment
Fee, Utilization Fee and the Applicable Margin shall be calculated based on the
Leverage Ratio and EBITDA set forth in the Compliance Certificate for the fiscal
quarter ended September 30, 2000 delivered by the Company to the Agent on the
Closing Date pursuant to Section 4.01(h) of the Credit Agreement.
For each day on which utilization of the combined Commitments equals
or exceeds 33% at the close of the Agent's business on such day (or the close of
the Agent's business on the next preceding Business Day in the case of a
Saturday or Sunday or other day not a Business Day), the Applicable Margin for
Offshore Rate Loans outstanding on such day shall be increased by 12.5 bps.
1
ANNEX I
-------
* more than or equal to
** less than
*** more than
**** less than or equal to
SCHEDULE 2.01
COMMITMENTS AND PRO RATA SHARES
-------------------------------
Bank Commitment Pro Rata Share
---- ---------- --------------
Bank of America, N.A. $ 25,000,000 25.000000000%
The Bank of Nova Scotia $ 22,500,000 22.000000000%
Fleet National Bank, N.A. $ 22,500,000 22.500000000%
BNP Paribas $ 15,000,000 15.000000000%
The Fuji Bank, Limited $ 15,000,000 15.000000000%
TOTAL $100,000,000 100%
1
SCHEDULE 2.01
-------------
SCHEDULE 10.02
OFFSHORE AND DOMESTIC LENDING OFFICES, ADDRESSES FOR NOTICES
------------------------------------------------------------
MENTOR GRAPHICS CORPORATION
---------------------------
Address for Notices:
--------------------
Mentor Graphics Corporation
0000 X.X. Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Website: xxx.xxxxxxx.xxx
BANK OF AMERICA, N.A.,
---------------------
as Agent
Borrowing Notices:
------------------
Bank of America, N.A.
Agency Administrative Services #5596
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: xxxx.x.xxxxxx@xxxxxxxxxxxxx.xxx
Agent's Payment Office:
----------------------
Bank of America, N.A.
ABA 000-000-000
Attention: PSO #5693
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
For Credit to Account No.: 12336-16087
All Other Notices:
------------------
Bank of America, N.A.,
Mail Code CA5-705-12-08
000 Xxxxxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx XxXxxxx, Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA, N.A.,
---------------------
as Bank
H-1
Domestic and Offshore Lending Office:
-------------------------------------
Bank of America, N.A.
Global Payment Operations
CA4-706-05-09
0000 Xxxxxxx Xxxxxxxxx, 0xx xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxx.x.xxxxxx@xxxxxxxxxxxxx.xxx
Notices (other than Borrowing Notices and
-----------------------------------------
Notices of Conversion/Continuation):
------------------------------------
Bank of America, N.A.,
Mail Code CA5-705-12-08
000 Xxxxxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx XxXxxxx, Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
BNP PARIBAS
-----------
Domestic and Offshore Lending Office:
-------------------------------------
BNP Paribas
000 Xxxxxxxxxx Xx., 0xx Xx.
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing Notices and
-----------------------------------------
Notices of Conversion/Continuation):
------------------------------------
BNP Paribas
000 Xxxxxxxxxx Xx., 0xx Xx.
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxx.xxxxx@xxxxxxxx.xxxxxxxxx.xxx
FLEET NATIONAL BANK
-------------------
Domestic and Offshore Lending Office:
------------------------------------
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Mail Stop: MADE 10009H
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
H-2
Notices (other than Borrowing Notices and
-----------------------------------------
Notices of Conversion/Continuation):
------------------------------------
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Mail Stop: MADE 10009H
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxx_x_xxxx@xxxxx.xxx
THE BANK OF NOVA SCOTIA
-----------------------
Domestic and Offshore Lending Office:
-------------------------------------
The Bank of Nova Scotia
Atlanta Agency
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxx_xxxxxxx@xxxxxxxxxxxxx.xxx
Notices (other than Borrowing Notices and
-----------------------------------------
Notices of Conversion/Continuation):
------------------------------------
The Bank of Nova Scotia
000 X.X. 0xx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxxxxxxx.xxx
THE FUJI BANK, LIMITED
----------------------
Domestic and Offshore Lending Office:
-------------------------------------
The Fuji Bank, Limited
000 X. Xxxx Xxxxxx, Xxxxx 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing Notices and
-----------------------------------------
Notices of Conversion/Continuation):
------------------------------------
The Fuji Bank, Limited
000 X. Xxxx Xxxxxx, Xxxxx 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Mano Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxx_xxxxxxxxxx@xxxxxxxx.xx.xx
H-3
