EXHIBIT 10.1
LOAN AGREEMENT
BY AND AMONG
PCD INC.
AND
FLEET NATIONAL BANK, AS COLLATERAL AGENT,
ADMINISTRATIVE AGENT AND A LENDER
AND
THE OTHER FINANCIAL INSTITUTIONS NOW OR
HEREAFTER PARTIES HERETO
$30,000,000 SECURED TERM LOAN A
AND
$40,000,000 SECURED TERM LOAN B
AND
$20,000,000 SECURED REVOLVING CREDIT LOAN
DECEMBER 26, 1997
INDEX TO
LOAN AGREEMENT
PAGE
ARTICLE 1. DEFINITIONS AND ACCOUNTING AND OTHER TERMS . . . . . . . . . . . 1
Section 1.1. Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Accounting Terms. . . . . . . . . . . . . . . . . . . . . 17
Section 1.3. Other Terms. . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE 2. AMOUNT AND TERMS OF THE LOANS . . . . . . . . . . . . . . . . . .17
Section 2.1. The Loans. . . . . . . . . . . . . . . . . . . . . . . . .17
Section 2.1.0. The Revolving Credit Loans . . . . . . . . . . . . 17
Section 2.1.1. Term Loan A . . . . . . . . . . . . . . . . . . . .19
Section 2.1.2. Term Loan B . . . . . . . . . . . . . . . . . . . .20
Section 2.2. Interest and Fees on the Loans. . . . . . . . . . . . . . 20
Section 2.2.1. Interest. . . . . . . . . . . . . . . . . . . . . 20
Section 2.2.2. Fees . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.2.3. Increased Costs - Capital . . . . . . . . . . . . .22
Section 2.3. Notations . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.4. Computation of Interest . . . . . . . . . . . . . . . . . 24
Section 2.5. Time of Payments and Prepayments in Immediately
Available Funds . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Section 2.5.1. Time . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.5.2. Setoff, etc . . . . . . . . . . . . . . . . . . . .25
Section 2.5.3. Unconditional Obligations and No Deductions . . . .25
Section 2.6. Prepayment and Certain Payments . . . . . . . . . . . . .28
Section 2.6.1. Mandatory Payments . . . . . . . . . . . . . . . .28
Section 2.6.2. Voluntary Prepayments . . . . . . . . . . . . . . 29
Section 2.6.3. Prepayment of Libor Loans . . . . . . . . . . . . 30
Section 2.6.4. Permanent Reduction of Commitment . . . . . . . ..30
Section 2.7. Payment on Non-Business Days . . . . . . . . . . . . . . .30
Section 2.8. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 30
Section 2.9. Special Libor Loan Provisions . . . . . . . . . . . . . . 30
Section 2.9.1. Requests . . . . . . . . . . . . . . . . . . . . . 30
Section 2.9.2. Libor Loans Unavailable . . . . . . . . . . . . . .31
Section 2.9.3. Libor Lending Unlawful . . . . . . . . . . . . . . 32
Section 2.9.4. Additional Costs on Libor Loans . . . . . . . . . .32
Section 2.9.5. Libor Funding Losses . . . . . . . . . . . . . . . 33
Section 2.9.6. Banking Practices . . . . . . . . . . . . . . . . .34
Section 2.9.7. Borrower's Options on Unavailability or Increased
Cost of Libor Loans . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.9.8. Assumptions Concerning Funding of Libor Loans . . .35
Section 2.10. Interest Rate Protection . . . . . . . . . . . . . . . . 36
ARTICLE 3. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . .36
Section 3.1. Conditions Precedent to the Commitment and to all Loans . 36
Section 3.1.1. The Commitment and Initial Loans . . . . . . . . . 36
Section 3.1.2. The Commitment and the Loans . . . . . . . . . . . 40
ARTICLE 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 41
Section 4.1. Representations and Warranties of the Borrower . . . . . .41
Section 4.1.1. Organization and Existence . . . . . . . . . . . . 41
Section 4.1.2. Authorization and Absence of Defaults . . . . . . .41
Section 4.1.3. Acquisition of Consents . . . . . . . . . . . . . .41
Section 4.1.4. Validity and Enforceability . . . . . . . . . . . .42
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Section 4.1.5. Financial Information . . . . . . . . . . . . . . .42
Section 4.1.6. No Litigation . . . . . . . . . . . . . . . . . . .43
Section 4.1.7. Regulation U . . . . . . . . . . . . . . . . . . . 43
Section 4.1.8. Absence of Adverse Agreements . . . . . . . . . . .43
Section 4.1.9. Taxes . . . . . . . . . . . . . . . . . . . . . . .43
Section 4.1.10. ERISA . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.1.11. Ownership of Properties . . . . . . . . . . . . .44
Section 4.1.12. Accuracy of Representations and Warranties . . . .45
Section 4.1.13. No Investment Company . . . . . . . . . . . . . . 45
Section 4.1.14. Solvency, etc . . . . . . . . . . . . . . . . . . 45
Section 4.1.15. Approvals . . . . . . . . . . . . . . . . . . . . 46
Section 4.1.16. Ownership Interests . . . . . . . . . . . . . . . 46
Section 4.1.17. Licenses, Registrations, Compliance with
Laws, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.1.18. Principal Place of Business; Books and Records . .46
Section 4.1.19. Subsidiaries . . . . . . . . . . . . . . . . . . .46
Section 4.1.20. Copyright . . . . . . . . . . . . . . . . . . . . 46
Section 4.1.21. Environmental Compliance . . . . . . . . . . . . .47
Section 4.1.22. Material Agreements, etc . . . . . . . . . . . . .47
Section 4.1.23. Patents, Trademarks and Other Property Rights . . 47
Section 4.1.24. Related Transaction Documents . . . . . . . . . . 48
Section 4.1.25. Material Adverse Effect . . . . . . . . . . . . . 48
ARTICLE 5. COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . . .48
Section 5.1. Affirmative Covenants of the Borrower Other than
Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.1.1. Payment of Taxes, etc . . . . . . . . . . . . . . 48
Section 5.1.2. Maintenance of Insurance . . . . . . . . . . .. . .49
Section 5.1.3. Preservation of Existence, etc . . . . . . . .. . .50
Section 5.1.4. Compliance with Laws, etc . . . . . . . . . . . . 50
Section 5.1.5. Visitation Rights . . . . . . . . . . . . . . . . 50
Section 5.1.6. Keeping of Records and Books of Account . . . . . 50
Section 5.1.7. Maintenance of Properties, etc . . . . . . . .. . .50
Section 5.1.8. Post-Closing Items . . . . . . . . . . . . .. . .50
Section 5.1.9. Other Documents, etc . . . . . . . . . . . . .. . .50
Section 5.1.10. Minimum Fixed Charge Coverage Ratio . . . . .. . .51
Section 5.1.11. Minimum Quick Ratio . . . . . . . . . . . . .. . .51
Section 5.1.12. Maximum Ratio of Total Senior Debt to EBITDA . . 52
Section 5.1.12A. Maximum Ratio of Total Indebtedness for
Borrowed Money to EBITDA . . . . . . . . . . . . . . . . .. . .52
Section 5.1.13. Officer's Certificates and Requests . . . . .. . .53
Section 5.1.14. Depository . . . . . . . . . . . . . . . . . . . 53
Section 5.1.15. Chief Executive Officer . . . . . . . . . . .. . .53
Section 5.1.16. Notice of Purchase of Real Estate and Leases . . 53
Section 5.1.17. Additional Assurances . . . . . . . . . . . .. . .54
Section 5.1.18. Appraisals . . . . . . . . . . . . . . . . . . . 54
Section 5.1.19. Environmental Compliance . . . . . . . . . . . . 54
Section 5.1.20. Remediation . . . . . . . . . . . . . . . . .. . .54
Section 5.1.21. Site Assessments . . . . . . . . . . . . . . . . 54
Section 5.1.22. Indemnity . . . . . . . . . . . . . . . . . .. . .55
Section 5.1.23. Trademarks, Copyrights, etc . . . . . . . . .. . .55
Section 5.1.24. Minimum Interest Coverage Ratio . . . . . . .. . .55
Section 5.2. Negative Covenants of the Borrower . . . . . . .. . .56
Section 5.2.1. Liens, etc . . . . . . . . . . . . . . . . . .. . .56
Section 5.2.2. Assumptions, Guaranties, etc. of Indebtedness of
Other Persons . . . . . . . . . . . . . . . . . . . . . . . . .57
Section 5.2.3. Acquisitions, Dissolution, etc . . . . . . . . . .58
Section 5.2.4. Change in Nature of Business . . . . . . . . . . .58
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Section 5.2.5. Ownership . . . . . . . . . . . . . . . . . . . . 56
Section 5.2.6. Sale and Leaseback . . . . . . . . . . . . . . . . 57
Section 5.2.7. Sale of Accounts, etc . . . . . . . . . . . . . . .57
Section 5.2.8. Indebtedness . . . . . . . . . . . . . . . . . . . 57
Section 5.2.9. Other Agreements . . . . . . . . . . . . . . . . . 58
Section 5.2.10. Prepayments of Indebtedness . . . . . . . . . . . 58
Section 5.2.11. Dividends, Payments and Distributions . . . . . . 58
Section 5.2.12. Investments in or to Other Persons . . . . . . . .58
Section 5.2.13. Transactions with Affiliates . . . . . . . . . . .59
Section 5.2.14. Change of Fiscal Year, Accounting Policies . . . .59
Section 5.2.15. Subordination of Claims . . . . . . . . . . . . 59
Section 5.2.16. Compliance with ERISA . . . . . . . . . . . . . . 59
Section 5.2.17. Capital Expenditures . . . . . . . . . . . . . . .59
Section 5.2.18. Hazardous Waste . . . . . . . . . . . . . . . . . 60
Section 5.2.19 Other Restrictions on Liens . . . . . . . . . . . 60
Section 5.2.20 Limitation on Creation of Subsidiaries, etc. . . . 60
Section 5.3. Reporting Requirements . . . . . . . . . . . . . . . . . .60
ARTICLE 6. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . .62
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . . . .62
ARTICLE 7. REMEDIES OF LENDERS . . . . . . . . . . . . . . . . . . . . . . .64
ARTICLE 8. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
Section 8.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . 65
Section 8.2. Powers; General Immunity . . . . . . . . . . . . . . . . .65
Section 8.2.1. Duties Specified . . . . . . . . . . . . . . . . . 65
Section 8.2.2. No Responsibility For Certain Matters . . . . . . .66
Section 8.2.3. Exculpatory Provisions . . . . . . . . . . . . . . 66
Section 8.2.4. Agent Entitled to Act as Lender . . . . . . . . . .67
Section 8.3. Representations and Warranties; No Responsibility for
Appraisal of Creditworthiness . . . . . . . . . . . . . . . . . . . .67
Section 8.4. Right to Indemnity . . . . . . . . . . . . . . . . . 67
Section 8.5. Payee of Note Treated as Owner . . . . . . . . . . . 67
Section 8.6. Resignation by Agent . . . . . . . . . . . . . . . . 68
Section 8.7. Successor Agent . . . . . . . . . . . . . . . . . . .68
ARTICLE 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .69
Section 9.1. Consent to Jurisdiction and Service of Process . . . . . .69
Section 9.2. Rights and Remedies Cumulative . . . . . . . . . . . . . .69
Section 9.3. Delay or Omission not Waiver . . . . . . . . . . . . . . .70
Section 9.4. Waiver of Stay or Extension Laws . . . . . . . . . . . . .70
Section 9.5. Amendments, etc . . . . . . . . . . . . . . . . . . . . . 70
Section 9.6. Addresses for Notices, etc . . . . . . . . . . . . . . . .71
Section 9.7. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . 72
Section 9.8. Participations . . . . . . . . . . . . . . . . . . . . . .72
Section 9.9. Binding Effect; Assignment . . . . . . . . . . . . . . . .72
Section 9.10. Actual Knowledge . . . . . . . . . . . . . . . . . . . . 73
Section 9.11. Substitutions and Assignments . . . . . . . . . . . . . .73
Section 9.12. Payments Pro Rata . . . . . . . . . . . . . . . . . . . .75
Section 9.13. Indemnification . . . . . . . . . . . . . . . . . . . . .75
Section 9.14. Governing Law . . . . . . . . . . . . . . . . . . . . . .77
Section 9.15. Severability of Provisions . . . . . . . . . . . . . . . 77
Section 9.16. Headings . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 9.17. Counterparts . . . . . . . . . . . . . . . . . . . . . . 77
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SCHEDULE OF EXHIBITS
EXHIBIT 1.1 - EQUITY INVESTMENTS, OWNERSHIP INTERESTS AND SUBSIDIARIES
EXHIBIT 1.2 - RELATED TRANSACTION DOCUMENTS
EXHIBIT 1.4 - FORM OF INTEREST RATE ELECTION
EXHIBIT 1.5 - FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.6 - FORM OF TERM NOTE - TERM NOTE A
EXHIBIT 1.7 - FORM OF TERM NOTE - TERM NOTE B
EXHIBIT 1.8 - PERMITTED ENCUMBRANCES
EXHIBIT 1.9 - PRO RATA SHARES
EXHIBIT 1.10 - FORM OF REQUEST
EXHIBIT 1.12 - PROJECTIONS
EXHIBIT 3.1.1.8 - PERMITTED INDEBTEDNESS AND CAPITALIZED LEASES
EXHIBIT 3.1.1.10 - FORM OF COMPLIANCE CERTIFICATE
EXHIBIT 4.1.1 - FOREIGN QUALIFICATIONS
EXHIBIT 4.1.2 - AUTHORIZATIONS
EXHIBIT 4.1.3 - CONSENTS
EXHIBIT 4.1.6 - LITIGATION
EXHIBIT 4.1.8 - ADVERSE AGREEMENTS
EXHIBIT 4.1.9 - TAXES
EXHIBIT 4.1.11 - REAL PROPERTY
EXHIBIT 4.1.17 - GOVERNMENTAL PERMITS
EXHIBIT 4.1.20 - COPYRIGHTS
EXHIBIT 4.1.21 - HAZARDOUS WASTE
EXHIBIT 4.1.22 - MATERIAL CONTRACTS
EXHIBIT 4.1.23 - INTELLECTUAL PROPERTY
EXHIBIT 5.2.2 - GUARANTIES
EXHIBIT 5.2.13 - TRANSACTIONS WITH AFFILIATES
EXHIBIT 9.11.1 - FORM OF SUBSTITUTION AGREEMENT
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LOAN AGREEMENT
PCD INC., a Massachusetts corporation with a principal place
of business at 0 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000
(the "Borrower"), FLEET NATIONAL BANK, a national banking
association organized under the laws of the United States and
having an office at Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 (hereinafter sometimes the "Agent" as collateral agent and
administrative agent for itself, sometimes "Fleet" and sometimes
a "Lender") and each of the other Lenders who now and/or
hereafter become parties to this Agreement pursuant to the terms
of SECTION 9.11 hereof, and such Lenders, Fleet State Street Bank
and Trust Company, a Massachusetts trust company, having an
office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(hereinafter "State Street" and sometimes a "Lender"),
Imperial Bank, a California bank corporation, having an office at
0000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
(hereinafter "Imperial" and sometimes a "Lender", and Eastern
Bank, a Massachusetts state-chartered savings bank, having an
address at 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 (hereinafter "Eastern" and sometimes a "Lender") as
Lenders, hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND ACCOUNTING AND OTHER TERMS
SECTION 1.1. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"ADJUSTED LIBOR RATE" means, with respect to any Libor Loan
to be made by the Lenders for the Interest Period applicable to
such Libor Loan, the rate per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on
the basis of the offered rates for deposits in Dollars, for a
period of time comparable to such Libor Loan which appears on the
Telerate page 3750 as of 11:00 a.m. London time on the day that
is two Business Days preceding the first day of such Libor Loan;
provided, however, if the rate described above does not appear on
the Telerate System on any applicable Interest Adjustment Date,
the Adjusted Libor Rate shall be the average of four (4) such
rates (rounded upwards as described above, if necessary) for
deposits in Dollars for a period substantially equal to the
Interest Period on the Reuters Page "LIBO" (or such other page as
may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time), on the
day that is two Business Days prior to the beginning of such
Interest Period.
If both the Telerate and Reuters system are unavailable,
then the rate for that date will be determined on the basis of
the offered rates for deposits in Dollars for a period of time
comparable to such Libor Loan Interest Period which are offered
to each Reference Lender by four first-class banks in the London
interbank market at approximately 11:00 a.m. London time, on the
day that is two Business Days preceding the first day of such
Libor Loan as selected by the Lender. The principal London
office of each of the four first-class London banks will be
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requested to provide a quotation of its Dollar deposit offered
rate. If at least two such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for
that date will be determined on the basis of the rates quoted for
loans in Dollars to leading European banks for a period of time
comparable to such Libor Loan Interest Period offered by major
banks in New York City at approximately 11:00 a.m. New York City
time, on the day that its two Business Days preceding the first
day of such Libor Loan. In the event that the Reference Lenders
are unable to obtain any such quotation as provided above, it
will be deemed that the Adjusted Libor Rate pursuant to a Libor
Loan cannot be determined.
In the event that the Board of Governors of the Federal
Reserve System shall impose a "Reserve Percentage" with respect
to Libor deposits of any Reference Lender then, to the extent
that the rate determined in the foregoing paragraph does not
include a provision for such Reserve Percentage, for any period
during which such Reserve Percentage shall apply, the Adjusted
Libor Rate shall be equal to the amount determined above divided
by an amount equal to 1 minus the Reserve Percentage. If any
Reference Lender fails to provide its offered quotation to the
Agent, the Adjusted Libor Rate shall be determined on the basis
of the offered quotation of the other Reference Lender. The
Adjusted Libor Rate shall be adjusted automatically on and as of
the effective date of any change in the Libor Rate Reserve
Percentage.
"ADVANCE" and "ADVANCES" means the funding by any Lender of
all or a portion of the Loans in accordance with this Agreement.
"AFFILIATE" means singly and collectively, any Person (other
than a Subsidiary) which, directly or indirectly, is in control
of, is controlled by, or is under common control with, the
Borrower. For purposes of this definition, a Person shall be
deemed to be "controlled by" the Borrower if the Borrower
possesses, directly or indirectly, power either to (i) vote 10%
or more of the securities having ordinary voting power for the
election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether
by contract or otherwise, and the legal representative, successor
or assign of any such Person.
"AGENT" means Fleet or any other Person which is at the time
in question serving as the collateral agent and the
administrative agent under the terms of Article 8 hereof and the
other Financing Documents.
"AGREEMENT" means this loan agreement, as the same may from
time to time be amended.
"A.M." means a time from and including 12 o'clock midnight
to and excluding 12 o'clock noon on any Business Day using
Eastern Standard (Daylight Savings) time.
"APPLICABLE MARGIN" means, with respect to the Revolving
Credit Loan and Term Loan A only, for each Libor Loan, two and
three quarters percent (2.75%) per annum and for each Prime Rate
Loan, one and one half percent (1.50%) per annum, provided,
however, that if, at any time on or after the receipt by the
Agent of the quarterly financial statements for the Borrower's
March 31, 1998 fiscal quarter and each subsequent Borrower fiscal
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quarter provided to the Agent by the Borrower pursuant to SECTION
5.3.3 hereof, the ratio of (a) total Senior Debt on a
consolidated basis as of the last day of the most recently ended
fiscal quarter of the Borrower to (b) EBITDA, is within the
ratios set forth below and if and so long as no Event of Default
or Default exists, the Applicable Margin shall, subject to the
last sentence of this definition, equal the rate set forth below
opposite the applicable ratio:
Applicable Margin Applicable Margin
Ratio Libor Loan Prime Rate Loan
----- ---------- ---------------
Less than 3.00:1 and greater 2.50% 1.25%
than or equal to 2.75:1
Less than 2.75:1 and greater 2.25% 1.00%
than or equal to 2.50:1
Less than 2.50:1 and greater 2.00% 0.75%
than or equal to 2.00:1
Less than 2.00:1 and greater 1.75% 0.50%
than or equal to 1.50:1
Less than 1.50:1 1.50% 0.25%
and, with respect to Term Loan B only, for each Libor Loan, three
and one quarter percent (3.25%) per annum, and for each Prime
Rate Loan, two percent (2.00%) per annum, provided, however, that
if, at any time on or after the receipt by the Agent of the
quarterly financial statements for the Borrower's March 31, 1998
fiscal quarter and each subsequent Borrower fiscal quarter
provided to the Agent by the Borrower pursuant to SECTION 5.3.3
hereof, the ratio of (a) total Senior Debt on a consolidated
basis as of the last day of the most recently ended fiscal
quarter of the Borrower to (b) EBITDA, is within the ratios set
forth below and if and so long as no Event of Default or Default
exists, the Applicable Margin shall, subject to the last sentence
of this definition, equal the rate set forth below opposite the
applicable ratio:
Applicable Margin Applicable Margin
Ratio Libor Loan Prime Rate Loan
----- ---------- ---------------
Less than 3.00:1 and greater 3.00% 1.75%
than or equal to 2.75:1
Less than 2.75:1 and greater 2.75% 1.50%
than or equal to 2.50:1
Less than 2.50:1 and greater 2.50% 1.25%
than or equal to 2.00:1
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Less than 2.00:1 and greater 2.25% 1.00%
than or equal to 1.50:1
Less than 1.50:1 2.00% 0.75%
Any change in the Applicable Margin required pursuant to the
foregoing shall become effective on the fifth Business Day after
the Agent receives the Borrower's financial statement for the
Borrower's fiscal quarter in question and a request for a rate
reduction if applicable; provided, however, that each of the
above-referenced interest rates shall remain in effect only so
long as Borrower qualifies therefor and provided further,
however, that interest rate reductions shall become final only on
the basis of Borrower's annual audited financial statements and
in the event that such annual audited financial statements
establish that the Borrower was not entitled to a rate reduction
which was previously granted, the Borrower shall, upon written
demand by the Agent, repay to the Agent for the account of each
Lender an amount equal to the excess of interest at the rate
which should have been charged based on such annual audited
financial statements and the rate actually charged on the basis
of Borrower's quarterly financial statement(s) (provided that in
the event of a dispute as to the appropriate fiscal quarter as to
which any adjustment should be allocated, the decision of the
independent accountants of the Borrower shall be made in
accordance with GAAP and shall be binding upon the Agent, the
Lenders and the Borrower absent manifest error); and provided
further, however, that in the event that Borrower fails to
provide any financial statement on a timely basis in accordance
with SECTION 5.3.3, any interest rate increase payable as a
result thereof shall be retroactively effective to the date on
which the financial statement in question should have been
received by the Agent in accordance with SECTION 5.3.3, and the
Borrower shall pay any amount due as a result thereof upon
written demand from the Agent. The Agent shall send the Borrower
written acknowledgment of each change in the Applicable Margin in
accordance with the Agent's customary procedures as in effect
from time to time, but the failure to send such acknowledgment
shall have no effect on the effectiveness or applicability of the
foregoing provisions of this definition or Borrower's obligations
with respect to payment and calculation of interest on Libor
Loans.
"AUTHORIZED REPRESENTATIVE" means such senior personnel of
the Borrower as shall be duly authorized and designated in
writing by the Borrower to execute documents, instruments and
agreements on its behalf and to perform the functions of
Authorized Representative under any of the Financing Documents.
"BORROWED MONEY" means any obligation to repay funded
Indebtedness, any Indebtedness evidenced by notes, bonds,
debentures, guaranties or similar obligations including without
limitation the Loans and any obligation to pay money under a
conditional sale or other title retention agreement, the net
aggregate rentals payable under any Capitalized Lease Obligation,
any reimbursement obligation for any letter of credit and any
obligations in respect of banker's and other acceptances or
similar obligations.
"BORROWER" has the meaning assigned in the first paragraph
of this Agreement.
"BUDGET" has the meaning assigned to such term in
SECTION 5.3.7.
- 4 -
"BUSINESS CONDITION" means the financial condition,
business, property, assets, liabilities and/or operations of a
Person.
"BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day on which banks in Boston,
Massachusetts or New York, New York are not authorized or
required by applicable law to close; and (ii) with respect to all
notices and determinations in connection with, and payments of
principal and interest on, Libor Loans, any day which is a
Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the London
interbank market.
"CAPITAL EXPENDITURES" means all expenditures paid or
incurred by the Borrower or any Subsidiary in respect of (i) the
acquisition, construction, improvement or replacement of land,
buildings, machinery, equipment, any other fixed assets or
leaseholds and (ii) to the extent related to and not included in
(i) above, materials, contract labor and direct labor, which
expenditures have been or should be, in accordance with GAAP,
capitalized on the books of the Borrower or such Subsidiary.
Where a fixed asset is acquired by a lease which is required to
be capitalized pursuant to Statement of Financial Accounting
Standards number 13 or any successor thereto, the amount required
to be capitalized in accordance therewith shall be considered to
be an expenditure in the year such asset is first leased.
"CAPITALIZED LEASE OBLIGATIONS" means all lease obligations
which have been or should be, in accordance with GAAP,
capitalized on the books of the lessee.
"CASH EQUIVALENT INVESTMENTS" means any Investment in (i)
direct obligations of the United States or any agency, authority
or instrumentality thereof, or obligations guaranteed by the
United States or any agency, authority or instrumentality
thereof, whether or not supported by the full faith and credit
of, a right to borrow from or the ability to be purchased by the
United States; (ii) commercial paper rated in the highest grade
by a nationally recognized statistical rating agency or which, if
not rated, is issued or guaranteed by any issuer with outstanding
long-term debt rated A or better by any nationally recognized
statistical rating agency; (iii) demand and time deposits with,
and certificates of deposit and bankers acceptances issued by,
any office of the Agent, any Lender or any other bank or trust
company which is organized under the laws of the United States or
any state thereof and has capital, surplus and undivided profits
aggregating at least $500,000,000, the outstanding long-term debt
of which or of the holding company of which it is a subsidiary is
rated A or better by any nationally recognized statistical rating
agency; (iv) any short-term note which has a rating of MIG-2 or
better by Xxxxx'x Investors Service Inc. or a comparable rating
from any other nationally recognized statistical rating agency;
(v) any municipal bond or other governmental obligation
(including without limitation any industrial revenue bond or
project note) which is rated A or better by any nationally
recognized statistical rating agency; (vi) any other obligation
of any issuer, the outstanding long-term debt of which is rated A
or better by any nationally recognized statistical rating agency;
(vii) any repurchase agreement with any financial institution
described in clause (iii) above, relating to any of the foregoing
instruments and fully collateralized by such instruments; (viii)
shares of any open-end diversified investment company that has
- 5 -
its assets invested only in investments of the types described in
clause (i) through (vii) above at the time of purchase and which
maintains a constant net asset value per share; and (ix) shares
of any open-end diversified investment company registered under
the Investment Company Act of 1940, as amended, which maintains a
constant net asset value per share in accordance with regulations
of the Securities & Exchange Commission, has aggregate net assets
of not less than $50,000,000 on the date of purchase and either
derives at least 95% of its gross income from interest on or
gains from the sale of investments of the type described in
clauses (i) through (vii), above or has at least 85% of the
weighted average value of its assets invested in investments of
such types; provided that the purchase of any shares in any
particular investment company shall be limited to an aggregate
amount owned at any one time of $500,000. Each Cash Equivalent
Investment shall have a maturity of less than one year at the
time of purchase; provided that the maturity of any repurchase
agreement shall be deemed to be the repurchase date and not the
maturity of the subject security and that the maturity of any
variable or floating rate note subject to prepayment at the
option of the holder shall be the period remaining (including any
notice period remaining) before the holder is entitled to
prepayment.
"CHANGE OF CONTROL" means, at any time;
(i) any change in the ownership of the Borrower such
that the Subordinated Creditor owns less than 15% of the equity
interests in the Borrower on a fully-diluted basis or;
(ii) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended from time to time) either (A) becomes the "beneficial
owner" (as defined in Rule 13d-3 of the Securities Exchange Act
of 1934, as amended from time to time), directly or indirectly,
of voting capital stock of the Borrower (or securities
convertible into or exchangeable for such voting capital stock)
representing 50.1% or more of the combined voting power of all
voting capital stock of the Borrower (on a fully diluted basis)
or (B) otherwise has the ability, directly or indirectly, to
elect a majority of the board of directors of the Borrower; or
(iii) during any period of up to 24 consecutive months,
commencing on the Closing Date, individuals who at the beginning
of such 24-month period were directors of the Borrower shall
cease for any reason (other than (A) the death, disability or
retirement of a director or (B) the death, disability or
retirement of an officer of the Borrower that is serving as a
director at such time so long as another officer of the Borrower
replaces such Person as a director) to constitute a majority of
the board of directors of the Borrower; or
(iv) any Person or two or more Persons acting in concert
shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation
thereof, will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence on the
management or policies of the Borrower;
(v) the common stock of the Borrower shall no longer be
available for purchase and sale on a national securities exchange
or on the NASDAQ System or any similar successor organization.
- 6 -
"CLOSING DATE" means the date on which all of the conditions
precedent set forth in SECTION 3.1 of this Agreement have been
satisfied and the Loans are funded in accordance with this
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITMENT" means the Lenders' several commitments to make
or maintain the Loans as set forth IN SECTION 2.1 hereof in the
maximum outstanding amount of each Lender's Pro Rata Share of
$90,000,000 less the reductions set forth in SECTION 2.1 and less
any reductions and prepayments or repayments of the Term Loans as
set forth in SECTION 2.6.
"COMMONLY CONTROLLED ENTITY" means a Person, whether or not
incorporated, which is under common control with the Borrower
within the meaning of section 414(b) or (c) of the Code.
"CURRENT LIABILITIES" means all liabilities of the
Borrower and the Subsidiaries which would, in accordance with
GAAP on a consolidated basis, be classified as current
liabilities of corporations conducting a business the same as or
similar to that of the Borrower and any Subsidiaries, including
without limitation, the capitalized amount of Capitalized Lease
Obligations and fixed prepayments of, and sinking fund payments
and reserves with respect to, Indebtedness, in each case required
to be made within one year from the date of determination.
"DEFAULT" means an event or condition which with the giving
of notice or lapse of time or both would become an Event of
Default.
"DISCHARGED RIGHTS AND OBLIGATIONS" shall have the meaning
assigned to such term in SECTION 9.11.4.
"DOLLARS" and the sign "$" mean lawful money of the United
States of America.
"EBITDA" means, for any fiscal period, Net Income (without
taking into account any non-cash, non-recurring charge taken by
the Borrower on or before December 31, 1997 on account of in-
process research and development) PLUS, to the extent accounted
for in Net Income, Interest Expense, taxes, depreciation and
amortization, for such period determined on an accrual and
consolidated basis in accordance with GAAP. EBITDA shall be
calculated (excluding however, the calculation of EBITDA for the
purpose of determining "Excess Cash Flow", in which case, the
calculation of EBITDA in the definition of "Excess Cash Flow"
shall govern) as follows: for the fiscal quarter of the Borrower
ending on Xxxxx 00, 0000, XXXXXX for the Borrower fiscal quarter
then ending multiplied by four (4), for the fiscal quarter of the
Borrower ending on June 30, 1998, EBITDA for the Borrower fiscal
quarter then ending plus EBITDA for the Borrower fiscal quarter
immediately preceding such quarter, multiplied by two (2), for
the fiscal quarter of the Borrower ending on September 30, 1998,
EBITDA for the Borrower fiscal quarter then ending plus EBITDA
for the two (2) Borrower fiscal quarters immediately preceding
such quarter, multiplied by one and one-third (1.33) and,
- 7 -
thereafter, for the rolling four Borrower fiscal quarter period
consisting of the Borrower fiscal quarter then ending and the
three immediately preceding Borrower fiscal quarters.
"EFFECTIVE PRIME" means for any Interest Period, the Prime
Rate in effect on the first day of such Interest Period, plus the
Applicable Margin for Prime Rate Loans from time to time in
effect.
"ERISA" means the Employee Retirement Income Security Act of
1974 as amended from time to time.
"EVENTS OF DEFAULT" has the meaning assigned to that term in
SECTION 6.1 of this Agreement.
"EXCESS CASH FLOW" means, for any fiscal year of the
Borrower, the sum of EBITDA for each Borrower fiscal quarter in
such fiscal year, (y) MINUS the sum of (i) an amount equal to the
sum of payments included in Total Debt Service paid during each
fiscal quarter in such fiscal year, (ii) to the extent not
included in Total Debt Service, all Capital Expenditures
permitted under SECTION 5.2.17 and paid during each Borrower
fiscal quarter in such fiscal year, and (iii) taxes payable
during each Borrower fiscal quarter in such fiscal year and (z)
PLUS decreases and MINUS increases in working capital.
"EXHIBIT" means, when followed by a letter, the exhibit
attached to this Agreement bearing that letter and by such
reference fully incorporated in this Agreement.
"EXTRAORDINARY RECEIPTS" means any proceeds that the
Borrower or any Subsidiary receives not in the ordinary course of
their respective businesses, including without limitation, from
(i) subject to SECTION 5.1.2, any casualty insurance policies
maintained by the Borrower and/or any Subsidiary (other than the
proceeds of business interruption insurance to the extent such
proceeds constitute compensation for lost earnings and such
proceeds are less than $3,000,000), (ii) tax refunds, (iii)
pension plan reversions, (iv) condemnation awards (and payments
in lieu thereof), (v) indemnity payments or (vi) any
extraordinary gains realized by the Borrower and/or any
Subsidiary.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum
plus one-half of one percent (.50%) (rounded upward, if
necessary, to the nearest 1/16th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of
New York, PROVIDED that (i) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such
transactions on the next succeeding Business Day as so published,
and (ii) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent on such day on such transactions
as determined by the Agent in its discretion exercised in good
faith.
"FEE LETTER" means that certain fee letter dated October 31,
1997 between the Borrower and the Agent regarding certain fees
payable by the Borrower.
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"FINANCING DOCUMENTS" means, collectively, this Agreement,
each Note, the Security Documents, the Fee Letter, the
Post-Closing Letter, any agreement with any Lender providing any
interest rate protection arrangement and each other agreement,
instrument or document now or hereafter executed in connection
herewith or therewith.
"FIXED CHARGE COVERAGE RATIO" means the ratio of (i) EBITDA
MINUS all Capital Expenditures permitted under SECTION 5.2.17 and
paid during each Borrower fiscal quarter during the period in
question, and taxes payable during each Borrower fiscal quarter
during the period in question to (ii) Total Debt Service.
"FOREIGN SUBSIDIARY" shall mean each Subsidiary of the
Borrower that is incorporated under the laws of any jurisdiction
other than the United States of America or any state thereof.
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States of America.
"HAZARDOUS MATERIAL" shall mean any substance or material
defined or designated as a hazardous or toxic waste, hazardous or
toxic material, hazardous or toxic substance, or other similar
term, by any United States federal, state or local environmental
statute, regulation or ordinance.
"INDEBTEDNESS" means, without duplication for any Person,
(i) all indebtedness or other obligations of said Person for
Borrowed Money or for the deferred purchase price of property or
services, including, without limitation, all reimbursement
obligations of said Person with respect to standby and/or
documentary letters of credit (ii) all indebtedness or other
obligations of any other Person ("Other Person") for Borrowed
Money or for the deferred purchase price of property or services,
the payment or collection of which said Person has guaranteed
(except by reason of endorsement for deposit or collection in the
ordinary course of business) or in respect of which said Person
is liable, contingently or otherwise, including, without
limitation, liable by way of agreement to purchase or lease, to
provide funds for payment, to supply funds to purchase, sell or
lease property or services primarily to assure a creditor of such
Other Person against loss or otherwise to invest in or make a
loan to the Other Person, or otherwise to assure a creditor of
such Other Person against loss, (iii) all indebtedness or other
obligations of any Person for Borrowed Money or for the deferred
purchase price of property or services 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 any property
owned by said Person, whether or not said Person has assumed or
become liable for the payment of such indebtedness or
obligations, (iv) Capitalized Lease Obligations of said Person
and (v) to the extent not included in any of (i) through (iv)
above, obligations of such Person under contracts pursuant to
which such Person has agreed to purchase interest rate protection
or swap interest rate obligations.
"INTEREST ADJUSTMENT DATE" means (i) as to any Prime Rate
Loan to be converted to a Libor Loan the Business Day elected by
the Borrower in its applicable Interest Rate Election, but being
not less than three (3) Business Days after the receipt by the
Agent before 12:00 o'clock P.M. on a Business Day of an Interest
- 9 -
Rate Election electing the Libor Rate as the interest rate on
such Loan; and (ii) as to any Libor Loan, the last Business Day
of the Interest Period pertaining to such Libor Loan.
"INTEREST EXPENSE" means, with respect to any fiscal
quarter, the aggregate amount required to be accrued by the
Borrower and any Subsidiaries in such fiscal quarter for
interest, fees, charges and expenses, however characterized, on
its Indebtedness, including, without limitation, all such
interest, fees, charges and expenses required to be accrued with
respect to Indebtedness under the Financing Documents, all
determined in accordance with GAAP.
"INTEREST PERIOD" means:
With respect to each Libor Loan:
(i) initially, the period commencing on the date of
such Libor Loan and ending one, two, three or six months
thereafter as the Borrower may elect in the applicable
Interest Rate Election and subject to SECTION 2.9; and
(ii) thereafter, each period commencing on the last
day of the immediately preceding Interest Period applicable
to such Libor Loan and ending one, two, three or six months
thereafter as the Borrower may elect in the applicable
Interest Rate Election and subject to SECTION 2.9;
PROVIDED THAT clauses (i) and (ii) of this definition are
subject to the following:
(A) any Interest Period (other than an Interest Period
determined pursuant to clause (C) below) which would otherwise
end on a day which is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall
end on the immediately preceding Business Day;
(B) any Interest Period which 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, subject to clause (C) below, end on
the last Business Day of a calendar month; and
(C) for Term Loan A, no Interest Period shall end after the
Term Loan A Repayment Date, for Term Loan B, no Interest Period
shall end after the Term Loan B Repayment Date and for the
Revolving Credit Loan, no Interest Period shall end after the
Revolving Credit Repayment Date; and
(D) with respect to all Libor Loans, no more than six (6)
Interest Periods may be in effect at any time.
"INTEREST RATE ELECTION" means the Borrower's irrevocable
telecopied or telephonic notice of election, which shall be
promptly confirmed by a written notice of election that the
- 10 -
Effective Prime or the Libor Rate shall apply to all or any
portion of the Loans, which shall, subject to this Agreement, be
effective on the next Interest Adjustment Date, such telecopied
or telephonic notice and written confirmation thereof to be in
the form of EXHIBIT 1.4 and to be received by the Agent prior to
12:00 o'clock P.M. on a Business Day and at least three (3)
Business Days prior to an Interest Adjustment Date in the case of
a Libor Loan, and by 12:00 p.m. on an Interest Adjustment Date in
the case of a Prime Rate Loan (or four (4) Business Days in the
case of an Interest Rate Election as to which the consent of the
Lenders is required), each such Interest Rate Election, subject
to the terms of this Agreement to apply to the Advance or the
Loan referred to in such Interest Rate Election or to effect a
change in the interest rate on the applicable portion of the
Loans then outstanding, as applicable, with respect to which such
Interest Rate Election was made, such change to occur on the
Interest Adjustment Date next succeeding receipt of such Interest
Rate Election by the Agent. Any Interest Rate Election received
by the Agent after 12 o'clock P.M. on a Business Day shall be
deemed, for all purposes of this Agreement to have been received
prior to 12 o'clock P.M. on the next succeeding Business Day.
"INVESTMENT" means any investment in any Person whether by
means of a purchase of capital stock, notes, bonds, debentures or
other evidences of Indebtedness and/or by means of a capital or
partnership contribution, loan, deposit, advance or other means.
"LENDER" means Fleet, State Street, Imperial, Eastern or any
financial institution which hereafter becomes a party hereto
pursuant to the terms of SECTION 9.11, each in their individual
capacity, and "Lenders" means Fleet, State Street, Imperial,
Eastern and each of such financial institutions.
"LETTER OF CREDIT" means an irrevocable stand-by or
commercial letter of credit issued by the Agent for the account
of the Borrower pursuant to a Letter of Credit Agreement subject
to and in accordance with this Agreement.
"LETTER OF CREDIT AGREEMENT" means an application and
agreement for stand-by or commercial letter of credit in such
form as may at any time be customarily required by the Agent for
its issuance of stand-by or commercial letters of credit.
"LIBOR LOAN" means any portion of any Loan bearing interest
at the Libor Rate.
"LIBOR RATE" means, for any Interest Period, the Adjusted
Libor Rate in effect on the first day of such Interest Period
(subject to adjustment as provided in the definition of Adjusted
Libor Rate) plus the Applicable Margin for Libor Loans from time
to time in effect.
"LIEN" means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or
other) or other security agreement or preferential arrangement of
any kind or nature whatsoever (including without limitation any
conditional sale or other title retention agreement and any
Capitalized Lease Obligation) having substantially the same
economic effect as any of the foregoing and the filing of any
- 11 -
financing statement under the applicable Uniform Commercial Code
or comparable law of any jurisdiction in respect of any of the
foregoing.
"LOANS" and "LOAN" means at any time the outstanding
principal amount of Indebtedness owed to the Lenders or to any
lender, as the context may require pursuant to this Agreement.
"MAJORITY LENDERS" means Lenders holding an aggregate Pro
Rata Share of the outstanding principal balance of the Loans in
an amount equal to or in excess of 50.1% of the total outstanding
principal balance of the Loans and if there is no outstanding
principal balance of the Loans, Lenders having at least 50.1% of
the Commitment.
"MATERIAL ADVERSE EFFECT" means material adverse effect on
(i) the ability of the Borrower or any Subsidiary to fulfill
their obligations under any of the Financing Documents, (ii) the
Business Condition of the Borrower or any Subsidiary or (iii) the
ability of the Borrower to consummate the Related Transactions.
"MATERIAL AGREEMENTS" means (i) any agreements, obligations
or other instruments by which the Borrower or any Subsidiary may
be bound having a face value of $100,000 or more, or creating an
obligation on the part of any party thereto in excess of
$100,000, (ii) any agreements, obligations or other instruments
by which the Borrower or any Subsidiary may be bound which are
reasonably necessary to the conduct of their respective
businesses, except where any of the foregoing could be
substituted for on terms at least as favorable or (iii) any
agreements, obligations or other instruments by which the
Borrower or any Subsidiary may be bound, the absence of which
would be reasonably likely to result in a Material Adverse
Effect.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET INCOME" means, for any fiscal period, the net after tax
income (loss) of the Borrower and any Subsidiaries for such
period determined on an accrual and consolidated basis in
accordance with GAAP.
"NOTE" means any promissory note of the Borrower payable to
the order of a Lender and substantially in the form of EXHIBIT
1.5 or EXHIBIT 1.6 and evidencing all or a portion of the Loan
and "Notes" means all of the Notes, collectively.
"OBLIGATIONS" mean any and all Indebtedness, obligations and
liabilities of the Borrower and/or any Subsidiaries under any of
the Financing Documents to any one or more of the Lenders and/or
the Agent of every kind and description, absolute or contingent,
due or to become due, whether for payment or performance, now
existing or hereafter arising, including, without limitation,
all Loans, interest, taxes, fees, charges, and expenses under the
Financing Documents and attorneys' fees chargeable to the
Borrower and/or any Subsidiaries or incurred by any of the
Lenders and/or the Agent under any of the Financing Documents.
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"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Representative and delivered to the Agent on behalf of
the Lenders.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to subtitle A of Title IV of ERISA.
"P.M." means a time from and including 12 o'clock noon on
any Business Day to the end of such Business Day using Eastern
Standard (Daylight Savings) time.
"PERMITTED ENCUMBRANCES" means each Lien granted pursuant to
any of the Security Documents, those Liens, security interests
and defects in title permitted under SECTION 5.2.1 and those
Liens listed on EXHIBIT 1.8 hereto.
"PERSON" means an individual, corporation, partnership,
limited liability company, joint venture, trust, or
unincorporated organization, or a government or any agency or
political subdivision thereof.
"PLAN" means an employee benefit plan as defined in Section
3(3) of ERISA maintained for employees of the Borrower or any
Commonly Controlled Entity.
"POST-CLOSING LETTER" means that certain letter agreement
between the Borrower and the Agent dated the Closing Date and
listing certain post-closing actions to be completed by the
Borrower.
"PREMISES" has the meaning assigned to such term in SECTION
4.1.21.1.
"PRIME RATE" means the higher of (i) the floating rate of
interest per annum designated from time to time by the Agent as
being its "prime rate" of interest, such interest rate to be
adjusted on the effective date of any change thereof by the
Agent, it being understood that such rate of interest may not be
the lowest rate of interest from time to time charged by the
Agent and (ii) the Federal Funds Rate, such interest rate to be
adjusted on the effective date of any change thereof by the
Federal Reserve Bank of New York.
"PRIME RATE LOAN(S)" means any portion of the Loans bearing
interest at Effective Prime.
"PROJECTIONS" means the Borrower's written projections of
Borrower's 3-year future performance on a consolidated basis
delivered to the Agent prior to the Closing and attached to this
Agreement as EXHIBIT 1.12.
"PRO RATA SHARE" means (i) with respect to the Commitment,
each Lender's percentage share of the Commitment as set forth
immediately opposite such Lender's name on EXHIBIT 1.9, and (ii)
with respect to the Loans, each Lender's percentage share of the
aggregate outstanding principal balance of the Loans and "Pro
Rata Shares" means such percentage shares of the Lenders.
- 13 -
"REFERENCE LENDER(S)" means the Agent unless the Agent
resigns said responsibility, at which time and thereafter such
term means one or two Lenders selected by the Agent in its
discretion from time to time as a reference lender for purposes
of determining the Adjusted Libor Rate.
"RELATED TRANSACTIONS" means the purchase by the Borrower of
all of the outstanding capital stock of Xxxxx pursuant to the
Related Transaction Documents and the extension by the
Subordinated Creditor of the Subordinated Debt to the Borrower.
"RELATED TRANSACTION DOCUMENTS" means the documents listed
on EXHIBIT 1.2.
"REPORTABLE EVENT" shall have the meaning assigned to that
term in Section 4043 of ERISA for which the requirement of 30
days' notice to the PBGC has not been waived by the PBGC.
"REQUEST" means a written request for the Loans in the form
of EXHIBIT 1.10, received by the Agent on behalf of the Lenders
from the Borrower in accordance with this Agreement, specifying
the date on which the Borrower desires such Loans and the
disbursement instructions of the Borrower with respect thereto.
"REVOLVING CREDIT LOAN" means the revolving credit loans to
be made by the Lenders to the Borrower from time to time in the
maximum outstanding principal amount of the Revolving Credit Loan
Commitment, all subject and pursuant to SECTION 2.1.0.
"REVOLVING CREDIT LOAN COMMITMENT" means the Lenders'
several commitments to make Revolving Credit Loans to the
Borrower in accordance with SECTION 2.1.0 and this Agreement and
in the maximum outstanding amount of each Lender's Pro Rata Share
of $20,000,000, as such amount may be reduced pursuant to SECTION
2.6.4.
"REVOLVING CREDIT NOTE" means each revolving credit note of
the Borrower, payable to the order of a Lender in the form of
EXHIBIT 1.5 hereto evidencing the Indebtedness of the Borrower to
such Lender with respect to the Revolving Credit Loan.
"REVOLVING CREDIT REPAYMENT DATE" means the earlier to occur
of (i) December 31, 2003 and (ii) such earlier date on which the
Revolving Credit Loan becomes due and payable pursuant to the
terms hereof.
"SECTION" means, when followed by a number, the section or
subsection of this Agreement bearing that number.
"SECURED DOMESTIC SUBSIDIARY" means any Subsidiary
incorporated under the laws of the United States of America or
any state thereof that has provided or granted or caused to be
provided or granted to the Agent a first priority perfected Lien
on its assets, together with its guaranty of the Obligations and
a pledge by its parent entity of 100% of its ownership interests
in such Subsidiary, all in form and substance acceptable to the
Agent.
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"SECURITY DOCUMENTS" means any and all documents,
instruments and agreements now or hereafter providing security
for the Loans and any other Indebtedness of the Borrower or any
Subsidiary to any of the Lenders and/or the Agent, including
without limitation the following documents, instruments and
agreements between the Agent and the Borrower or any Subsidiary:
any mortgages on and collateral assignments of real property
interests (fee, leasehold and easement) of the Borrower and any
Subsidiary granting Liens thereon; landlord lien waivers and
consents as may be reasonably requested by the Agent; security
agreements granting first Liens on all Borrower's and any
Subsidiary's fixtures and tangible and intangible personal
property; collateral assignments of Borrower's and any
Subsidiary's contracts, licenses, permits, easements and leases;
collateral assignments of Borrower's and any Subsidiary's
copyrights; conditional assignments of Borrower's and any
Subsidiary's trademarks; any Subordination Agreement; any
guaranty by a Subsidiary; any pledge of the capital stock of any
Subsidiary; casualty and liability insurance policies providing
coverage to the Agent for the benefit of the Lenders, UCC-1
financing statements or similar filings perfecting the
above-referenced security interests, pledges and assignments, all
as executed, delivered to and accepted by the Agent on or prior
to the Closing Date or subsequent to the Closing Date as may be
required by this Agreement, as any of the foregoing may be
amended in writing by the Agent and any other party or parties
thereto.
"SELLING LENDER" shall have the meaning assigned to such
term in SECTION 9.11.1.
"SENIOR DEBT" means Indebtedness for Borrowed Money of the
Borrower and its Subsidiaries, less the Subordinated Debt.
"SINGLE EMPLOYER PLAN" means any Plan as defined in Section
4001(a)(15) of ERISA.
"SUBORDINATED CREDITOR" means Xxxxxxx Electric Co., a
Missouri corporation.
"SUBORDINATED DEBT" means $25,000,000 of Indebtedness owing
to the Subordinated Creditor and subordinated to the Obligations
pursuant to the Subordination Agreement.
"SUBORDINATION AGREEMENT" means that certain agreement
between the Borrower, the Agent and the Subordinated Creditor
providing for subordination of the Subordinated Debt to the
Obligations on terms acceptable to the Agent.
"SUBSIDIARY" means any corporation or entity other than the
Borrower of which more than 50% of the outstanding capital stock
or voting interests or rights having ordinary voting power to
elect a majority of the board of directors or other managers of
such entity (irrespective of whether or not at the time capital
stock or voting interests or rights of any other class or classes
of such Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or
indirectly owned by the Borrower or by the Borrower and/or one or
more Subsidiaries or the management of which corporation or
entity is under control of the Borrower and/or any other
Subsidiary, directly or indirectly through one or more Persons
and any other Person which, under GAAP, should at any time for
financial reporting purposes be consolidated or combined with the
Borrower and/or any other Subsidiary.
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"SUBSTITUTED LENDER" has the meaning set forth in
SECTION 9.11 hereof.
"SUBSTITUTION AGREEMENT" has the meaning assigned to such
term in SECTION 9.11.1.
"TERM LOANS" means, collectively, Term Loan A and Term Loan
B.
"TERM LOAN A" means the term loan in the aggregate principal
amount of $30,000,000 to be made or maintained by the Lenders
pursuant to SECTION 2.1.1 hereof.
"TERM LOAN B" means the term loan in the aggregate principal
amount of $40,000,000 to be made or maintained by the Lenders
pursuant to SECTION 2.1.2 hereof.
"TERM NOTE A" means a term note of the Borrower payable to
the order of a Lender in the form of EXHIBIT 1.6 hereto
evidencing the Indebtedness of the Borrower to such Lender with
respect to Term Loan A.
"TERM NOTE B" means a term note of the Borrower payable to
the order of a Lender in the form of EXHIBIT 1.7 hereto
evidencing the Indebtedness of the Borrower to such Lender with
respect to Term Loan B.
"TERM LOAN A REPAYMENT DATE" means the earlier to occur of
(i) December 31, 2003 and (ii) such earlier date on which the
Term Loan A becomes due and payable pursuant to the terms hereof.
"TERM LOAN B REPAYMENT DATE" means the earlier to occur of
(i) December 31, 2004 and (ii) such earlier date on which the
Term Loan B becomes due and payable pursuant to the terms hereof.
"TOTAL DEBT SERVICE" means, at any date of determination,
the sum of (i) Interest Expense and (ii) scheduled and mandatory
principal payments for the fiscal period in question due on
account of any Indebtedness of the Borrower, but excluding any
mandatory payments of principal required pursuant to SECTIONS
2.6.1.2, 2.6.1.3, 2.6.1.4 and 2.6.1.5.
"UNUSED FEES" has the meaning assigned to such term in
SECTION 2.2.2.
"XXXXX" means Xxxxx Electronics, Inc., an Indiana
corporation.
"XXXXX JAPAN" means Xxxxx Japan Kabushiki Kaisha, a Japanese
limited stock company, having its principal place of business at
Paleana Xxxxxxxx 0-0-00, Xxxx-Xxxxxxxx, Xxxxxx-Xx, Xxxxxxxx,
Xxxxx.
"XXXXX SINGAPORE" means Xxxxx Electronics Asia Pte. Limited,
a Singapore limited liability company, having its principal place
of business at Xxx 0 Xxx Xxxxx #00-0000, Xxx Xxxxx Xxxxxxx,
Xxxxxxxxx.
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SECTION 1.2. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP, calculations of amounts for the purposes of calculating any
financial covenants or ratios hereunder shall be made in
accordance with GAAP applied on a basis consistent with those
used in the Borrower's financial statements referred to in
SECTION 4.1.5 (other than departures therefrom not material in
their impact), and all financial data submitted pursuant to this
Agreement shall be prepared in accordance with GAAP (except, in
the case of unaudited financial statements, the absence of
footnotes and that such statements are subject to changes
resulting from year-end adjustments made in accordance with
GAAP).
SECTION 1.3. OTHER TERMS. References to "Articles",
"Sections", "subsections" and "Exhibits" shall be to Sections,
subsections and Exhibits and of this Agreement unless otherwise
specifically provided. In this Agreement, "hereof," "herein,"
"hereto," "hereunder" and the like mean and refer to this
Agreement as a whole and not merely to the specific section,
paragraph or clause in which the respective word appears; words
importing any gender include the other genders; references to
"writing" include printing, typing, lithography and other means
of reproducing words in a tangible visible form; the words
"including," "includes" and "include" shall be deemed to be
followed by the words "without limitation"; references to
agreements and other contractual instruments shall be deemed to
include subsequent amendments, assignments, and other
modifications thereto, but only to the extent such amendments,
assignments and other modifications are not prohibited by the
terms of this Agreement or any other Financing Document;
references to Persons include their respective permitted
successors and assigns or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and
all references to statutes and related regulations shall include
any amendments of same and any successor statutes and
regulations.
ARTICLE 2.
AMOUNT AND TERMS OF THE LOANS
SECTION 2.1. THE LOANS.
SECTION 2.1.0. THE REVOLVING CREDIT LOANS. Each of
the Lenders severally agrees, subject to the terms and conditions
of this Agreement, to make Advances of Revolving Credit Loans to
the Borrower in a minimum aggregate amount of Advances from the
Lenders pursuant to any Request of $500,000 and an integral
multiple of $100,000 thereafter from time to time after receipt
by the Agent from time to time before the Revolving Credit
Repayment Date of, and at the times provided for in, a Request
and an Interest Rate Election from the Borrower in accordance
with this Agreement, during the period commencing on the Closing
Date and ending on the Business Day immediately preceding the
Revolving Credit Repayment Date, in an aggregate principal amount
at any one time outstanding not to exceed the lesser of (i) such
Lender's Pro Rata Share of the Revolving Credit Loan Commitment
less (ii) in each case, such Lender's Pro Rata Share of the
aggregate amount of the outstanding stated amount of any Letter
of Credit or Letter of Credit Agreement, and any unreimbursed
amounts thereunder.
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Promptly after receipt of a Request and Interest Rate
Election, Agent shall notify each Lender by telephone, telex or
telecopy of the proposed borrowing. Subject to the immediately
preceding paragraph, each Lender agrees that after its receipt of
notification from Agent of Agent's receipt of a Request and
Interest Rate Election, such Lender shall send its Pro Rata Share
(or such portion thereof as may be necessary to provide Agent
with such Pro Rata Share in Dollars and in immediately available
funds, without consideration or use of any contra accounts of any
Lender) of the requested Loan by wire transfer to Agent so that
Agent receives such Pro Rata Share in Dollars and in immediately
available funds not later than 12:00 P.M. (Boston, Massachusetts
time) on the first day of the Interest Period for any such
requested Libor Loan and on the Business Day for such Advance set
forth in Borrower's Request for any such requested Prime Rate
Loan, and Agent shall advance funds to the Borrower by depositing
such funds in Borrower's account with the Agent upon Agent's
receipt of such Pro Rata Shares in the amount of the Pro Rata
Shares of such Loan in Agent's possession. Unless Agent shall
have been notified by any Lender (which notice may be telephonic
if confirmed promptly in writing) prior to the first day of the
Interest Period in respect of any Loan which such Lender is
obligated to make under this Agreement, that such Lender does not
intend to make available to Agent such Lender's Pro Rata Share of
such Loan on such date, Agent may assume that such Lender has
made such amount available to Agent on such date and Agent in its
sole discretion may, but shall not be obligated to, make
available to the Borrower a corresponding amount on such date.
If such corresponding amount is not in fact made available to
Agent by such Lender, Agent shall be entitled to recover such
corresponding amount from such Lender promptly upon demand by
Agent together with interest thereon, for each day from such date
until the date such amount is paid to Agent, at the Federal Funds
Rate for three (3) Business Days and thereafter at the interest
rate on the Loan in question. If such Lender does not pay such
corresponding amount forthwith upon Agent's demand therefor,
Agent shall promptly notify the Borrower and the Borrower shall
promptly pay such corresponding amount to Agent. Nothing
contained in this Section shall be deemed to relieve any Lender
from its obligation to fulfill its obligations hereunder or to
prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
Throughout the term of the Revolving Credit Loans,
$5,000,000 of the Revolving Credit Loan Commitment and principal
amount of the Revolving Credit Loans may, in the Agent's
discretion, be made available to the Borrower prior to the
Revolving Credit Repayment Date by issuance of Letters of Credit
having an expiration date prior to the earlier to occur of (a)
the first anniversary date of the date of issuance of any such
Letter of Credit or (b) three (3) Business Days prior to the
Revolving Credit Repayment Date, reasonably promptly after
submission by the Borrower to the Agent of a Letter of Credit
Agreement, duly completed and executed by the Borrower and
otherwise in form and substance satisfactory to the Agent. The
Borrower shall pay upon demand by the Agent such fees and costs
as the Agent may from time to time establish for issuance,
transfer, amendment and negotiation of each Letter of Credit and
shall pay to the Agent for the Lenders' accounts equal to their
respective Pro Rata Shares upon issuance of any Letter of Credit
an annual Letter of Credit fee in an amount equal to the product
of (i) the stated amount of each Letter of Credit multiplied by
(ii) the Applicable Margin then in effect with respect to any
Revolving Credit Loan which is a Libor Loan. In the event that
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the Borrower shall fail to reimburse the Agent under any Letter
of Credit or Letter of Credit Agreement, and any outstanding
Indebtedness of the Borrower relating thereto, the Agent shall
promptly notify each Lender of the unreimbursed amount together
with accrued interest thereon, and each Lender agrees to
purchase, and it shall be deemed to have purchased, a
participation in such Letter of Credit or Letter of Credit
Agreement and such indebtedness in an amount equal to its Pro
Rata Share of the unpaid amount together with unpaid interest
thereon. Upon one (1) Business Day's notice from the Agent, each
Lender shall deliver to the Agent an amount equal to its
respective participation in same day funds, at the place and on
the date and by the time notified by the Agent. The obligation
of each Lender to deliver to the Agent an amount equal to its
respective participation pursuant to the foregoing sentence shall
be absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of
Default or the failure to satisfy any condition set forth in
Article III of this Agreement.
SECTION 2.1.1. TERM LOAN A. On the Closing Date, each
of the Lenders severally agrees, subject to the terms and
conditions of this Agreement, to make the Term Loan A to the
Borrower in the amount of its respective Pro Rata Share of
$30,000,000. Borrower shall pay on the last day of each calendar
quarter ending on or in between the dates set forth below the
amount of the Term Loan A set forth immediately opposite such
dates below:
REPAYMENT QUARTERLY
DATES PAYMENT AMOUNT
===== ==============
January 1, 1998 through
December 31, 1998 $1,075,000
January 1, 1999 through
December 31, 1999 $1,125,000
January 1, 2000 through
December 31, 2000 $1,200,000
January 1, 2001 through
December 31, 2001 $1,250,000
January 1, 2002 through
December 31, 2002 $1,350,000
January 1, 2003 through
September 30, 2003 $1,500,000
Term Loan A Repayment
Date Then Remaining
Outstanding
Balance of Term Loan A
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SECTION 2.1.2. TERM LOAN B. On the Closing Date, each of
the Lenders severally agrees, subject to the terms and conditions
of this Agreement, to make the Term Loan B to the Borrower in the
amount of its respective Pro Rata Share of $40,000,000. Borrower
shall pay on the last day of each calendar quarter ending on or
in between the dates set forth below the amount of the Term Loan
B set forth immediately opposite such dates below:
REPAYMENT QUARTERLY
DATES PAYMENT AMOUNT
===== ==============
January 1, 1998 through
December 31, 2003 $100,000
January 1, 2004 through
September 30, 2004 $9,400,000
Term Loan B Repayment
Date Then Remaining
Outstanding
Balance of Term Loan B
SECTION 2.2. INTEREST AND FEES ON THE LOANS.
SECTION 2.2.1. INTEREST. Interest shall accrue and be
paid currently on the Loans at Effective Prime or the Libor Rate
for each of the Loans' Interest Periods in accordance with the
Borrower's Interest Rate Elections for the Loans subject to and
in accordance with the terms and conditions of this Agreement and
the Note(s); provided that if a Default or an Event of Default
exists and is continuing, no Interest Rate Election electing the
Libor Rate shall be effective and any Loan or portion thereof
with respect to which any such Interest Rate Election would
otherwise have been effective shall bear interest at Effective
Prime plus, so long as an Event of Default exists and is
continuing, two percent (2%); all of the foregoing being
applicable until such Default or Event of Default is cured or
waived and an Interest Rate Election electing the Libor Rate for
such Loan or portion thereof which is effective in accordance
with this Agreement is submitted to the Agent; and provided
further that the Borrower shall submit Interest Rate Elections so
that on any date on which under SECTION 2.1.1 a regularly
scheduled payment of principal of the Term Loans is to be made,
at least the amount of the Term Loans to be so repaid is bearing
interest at Effective Prime and/or such payment date is an
Interest Adjustment Date for outstanding Libor Loans in such
amount of the Term Loans. Upon the occurrence and during the
continuance of any Event of Default, each Prime Rate Loan shall
bear interest, payable on demand, at a floating interest rate per
annum equal to two percent (2.0%) above Effective Prime and each
Libor Loan shall bear interest at the Libor Rate plus two percent
(2.0%). The Borrower shall pay such interest to the Agent for
the pro rata account of each Lender in arrears on the Loans
(including without limitation Libor Loans) outstanding from time
to time after the Closing Date, such payments to be made, with
respect to Libor Loans with Interest Periods of three months or
less on each Interest Adjustment Date for such Loans, and with
respect to Libor Loans with Interest Periods of more than three
months and with respect to Prime Rate Loans, quarterly on the
last Business Day of each calendar quarter of each year
commencing December 31, 1997. In the event no Interest Rate
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Election has been made by the Borrower with respect to any Loan
or Advance (or an Interest Rate Election shall have expired
without an effective substitute Interest Rate Election),
Effective Prime shall be the rate applicable to such Loan or
Advance. All provisions of each Note and any other agreements
between the Borrower and the Lenders are expressly subject to the
condition that in no event, whether by reason of acceleration of
maturity of the Indebtedness evidenced by any Note or otherwise,
shall the amount paid or agreed to be paid to the Lenders which
is deemed interest under applicable law exceed the maximum
permitted rate of interest under applicable law (the "Maximum
Permitted Rate"), which shall mean the law in effect on the date
of this Agreement, except that if there is a change in such law
which results in a higher Maximum Permitted Rate, then each Note
shall be governed by such amended law from and after its
effective date. In the event that fulfillment of any provision
of any Note, or this Agreement or any document, instrument or
agreement providing security for any Note results in the rate of
interest charged under any Note being in excess of the Maximum
Permitted Rate, the obligation to be fulfilled shall
automatically be reduced to eliminate such excess. If,
notwithstanding the foregoing, any Lender receives an amount
which under applicable law would cause the interest rate under
any Note to exceed the Maximum Permitted Rate, the portion
thereof which would be excessive shall automatically be deemed a
prepayment of and be applied to the unpaid principal balance of
such Note to the extent of then outstanding Prime Rate Loans and
not a payment of interest and to the extent said excessive
portion exceeds the outstanding principal amount of Prime Rate
Loans, said excessive portion shall be repaid to the Borrower.
SECTION 2.2.2. FEES. On the last Business Day of each
March, June, September and December commencing December 31, 1997
and continuing through the Revolving Credit Repayment Date, the
Borrower shall pay to the Agent for the pro rata account of each
Lender, a fee in an amount equal to .50% per annum of the amount,
if any, by which the average actual daily amount of the Revolving
Credit Loan Commitment for the quarterly period just ended (or in
the case of the first such payment, the period from the Closing
Date to the date such payment is due) exceeds the sum of (x) the
average of the actual daily (on the basis of a year of 360 days,
for the actual number of days elapsed) outstanding principal
balances of the Revolving Credit Loans PLUS (y) the average of
the actual daily aggregate amount of the outstanding stated
amount of any Letter of Credit or Letter of Credit Agreement, and
any unreimbursed amounts thereunder; provided, however, that if
at any time after the receipt by the Agent of the quarterly
financial statements for the Borrower's March 31, 1998 fiscal
quarter and each subsequent Borrower fiscal quarter provided to
the Agent by the Borrower pursuant to SECTION 5.3.3 hereof, the
ratio of (a) total Senior Debt on a consolidated basis as of the
last day of the most recently ended fiscal quarter of the
Borrower to (b) EBITDA, (i) is less than 2.5:1.0 and greater than
or equal to 2.0:1.0 and if and so long as no Event of Default or
Default exists and is continuing, the Borrower shall pay to the
Agent for the pro rata account of each Lender a fee in an amount
equal to .45% per annum of the amount, if any, by which the
average actual daily amount of the Revolving Credit Loan
Commitment for the quarterly period just ended (or in the case of
the first such payment, the period from the Closing Date to the
date such payment is due) exceeds the sum of (x) the average of
the actual daily (on the basis of a year of 360 days, for the
actual number of days elapsed) outstanding principal balance of
the Revolving Credit Loans PLUS (y) the average of the actual
daily aggregate amount of the outstanding stated amount of any
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Letter of Credit or Letter of Credit Agreement, and any
unreimbursed amounts thereunder; (ii) is less than 2.0:1.0 and
greater than or equal to 1.5:1.0 and if and so long as no Event
of Default or Default exists and is continuing, the Borrower
shall pay to the Agent for the pro rata account of each Lender a
fee in an amount equal to .40% per annum of the amount, if any,
by which the average actual daily amount of the Revolving Credit
Loan Commitment for the quarterly period just ended (or in the
case of the first such payment, the period from the Closing Date
to the date such payment is due) exceeds the sum of (x) the
average of the actual daily (on the basis of a year of 360 days,
for the actual number of days elapsed) outstanding principal
balance of the Revolving Credit Loans PLUS (y) the average of the
actual daily aggregate amount of the outstanding stated amount of
any Letter of Credit or Letter of Credit Agreement, and any
unreimbursed amounts thereunder or (iii) is less than 1.5:1.0 and
if and so long as no Event of Default or Default exists and is
continuing, the Borrower shall pay to the Agent for the pro rata
account of each Lender a fee in an amount equal to .35% per annum
of the amount, if any, by which the average actual daily amount
of the Revolving Credit Loan Commitment for the quarterly period
just ended (or in the case of the first such payment, the period
from the Closing Date to the date such payment is due) exceeds
the sum of (x) the average of the actual daily (on the basis of a
year of 360 days, for the actual number of days elapsed)
outstanding principal balance of the Revolving Credit Loans PLUS
(y) the aggregate amount of the outstanding stated amount of any
Letter of Credit or Letter of Credit Agreement, and any
unreimbursed amounts thereunder (the "Unused Fees"). In
addition, the Borrower shall pay to the Agent for its own
account certain fees as specified in the Fee Letter.
SECTION 2.2.3. INCREASED COSTS - CAPITAL. If, after
the date hereof, any Lender shall have reasonably determined that
the adoption after the date hereof of any applicable law,
governmental rule, regulation or order regarding capital adequacy
of banks or bank holding companies, or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by such Lender or such Lender's holding company with any policy,
guideline, directive or request regarding capital adequacy
(whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) of any such
authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such
Lender or such Lender's holding company as a consequence of the
obligations hereunder of such Lender to a level below that which
such Lender could have achieved but for such adoption, change or
compliance (taking into consideration the policies of such Lender
or such Lender's holding company with respect to capital adequacy
immediately before such adoption, change or compliance and
assuming that the capital of such Lender or such Lender's holding
company was fully utilized prior to such adoption, change or
compliance) by an amount reasonably deemed by such Lender to be
material, then such Lender shall notify the Agent and the
Borrower thereof and the Borrower shall pay to the Agent for the
account of such Lender from time to time as specified by such
Lender such additional amounts as shall be sufficient to
compensate such Lender for such reduced return, each such payment
to be made by the Borrower within five (5) Business Days after
each demand by such Lender; provided that the liability of the
Borrower to pay such costs shall only accrue with respect to
costs accruing from and after the 180th day prior to the date of
each such demand. A certificate in reasonable detail of one of
the officers of such Lender describing the event giving rise to
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such reduction and setting forth the amount to be paid to such
Lender hereunder and a computation of such amount shall accompany
any such demand and shall, in the absence of manifest error, be
conclusive. In determining such amount, such Lender shall act
reasonably and will use any reasonable averaging and attribution
methods. If the Borrower shall, as a result of the requirements
of this SECTION 2.2.3 above, be required to pay any Lender the
additional costs referred to above and the Borrower, in its sole
discretion, shall deem such additional amounts to be material,
the Borrower shall have the right to substitute another bank
satisfactory to the Agent for such Lender which has certified the
additional costs to the Borrower, and the Agent shall use
reasonable efforts at no cost to the Agent to assist the Borrower
to locate such substitute bank. Any such substitution shall take
place in accordance with SECTION 9.11 and shall otherwise be on
terms and conditions reasonably satisfactory to the Agent, and
until such time as such substitution shall be consummated, the
Borrower shall continue to pay such additional costs. Upon any
such substitution, the Borrower shall pay or cause to be paid to
the Lender that is being replaced, all principal, interest (to
the date of such substitution) and other amounts owing hereunder
to such Lender and such Lender will be released from liability
hereunder.
SECTION 2.3. NOTATIONS. At the time of (i) the making
of each Advance evidenced by any Note, (ii) each change in the
interest rate under any Note effected as a result of an Interest
Rate Election; and (iii) each payment or prepayment of any Note,
each Lender may enter upon its records an appropriate notation
evidencing (a) such Lender's Pro Rata Share of the Loans and (b)
the interest rate and Interest Adjustment Date applicable thereto
or (c) such payment or prepayment (voluntary or involuntary) of
principal and (d) in the case of payments or prepayments
(voluntary or involuntary) of principal, the portion of the
applicable Loan which was paid or prepaid. No failure to make
any such notation shall affect the Borrower's unconditional
obligations to repay the Loans and all interest, fees and other
sums due in connection with this Agreement and/or any Note in
full, nor shall any such failure, standing alone, constitute
grounds for disproving a payment of principal by the Borrower.
However, in the absence of manifest error, such notations and
each Lender's records containing such notations shall constitute
presumptive evidence of the facts stated therein, including,
without limitation, the outstanding amount of such Lender's Pro
Rata Share of the Loans and all amounts due and owing to such
Lender at any time. Any such notations and such Lender's records
containing such notations may be introduced in evidence in any
judicial or administrative proceeding relating to this Agreement,
the Loans or any Note.
SECTION 2.4. COMPUTATION OF INTEREST. Interest due
under this Agreement and any Note shall be computed on the basis
of a year of 360 days for the actual number of days elapsed.
SECTION 2.5. TIME OF PAYMENTS AND PREPAYMENTS IN
IMMEDIATELY AVAILABLE FUNDS.
SECTION 2.5.1. TIME. All payments and prepayments of
principal, fees, interest and any other amounts owed from time to
time under this Agreement and/or under each Note shall be made to
the Agent for the pro rata account of each Lender at the address
referred to in SECTION 9.6 in Dollars and in immediately
available funds prior to 12:00 o'clock P.M. on the Business Day
that such payment is due, provided that the Borrower hereby
authorizes and instructs the Agent to charge against the
Borrower's accounts with the Agent on each date on which a
- 23 -
payment is due hereunder and/or under any Note and on any
subsequent date if and to the extent any such payment is not made
when due an amount up to the principal, interest and fees due and
payable to the Lenders, the Agent or any Lender hereunder and/or
under any Note and such charge shall be deemed payment hereunder
and under the Note(s) in question to the extent that immediately
available funds are then in such accounts. The Agent shall use
reasonable efforts in accordance with the Agent's customary
procedures to give subsequent notice of any such charge to the
Borrower, but the failure to give such notice shall not affect
the validity of any such charge. To the extent that immediately
available funds are then in such accounts, the failure of the
Agent to charge any such account or the failure of the Agent to
charge any such account prior to 12 o'clock P.M. shall not be
basis for an Event of Default under SECTION 6.1.1 and any amount
due on the Loans on such date shall be deemed paid; provided that
the Agent shall have the right to charge any such account on any
subsequent date for such unpaid payment and an Event of Default
shall exist if sufficient immediately available funds are not in
such accounts on the date the Agent so charges such account after
the expiration of any applicable cure period. In the event of
any charge against the Borrower's accounts by the Agent pursuant
to the immediately preceding sentence, the Agent shall use
reasonable efforts to provide notice to the Borrower of such
charge in accordance with the Agent's customary procedures, but
the failure to provide such notice shall not in any way be a
basis for any liability of the Agent nor shall such failure
adversely affect the validity and effectiveness of any such
action by the Agent. Any such payment or prepayment which is
received by the Agent in Dollars and in immediately available
funds after 12 o'clock P.M. on a Business Day shall be deemed
received for all purposes of this Agreement on the next
succeeding Business Day unless the failure by Agent to receive
such funds prior to 12 o'clock P.M. is due to Agent's failure to
charge the account of Borrower prior to 12 o'clock P.M., except
that solely for the purpose of determining whether a Default or
Event of Default has occurred under SECTION 6.1.1, any such
payment or prepayment, if received by the Agent prior to the
close of the Agent's business on a Business Day, shall be deemed
received on such Business Day. All payments of principal,
interest, fees and any other amounts which are owing to any or
all of the Lenders or the Agent hereunder and/or under any of the
Notes that are received by the Agent in immediately available
Dollars prior to 12:00 o'clock P.M. on any Business Day shall, to
the extent owing to the Lenders other than the Agent, be sent by
wire transfer by the Agent to any such other Lenders (in each
case, without deduction for any claim, defense or offset of any
type) before 3:00 o'clock P.M. on the same Business Day. Each
such wire transfer shall be addressed to each Lender in
accordance with the wire instructions set forth in EXHIBIT 1.9
hereto. The amount of each payment wired by the Agent to each
such Lender shall be such amount as shall be necessary to provide
such Lender with its Pro Rata Share of such payment (without
consideration or use of any contra accounts of any Lender), or
with such other amount as may be owing to such Lender in
accordance with this Agreement (in each case, without deduction
for any claim, defense or offset of any type). Each such wire
transfer shall be sent by the Agent only after the Agent has
received immediately available Dollars from or on behalf of the
Borrower and each such wire transfer shall provide each Lender
receiving same with immediately available Dollars on receipt by
such Lender. Any such payments of immediately available Dollars
received by the Agent after 12:00 o'clock P.M. and before 3:00
o'clock P.M. on any Business Day shall be forwarded in the same
manner by the Agent to such Lender(s) as soon as practicable on
said Business Day, and if any such payments of immediately
available Dollars are received by the Agent after 3:00 o'clock
P.M. on a Business Day, the Agent shall so forward same to such
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Lender(s) before 10:00 o'clock A.M. on the immediately succeeding
Business Day.
SECTION 2.5.2. SETOFF, ETC. Regardless of the
adequacy of any collateral for any of the Obligations, upon the
occurrence and during the continuance of any Event of Default,
each Lender is hereby authorized at any time and from time to
time, without notice to the Borrower (any such notice being
expressly waived by the Borrower), to set off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and any other Indebtedness at any time
owing by such Lender to or for the credit or the account of the
Borrower against any and all of the Obligations of the Borrower
irrespective of whether or not such Lender shall have made any
demand under this Agreement or any Note and although such
obligations may be unmatured. Each such Lender agrees to
promptly notify the Borrower and the Agent after any such setoff
and application; provided that the failure to give such notice
shall not affect the validity of such setoff and application.
Promptly following any notice of setoff received by the Agent
from a Lender pursuant to the foregoing, the Agent shall notify
each other Lender thereof. The rights of each Lender under this
SECTION 2.5.2 are in addition to all other rights and remedies
(including, without limitation, other rights of setoff) which
such Lender may have and are subject to SECTION 9.12.
SECTION 2.5.3. UNCONDITIONAL OBLIGATIONS AND NO
DEDUCTIONS.
SECTION 2.5.3.1. The Borrower's obligation to
make all payments provided for in this Agreement and the other
Financing Documents shall be unconditional. Each such payment
shall be made without deduction for any claim, defense or offset
of any type and regardless of whether any claims, defenses or
offsets of any type exist.
SECTION 2.5.3.2. (a) Any and all payments by the
Borrower to or for the account of any Lender or the Agent
hereunder or under any other Financing Document shall be made
free and clear of and without deduction for any and all present
or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender (or its
applicable lending office) or the Agent (as the case may be) is
organized or any political subdivision thereof, other than to the
extent such income or franchise tax is imposed solely as a result
of the activities of the Agent or a Lender pursuant to or in
respect of this Agreement or any of the other Financing Documents
(all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Financing Document to
any Lender or the Agent,(i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this
SECTION 2.5.3.2) such Lender or the Agent receives an amount
equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions, (iii)
the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with
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applicable law, and (iv) the Borrower shall furnish to the Agent,
at its address referred to in SECTION 9.6 hereof, the original or
a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise
or property taxes or charges or similar levies which arise from
any payment made under this Agreement or any other Financing
Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this SECTION
2.5.3.2) paid by such Lender or the Agent (as the case may be)
and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to
the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing
by the Borrower or the Agent (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrower and
the Agent with (i) a properly completed Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the
income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United
States, (ii) a properly completed Internal Revenue Service Form
W-8 or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is
exempt from United States backup withholding, and (iii) any other
form or certificate required by any taxing authority (including
any certificate required by Sections 871(h) and 881(c) of the
Internal Revenue Code), certifying that such Lender is entitled
to an exemption from or a reduced rate of tax on payments
pursuant to this Agreement or any of the other Financing
Documents.
(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the appropriate
form pursuant to SECTION 2.5.3.2(d) hereof (unless such failure
is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to
be provided), such Lender shall not be entitled to
indemnification under SECTION 2.5.3.2(A) OR 2.5.3.2(B) hereof
with respect to Taxes imposed by the United States; provided,
however, that should a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender
shall reasonably request and at such Lender's cost to assist such
Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this SECTION
2.5.3.2, then such Lender will agree to use reasonable efforts to
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change the jurisdiction of its applicable lending office so as to
eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender,
is not otherwise disadvantageous to such Lender. Alternatively,
in the event of such an additional cost, the Borrower shall have
the right to substitute another bank satisfactory to the Agent,
and the Agent and such Lender shall use reasonable efforts at no
cost to the Agent and such Lender to assist the Borrower to
locate and effect the substitution in favor of such substitute
bank. Any such substitution shall take place in accordance with
SECTION 9.11 and shall otherwise be on terms and conditions
reasonably satisfactory to the Agent, and until such time as such
substitution shall be consummated, the Borrower shall continue to
pay such additional costs. Upon any such substitution, the
Borrower shall pay or cause to be paid to the Lender that is
being replaced, all principal, interest (to the date of such
substitution) and other amounts owing hereunder to such Lender
and such Lender will be released from liability hereunder.
(g) Within thirty (30) days after the date of any payment
of Taxes, the Borrower shall furnish to the Agent the original or
a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this SECTION 2.5.3.2
shall survive until the first anniversary of the Repayment Date.
(i) If the Borrower makes any additional payment to any
Lender pursuant to this SECTION 2.5.3.2 in respect of any Taxes,
and such Lender determines that it has received (i) a refund of
such Taxes, or (ii) a credit against, relief or remission for, or
a reduction in the amount of, any tax or other governmental
charge as a result of any deduction or credit for any Taxes with
respect to which it has received payments under this SECTION
2.5.3.2, such Lender shall, to the extent that it can do so
without prejudice to the retention of such refund, credit,
relief, remission or reduction, pay to the Borrower such amount
as shall be reasonably determined by such Lender to be solely
attributable to the deduction or withholding of such Taxes. If
such Lender later determines that it was not entitled to such
refund, credit, relief, remission or reduction to the full extent
of any payment made pursuant to the first sentence of this
SECTION 2.5.3.2(i), the Borrower shall upon demand of such Lender
promptly repay the amount of such overpayment. Nothing in this
SECTION 2.5.3.2(i) shall be construed as requiring such Lender to
conduct its business or to arrange or alter in any respect its
tax or financial affairs so that it is entitled to receive such a
refund, credit or reduction or as allowing any Person to inspect
any records, including tax returns, of such Lender.
SECTION 2.6. PREPAYMENT AND CERTAIN PAYMENTS.
SECTION 2.6.1. MANDATORY PAYMENTS.
SECTION 2.6.1.1. In addition to each other
principal payment required hereunder, the outstanding principal
balances of Term Loan A shall be repaid on the Term Loan A
Repayment Date, the outstanding principal balances of Term Loan B
shall be repaid on the Term Loan B Repayment Date and the
outstanding principal balances of the Revolving Credit Loans
shall be repaid on the Revolving Credit Repayment Date.
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SECTION 2.6.1.2. On or before the 90th day after
the end of each fiscal year of the Borrower commencing with the
fiscal year ending December 31, 1998, the Borrower shall prepay
to the Agent for the accounts of the Lenders in accordance with
their Pro Rata Shares an amount of the outstanding principal
balances of the Term Loans equal to (i) 75% of the amount, if
any, of Excess Cash Flow for such fiscal year (provided that such
amount shall be reduced to 50% of the amount, if any, of Excess
Cash Flow for such fiscal year if, based upon the financial
statements for the Borrower's fiscal year end delivered to the
Agent pursuant to SECTION 5.3.2, the ratio of (a) total Senior
Debt on a consolidated basis as of the last day of the most
recently ended fiscal quarter of the Borrower to (b) EBITDA, is
less than 2.25:1.0) LESS (ii) voluntary prepayments of the Term
Loans made during such fiscal year. Such prepayments shall be in
addition to any and all other mandatory and voluntary prepayments
required or permitted hereunder and shall be applied to the
principal installments of the Term Loans in accordance with
SECTION 2.6.1.6.
SECTION 2.6.1.3. In the event that the Borrower
or any Subsidiary is entitled to receive any Extraordinary
Receipts, the Borrower upon receipt of such proceeds shall make a
prepayment of the Term Loans for the accounts of the Lenders in
accordance with their Pro Rata Shares. All such payments shall
be applied to the principal installments of the Term Loans in
accordance with SECTION 2.6.1.6.
SECTION 2.6.1.4. In the event that the Borrower
and/or any Subsidiary sells, assigns or otherwise transfers title
to any asset other than in the ordinary course of its business
for net cash proceeds in the aggregate since the Closing Date in
excess of $500,000, the Borrower and/or such Subsidiary shall
remit 100% of the net cash proceeds of such sale, assignment or
other transfer to the Agent for the accounts of the Lenders in
accordance with their Pro Rata Shares to be applied to the
principal installments of the Term Loans in accordance with
SECTION 2.6.1.6 within 10 Business Days of the date of Borrower's
or any Subsidiary's receipt of such net cash proceeds; provided,
however, that Borrower may sell any of its equipment which is
obsolete, worn-out or no longer used or useful in Borrower's or
any Subsidiary's business and Borrower or any Subsidiaries may
use the proceeds of such sale to purchase other equipment which
is useful or necessary in the operation of Borrower's or any
Subsidiary's business and that Borrower or any Subsidiaries may
also sell inventory in the ordinary course of its business.
SECTION 2.6.1.5. In the event that the Borrower
and/or any Subsidiary sells or issues any class of the Borrower's
or any Subsidiary's equity securities, the Borrower and/or such
Subsidiary upon receipt of the net aggregate cash consideration
from the sale or issuance of any such equity shall prepay the
amount of such net cash proceeds to the Agent for the accounts of
the Lenders in accordance with their Pro Rata Shares to be
applied to the principal installments of the Term Loans in
accordance with SECTION 2.6.1.6 within 10 Business Days of the
date of Borrower's or any Subsidiary's receipt of such net cash
proceeds. Notwithstanding the foregoing, at any time after the
Closing Date, and if and so long as no Event of Default or
Default exists and is continuing, the Borrower may apply any net
cash proceeds from the sale or issuance of any class of the
Borrower's or any Subsidiary's equity securities to reduce the
then-outstanding balance of the Subordinated Debt.
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SECTION 2.6.1.6. Any amounts repaid by the
Borrower and/or any Subsidiary under this SECTION 2.6.1 shall be
applied to the principal installments of the Term Loans under
SECTIONS 2.1.1 and 2.1.2 in accordance with the following: pro-
rata between Term Loan A and Term Loan B, such amounts then to be
applied on a pro-rata basis to the respective amounts of the
remaining payments to reduce the remaining quarterly payments
thereof; provided, however, that so long as any amounts of Term
Loan A remain outstanding, any Lender of Term Loan B may elect to
refuse its pro-rata share of such amounts allocable to Term Loan
B and its share shall then be applied on a pro-rata basis to the
respective amounts of the remaining quarterly payments of Term
Loan A. In the event that any payment or prepayment of a Libor
Loan under this SECTION 2.6.1 is received on a date other than
the last day of an Interest Period, such payment or prepayment
shall be held by the Agent in a separate, interest bearing
account (as reasonably selected by the Agent and which amounts
may bear interest in an amount less than the Interest Rate then
applicable to such amounts) and be pledged to the Agent as
collateral for the Obligations of the Borrower arising in
connection with the Financing Documents until the last day of the
then current Interest Period, at which time the Agent shall apply
such payment or prepayment, for the account of the Lenders in
accordance with their Pro Rata Shares, to the outstanding Libor
Loans, for which such day is an Interest Adjustment Date.
SECTION 2.6.2. VOLUNTARY PREPAYMENTS. All or any
portion of the unpaid principal balance of the Loans (other than
portions of any Loans constituting Libor Loans) may be prepaid at
any time, without premium or penalty, by giving the Agent at
least 3 days' prior written notice of such prepayment and by a
payment to the Agent for the accounts of the Lenders in
accordance with their Pro Rata Shares of such prepayment in
immediately available Dollars by the Borrower; provided that each
such partial payment or prepayment of principal of the Loans
shall be in a principal amount of at least $500,000 or an
integral multiple of $100,000 in excess thereof and provided
further that each such prepayment of the Term Loans shall be
applied to the principal installments of the Term Loans in the
manner set forth in SECTION 2.6.1.6.
SECTION 2.6.3. PREPAYMENT OF LIBOR LOANS.
Notwithstanding anything to the contrary contained in any Note or
in any other agreement executed in connection herewith or
therewith, the Borrower shall be permitted to prepay any portion
of the Loans constituting Libor Loans only in accordance with
SECTION 2.9 hereof.
SECTION 2.6.4. PERMANENT REDUCTION OF COMMITMENT. At
the Borrower's option the Commitment and the Revolving Credit
Loan Commitment may be permanently and irrevocably reduced in
whole or in part by an amount of at least $500,000 and to the
extent in excess thereof in integral multiples of $100,000 at any
time; provided that (i) the Borrower gives the Agent written
notice of the exercise of such option at least three (3) Business
Days prior to the effective date thereof, (ii) the aggregate
outstanding balance of the Loans, if any, does not exceed the
Commitment and the aggregate outstanding balance of the Revolving
Credit Loans together with the aggregate amount of the
outstanding stated amount of any Letter of Credit or Letter of
Credit Agreement, and any unreimbursed amounts thereunder, if
any, does not exceed the Revolving Credit Loan Commitment, both
as so reduced in any such case on the effective date of such
reduction and (iii) the Borrower is not, and after giving effect
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to such reduction, would not be in violation of SECTION 2.6.3.
Any such reduction shall concurrently reduce the Dollar amount of
each Lender's Pro Rata Share of the Commitment and the Revolving
Credit Loan Commitment.
SECTION 2.7. PAYMENT ON NON-BUSINESS DAYS. Whenever any
payment to be made hereunder or under any Note shall be stated to
be due on a day other than a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment
of fees, if any, and interest under this Agreement and under such
Note.
SECTION 2.8. USE OF PROCEEDS. The Borrower shall use
the proceeds of the Term Loans to purchase all of the outstanding
capital stock of Xxxxx and to pay costs incurred by the Borrower
in connection with the closing of the Loans, including without
limitation, the costs incurred in connection with the Related
Transactions and shall use the proceeds of the Revolving Credit
Loans to purchase such capital stock, pay such costs, for
Borrower's working capital needs and for Investments permitted by
SECTION 5.2.12.
SECTION 2.9. SPECIAL LIBOR LOAN PROVISIONS. The Libor
Loans shall be subject to and governed by the following terms and
conditions:
SECTION 2.9.1. REQUESTS. Each Request accompanied by
an Interest Rate Election selecting the Libor Rate must be
received by the Agent in accordance with the definition of
Interest Rate Election.
SECTION 2.9.2. LIBOR LOANS UNAVAILABLE.
Notwithstanding any other provision of this Agreement, if, prior
to or on the date on which all or any portion of the Loans is to
be made as or converted into a Libor Loan, any of the Lenders (or
the Agent with respect to (ii) below) shall reasonably determine
(which determination shall be conclusive and binding on the
Borrower), that
(i) Dollar deposits in the relevant amounts and for
the relevant Interest Period are not offered to such Lender in
the London interbank market,
(ii) by reason of circumstances affecting the London
interbank market, adequate and reasonable means do not exist
for ascertaining the Adjusted Libor Rate, or
(iii) the Adjusted Libor Rate shall no longer
represent the effective cost to such Lender for Dollar
deposits in the London interbank market for reasons other
than the fact, standing alone, that the Adjusted Libor Rate
is based on an averaging of rates determined by the Agent
and that such Lender's rate may exceed such average,
such Lender may elect not to accept any Interest Rate Election
electing a Libor Loan and such Lender shall notify the Agent by
telephone or telex thereof, stating the reasons therefor, not
later than the close of business on the second Business Day prior
to the date on which such Libor Loan is to be made. The Agent
shall promptly give notice of such determination and the reason
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therefor to the Borrower, and all or such portion of the Loans,
as the case may be, which are subject to any of SECTION 2.9.2
(i), (ii) through (iii) as a result of such Lender's
determination shall be made as or converted into, as the case may
be, Prime Rate Loans and such Lender shall have no further
obligation to make Libor Loans, until further written notice to
the contrary is given by the Agent to the Borrower. If such
circumstances subsequently change so that such Lender shall no
longer be so affected, such Lender's obligation to make or
maintain its Pro Rata Share of all or any portion of the Loans as
Libor Loans shall be reinstated when such Lender obtains actual
knowledge of such change of circumstances and promptly after
obtaining such actual knowledge such Lender shall forward written
notice thereof to the Agent. After receipt of such notice, the
Agent shall promptly forward written notice thereof to the
Borrower. Upon or after receipt by the Borrower of such written
notice, the Borrower may submit an Interest Rate Election in
accordance with this Agreement electing an Interest Period ending
no later than the Interest Adjustment Date for the then current
Interest Period for the other Lenders' Pro Rata Shares of Libor
Loans and electing the Libor Rate for such Lenders' or Lender's
Pro Rata Share(s) of the Loans as to which such Lender's or
Lenders' obligation(s) to make or maintain its or their Pro Rata
Share(s) of the Loans as Libor Loans was suspended and such Pro
Rata Share(s) shall be converted to Libor Loans in accordance
with this Agreement. During any period throughout which any of
the Lenders has or have no obligation to make or maintain its or
their Pro Rata Share(s) of the Loans as Libor Loans, no Interest
Rate Elections electing the Libor Rate shall be effective with
regard to the Loans to the extent of the Pro Rata Share(s) of
such Lender(s), but shall be effective as to the other Lenders.
SECTION 2.9.3. LIBOR LENDING UNLAWFUL. In the event
that any change in applicable laws or regulations (including the
introduction of any new applicable law or regulation) or in the
interpretation thereof (whether or not having the force of law)
by any governmental or other regulatory authority charged with
the administration thereof, shall make it unlawful for any of the
Lenders to make or continue to maintain its Pro Rata Share of all
or any portion of the Loans as Libor Loans, each such Lender
shall promptly notify the Agent by telephone or telex thereof,
and of the reasons therefor, and the obligation of such Lender to
make or maintain its Pro Rata Share of the Loans or such portion
thereof as Libor Loans shall, upon the happening of such event,
terminate and the Agent shall, by telephonic notice to the
Borrower, declare that such obligation has so terminated with
respect to such Lender, and such Pro Rata Share of the Loans or
any portion thereof to the extent then maintained as Libor Loans,
shall, on the last day on which such Lender can lawfully continue
to maintain such Pro Rata Share of the Loans or any portion
thereof as Libor Loans, automatically convert into Prime Rate
Loans without additional cost to the Borrower. If circumstances
subsequently change so that such Lender shall no longer be so
affected, such Lender's obligation to make or maintain its Pro
Rata Share of all or any portion of the Loans as Libor Loans
shall be reinstated when such Lender obtains actual knowledge of
such change of circumstances, and promptly after obtaining such
actual knowledge such Lender shall forward written notice thereof
to the Agent. After receipt of such notice, the Agent shall
promptly forward written notice thereof the Borrower. Upon or
after receipt by the Borrower of such written notice, the
Borrower may submit an Interest Rate Election in accordance with
this Agreement electing an Interest Period ending no later than
the Interest Adjustment Date for the then current Interest Period
for the other Lenders' Pro Rata Shares of Libor Loans and
electing the Libor Rate for such Lenders' or Lender's Pro Rata
- 31 -
Share(s) of the Loans as to which such Lender's or Lenders'
obligation(s) to make or maintain its or their Pro Rata Share(s)
of the Loans as Libor Loans was suspended and such Pro Rata
Share(s) shall be converted to Libor Loans in accordance with
this Agreement. During any period throughout which any of the
Lenders has or have no obligation to make or maintain its or
their Pro Rata Share(s) of the Loans as Libor Loans, no Interest
Rate Elections electing the Libor Rate shall be effective with
regard to the Loans to the extent of the Pro Rata Share(s) of
such Lender(s), but shall be effective as to the other Lenders.
SECTION 2.9.4. ADDITIONAL COSTS ON LIBOR LOANS. The
Borrower further agrees to pay to the Agent for the account of
the applicable Lender or Lenders such amounts as will compensate
any of the Lenders for any increase in the cost to such Lender of
making or maintaining (or of its obligation to make or maintain)
all or any portion of its Pro Rata Share of the Loans as Libor
Loans and for any reduction in the amount of any sum receivable
by such Lender under this Agreement in respect of making or
maintaining all or any portion of such Lender's Pro Rata Share of
the Loans as Libor Loans, in either case, from time to time by
reason of:
(i) any reserve, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, such Lender, under or
pursuant to any law, treaty, rule, regulation (including,
without limitation, any Regulations of the Board of
Governors of the Federal Reserve System) or requirement in
effect on or after the date hereof, any interpretation
thereof by any governmental authority charged with
administration thereof or by any central bank or other
fiscal or monetary authority or other authority, or any
requirement imposed by any central bank or such other
authority whether or not having the force of law; or
(ii) any change in (including the introduction of any
new) applicable law, treaty, rule, regulation or requirement
or in the interpretation thereof by any official authority,
or the imposition of any requirement of any central bank,
whether or not having the force of law, which shall subject
such Lender to any tax (other than taxes on net income
imposed on such Lender), levy, impost, charge, fee, duty,
deduction or withholding of any kind whatsoever or change
the taxation of such Lender with respect to making or
maintaining all or any portion of its Pro Rata Share of the
Loans as Libor Loans and the interest thereon (other than
any change which affects, and to the extent that it affects,
the taxation of net income of such Lender); provided, that
with respect to any withholding the foregoing shall not
apply to any withholding tax described in sections 1441,
1442 or 3406 of the Code, or any succeeding provision of any
legislation that amends, supplements or replaces any such
section, or to any tax, levy, impost, duty, charge, fee,
deduction or withholding that results from any noncompliance
by a Lender with any federal, state or foreign law or from
any failure by a Lender to file or furnish any report,
return, statement or form the filing or furnishing of which
would not have an adverse effect on such Lender and would
eliminate such tax, impost, duty, deduction or withholding;
In any such event, such Lender shall promptly notify the Agent
thereof, and of the reasons therefor, and the Agent shall
promptly notify the Borrower thereof in writing stating the
- 32 -
reasons provided to the Agent by such Lender therefor and the
additional amounts required to fully compensate such Lender for
such increased or new cost or reduced amount as reasonably
determined by such Lender. Such additional amounts shall be
payable on each date on which interest is to be paid hereunder
or, if there is no outstanding principal amount under any of the
Notes, within 10 Business Days after the Borrower's receipt of
said notice. Such Lender's certificate as to any such increased
or new cost or reduced amount (including calculations, in
reasonable detail, showing how such Lender computed such cost or
reduction) shall be submitted by the Agent to the Borrower and
shall, in the absence of manifest error, be conclusive. In
determining any such amount, the Lender(s) may use any reasonable
averaging and attribution methods. Notwithstanding anything to
the contrary set forth above, the Borrower shall not be obligated
to pay any amounts pursuant to this SECTION 2.9.4 as a result of
any requirement or change referenced above with respect to any
period prior to the one hundred and eightieth (180th) day prior
to the date on which the Borrower is first notified thereof
(other than any amounts which relate to any such requirement or
change which is adopted with retroactive effect in which case the
Borrower shall be obligated to pay all such amounts accrued from
the date as of which such requirement or change is retroactively
effective) unless the failure to give such notice within such one
hundred and eighty (180) day period resulted from reasonable
circumstances beyond such Lender's reasonable control.
SECTION 2.9.5. LIBOR FUNDING LOSSES. In the event
that any payment or prepayment of a Libor Loan is received on a
date other than the last day of an Interest Period, such payment
or prepayment shall be held by the Agent in a separate account
and be pledged to the Agent as collateral for the obligations of
the Borrower arising in connection with this Agreement, the Notes
and the other Financing Documents until the end of the then
current Interest Period, at which time the Agent shall apply such
payment or prepayment, for the accounts of the Lenders in
accordance with their Pro Rata Shares, to the outstanding Libor
Loans. Notwithstanding the foregoing, in the event any of the
Lenders shall incur any loss or expense (including, without
limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain all or any portion of the
Loans as Libor Loans) as a result of:
(i) payment or prepayment by the Borrower of all or
any portion of any Libor Loan on a date other than the
Interest Adjustment Date for such Libor Loan, for any
reason; provided, however that this clause shall not be
deemed to grant the Borrower any right to convert a Libor
Loan to a Prime Rate Loan prior to the end of any Interest
Period or to imply such right;
(ii) conversion of all or any portion of any Libor
Loan on a day other than the last day of an Interest Period
applicable to such Loan to a Prime Rate Loan for any reason
including, without limitation, acceleration of the Loans
upon or after an Event of Default, any Interest Rate
Election or any other cause whether voluntary or involuntary
and whether or not referred to or described in this
Agreement, other than any such conversion resulting solely
from application of SECTIONS 2.9.2 or 2.9.3 by any Lender;
or
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(iii) any failure by the Borrower to borrow the Loans
as Libor Loans on the date specified in any Interest Rate
Election selecting the Libor Rate, other than any such
failure resulting solely from application of SECTIONS 2.9.2
or 2.9.3 by any Lender;
such Lender shall promptly notify the Agent thereof, and of the
reasons therefor. Upon the request of the Agent, the Borrower
shall pay directly to the Agent for the account of such Lender
such amount as will (in the reasonable determination of such
Lender, which shall be correct in the absence of manifest error)
reimburse such Lender for such loss or expense. Each Lender
shall furnish to the Borrower, upon written request from the
Borrower received by the Agent, a written statement setting forth
the computation of any such amounts payable to such Lender under
this SECTION 2.9.5.
SECTION 2.9.6. BANKING PRACTICES. Each Lender agrees
that upon the occurrence of any of the events described in
SECTIONS 2.2.3 and/or 2.9.2, 2.9.4 or 2.9.5, such Lender will
exercise all reasonable efforts to take such reasonable actions
at no expense to such Lender (other than reasonable expenses
which are covered by the Borrower's advance deposit of funds with
such Lender for such purpose, or if such Lender agrees, which the
Borrower has agreed to pay or reimburse to such Lender in full
upon demand), in accordance with such Lender's usual banking
practices in such situations and subject to any statutory or
regulatory requirements applicable to such Lender, as such Lender
may take without the consent or participation of any other Person
to, in the case of an event described in SECTIONS 2.2.3 and/or
2.9.4 or 2.9.5, mitigate the cost of such events to the Borrower
and, in the case of an event described in SECTIONS 2.9.2(i), (ii)
or (iii), to seek Dollar deposits in any other interbank Libor
market in which such Lender regularly participates and in which
the applicable determination(s) described in SECTIONS 2.9.2(i),
(ii) or (iii), as the case may be, does not apply.
SECTION 2.9.7. BORROWER'S OPTIONS ON UNAVAILABILITY OR
INCREASED COST OF LIBOR LOANS. In the event of any conversion of
all or any portion of any Lender's Pro Rata Share of any Libor
Loans to a Prime Rate Loan for reasons beyond the Borrower's
control or in the event that any Lender's Pro Rata Share of all
or any portion of the Libor Loans becomes subject, under SECTIONS
2.9.4 or 2.9.5, to additional costs, the Borrower shall have the
option, subject to the other terms and conditions of this
Agreement, to convert such Lender's Pro Rata Share to a Prime
Rate Loan by making Interest Rate Elections for Interest Periods
which (i) end on the Interest Adjustment Date for such Libor Loan
or (ii) end on Business Days occurring prior to such Interest
Adjustment Date, in which case, at the end of the last of such
Interest Periods any such Libor Rate Loan shall automatically
convert to a Prime Rate Loan and the Borrower shall have no
further right to make an Interest Rate Election with respect to
such Prime Rate Loan other than an Interest Rate Election which
is effective on the Interest Adjustment Date for such Libor Loan.
The Borrower's options set forth in this SECTION 2.9.7 may be
exercised, if and only if the Borrower pays, concurrently with
delivery to the Agent of each such Interest Rate Election and
thereafter in accordance with SECTIONS 2.9.4, 2.9.5 and 2.9.6 all
amounts provided for therein to the Agent in accordance with this
Agreement.
If the Borrower shall, as a result of the requirements
of SECTION 2.9.4 above, be required to pay any Lender the
additional costs referred to therein, but not be required to pay
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such additional costs to the other Lender or Lenders and the
Borrower, in its sole discretion, shall deem such additional
amounts to be material or in the event that Libor Loans from a
Lender are unavailable to the Borrower as a result solely of the
provisions of SECTIONS 2.9.2, 2.9.3 or 2.9.4, but are available
from the other Lender or Lenders, the Borrower shall have the
right to substitute another bank satisfactory to the Agent for
such Lender which is entitled to such additional costs or which
is relieved from making Libor Loans and the Agent shall use
reasonable efforts (with all reasonable costs of such efforts by
the Agent to be borne by the Borrower) to assist the Borrower to
locate such substitute bank. Any such substitution shall take
place in accordance with SECTION 9.11 and otherwise be on terms
and conditions reasonably satisfactory to the Agent, and until
such time as such substitution shall be consummated, the Borrower
shall continue to pay such additional costs and comply with the
above-referenced Sections. Upon any such substitution, the
Borrower shall pay or cause to be paid to the Lender that is
being replaced, all principal, interest (to the date of such
substitution) and other amounts owing hereunder to such Lender
and such Lender will be released from liability hereunder.
SECTION 2.9.8. ASSUMPTIONS CONCERNING FUNDING OF LIBOR
LOANS. The calculation of all amounts payable to the Lenders
under this SECTION 2.9 shall be made as though each Lender
actually funded its relevant Libor Loans through the purchase of
a deposit in the London interbank market bearing interest at the
Libor Rate in an amount equal to that Libor Loan and having a
maturity comparable to the relevant Interest Period and through
the transfer of such deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States
of America; provided, however, that each Lender may fund each of
its Libor Loans in any manner it sees fit and the foregoing
assumption shall be utilized solely for the calculation of
amounts payable under this SECTION 2.9.
SECTION 2.10. INTEREST RATE PROTECTION. On or before
March 31, 1998, the Borrower shall enter into an interest rate
protection arrangement covering not less than the sum of (y) one
half of the then outstanding total Indebtedness for Borrowed
Money (including, without limitation, the Subordinated Debt)
MINUS (z) the then outstanding Subordinated Debt. Such interest
rate protection arrangement may consist of any one or a
combination of the following: (i) the purchase of an interest
rate swap arrangement from a financial institution reasonably
acceptable to the Majority Lenders covering such Loans
effectively converting the Borrower's interest payment
obligations with respect to such portion of the Term Loans to a
fixed rate per annum then prevailing in the market, for a term
expiring not earlier than March 31, 2001 or (ii) the purchase of
an interest rate cap from a financial institution reasonably
acceptable to the Majority Lenders covering such Loans at a cap
rate per annum equal to the highest Libor Rate then in effect for
the Loans, plus one and one-half percent (1.5%) for a term
expiring not earlier than March 31, 2001. The other terms and
conditions of any such interest rate swap or interest rate cap
shall be reasonably satisfactory to the Majority Lenders.
ARTICLE 3.
CONDITIONS OF LENDING
SECTION 3.1. CONDITIONS PRECEDENT TO THE COMMITMENT AND
TO ALL LOANS.
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SECTION 3.1.1. THE COMMITMENT AND INITIAL LOANS. The
Commitment and the obligation of the Lenders to make the initial
Advances of the Loans and/or to issue any Letter of Credit or
Letter of Credit Agreement are subject to performance by the
Borrower of all of its obligations under this Agreement and to
the satisfaction of the conditions precedent that all legal
matters incident to the transactions contemplated hereby or
incidental to the Loans shall be reasonably satisfactory to
counsel for the Agent and that the Lenders shall have received on
or before the Closing Date all of the following, each dated the
Closing Date or another date acceptable to the Lenders and each
to be in form and substance reasonably satisfactory to the Agent
or if any of the following is not a deliverable, the satisfaction
of such condition in form and substance reasonably satisfactory
to the Agent:
SECTION 3.1.1.1. The Financing Documents,
including, without limitation, those hereinafter set forth and
the Borrower's and any Subsidiary's certificate of incorporation
or other organizational documents, bylaws and each agreement or
instrument relating thereto, which such materials shall be
reasonably satisfactory to the Lenders.
SECTION 3.1.1.2. Certificate of the secretary,
clerk or similar officer, as applicable of the Borrower and each
Subsidiary certifying as to the resolutions of the shareholders
or board of directors of the Borrower and each Subsidiary
authorizing and approving each of the Financing Documents to
which the Borrower and each Subsidiary is a party and other
matters contemplated hereby and certifying as to the names and
signatures of the Authorized Representative(s) of the Borrower
and each Subsidiary authorized to sign each Financing Document to
be executed and delivered by or on behalf of the Borrower and
each Subsidiary. The Agent and the Lenders may conclusively rely
on each such certificate until the Agent shall receive a further
certificate canceling or amending the prior certificate and
submitting the signatures of the Authorized Representative(s)
named in such further certificate.
SECTION 3.1.1.3. Favorable opinions of Hill &
Xxxxxx, counsel for the Borrower, Xxxxx & Xxxx, Xxxxx & Daniels,
Stone, XxXxxxx & Stone and Xxxxxxxxx & Mitsuki, special local
counsel for the Borrower, all in form and substance reasonably
satisfactory to the Agent.
SECTION 3.1.1.4. An Officer's Certificate stating
that:
SECTION 3.1.1.4.1. The representations and
warranties contained in SECTION 4.1 and/or contained in any of
the other Financing Documents are correct on and as of the
Closing Date as though made on and as of such date; and
SECTION 3.1.1.4.2. No Default or Event of
Default has occurred and is continuing, or would result from the
making of the Loans.
SECTION 3.1.1.5. Certificates of good standing or
legal existence of the secretaries of state (or equivalent
officials) of the states (or jurisdictions) of organization and
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qualification of and covering the Borrower and any Subsidiaries
dated reasonably near the Closing Date.
SECTION 3.1.1.6. Evidence that (i) the ownership
interests in the Borrower and the Subsidiaries are as set forth
in EXHIBIT 1.1 and that such equity interests are owned free of
any Liens or charge, other than the Permitted Encumbrances and
(ii) that except for receipt and application of certain proceeds
of the Loans, the Related Transactions have been completed in
accordance with the Related Transaction Documents, without any
waiver or amendment of any term or condition contained therein
without the prior written approval of the Lenders, and in
compliance with any applicable laws and necessary governmental
authority approvals.
SECTION 3.1.1.7. A Request and an Interest Rate
Election.
SECTION 3.1.1.8. All documents, instruments and
agreements necessary to terminate, cancel and discharge the
documents, instruments and agreements evidencing or securing any
and all existing Indebtedness of the Borrower and any Subsidiary
and Liens securing such Indebtedness other than those listed in
EXHIBIT 3.1.1.8.
SECTION 3.1.1.9. Payment to the Agent and the
Lenders of the fees specified in this Agreement or in the Fee
Letter as being payable on the Closing Date and all reasonable
out-of-pocket costs and expenses incurred by the Agent and Fleet
in connection with the transactions contemplated hereby,
including, but not limited to, reasonable outside legal expenses
and any accounting fees, auditing fees, appraisal fees, and other
fees associated with any independent analyses of the Borrower and
any Subsidiary and evidence that all other reasonable fees and
costs payable by the Borrower in connection with the transactions
contemplated by the Financing Documents and completed on the
Closing Date have been paid in full.
SECTION 3.1.1.10. An Officer's Certificate in the
form of EXHIBIT 3.1.1.10, duly completed and reflecting, INTER
ALIA, compliance by the Borrower as of the opening of business on
the first Business Day after the Closing Date but based on the
Borrower's financial information as of the last day of the
Borrower's most recent fiscal quarter, adjusted to give effect to
the Loans made on the Closing Date and completion of the Related
Transactions to be completed on or prior to the Closing Date,
with the financial covenants provided for herein.
SECTION 3.1.1.11. Such other information about
the Borrower and/or its Business Condition as the Lenders may
reasonably request.
SECTION 3.1.1.12. True copies of, and/or true
copies of any revisions to, the financial statements, the
Projections, the pro forma Closing Date financial statements
giving effect to the Loans, the Subordinated Debt to be received
on or prior to the Closing Date and completion of the other
Related Transactions to be completed on or prior to the Closing
Date, and other information provided pursuant to SECTION 4.1.5
and certification by the Borrower of the Projections.
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SECTION 3.1.1.13. Certificates of fire, business
interruption, liability and extended coverage insurance policies,
each such policy to name the Agent as mortgagee and loss payee
and, on all liability policies, as additional insured.
SECTION 3.1.1.14. True descriptions of any
pending or threatened litigation against or by Borrower or any
Subsidiary.
SECTION 3.1.1.15. Evidence that all necessary
material third party consents to the Related Transactions and the
Loans have been obtained and remain in effect without the
imposition of any conditions or terms not reasonably acceptable
to the Lenders, all required filings with any governmental
authority have been duly completed and any applicable waiting
periods shall have expired without any adverse action being taken
by any competent authority, including, without limitation,
filings with the Federal Trade Commission and waiting periods
under the Xxxxxxx Act and Section 803.10(b) of the pre-merger
notification requirements under the Xxxx Xxxxx Xxxxxx Anti-Trust
Improvements Act of 1976.
SECTION 3.1.1.16. The financial statements
described in SECTION 4.1.5 together with the Borrower's pro forma
Closing Date balance sheet. Such financial statements shall be
accompanied by an Officer's Certificate of the chief financial
officer of the Borrower to the effect that (i) the
representations of the Borrower set forth in SECTION 4.1.14 are
accurate as of the Closing Date and (ii) that no Material Adverse
Effect has occurred since the date of the Borrower's most recent
audited financial statements delivered to the Lenders except as
set forth or reflected in the financial statements described in
SECTION 4.1.5 or otherwise disclosed in writing and acceptable to
the Agent.
SECTION 3.1.1.17. True copies of the Related
Transaction Documents and all documents, instruments and
agreements relating to the Borrower's capital structure.
SECTION 3.1.1.18. The fact that the
representations and warranties of the Borrower contained in
Article 4, INFRA, and in each of the other Financing Documents
are true and correct in all material respects on and as of the
Closing Date except as altered hereafter by actions not
prohibited hereunder. The Borrower's delivery of each Note to
the Lenders and of each Request to the Agent shall be deemed to
be a representation and warranty by the Borrower as of the date
thereof to such effect.
SECTION 3.1.1.19. That there has been no
enactment of any law or regulation by any governmental authority
which would make it (i) unlawful, (ii) prevent, (iii) restrain or
(iv) impose conditions which the Lenders determine to be adverse,
in any respect as to the foregoing, to the making of the Loans
and/or the completion of the Related Transactions.
SECTION 3.1.1.20. The Security Documents, after
the completion of any required filings or recordations, will
grant to the Agent perfected, first priority security interests
or mortgages, as the case may be, with respect to the collateral
identified therein and the Agent shall received the favorable
opinions of counsel referred to in SECTION 3.1.1.3 above with
respect to such perfection. The Agent shall also have received
such searches, landlord consents, access agreements and/or title
- 38 -
insurance commitments as reasonably requested by the Agent, all
in form and substance reasonably satisfactory to the Agent and/or
its counsel. Without limiting the generality of the foregoing,
the Agent shall be reasonably satisfied with the terms and
conditions of all real property leases in which the Borrower and
any Subsidiary has a leasehold interest, including the terms of
such leaseholds and the assumability of the lessee's obligations
thereunder upon the transfer of or foreclosure upon of the
Borrower's or any Subsidiary's leasehold interest.
SECTION 3.1.1.21. No Material Adverse Effect has
occurred and there shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or
before any arbitrator or governmental or regulatory agency or
authority that could reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.1.1.22. All information and materials
supplied to the Agent prior to the date hereof shall be true and
correct in all material aspects; and no additional information
shall have come to the attention of the Agent or the Lenders that
is inconsistent in any material respect with the information and
materials supplied to the Agent prior to the date hereof or that
could reasonably be expected to have a Material Adverse Effect.
SECTION 3.1.1.23. The Agent shall be satisfied
with the results of its discussions with selected customers and
suppliers of Xxxxx.
SECTION 3.1.1.24. The Agent shall be satisfied
with the results of its due diligence examination of Xxxxx,
including without limitation, discussions with Xxxxx' management,
visits to Xxxxx' facilities and review of other business and
financial information about Xxxxx as may be requested from time
to time by the Agent.
SECTION 3.1.1.25. The Agent shall have received
an environmental assessment report, in form and substance
satisfactory to the Agent, from an environmental consulting firm
acceptable to the Agent, which report shall identify existing and
potential environmental concerns, and shall quantify related
costs and liabilities, associated with any manufacturing
facilities of the Borrower and any of the Subsidiaries, and the
Agent shall be satisfied with the nature and amount of any such
matters and with the Borrower's plans with respect thereto.
SECTION 3.1.2. THE COMMITMENT AND THE LOANS The
Commitment and the obligation of each Lender to make or maintain
its Pro Rata Share of any Advance or Loan and/or to issue any
Letter of Credit or Letter of Credit Agreement are subject to
performance by the Borrower of all its obligations under this
Agreement and to the satisfaction of the following further
conditions precedent:
(a) The fact that, immediately prior to and upon the
making of each Loan, no Event of Default or Default shall have
occurred and be continuing;
(b) The fact that the representations and warranties
of the Borrower contained in Article 4, INFRA and in each of the
- 39 -
other Financing Documents, are true and correct in all material
respects on and as of the date of each Advance or Loan except as
altered hereafter by actions consented to or not prohibited
hereunder. The Borrower's delivery of the Notes to the Lenders
and of each Request to the Agent shall be deemed to be a
representation and warranty by the Borrower as of the date of
such Advance or Loan as to the facts specified in SECTIONS
3.1.2(a) and (b);
(c) Receipt by Agent on or prior to the Business Day
specified in the definition of Interest Rate Election of a
written Request stating the amount requested for the Loan or
Advance in question and an Interest Rate Election for such Loan
or Advance, all signed by a duly authorized officer of the
Borrower on behalf of the Borrower;
(d) That there exists no law or regulation by any
governmental authority having jurisdiction over the Agent or any
of the Lenders which would make it unlawful in any respect for
such Lender to make its Pro Rata Share of the Loan or Advance,
including, without limitation, Regulations U, T, G and X of the
Board of Governors of the Federal Reserve System; and
(e) No Material Adverse Effect has occurred.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF THE
BORROWER. The Borrower represents and warrants to the Agent and
the Lenders that, after giving effect to the Loans and the
application of the proceeds thereof (which representations and
warranties shall survive the making of the Loans) as follows:
SECTION 4.1.1. ORGANIZATION AND EXISTENCE. The
Borrower and any Subsidiary is a corporation, duly organized,
validly existing and in good standing under the laws of the state
(or applicable jurisdiction) of its incorporation or organization
and is duly qualified to do business in all jurisdictions in
which such qualification is required, all as noted on EXHIBIT
4.1.1, except where failure to so qualify would not have a
Material Adverse Effect, and has all requisite power and
authority to conduct its business, to own its properties and to
execute and deliver, and to perform all of its obligations under
the Financing Documents.
SECTION 4.1.2. AUTHORIZATION AND ABSENCE OF DEFAULTS.
Except as described on EXHIBIT 4.1.2, the execution, delivery to
the Agent and/or the Lenders and performance by the Borrower and
any Subsidiary of the Financing Documents and Related Transaction
Documents have been duly authorized by all necessary corporate
and governmental action and do not and will not (i) require any
consent or approval of the shareholders or board of directors of
the Borrower or any Subsidiary which has not been obtained, (ii)
violate any provision of any law, rule, regulation (including,
without limitation, Regulations U and X of the board of governors
of the federal reserve system), order, writ, judgment,
injunction, decree, determination or award presently in effect
- 40 -
having applicability to the Borrower and/or any Subsidiary and/or
the articles of organization or by-laws, as applicable, of the
Borrower and/or any Subsidiary, (iii) result in a material breach
of or constitute a material default under any indenture or loan
or credit agreement or any other agreement, lease or instrument
to which the Borrower and/or any Subsidiary is or are a party or
parties or by which it or they or its or their properties may be
bound or affected; or (iv) result in, or require, the creation or
imposition of any Lien on any of the Borrower's and/or any
Subsidiary's respective properties or revenues other than Liens
granted to the Agent by any of the Financing Documents securing
the Obligations. The Borrower and any Subsidiary are in
compliance with any such applicable law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or any
such indenture, other agreement, lease or instrument, except
where the failure to be in compliance does not have a Material
Adverse Effect.
SECTION 4.1.3. ACQUISITION OF CONSENTS. Except as
noted on EXHIBIT 4.1.3, no authorization, consent, approval,
license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, other than those which have
been obtained, is or will be necessary to the valid execution and
delivery to the Agent and/or the Lenders or performance by the
Borrower or any Subsidiary of any Financing Documents and each of
the foregoing which has been obtained is in full force and
effect.
SECTION 4.1.4. VALIDITY AND ENFORCEABILITY. Each of
the Financing Documents when delivered hereunder will constitute
the legal, valid and binding obligations of each of the Borrower
and any Subsidiary which is or are a party thereto enforceable
against the Borrower, and any Subsidiary which is or are a party
thereto in accordance with their respective terms except as the
enforceability thereof may be limited by the effect of general
principles of equity and bankruptcy and similar laws affecting
the rights and remedies of creditors generally.
SECTION 4.1.5. FINANCIAL INFORMATION. The following
information with respect to the Borrower and its Subsidiaries has
heretofore been furnished to the Agent:
SECTION 4.1.5.1. Audited annual financial
statements of the Borrower for the periods ended December 31,
1995 and December 31, 1996 and the following consolidated
financial statements of Xxxxx and Subsidiaries of Xxxxx:
consolidated statements of income and cash flow for the periods
from May 29, 1994 to June 3, 1995, from June 4, 1995 to June 1,
1996, from May 3, 1996 to April 5, 1997, and from April 6, 1997
to September 30,1997 and consolidated balance sheets as of June
3,1995, June 1, 1996, April 5, 1997 and September 30, 1997;
SECTION 4.1.5.2. Interim, consolidated balance
sheets of the Borrower and any Subsidiaries (excluding, however,
Xxxxx and its Subsidiaries) as of the end of the most recent
fiscal quarter prior to the Closing for which such statements are
available and the related statements of income and cash flows and
shareholders' equity, such balance sheets and statements to be
prepared and certified by an Authorized Representative in an
Officer's Certificate as having been prepared in accordance with
GAAP except for footnotes and year-end adjustments, and to be in
form reasonably satisfactory to the Agent;
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SECTION 4.1.5.3. The Projections; and
SECTION 4.1.5.4. The pro forma financial
statements of the Borrower as of the Closing Date provided
pursuant to SECTION 3.1.1.12.
Each of the financial statements referred to above
in SECTION 4.1.5.1 was prepared in accordance with GAAP (subject,
in the case of interim statements, to the absence of footnotes
and normal year-end adjustments) applied on a consistent basis,
except as stated therein. To the best of the Borrower's
knowledge, each of the financial statements referred to above in
SECTIONS 4.1.5.1 and 4.1.5.4 fairly presents the financial
condition or pro forma financial condition, as the case may be,
of the Person being reported on at such dates and is complete and
correct in all material respects and no Material Adverse Effect
has occurred since the date thereof. The Projections were
prepared by the Borrower in good faith and are based on
reasonable assumptions, it being recognized that projections as
to future results are not assertions of fact and that actual
results for the periods cited therein may differ from the results
projected therein.
SECTION 4.1.6. NO LITIGATION. There are no actions,
suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower and/or any
Subsidiary or any of their properties before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which if determined
adversely to the Borrower and/or any Subsidiary would draw into
question the legal existence of the Borrower and/or any such
Subsidiary and/or the validity, authorization and/or
enforceability of any of the Financing Documents and/or any
provision thereof and/or could have a Material Adverse Effect
except those matters, if any, described on EXHIBIT 4.1.6 none of
which, in Borrower's good faith opinion, will (i) have such
Material Adverse Effect or (ii) draw into question (a) the legal
existence of the Borrower and/or any such Subsidiary or (b) the
validity, authorization and/or enforceability of any of the
Financing Documents and/or any provision thereof.
SECTION 4.1.7. REGULATION U. The Borrower is not
engaged in the business of extending credit for the purpose of
purchasing or carrying "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve
System (12 CFR Part 221), does not own and has no present
intention of acquiring any such margin stock or a "margin
security" within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR, Part 207). None
of the proceeds of the Loans will be used directly or indirectly
by the Borrower for the purpose of purchasing or carrying, or for
the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry, any such margin
security or margin stock or for any other purpose which might
constitute the transaction contemplated hereby a "purpose credit"
within the meaning of said Regulation G or Regulation U, or cause
this Agreement to violate any other regulation of the Board of
Governors of the Federal Reserve System or the Securities and
Exchange Act of 1934, as amended, or any rules or regulations
promulgated under either said statute.
- 42 -
SECTION 4.1.8. ABSENCE OF ADVERSE AGREEMENTS. Neither
the Borrower nor any Subsidiary is a party to any indenture, loan
or credit agreement or any lease or other agreement or instrument
or subject to any corporate or partnership restriction which
would have a Material Adverse Effect.
SECTION 4.1.9. TAXES. The Borrower and each
Subsidiary has filed all tax returns (federal, state and local)
required to be filed and paid all taxes shown thereon to be due,
including interest and penalties, except for those taxes, if any,
which are being contested in good faith and by appropriate
proceedings, and for which proper reserve or other provision has
been made in accordance with GAAP and except where any failure to
file or pay would not have a Material Adverse Effect on the
Borrower or any Subsidiary and except as described in EXHIBIT
4.1.9.
SECTION 4.1.10. ERISA. Borrower and any Commonly
Controlled Entity do not maintain or contribute to any Plan which
is not in substantial compliance with ERISA, or any Single
Employer Plan which has incurred any accumulated funding
deficiency within the meaning of sections 412 and 418 of the Code
or which has applied for or obtained a waiver from the Internal
Revenue Service of any minimum funding requirement under section
412 of the Code. Borrower and any Commonly Controlled Entity
have not incurred any liability to the PBGC in connection with
any Plan covering any employees of Borrower or any Commonly
Controlled Entity in amount exceeding Fifty Thousand Dollars
($50,000) in the aggregate or ceased operations at any facility
or withdrawn from any Plan in a manner which could subject any of
them to liability under sections 4062(e), 4063 or 4064 of ERISA
in amount exceeding Fifty Thousand Dollars ($50,000) in the
aggregate, and know of no facts or circumstance which might give
rise to any liability of Borrower or any Commonly Controlled
Entity to the PBGC under Title IV of ERISA in amount exceeding
Fifty Thousand Dollars ($50,000) in the aggregate. Borrower and
any Commonly Controlled Entity have not incurred any withdrawal
liability in amount exceeding Fifty Thousand Dollars ($50,000) in
the aggregate (including but not limited to any contingent or
secondary withdrawal liability) within the meaning of sections
4201 and 4202 of ERISA, to any Multiemployer Plan, and no event
has occurred, and there exists no condition or set of
circumstances known to the Borrower, which presents a risk of the
occurrence of any withdrawal from or the partition, termination,
reorganization or insolvency of any Multiemployer Plan which
could result in any liability to a Multiemployer Plan in amount
exceeding Fifty Thousand Dollars ($50,000) in the aggregate.
Except for payments for which the minimum funding
requirement has been waived under section 412 of the Code, full
payment has been made of all amounts which Borrower and any
Commonly Controlled Entity are required to have paid as
contributions to any Plan under applicable law or under any plan
or any agreement relating to any Plan to which Borrower or any
Commonly Controlled Entity is a party. Borrower and each
Commonly Controlled Entity have made adequate provision for
reserves to meet contributions that have not been made because
they are not yet due under the terms of any Plan or related
agreements.
Neither Borrower nor any Commonly Controlled Entity has
any knowledge, nor do any of them have any reason to believe,
that any Reportable Event which could result in a liability or
- 43 -
liabilities of Fifty Thousand Dollars ($50,000) or more in the
aggregate has occurred with respect to any Plan.
SECTION 4.1.11. OWNERSHIP OF PROPERTIES.
SECTION 4.1.11.1. Except for Permitted
Encumbrances, Borrower and any Subsidiary has good title to all
of its properties and assets free and clear of all restrictions
and Liens of any kind other than those which could not have a
Material Adverse Effect or a material adverse effect on the
validity, authorization and/or enforceability of the Financing
Documents and/or any provision thereof.
SECTION 4.1.11.2. EXHIBIT 4.1.11 accurately and
completely lists the location of all real property owned or
leased by Borrower or any Subsidiary. Borrower and each
Subsidiary enjoys quiet possession under all material leases of
real property to which it is a party as a lessee, and all of such
leases are valid, subsisting and, to Borrower's knowledge, in
full force and effect.
SECTION 4.1.11.3. To Borrower's knowledge, except
as specified in EXHIBIT 4.1.11, none of the real property
occupied by Borrower or any Subsidiary is located within any
federal, state or municipal flood plain zone.
SECTION 4.1.11.4. Except as set forth in EXHIBIT
4.1.11, all of the material properties used in the conduct of the
Borrower's and each Subsidiary's business (i) are in good repair,
working order and condition (reasonable wear and tear excepted)
and reasonably suitable for use in the operation of Borrower's,
and each Subsidiary's business; and (ii) to Borrower's knowledge
are currently operated and maintained, in all material respects,
in accordance with the requirements of applicable governmental
authorities.
SECTION 4.1.12. ACCURACY OF REPRESENTATIONS AND
WARRANTIES. None of Borrower's representations or warranties set
forth in this Agreement or in any document or certificate
furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of
a material fact or omits to state a material fact necessary to
make any statement of fact contained herein or therein, in light
of the circumstances under which it was made, not misleading;
except that unless provided otherwise any such document or
certificate which is dated speaks as of the date stated and not
the present.
SECTION 4.1.13. NO INVESTMENT COMPANY. Neither the
Borrower nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended, which
is required to register thereunder.
SECTION 4.1.14. SOLVENCY, ETC. After giving effect to
the consummation of each Loan outstanding and to be made under
this Agreement as of the time this representation and warranty is
given, the Borrower (a) will be able to pay its debts as they
become due, (b) will have funds and capital sufficient to carry
on its business and all businesses in which it is about to
- 44 -
engage, and (c) will own property in the aggregate having a value
both at fair valuation and at fair saleable value in the ordinary
course of the Borrower's business greater than the amount
required to pay its Indebtedness, including for this purpose
unliquidated and disputed claims. The Borrower will not be
rendered insolvent by the execution and delivery of this
Agreement and the consummation of any transactions contemplated
herein.
SECTION 4.1.15. APPROVALS. Except as set forth in
EXHIBIT 4.1.3, all approvals required from all Persons including
without limitation all governmental authorities with respect to
the Financing Documents have been obtained.
SECTION 4.1.16. OWNERSHIP INTERESTS. The schedule of
ownership interests in the Borrower and any Subsidiaries set
forth in EXHIBIT 1.1 is true, accurate and complete and the
Investments to be made for all ownership interests disclosed
therein have in fact been fully paid in immediately available
Dollars after giving effect to the closing of the Related
Transactions.
SECTION 4.1.17. LICENSES, REGISTRATIONS, COMPLIANCE
WITH LAWS, ETC. Except as set forth on EXHIBIT 4.1.17, the
Borrower and each Subsidiary maintains in full force and effect
all permits, governmental licenses, registrations and approvals,
material to carrying out of Borrower's and each of the
Subsidiaries' businesses as presently conducted and as required
by law or the rules and regulations of any federal, foreign
governmental, state, county or local association, corporation or
governmental agency, body, instrumentality or commission having
jurisdiction over the Borrower or any of the Subsidiaries,
including but not limited to the United States Environmental
Protection Agency, the United States Department of Labor, the
United States Occupational Safety and Health Administration, the
United States Equal Employment Opportunity Commission, the
Federal Trade Commission and the United States Department of
Justice and analogous and related state and foreign agencies.
All existing authorizations, licenses and permits are in full
force and effect, are duly issued in the name of, or validly
assigned to the Borrower or a Subsidiary and the Borrower or a
Subsidiary has full power and authority to operate thereunder.
There is no material violation or material failure of compliance
or, to Borrower's knowledge, allegation of such violation or
failure of compliance on the part of the Borrower or any
Subsidiary with any of the foregoing permits, licenses,
registrations, approvals, rules or regulations and there is no
action, proceeding or investigation pending or to the knowledge
of the Borrower threatened nor has the Borrower or any Subsidiary
received any notice of such which might result in the
termination or suspension of any such permit, license,
registration or approval which in any case could have a Material
Adverse Effect.
SECTION 4.1.18. PRINCIPAL PLACE OF BUSINESS; BOOKS AND
RECORDS. The Borrower's chief executive offices are located at
Borrower's addresses set forth in SECTION 9.6. All of the
Borrower's books and records are kept at one or more of its
addresses set forth in SECTION 9.6.
SECTION 4.1.19. SUBSIDIARIES. The Borrower has only
the Subsidiaries identified on EXHIBIT 1.1.
SECTION 4.1.20. COPYRIGHT. Except as set forth in
EXHIBIT 4.1.20 the Borrower has not violated any of the
provisions of the Copyright Revision Act of 1976, 17 U.S.C. 101,
- 45 -
ET SEQ. The Borrower has taken all actions reasonably necessary
to assert and protect its ownership interest in any copyrights
used by the Borrower and any Subsidiary in the conduct of their
respective business(es). EXHIBIT 4.1.20 accurately and
completely sets forth all copyrights held by the Borrower or any
of the Subsidiaries and contains exceptions to the
representations contained in this SECTION 4.1.20. No inquiries
regarding any such filings have been received by the Copyright
Office. The Borrower has not allocated revenues in any manner
inconsistent with the rules and regulations of the Copyright
Office.
SECTION 4.1.21. ENVIRONMENTAL COMPLIANCE. Neither the
Borrower nor, to the knowledge of the Borrower, any other Person:
SECTION 4.1.21.1. other than as disclosed on
EXHIBIT 4.1.21, or in respect of Hazardous Material used or
disposed of in compliance with law, has ever caused, permitted,
or suffered to exist any Hazardous Material to be spilled,
placed, held, located or disposed of on, under, or about, any of
the facilities owned, leased or used by the Borrower (the
"Premises"), or from the Premises into the atmosphere, any body
of water, any wetlands, or on any other real property, nor to
Borrower's knowledge does any Hazardous Material exist on, under
or about the Premises;
SECTION 4.1.21.2. has any knowledge that any of
the Premises has ever been used (whether by the Borrower or, to
the knowledge of the Borrower, by any other Person) as a
treatment, storage or disposal (whether permanent or temporary)
site for any Hazardous Waste as defined in 42 U.S.C.A. 6901, ET
SEQ. (the Resource Recovery and Conservation Act); and
SECTION 4.1.21.3. has any knowledge of any notice
of violation, Lien or other notice issued by any governmental
agency with respect to the environmental condition of the
Premises or any other property occupied by the Borrower, or any
other property which was included in the property description of
the Premises or such other real property within the preceding
three years except as disclosed to the Agent.
SECTION 4.1.22. MATERIAL AGREEMENTS, ETC.
EXHIBIT 4.1.22 attached hereto accurately and completely lists
all Material Agreements to which the Borrower or any of the
Subsidiaries are a party including without limitation all
software licenses, and all material construction, engineering,
consulting, employment, management, operating and related
agreements, if any, which are presently in effect. All of the
Material Agreements to which Borrower or any Subsidiary is a
party, are legally valid, binding, and, to Borrower's knowledge,
in full force and effect and neither the Borrower, any of the
Subsidiaries nor, to Borrower's knowledge, any other parties
thereto are in material default thereunder.
SECTION 4.1.23. PATENTS, TRADEMARKS AND OTHER PROPERTY
RIGHTS. EXHIBIT 4.1.23 attached hereto contains a complete and
accurate schedule of all registered trademarks, registered
copyrights and patents of the Borrower and/or any of the
Subsidiaries, and pending applications therefor, and all other
intellectual property in which the Borrower and/or any of the
Subsidiaries has any rights other than "off-the shelf" software
which is generally available to the general public at retail.
- 46 -
Except as set forth in EXHIBIT 4.1.23, the Borrower and any
Subsidiaries own, possess, or have licenses to use all the
patents, trademarks, service marks, trade names, copyrights and
non-governmental licenses, and all rights with respect to the
foregoing, necessary for the conduct of their respective
businesses as now conducted, without, to the Borrower's knowledge
any conflict with the rights of others with respect thereto.
SECTION 4.1.24. RELATED TRANSACTION DOCUMENTS. The
Borrower has, prior to the date hereof, delivered to the Lenders
true copies of the Related Transaction Documents, and each and
every amendment or modification thereto and, except for receipt
and application of certain proceeds of the Loans, the Related
Transactions have been completed in accordance with the Related
Transaction Documents, without any waiver or amendment of any
term or condition contained therein without the prior written
approval of the Lenders, and in compliance with any applicable
laws and necessary governmental authority approvals.
.
SECTION 4.1.25. MATERIAL ADVERSE EFFECT. No Material
Adverse Effect has occurred and there exists no action, suit,
investigation, litigation or proceeding pending or threatened in
any court or before any arbitrator or governmental or regulatory
agency or authority that could reasonably be expected to result
in a Material Adverse Effect.
SECTION 4.1.26. TRANSACTIONS WITH AFFILIATES. Except
as set forth on EXHIBIT 5.2(3), or except as contemplated by the
Related Transaction Documents and this Agreement, the Borrower
and each Subsidiary have not engaged in any transaction or
entered into any agreement with an Affiliate, except transactions
which are in the ordinary course upon fair and reasonable terms
and no less favorable to the Borrower or the Subsidiary than 5.1.10
could be obtained on an arm's length basis.
ARTICLE 5.
COVENANTS OF THE BORROWER
SECTION 5.1. AFFIRMATIVE COVENANTS OF THE BORROWER OTHER
THAN REPORTING REQUIREMENTS. From the date hereof and thereafter
for so long as there is Indebtedness of the Borrower to any
Lender and/or the Agent under any of the Financing Documents or
any part of the Commitment is in effect, the Borrower will, with
respect to itself and, unless noted otherwise below, with respect
to each of its Subsidiaries, ensure that each Subsidiary will,
unless the Majority Lenders shall otherwise consent in writing:
SECTION 5.1.1. PAYMENT OF TAXES, ETC. Pay and
discharge all taxes and assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties
attach thereto, and all lawful claims for the same which, if
unpaid, might become a Lien upon any of its properties, provided
that (unless and until foreclosure, restraint, sale or any
similar proceeding is pending and is not stayed, discharged or
bonded within 30 days after commencement) the Borrower shall not
be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper
- 47 -
proceedings and for which proper reserve or other provision has
been made in accordance with GAAP, unless failure to pay could
result in a Material Adverse Effect.
SECTION 5.1.2. MAINTENANCE OF INSURANCE. Maintain
insurance in accordance with the Security Documents including,
without limitation, casualty, liability and business interruption
insurance reasonably acceptable to the Majority Lenders and, to
the extent not covered by any of the Security Documents, with
responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar
properties and in accordance with the requirements of any
governmental agency having jurisdiction over the Borrower and/or
any Subsidiary. The Borrower shall provide the Lenders with such
evidence as the Agent may request from time to time as to the
maintenance of all such insurance. In the event that the
Borrower or any Subsidiary shall be entitled to receive any
proceeds from any casualty insurance policies maintained by any
of them on account of any interest of the Borrower and/or any
Subsidiary in any property, which proceeds are in an aggregate
amount in excess of $250,000 with respect to any occurrence or
related series of occurrences in any 12-month period, such
proceeds shall be received by the Agent and, to the extent that
such proceeds result from a casualty to property of the Borrower
and/or any Subsidiary, so long as no Default or Event of Default
exists and is continuing and the Borrower elects to repair,
replace or restore such property, such proceeds shall be released
to the Borrower subject to reasonable procedures and conditions
established by the Agent to the extent necessary to so repair,
replace or restore such property within 3 months (or as soon as
reasonably practicable if such restoration, replacement or repair
is not susceptible to being completed within 3 months) from the
date of receipt of such proceeds by the Agent and failing such
application of said proceeds to so repair, replace or restore
such property as provided above, such amounts shall be
Extraordinary Receipts. Furthermore, with respect to all such
amounts referenced in the immediately preceding sentence, the
Agent shall have the right and is hereby constituted and
appointed the true and lawful attorney irrevocable of the
Borrower and each Subsidiary, in the name and stead of Borrower
and each Subsidiary, but in the uncontrolled discretion of said
attorney, (i) to adjust, xxx for, compromise and collect any
amounts due under such insurance policies in the event of loss
and (ii) to give releases for any and all amounts received in
settlement of losses under such policies; and the same shall,
subject to SECTION 2.6.1.3 of this Agreement, at the option of
the Agent, be applied, after first deducting the costs of
collection, on account of any Indebtedness the payment of which
is secured by any of the Financing Documents, whether or not then
due, or, notwithstanding the claims of any subsequent lienor, be
used or paid over to the Borrower in accordance with reasonable
procedures established by the Agent for use in repairing or
replacing any damaged or destroyed collateral under any of the
Security Documents.
SECTION 5.1.3. PRESERVATION OF EXISTENCE, ETC.
Preserve and maintain in full force and effect its legal
existence, and all material rights, franchises and privileges in
the jurisdiction of its organization, preserve and maintain all
material licenses, governmental approvals, trademarks, patents,
trade secrets, copyrights and trade names owned or possessed by
it and which are necessary or, in the reasonable business
judgment of the Borrower, desirable in view of its business and
operations or the ownership of its properties and qualify or
remain qualified as a foreign corporation in each jurisdiction in
which such qualification is necessary or, in its reasonable
- 48 -
business judgment, desirable in view of its business and
operations and ownership of its properties except where the
failure to so qualify will not have a Material Adverse Effect.
SECTION 5.1.4. COMPLIANCE WITH LAWS, ETC. Comply with
the requirements of all present and future applicable laws,
rules, regulations and orders of any governmental authority
having jurisdiction over it and/or its business including,
without limitation, regulations of the United States Copyright
Office, except where the failure to comply would not have a
Material Adverse Effect.
SECTION 5.1.5. VISITATION RIGHTS. Permit, during
normal business hours and upon the giving of reasonable notice,
the Agent, the Lenders and any agents or representatives thereof,
to examine and make copies of (at Borrower's cost and expense)
and abstracts from the records and books of account of, and visit
the properties of the Borrower and any Subsidiary to discuss the
affairs, finances and accounts of the Borrower or any Subsidiary
with any of their partners, officers or management level
employees and/or any independent certified public accountant of
the Borrower and/or any Subsidiary.
SECTION 5.1.6. KEEPING OF RECORDS AND BOOKS OF
ACCOUNT. Keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP and with
applicable requirements of any governmental authority having
jurisdiction over the Borrower and/or any Subsidiary in question,
reflecting all financial transactions.
SECTION 5.1.7. MAINTENANCE OF PROPERTIES, ETC.
Maintain and preserve all of its properties necessary or useful
in the proper conduct of its business, in good working order and
condition, ordinary wear and tear excepted, and in accordance
with each of the Security Documents.
SECTION 5.1.8. POST-CLOSING ITEMS. Complete in a
timely fashion all actions required in the Post-Closing Letter.
SECTION 5.1.9. OTHER DOCUMENTS, ETC. Except as
otherwise required by this Agreement, pay, perform and fulfill
all of its obligations and covenants under each material
document, instrument or agreement to which it is a party
including, without limitation, the Related Transaction Documents;
provided that so long as the Borrower or any Subsidiary is
contesting any claimed default by it or them under any of the
foregoing by proper proceedings conducted in good faith and for
which any proper reserve or other provision in accordance with
and to the extent required by GAAP has been made, such default
shall not be deemed a violation of this covenant.
SECTION 5.1.10. MINIMUM FIXED CHARGE COVERAGE RATIO.
Maintain at the end of each fiscal quarter of the Borrower in
each period set forth below a Fixed Charge Coverage Ratio of not
less than the ratio set forth below opposite such period, such
ratio to be measured (i) at each Borrower fiscal quarter end on
or prior to December 31, 1998 for the period commencing as of
January 1, 1998 and ending on such fiscal quarter end and (ii) at
- 49 -
each Borrower fiscal quarter end thereafter for the rolling four
Borrower fiscal quarter period consisting of the Borrower fiscal
quarter then ending and the three immediately preceding Borrower
fiscal quarters:
BORROWER FISCAL QUARTER(S) ENDING RATIO
================================= =====
March 31, 1998 1.05:1.00
June 30, 1998 1.05:1.00
September 30, 1998 1.10:1.00
December 31, 1998 1.15:1.00
March 31, 1999 1.15:1.00
June 30, 1999 1.15:1.00
September 30, 1999 1.20:1.00
December 31, 1999 1.20:1.00
March 31, 2000 1.20:1.00
June 30, 2000 1.20:1.00
September 30, 2000 1.20:1.00
December 31, 2000 and thereafter 1.25:1.00
SECTION 5.1.11. MINIMUM QUICK RATIO. Maintain at the
end of each fiscal quarter of the Borrower in each period set
forth below a ratio of (i) the sum of (w) cash on hand or on
deposit in any bank or trust company which has not suspended
business, (x) Cash Equivalent Investments (without duplication
with (w)), (y) net outstanding amount of accounts receivable,
less allowances for doubtful accounts and (z) unused borrowing
availability under the Revolving Credit Loan to (ii) the sum of
(x) Current Liabilities minus (y) the outstanding amount of the
Revolving Credit Loan (only to the extent included in Current
Liabilities) minus (z) current maturities of Indebtedness of not
less than the ratio set forth below opposite such period:
BORROWER FISCAL QUARTER(S) ENDING RATIO
================================= =====
March 31, 1998 through December 31, 1998 1.35:1.00
March 31, 1999 through December 31, 1999 1.50:1.00
March 31, 2000 through December 31, 2000 1.75:1.00
March 31, 2001 and thereafter 2.00:1.00
Each item described in clauses (i) and (ii) of this SECTION
5.1.11 shall be calculated as of the last day of the Borrower
fiscal quarter and include only the item(s) in question of the
Borrower and its Subsidiaries on a consolidated basis.
SECTION 5.1.12. MAXIMUM RATIO OF TOTAL SENIOR DEBT TO
EBITDA. Maintain at the end of each fiscal quarter of the
Borrower in each period set forth below a ratio of (i) total
- 50 -
Senior Debt on a consolidated basis as of the last day of such
fiscal quarter to (ii) EBITDA, of not greater than the ratio set
forth below opposite such period:
BORROWER FISCAL QUARTER(S) ENDING RATIO
================================= =====
March 31, 1998 3.50:1.00
June 30, 1998 3.50:1.00
September 30, 1998 3.25:1.00
December 31, 1998 3.00:1.00
March 31, 1999 2.75:1.00
June 30, 1999 2.50:1.00
September 30, 1999 2.25:1.00
December 31, 1999 2.00:1.00
March 31, 2000 2.00:1.00
June 30, 2000 1.75:1.00
September 30, 2000 1.75:1.00
December 31, 2000 1.50:1.00
March 31, 2001 1.50:1.00
June 30, 2001 1.50:1.00
September 30, 2001 1.50:1.00
December 31, 2001 and thereafter 1.00:1.00
SECTION 5.1.12A. MAXIMUM RATIO OF TOTAL INDEBTEDNESS
FOR BORROWED MONEY TO EBITDA. Maintain at the end of each fiscal
quarter of the Borrower in each period set forth below a ratio of
(i) total Indebtedness for Borrowed Money of the Borrower and its
Subsidiaries on a consolidated basis as of the last day of such
fiscal quarter to (ii) EBITDA, of not greater than the ratio set
forth below opposite such period:
BORROWER FISCAL QUARTER(S) ENDING RATIO
================================= =====
March 31, 1998 4.50:1.00
June 30, 1998 4.25:1.00
September 30, 1998 4.00:1.00
December 31, 1998 3.75:1.00
March 31, 1999 3.50:1.00
June 30, 1999 3.25:1.00
September 30, 1999 3.00:1.00
December 31, 1999 2.75:1.00
March 31, 2000 2.75:1.00
June 30, 2000 2.75:1.00
- 51 -
September 30, 2000 2.75:1.00
December 31, 2000 2.50:1.00
March 31, 2001 2.50:1.00
June 30, 2001 2.50:1.00
September 30, 2001 2.50:1.00
December 31, 2001 and thereafter 2.00:1.00
PROVIDED, HOWEVER, that notwithstanding the above, from and after
the repayment by the Borrower of any of the Subordinated Debt,
the above ratios shall be deleted and the ratios set forth in
SECTION 5.1.12 above shall be substituted therefore and shall
thereafter be the ratios of the Total Indebtedness for Borrowed
Money to EBITDA required for compliance with this SECTION
5.1.12A.
SECTION 5.1.13. OFFICER'S CERTIFICATES AND REQUESTS.
Provide each Officer's Certificate required under this Agreement
and each Request so that the statements contained therein are
accurate and complete in all material respects.
SECTION 5.1.14. DEPOSITORY. Use the Agent as a
principal depository of Borrower's funds.
SECTION 5.1.15. CHIEF EXECUTIVE OFFICER. Maintain
Xxxx X. Xxxxxx, Xx. as chief executive officer of the Borrower
and as the Person with principal executive, operating and
management responsibility for the Borrower's business or obtain a
replacement of comparable experience and training in the
Borrower's industry reasonably satisfactory to the Majority
Lenders within 120 days of his ceasing to act in such capacity.
SECTION 5.1.16. NOTICE OF PURCHASE OF REAL ESTATE AND
LEASES. Promptly notify the Agent in the event that the Borrower
shall purchase any real estate or enter into any lease of real
estate or of equipment material to the operation of the
Borrower's business, supply the Agent with a copy of the related
purchase agreement or of such lease, as the case may be, and if
requested by the Agent, execute and deliver, or cause to be
executed and delivered, to the Agent for the benefit of the
Lenders a deed of trust, mortgage, assignment or other document,
together with landlord consents, in the case of leased property,
reasonably satisfactory in form and substance to the Agent,
granting a valid first Lien (subject to any Liens permitted under
SECTION 5.2.1 hereof) on such real property or leasehold as
security for the Financing Documents, all subject to the
limitations of SECTION 5.2.17.
SECTION 5.1.17. ADDITIONAL ASSURANCES. From time to
time hereafter, execute and deliver or cause to be executed and
delivered, such additional instruments, certificates and
documents, and take all such actions, as the Agent shall
reasonably request for the purpose of implementing or
effectuating the provisions of the Financing Documents, and upon
the exercise by the Agent of any power, right, privilege or
remedy pursuant to the Financing Documents which requires any
consent, approval, registration, qualification or authorization
- 52 -
of any governmental authority or instrumentality, exercise and
deliver all applications, certifications, instruments and other
documents and papers that the Agent may be so required to obtain.
SECTION 5.1.18. APPRAISALS. Permit the Agent and its
agents, at any time and in the sole discretion of the Agent or at
the request of the Majority Lenders, to conduct appraisals of the
Borrower's business, the cost of which shall be borne by the
Borrower. Prior to the occurrence of a Default or an Event of
Default, Agent agrees to limit any such examinations to no more
than one (1) such examination in any calendar year.
SECTION 5.1.19. ENVIRONMENTAL COMPLIANCE. Comply
strictly and in all material respects with the requirements of
all federal, state, and local environmental laws; notify the
Lenders promptly in the event of any spill of Hazardous Material
materially affecting the Premises occupied by the Borrower from
time to time; forward to the Lenders promptly any written notices
relating to such matters received from any governmental agency;
and pay promptly when due any uncontested fine or assessment
against the Premises.
SECTION 5.1.20. REMEDIATION. Immediately contain and
remove any Hazardous Material found on the Premises in compliance
with applicable laws and at the Borrower's expense, subject
however, to the right of the Agent, at the Agent's option but at
the Borrower's expense, to have an environmental engineer or
other representative review the work being done.
SECTION 5.1.21. SITE ASSESSMENTS. Promptly upon the
request of the Agent, based upon the Agent's reasonable belief
that a material Hazardous Waste or other environmental problem
exists with respect to any Premises, provide the Agent with a
Phase I environmental site assessment report and, if Agent finds
a reasonable basis for further assessment in such Phase I
assessment, a Phase II environmental site assessment report, or
an update of any existing report, all in scope, form and content
and performed by such company as may be reasonably satisfactory
to the Agent.
SECTION 5.1.22. INDEMNITY. Indemnify, defend, and
hold the Agent and the Lenders, their agents or employees and
each Person, if any, who controls any of the Agent or the Lenders
within the meaning of Section 15 of the Securities Act of 1933,
as amended, and each and all and any of them (the "Indemnified
Parties") harmless from and against any claim, cost, damage
(including without limitation consequential damages), expense
(including without limitation reasonable attorneys' fees and
expenses), loss, liability, or judgment now or hereafter arising
as a result of any claim for environmental cleanup costs, any
resulting damage to the environment and any other environmental
claims against the Borrower, any Subsidiary, and/or the
Indemnified Parties transactions contemplated by this Agreement,
or any of the Premises. The provisions of this Section shall
continue in effect and shall survive (among other events), until
the applicable statute of limitations has expired, any
termination of this Agreement, foreclosure, a deed in lieu
transaction, payment and satisfaction of the Obligations of
Borrower, and release of any collateral for the Loans.
SECTION 5.1.23. TRADEMARKS, COPYRIGHTS, ETC.
Concurrently with the acquisition of any trademark, tradename,
copyright, patent or service xxxx collaterally assign and grant a
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first priority perfected Lien thereon to the Agent pursuant to
documents in form and substance reasonably satisfactory to the
Agent.
SECTION 5.1.24. MINIMUM INTEREST COVERAGE RATIO.
Maintain at the end of each fiscal quarter of the Borrower in
each period set forth below a ratio of (i) EBITDA to (ii)
Interest Expense of not less than the ratio set forth below
opposite such period such ratio to be measured (i) at each
Borrower fiscal quarter end on or prior to December 31, 1998 for
the period commencing as of January 1, 1998 and ending on such
fiscal quarter end and (ii) at each Borrower fiscal quarter end
thereafter for the rolling four Borrower fiscal quarter period
consisting of the Borrower fiscal quarter then ending and the
three immediately preceding Borrower fiscal quarters:
BORROWER FISCAL QUARTER(S) ENDING RATIO
================================= =====
March 31, 1998 2.00:1.00
June 30, 1998 2.25:1.00
September 30, 1998 2.50:1.00
December 31, 1998 2.75:1.00
March 31, 1999 3.00:1.00
June 30, 1999 3.00:1.00
September 30, 1999 3.00:1.00
December 31, 1999 3.00:1.00
March 31, 2000 3.00:1.00
June 30, 2000 3.00:1.00
September 30, 2000 3.00:1.00
December 31, 2000 3.25:1.00
March 31, 2001 3.25:1.00
June 30, 2001 3.25:1.00
September 30, 2001 3.25:1.00
December 31, 2001 3.50:1.00
March 31, 2002 3.50:1.00
June 30, 2002 3.50:1.00
September 30, 2002 3.50:1.00
December 31, 2002 3.75:1.00
March 31, 2003 3.75:1.00
June 30, 2003 3.75:1.00
September 30, 2003 3.75:1.00
December 31, 2003 4.00:1.00
March 31, 2004 4.00:1.00
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June 30, 2004 4.00:1.00
September 30, 2004 4.00:1.00
December 31, 2004 4.25:1.00
SECTION 5.2. NEGATIVE COVENANTS OF THE BORROWER. From
the date hereof and thereafter for so long as there is
Indebtedness of the Borrower to any Lender and/or the Agent under
any of the Financing Documents or any part of the Commitment is
in effect, the Borrower will not, with respect to itself and,
unless noted otherwise below, with respect to each of the
Subsidiaries, will ensure that each such Subsidiary will not,
without the prior written consent of the Majority Lenders:
SECTION 5.2.1. LIENS, ETC. Create, incur, assume or
suffer to exist any Lien of any nature, upon or with respect to
any of its properties, now owned or hereafter acquired, or assign
as collateral or otherwise convey as collateral, any right to
receive income, except that the foregoing restrictions shall not
apply to any Liens:
SECTION 5.2.1.1. For taxes, assessments or
governmental charges or levies on property if the same shall not
at the time be delinquent or thereafter can be paid without
penalty or interest, or (if foreclosure, distraint, sale or other
similar proceedings shall not have been commenced or if commenced
not stayed, bonded or discharged within 30 days after
commencement) are being contested in good faith and by
appropriate proceedings diligently conducted and for which proper
reserve or other provision has been made in accordance with and
to the extent required by GAAP;
SECTION 5.2.1.2. Imposed by law, such as
landlords', carriers', warehousemen's and mechanics' liens,
bankers' set off rights and other similar Liens arising in the
ordinary course of business for sums not yet due or being
contested in good faith and by appropriate proceedings diligently
conducted and for which proper reserve or other provision has
been made in accordance with and to the extent required by GAAP;
SECTION 5.2.1.3. Arising in the ordinary course
of business out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation;
SECTION 5.2.1.4. Arising from or upon any
judgment or award, provided that such judgment or award is being
contested in good faith by proper appeal proceedings and only so
long as execution thereon shall be stayed;
SECTION 5.2.1.5. Those set forth on EXHIBIT 1.8;
SECTION 5.2.1.6. Those now or hereafter granted
pursuant to the Security Documents or otherwise now or hereafter
granted to the Agent for the benefit of the Lenders as collateral
for the Loans and/or Borrower's other Obligations arising in
connection with or under any of the Financing Documents;
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SECTION 5.2.1.7. Deposits to secure the
performance of bids, trade contracts (other than for Borrowed
Money), leases, statutory obligations, surety bonds, performance
bonds and other obligations of a like nature incurred in the
ordinary course of the Borrower's or any Subsidiary's business;
SECTION 5.2.1.8. Easements, rights of way,
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
materially interfere with the ordinary conduct of business by any
Borrower or any Subsidiary;
SECTION 5.2.1.9. Liens securing Indebtedness
permitted to exist under SECTION 5.2.8.3; provided that the Lien
securing any such Indebtedness is limited to the item of property
purchased or leased in each case;
SECTION 5.2.1.10. UCC-1 financing statements
filed solely for notice or precautionary purposes by lessors
under operating leases which do not secure Indebtedness and which
are limited to the items of equipment leased pursuant to the
lease in question; and
SECTION 5.2.2. ASSUMPTIONS, GUARANTIES, ETC. OF
INDEBTEDNESS OF OTHER PERSONS. Assume, guarantee, endorse or
otherwise become directly or contingently liable in connection
with any obligation or Indebtedness of any other Person, except:
SECTION 5.2.2.1. Guaranties by endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;
SECTION 5.2.2.2. Assumptions, guaranties,
endorsements and contingent liabilities within the definition of
Indebtedness and permitted by SECTION 5.2.8; and
SECTION 5.2.2.3. Those set forth on EXHIBIT
5.2.2.
SECTION 5.2.3. ACQUISITIONS, DISSOLUTION, ETC.
Acquire, in one or a series of transactions, all or any
substantial portion of the assets or ownership interests in
another Person, or dissolve, liquidate, wind up, merge or
consolidate or combine with another Person or sell, assign, lease
or otherwise dispose of (whether in one transaction or in a
series of transactions) any material assets, whether now owned or
hereafter acquired, or any of the Borrower's or any Subsidiary's
interests in real property other than assets which are replaced
within 30 days of any asset sale, assignment, lease or
disposition with assets of like kind, usefulness and value.
SECTION 5.2.4. CHANGE IN NATURE OF BUSINESS. Make any
material change in the nature of its business.
SECTION 5.2.5. OWNERSHIP. Cause or permit the
occurrence of any Change of Control.
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SECTION 5.2.6. SALE AND LEASEBACK. Enter into any
sale and leaseback arrangement with any lender or investor, or
enter into any leases except in the normal course of business at
reasonable rents comparable to those paid for similar leasehold
interests in the area.
SECTION 5.2.7. SALE OF ACCOUNTS, ETC. Sell, assign,
discount or dispose in any way of any accounts receivable,
promissory notes or trade acceptances held by the Borrower or any
Subsidiary, with or without recourse, except in the ordinary
course of the Borrower's or any Subsidiary's business.
SECTION 5.2.8. INDEBTEDNESS. Incur, create, become or
be liable directly or indirectly in any manner with respect to or
permit to exist any Indebtedness except:
SECTION 5.2.8.1. Indebtedness under the Financing
Documents;
SECTION 5.2.8.2. Indebtedness with respect to
trade payable obligations and other normal accruals and customer
deposits in the ordinary course of business not yet due and
payable in accordance with customary trade terms or with respect
to which the Borrower or any Subsidiary is contesting in good
faith the amount or validity thereof by appropriate proceedings
and then only to the extent such person has set aside on its
books adequate reserves therefor in accordance with and to the
extent required by GAAP;
SECTION 5.2.8.3. Indebtedness with respect to
Capitalized Lease Obligations and purchase money Indebtedness
with respect to real or personal property in an aggregate amount
outstanding at any time not to exceed $1,000,000; provided that
the amount of any purchase money Indebtedness does not exceed 90%
of the lesser of the cost or fair market value of the asset
purchased with the proceeds of such Indebtedness;
SECTION 5.2.8.4. Unsecured Indebtedness in an
aggregate amount outstanding at any time not to exceed $250,000;
SECTION 5.2.8.5. Indebtedness listed on EXHIBIT
3.1.1.8;
SECTION 5.2.8.6. Indebtedness owing by the
Borrower to any Subsidiary or by any Secured Domestic Subsidiary
to the Borrower or any other Secured Domestic Subsidiary;
provided, however, that any Indebtedness owing by the Borrower to
any Affiliate shall only be permitted upon subordination terms
and conditions reasonably acceptable to the Agent.
SECTION 5.2.8.7. Indebtedness permitted by
SECTION 5.2.2.
SECTION 5.2.8.8. Indebtedness outstanding as a
refinancing of Indebtedness permitted under another clause of
this SECTION 5.2.8 other than SECTIONS 5.2.8.2 or 5.2.8.8;
provided that such Indebtedness as refinanced continues to
qualify as permitted Indebtedness under the clause of this
SECTION 5.2.8 under which the refinanced Indebtedness was
permitted under this SECTION 5.2.8.
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SECTION 5.2.8.9. The Subordinated Debt.
SECTION 5.2.8.10. Indebtedness owing by Xxxxx
Japan to the Borrower or any Subsidiary not to exceed $1,500,000
in the aggregate outstanding at any one time (after taking into
account and reduced by the amount of any Investments in Xxxxx
Japan under SECTION 5.2.12(VI) hereof.
SECTION 5.2.8.11. Indebtedness owing by Xxxxx
Singapore to the Borrower or any Subsidiary not to exceed
$500,000 in the aggregate outstanding at any one time (after
taking into account and reduced by the amount of any Investments
in Xxxxx Singapore under SECTION 5.2.12(VII) hereof
SECTION 5.2.9. OTHER AGREEMENTS. In a manner
materially adverse to the Agent or any of the Lenders, amend any
of the terms or conditions of any of the Related Transaction
Documents, its certificate of incorporation or bylaws (or
comparable applicable charter and governance document), the
Subordination Agreement or any subordination agreement or any
indenture, agreement, document, note or other instrument
evidencing, securing or relating to any other Indebtedness
permitted under SECTION 5.2.8.
SECTION 5.2.10. PREPAYMENTS OF INDEBTEDNESS. Except as
provided in SECTION 2.6.1.5 hereof, make (or give any notice in
respect thereof) any voluntary or optional payment or prepayment
or redemption or acquisition for value of or exchange of any
Indebtedness other than the Loans.
SECTION 5.2.11. DIVIDENDS, PAYMENTS AND DISTRIBUTIONS.
Other than dividends or distributions declared or paid by any
Subsidiary to the Borrower, declare or pay any dividends,
management fees or like fees or make any other distribution of
cash or property or both (other than compensation for services
rendered to the Borrower and/or any Subsidiary) or use any of its
assets for payment, purchase, conversion, redemption, retention,
acquisition or retirement of any beneficial interest in the
Borrower or set aside or reserve assets for sinking or like funds
for any of the foregoing purposes, make any other distribution by
reduction of capital or otherwise in respect of any beneficial
interest in the Borrower or permit any Subsidiary which is not a
wholly-owned Subsidiary so to do.
SECTION 5.2.12. INVESTMENTS IN OR TO OTHER PERSONS.
Make or commit to make any Investment in or to any other Person
(including, without limitation, any Subsidiary) other than (i)
advances to employees for business expenses not to exceed $50,000
in the aggregate outstanding for any one employee and not to
exceed $250,000 in the aggregate outstanding at any one time to
all such employees, (ii) other employee loans not to exceed
$100,000 in the aggregate outstanding at any one time to all such
employees, (iii) Cash Equivalent Investments, (iv) Investments in
accounts, contract rights and chattel paper (as defined in the
Uniform Commercial Code) and notes receivable, arising or
acquired in the ordinary course of business, (v) Investments in
Secured Domestic Subsidiaries, (vi) Investments in Xxxxx Japan
not to exceed $1,500,000 in the aggregate outstanding at any one
time, (vii) Investments in Xxxxx Singapore not to exceed $500,000
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in the aggregate outstanding at any one time, and (viii)
Investments described on EXHIBIT 5.2.2.
SECTION 5.2.13. TRANSACTIONS WITH AFFILIATES. Except
as contemplated by the Related Transaction Documents and this
Agreement, engage in any transaction or enter into any agreement
with an Affiliate, or in the case of Affiliates or Subsidiaries,
with the Borrower or another Affiliate or Subsidiary, except
transactions which are in the ordinary course, upon fair and
reasonable terms and no less favorable to the Borrower than could
be obtained on an arm's length basis except as set forth on
EXHIBIT 5.2.13.
SECTION 5.2.14. CHANGE OF FISCAL YEAR; ACCOUNTING
POLICIES. Change its accounting policies, reporting practices or
its fiscal year from that which was in effect on the Closing
Date.
SECTION 5.2.15. SUBORDINATION OF CLAIMS. Subordinate
any present or future claim against or obligation of another
Person, except as ordered in a bankruptcy or similar creditors'
remedy proceeding of such other Person.
SECTION 5.2.16. COMPLIANCE WITH ERISA. With respect
to Borrower and any Commonly Controlled Entity (a) withdraw from
or cease to have an obligation to contribute to, any
Multiemployer Plan, (b) engage in any "prohibited transaction"
(as defined in Section 4975 of the Code) involving any Plan, (c)
except for any deficiency caused by a waiver of the minimum
funding requirement under sections 412 and/or 418 of the Code, as
described above, incur or suffer to exist any material
"accumulated funding deficiency" (as defined in section 302 of
ERISA and section 412 of the Code) of the Borrower or any
Commonly Controlled Entity, whether or not waived, involving any
Single Employer Plan, (d) incur or suffer to exist any Reportable
Event or the appointment of a trustee or institution of
proceedings for appointment of a trustee for any Single Employer
Plan if, in the case of a Reportable Event, such event continues
unremedied for ten (10) days after notice of such Reportable
Event pursuant to sections 4043(a), (c) or (d) of ERISA is given,
if in the reasonable opinion of the Majority Lenders any of the
foregoing is likely to result in a material liability of the
Borrower or any Commonly Controlled Entity, (e) permit the assets
held under any Plan to be insufficient to protect all accrued
benefits, (f) allow or suffer to exist any event or condition,
which presents a material risk of incurring a material liability
of the Borrower or any Commonly Controlled Entity to PBGC by
reason of termination of any such Plan or (g) cause or permit any
Plan maintained by Borrower and/or any Commonly Controlled Entity
to be out of compliance with ERISA. For purposes of this SECTION
5.2.16 "material liability" shall be deemed to mean any liability
of Fifty Thousand Dollars ($50,000) or more in the aggregate.
SECTION 5.2.17. CAPITAL EXPENDITURES. Incur Capital
Expenditures (i) during 1998 in excess of $8,700,000, (ii) during
1999 in excess of $9,500,000, (iii) during 2000 in excess of
$9,500,000, (iv) during 2001 in excess of $11,000,000, (v) during
2002 in excess of $12,000,000, (vi) during 2003 in excess of
$13,000,000, and (vii) during 2004 in excess of $14,000,000.
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Subject to the foregoing, the Borrower shall make its
Capital Expenditures substantially in accordance with and for the
purposes outlined in the Budget for the Borrower fiscal year in
question.
SECTION 5.2.18. HAZARDOUS WASTE. Become involved, or
permit, to the extent reasonably possible after the exercise by
the Borrower of reasonable due diligence and preventive efforts,
any tenant of its real property to become involved, in any
operations at such real property generating, storing, disposing,
or handling Hazardous Material or any other activity that could
lead to the imposition on the Borrower or the Agent or any
Lender, or any such real property of any material liability or
Lien under any environmental laws.
SECTION 5.2.19. OTHER RESTRICTIONS ON LIENS. Enter
into any agreement or otherwise agree to or grant any restriction
substantially similar to the provisions of SECTION 5.2.1 hereof
or which would otherwise have the effect of prohibiting,
restricting, impeding or interfering with the creation subsequent
to the Closing Date of Liens to secure the Obligations.
SECTION 5.2.20. LIMITATION ON CREATION OF
SUBSIDIARIES, ETC. Establish, create or acquire any Subsidiary
or become the general partner in any general partnership, except
for (i) any such Subsidiary which becomes a Secured Domestic
Subsidiary or (ii) any Subsidiaries which do not become Secured
Domestic Subsidiaries so long as the assets owned or held by any
such Subsidiaries in the aggregate do not exceed five percent
(5%) of the total assets of the Borrower.
SECTION 5.3. REPORTING REQUIREMENTS. From the date
hereof and thereafter for so long as the Borrower is indebted to
any Lender and/or the Agent under any of the Financing Documents,
the Borrower will, unless the Majority Lenders shall otherwise
consent in writing, furnish or cause to be furnished to the Agent
for distribution to the Lenders:
SECTION 5.3.1. As soon as possible and in any event
upon acquiring knowledge of an Event of Default or Default,
continuing on the date of such statement, the written statement
of an Authorized Representative setting forth details of such
Event of Default or Default and the actions which the Borrower
has taken and proposes to take with respect thereto;
SECTION 5.3.2. As soon as practicable after the end of
each Borrower fiscal year and in any event within 90 days after
the end of each such fiscal year, consolidated and consolidating
balance sheets of the Borrower and any Subsidiaries as at the end
of such year, and the related statements of income and cash flows
or shareholders' equity of the Borrower and any Subsidiaries
setting forth in each case the corresponding figures for the
preceding fiscal year, such statements to be certified by a firm
of independent certified public accountants selected by Borrower
and reasonably acceptable to the Majority Lenders, to be
accompanied by a true copy of said auditors' management letter,
if one was provided to the Borrower, and to contain a statement
to the effect that such accountants have examined SECTIONS 5.1.10
through 5.1.13 and 5.2.17 and that no Default or Event of Default
exists on account of Borrower's failure to have been in
compliance therewith on the date of such statement;
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SECTION 5.3.3. As soon as is practicable after the end
of each fiscal quarter of each Borrower fiscal year and in any
event within 45 days thereafter, consolidated balance sheets of
the Borrower and any Subsidiaries as of the end of such period
and the related statements of income and cash flows and
shareholders' equity of the Borrower and any Subsidiaries,
subject to changes resulting from year-end adjustments, together,
subject to SECTION 5.3.7, with a comparison to the Budget for the
applicable period, such balance sheets and statements to be
prepared and certified by an Authorized Representative in an
Officer's Certificate as having been prepared in accordance with
GAAP except for footnotes and year-end adjustments, and to be in
form reasonably satisfactory to the Agent;
SECTION 5.3.4. Simultaneously with the furnishing of
each of the year-end consolidated and consolidating financial
statements of the Borrower and any Subsidiaries to be delivered
pursuant to SECTION 5.3.2 and each of the consolidated quarterly
statements of the Borrower and the Subsidiaries to be delivered
pursuant to SECTION 5.3.3 an Officer's Certificate of an
Authorized Representative which shall contain a statement in the
form of EXHIBIT 3.1.1.10 to the effect that no Event of Default
or Default has occurred, without having been waived in writing,
or if there shall have been an Event of Default not previously
waived in writing pursuant to the provisions hereof, or a
Default, such Officer's Certificate shall disclose the nature
thereof and the actions the Borrower has taken and prepare to
take with respect thereto. Each such Officer's Certificate shall
also contain a calculation of and certify to the accuracy of the
amounts required to be calculated in the financial covenants of
the Borrower contained in this Agreement and described in EXHIBIT
3.1.1.10;
SECTION 5.3.5. Promptly after the commencement
thereof, notice of all material actions, suits and proceedings
before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting
the Borrower and/or any Subsidiary;
SECTION 5.3.6. As soon as is practicable after the
Closing Date, (i) and in any event within 35 days thereafter, the
following consolidated financial statements of Xxxxx and
Subsidiaries of Xxxxx: statements of income and cash flow for the
periods from May 29, 1994 to June 3, 1995, from June 4, 1995 to
May 2, 1996, and from May 3, 1996 to May 3, 1997 and consolidated
balance sheets as of May 2, 1996 and May 3, 1997; and (ii) in any
event within 50 days thereafter, the following consolidated
financial statements of Xxxxx and Subsidiaries of Xxxxx: audited
statements of income and cash flow for the periods from May 4,
1997 through the Closing Date and an audited balance sheet as of
the Closing Date, net sales and net income for the years ended
May 31, 1993 and May 31, 1994, total assets as of May 31, 1993,
May 31, 1994 and May 31, 1995 and such other selected financial
data as defined in Regulation S-K (or any successor provision or
regulation promulgated by the Securities and Exchange Commission)
for such periods as the Borrower shall have reasonably requested.
SECTION 5.3.7. On or before February 15 of each year,
an updated proposed budget, prepared on a quarterly basis, and
updated financial projections for the Borrower and any
Subsidiaries on a consolidated basis (together, the "Budget") for
such fiscal year, setting forth in detail reasonably satisfactory
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to the Agent the projected results of operations of the Borrower
and any Subsidiaries on a consolidated quarterly basis, detailed
Capital Expenditures plan and stating underlying assumptions and
accompanied by a written statement of an Authorized
Representative certifying as to the approval of such Budget by
Borrower's board of directors.
SECTION 5.3.8. Such other information respecting the
Business Condition of the Borrower or any Subsidiaries as the
Agent or any Lender may from time to time reasonably request;
SECTION 5.3.9. Written notice of the fact and of the
details of any filing with the Securities and Exchange Commission
of a Schedule 13(d) disclosure statement, given promptly after
the Borrower acquires knowledge thereof; provided, however, that
this clause shall not be deemed to constitute or imply any
consent to any such sale or transfer;
SECTION 5.3.10. Prompt written notice of loss of any
key personnel or any Material Adverse Effect and an explanation
thereof and of the actions the Borrower and/or such Subsidiary
propose to take with respect thereto; and
SECTION 5.3.11. Written notice of the following
events, as soon as possible and in any event within 15 days after
the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with
respect to any Plan, or (ii) the institution of proceedings or
the taking or expected taking of any other action by PBGC or the
Borrower or any Commonly Controlled Entity to terminate, withdraw
or partially withdraw from any Plan and, with respect to any
Multiemployer Plan, the Reorganization (as defined in Section
4241 of ERISA) or Insolvency (as defined in Section 4245 of
ERISA) of such Multiemployer Plan and in addition to such notice,
deliver to the Agent whichever of the following may be
applicable: (a) an Officer's Certificate setting forth details
as to such Reportable Event and the action that the Borrower or
Commonly Controlled Entity proposes to take with respect thereto,
together with a copy of any notice of such Reportable Event that
may be required to be filed with PBGC, or b) any notice delivered
by PBGC evidencing its intent to institute such proceedings or
any notice to PBGC that such Plan is to be terminated, as the
case may be.
ARTICLE 6.
EVENTS OF DEFAULT
SECTION 6.1. EVENTS OF DEFAULT. The Borrower shall be
in default under each of the Financing Documents, upon the
occurrence of any one or more of the following events ("Events of
Default"):
SECTION 6.1.1. If the Borrower shall fail to make due
and punctual payment of any principal, fees, interest and/or
other amounts payable under this Agreement as provided in any
Note and/or in this Agreement when the same is due and payable
except that it shall not be an Event of Default if any interest,
fees and/or other amounts (excluding principal) is paid within 5
- 62 -
Business Days after it is due and payable, whether at the due
date thereof or at a date fixed for prepayment or if the Borrower
shall fail to make any such payment of fees, interest, principal
and/or any other amount under this Agreement and/or under any
Note on the date when such payment becomes due and payable by
acceleration;
SECTION 6.1.2. If the Borrower or any Subsidiary shall
make an assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall admit in
writing its inability to pay its debts as they become due or
shall file a voluntary petition in bankruptcy, or shall file any
petition or answer seeking any reorganization, arrangement,
composition, adjustment, liquidation, dissolution or similar
relief under the present or any future federal bankruptcy laws or
other applicable federal, state or other statute, law or
regulation, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of it or of
all or any substantial part of its properties, or if partnership
or corporate action shall be taken for the purpose of effecting
any of the foregoing; or
SECTION 6.1.3. To the extent not described in
SECTION 6.1.2, (i) if the Borrower or any Subsidiary shall be the
subject of a bankruptcy proceeding, or (ii) if any proceeding
against any of them seeking any reorganization, arrangement,
composition, adjustment, liquidation, dissolution, or similar
relief under the present or any future federal bankruptcy law or
other applicable federal, foreign, state or other statute, law or
regulation shall be commenced, or (iii) if any trustee, receiver
or liquidator of any of them or of all or any substantial part of
any or all of their properties shall be appointed without their
consent or acquiescence; provided that in any of the cases
described above in this SECTION 6.1.3, such proceeding or
appointment shall not be an Event of Default if the Borrower or
the Subsidiary in question shall cause such proceeding or
appointment to be discharged, vacated, dismissed or stayed within
sixty (60) days after commencement thereof; or
SECTION 6.1.4. If final judgment or judgments
aggregating more than $500,000 shall be rendered against the
Borrower or any Subsidiary and shall remain undischarged,
unstayed or unpaid for an aggregate of thirty (30) days (whether
or not consecutive) after entry thereof; or
SECTION 6.1.5. If the Borrower or any Subsidiary shall
default (after giving effect to any applicable grace period) in
the due and punctual payment of the principal of or interest on
any Indebtedness exceeding in the aggregate $500,000 (other than
the Loans), or if any default shall have occurred and be
continuing after any applicable grace period under any mortgage,
note or other agreement evidencing, securing or providing for the
creation of such Indebtedness, which results in the acceleration
of such Indebtedness or which permits, or with the giving of
notice would permit, any holder or holders of any such
Indebtedness to accelerate the stated maturity thereof; or
SECTION 6.1.6. If there shall be a default in the
performance of the Borrower's obligations under SECTION 5.1.3
(insofar as such Section requires the preservation of the
corporate existence of the Borrower or any Subsidiary), any of
SECTIONS 5.1.2, 5.1.10 through 5.1.13 or SECTION 5.2 of this
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Agreement or under any covenant, representation or warranty
contained in any of the Security Documents for which no cure
period is provided in such Security Document; or
SECTION 6.1.7. If there shall be any Default in the
performance of any covenant or condition contained in this
Agreement or in any of the other Financing Documents to be
observed or performed pursuant to the terms hereof or any
Financing Document, as the case may be, or to the extent such
Default would have a Material Adverse Effect, by the Borrower
under any of the Related Transaction Documents, other than a
covenant or condition referred to in any other subsection of this
SECTION 6.1 and such Default shall continue unremedied or
unwaived, (i) in the case of any covenant or condition contained
in SECTION 5.3, for fifteen (15) Business Days, or (ii) in the
case of any other covenant or condition for which no other grace
period is provided, for thirty (30) days, or (iii) in the case of
any other covenant or condition for which another grace period is
provided, for such grace period, or (iv) if any of the
representations and warranties made or deemed made by the
Borrower to the Agent and/or any Lender pursuant to any of the
Financing Documents proves to have been false or misleading in
any material respect when made and such falseness or misleading
representation or warranty would be reasonably likely to have a
material adverse effect on the Agent or any Lender or their
rights and remedies or a Material Adverse Effect; or
SECTION 6.1.8. If there shall be any attachment of any
deposits or other property of the Borrower and/or any Subsidiary
in the possession of any Lender or any attachment of any other
property of the Borrower and/or any Subsidiary in an amount
exceeding $500,000, which shall not be discharged, vacated or
stayed within thirty (30) days of the date of such attachment; or
SECTION 6.1.9. Any certification of the financial
statements, furnished to the Agent pursuant to SECTION 5.3.2,
shall contain any qualification; provided, however, that such
qualifications will not be deemed an Event of Default if in each
case (i) such certification shall state that the examination of
the financial statements covered thereby was conducted in
accordance with generally accepted auditing standards, including
but not limited to all such tests of the accounting records as
are considered necessary in the circumstances by the independent
certified public accountants preparing such statements, (ii) such
financial statements were prepared in accordance with GAAP and
(iii) such qualification does not involve the "going concern"
status of the entity being reported upon.
ARTICLE 7.
REMEDIES OF LENDERS
Upon the occurrence and during the continuance of any one or
more of the Events of Default, the Agent, at the request of the
Majority Lenders, shall, by written notice to the Borrower,
declare the obligation of the Lenders to make or maintain the
Loans to be terminated, whereupon the same and the Commitment
shall forthwith terminate, and the Agent, at the request of the
Majority Lenders, shall, by notice to the Borrower, declare the
entire unpaid principal amount of each Note and all fees and
interest accrued and unpaid thereon and/or under this Agreement,
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and/or any of the other Financing Documents and any and all other
Indebtedness under this Agreement, each Note and/or any of the
other Financing Documents to the Agent and/or any of the Lenders
and/or to any holder of all or any portion of each Note to be
forthwith due and payable, whereupon each Note, and all such
accrued fees and interest and other such Indebtedness shall
become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that
upon the occurrence of an Event of Default under SECTIONS 6.1.2
or 6.1.3, all of the unpaid principal amount of each Note, all
fees and interest accrued and unpaid thereon and/or under this
Agreement and/or under any of the other Financing Documents and
any and all other such Indebtedness of the Borrower to any of the
Lenders and/or to any such holder shall thereupon be due and
payable in full without any need for the Agent and/or any Lender
to make any such declaration or take any action and the Lenders'
obligations to make the Loans shall simultaneously terminate.
The Agent shall, in accordance with the votes of the Majority
Lenders, exercise all remedies on behalf of and for the account
of each Lender and on behalf of its respective Pro Rata Share of
the Loans, its Note and Indebtedness of the Borrower owing to it
or any of the foregoing, including, without limitation, all
remedies available under or as a result of this Agreement, the
Notes or any of the other Financing Documents or any other
document, instrument or agreement now or hereafter securing any
Note without any such exercise being deemed to modify in any way
the fact that each Lender shall be deemed a separate creditor of
the Borrower to the extent of its Note and Pro Rata Share of the
Loans and any other amounts payable to such Lender under this
Agreement and/or any of the other Financing Documents and the
Agent shall be deemed a separate creditor of the Borrower to the
extent of any amounts owed by the Borrower to the Agent.
ARTICLE 8.
AGENT
SECTION 8.1. APPOINTMENT. The Agent is hereby appointed
as administrative and collateral agent hereunder and each Lender
hereby authorizes the Agent to act under the Financing Documents
as its Agent hereunder and thereunder, respectively. The Agent
agrees to act as such upon the express conditions and the Lenders
contained in this Article 8. The provisions of this Article 8
are solely for the benefit of the Agent, and, except as expressly
provided in SECTION 8.6, neither the Borrower nor any third party
shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under
this Agreement and the other Financing Documents to which the
Agent is a party, the Agent shall act solely as Agent of the
Lenders and does not assume nor shall the Agent be deemed to have
assumed any obligation towards or relationship of agency or trust
with or for the Borrower, any Affiliate or any Subsidiary.
SECTION 8.2. POWERS; GENERAL IMMUNITY.
SECTION 8.2.1. DUTIES SPECIFIED. Each Lender
irrevocably authorizes the Agent to take such action on such
Lender's behalf, including, without limitation, to execute and
deliver the Financing Documents to which the Agent is a party and
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to exercise such powers hereunder and under the Financing
Documents and other instruments and agreements referred to herein
as are specifically delegated to the Agent by the terms hereof
and thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have only those duties and
responsibilities which are expressly specified in this Agreement
or in any of the Financing Documents and may perform such duties
by or through its agents or employees. The duties of the Agent
shall be mechanical and administrative in nature; and the Agent
shall not have by reason of this Agreement or any of the
Financing Documents a fiduciary relationship in respect of any
Lender; and nothing in this Agreement or any of the Security
Documents, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect
of this Agreement or any of the Financing Documents or the other
instruments and agreements referred to herein except as expressly
set forth herein or therein. Without limiting any of the other
provisions of this Article 8, the Agent agrees to exercise the
same degree of care hereunder in its capacity as Agent for the
Lenders as the Agent does to protect its own interest as a
Lender.
SECTION 8.2.2. NO RESPONSIBILITY FOR CERTAIN MATTERS.
The Agent shall not be responsible to any Lender for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of any of the Financing Documents
or any other document, instrument or agreement now or hereafter
executed in connection herewith or therewith, or for any
representations, warranties, recitals or statements made herein
or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates
or any other documents in connection herewith or therewith by or
on behalf of the Borrower, and/or any Subsidiary to the Agent or
any Lender, or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein
or as to the use of the proceeds of the Loans or of the existence
or possible existence of any Default or Event of Default.
SECTION 8.2.3. EXCULPATORY PROVISIONS. Neither the
Agent nor any of its officers, directors, employees or agents
shall be liable to any Lender for any action taken or omitted
hereunder or under any of the Financing Documents, or in
connection herewith or therewith unless caused by its or their
gross negligence or willful misconduct. If the Agent shall
request instructions from Lenders with respect to any action
(including the failure to take an action) in connection with any
of the Financing Documents, the Agent shall be entitled to
refrain from taking such action unless and until the Agent, shall
have received instructions from the Majority Lenders (or all of
the Lenders if the action requires their consent). Without
prejudice to the generality of the foregoing, (i) the Agent shall
be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to
be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall
be protected in relying on opinions and judgments of attorneys
(who may be attorneys for the Borrower and/or any Subsidiary),
accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or (where so
instructed) refraining from acting under any of the Financing
Documents or the other instruments and agreements referred to
herein in accordance with the instructions of the Majority
Lenders (or all of the Lenders if the action requires their
consent). The Agent shall be entitled to refrain from exercising
any power, discretion or authority vested in it under any of the
Financing Documents or the other instruments and agreements
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referred to herein unless and until it has obtained the
instructions of the Majority Lenders (or all of the Lenders if
the action requires their consent).
SECTION 8.2.4. AGENT ENTITLED TO ACT AS LENDER. The
agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon,
Fleet in its individual capacity as a Lender hereunder. With
respect to its participation in the Loans and the Commitment,
Fleet shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not
performing the duties and functions delegated to it hereunder,
and the term "Lender" or "Lenders" or any similar term shall,
unless the context clearly otherwise indicates, include Fleet in
its individual capacity. The Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of
banking, trust, financial advisory or other business with the
Borrower, or any Affiliate or Subsidiary as if it were not
performing the duties specified herein, and may accept fees and
other consideration from the Borrower and/or any of such other
Persons for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
SECTION 8.3. REPRESENTATIONS AND WARRANTIES; NO
RESPONSIBILITY FOR APPRAISAL OF CREDITWORTHINESS. Each Lender
represents and warrants that it has made its own independent
investigation of the financial condition and affairs of the
Borrower and any Subsidiaries of any of them in connection with
the making of the Loans hereunder and has made and shall continue
to make its own appraisal of the creditworthiness of the Borrower
and the Subsidiaries. The Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to
make any such investigation or any such appraisal on behalf of
Lenders or to provide any Lender with any credit or other
information with respect thereto whether coming into its
possession before the making of any Loan or any time or times
thereafter (except for information received by the Agent under
SECTION 5.3 hereof which the Agent will promptly forward to the
Lenders), and the Agent shall further not have any responsibility
with respect to the accuracy of or the completeness of the
information provided to any of the Lenders.
SECTION 8.4. RIGHT TO INDEMNITY. Each Lender severally
agrees to indemnify the Agent proportionately to its Pro Rata
Share of the Loans, to the extent the Agent shall not have been
reimbursed by or on behalf of the Borrower, for and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Agent in performing its duties
hereunder or in any way relating to or arising out of this
Agreement and/or any of the other Financing Documents; PROVIDED
that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
the Agent's gross negligence or willful misconduct. If any
indemnity furnished to the Agent for any purpose shall, in the
opinion of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such
additional indemnity is furnished.
SECTION 8.5. PAYEE OF NOTE TREATED AS OWNER. The Agent
may deem and treat the payee of any Note as the owner thereof for
all purposes hereof unless and until a written notice of the
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assignment or transfer thereof shall have been filed with the
Agent. Any request, authority or consent of any person or entity
who, at the time of making such request or giving such authority
or consent, is the holder of any Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Notes issued in exchange for such Note.
SECTION 8.6. RESIGNATION BY AGENT.
SECTION 8.6.1. The Agent may resign from the
performance of all its functions and duties under the Financing
Documents at any time by giving 30 days' prior written notice to
the Borrower and each of the Lenders. Such resignation shall
take effect upon the acceptance by a successor Agent, of
appointment pursuant to SECTIONS 8.6.2 and 8.6.3 below or as
otherwise provided below.
SECTION 8.6.2. Upon any such notice of resignation,
the Majority Lenders shall appoint a successor Agent, who shall
be a Lender and, so long as no Default or Event of Default exists
and is continuing, who shall be reasonably satisfactory to the
Borrower and in any event shall be an incorporated bank or trust
company with a combined surplus and undivided capital of at least
Five Hundred Million Dollars ($500,000,000).
SECTION 8.6.3. If a successor Agent shall not have
been so appointed within said 30 day period, the resigning Agent,
with the consent of the Borrower, which shall not be unreasonably
withheld or delayed, shall then appoint a successor Agent, who
shall be a Lender and who shall serve as the Agent, until such
time, if any, as the Majority Lenders, and so long as no Default
or Event of Default exists and is continuing, with the consent of
the Borrower, which shall not be unreasonably withheld or
delayed, appoint a successor Agent as provided above.
SECTION 8.6.4. If no successor Agent has been
appointed pursuant to SECTIONS 8.6.2 or 8.6.3 by the 40th day
after the date such notice of resignation was given by the
resigning Agent, the resigning Agent's resignation shall become
effective and the Majority Lenders shall thereafter perform all
the duties of the resigning Agent under the Financing Documents
including without limitation directing the Borrower on how to
submit Requests and Interest Rate Elections and otherwise on
administration of the Agent's duties under the Financing
Documents and the Borrower shall comply therewith so long as such
directions do not have a Material Adverse Effect on the Borrower
or any Subsidiary until such time, if any, as the Majority
Lenders, and so long as no Default or Event of Default exists and
is continuing, with the consent of the Borrower, which shall not
be unreasonably withheld or delayed, appoint a successor Agent,
as provided above.
SECTION 8.7. SUCCESSOR AGENT. Upon the acceptance of any
appointment as the Agent hereunder by a successor Agent, that
successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring
Agent and the retiring Agent, shall be discharged from its duties
and obligations as the Agent under the Financing Documents.
After any retiring Agent's resignation hereunder as the Agent the
provisions of this Article 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent
under the Financing Documents.
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ARTICLE 9.
MISCELLANEOUS
SECTION 9.1. CONSENT TO JURISDICTION AND SERVICE OF
PROCESS.
SECTION 9.1.1. Except to the extent prohibited by
applicable law, the Borrower irrevocably:
SECTION 9.1.1.1. agrees that any suit, action, or
other legal proceeding arising out of any of the Financing
Documents or any of the Loans may be brought in the courts of
record of The Commonwealth of Massachusetts or any other state(s)
in which any of the Borrower's assets are located or the courts
of the United States located in The Commonwealth of Massachusetts
or any other state(s) in which any of the Borrower's assets are
located;
SECTION 9.1.1.2. consents to the jurisdiction of
each such court in any such suit, action or proceeding; and
SECTION 9.1.1.3. waives any objection which it
may have to the laying of venue of such suit, action or
proceeding in any of such courts.
For such time as any of the Indebtedness of the Borrower to
any Lender and/or the Agent shall be unpaid in whole or in part
and/or the Commitment is in effect, the Borrower irrevocably
designates the registered agent or agent for service of process
of the Borrower as reflected in the records of the Secretary of
State of The Commonwealth of Massachusetts as its registered
agent, and, in the absence thereof, the Secretary of State of The
Commonwealth of Massachusetts as its agent to accept and
acknowledge on its behalf service of any and all process in any
such suit, action or proceeding brought in any such court and
agrees and consents that any such service of process upon such
agent and written notice of such service to the Borrower by
registered or certified mail shall be taken and held to be valid
personal service upon the Borrower regardless of where the
Borrower shall then be doing business and that any such service
of process shall be of the same force and validity as if service
were made upon it according to the laws governing the validity
and requirements of such service in each such state and waives
any claim of lack of personal service or other error by reason of
any such service. Any notice, process, pleadings or other
papers served upon the aforesaid designated agent shall, within
three (3) Business Days after such service, be sent by the method
provided therefor under SECTION 9.6 to the Borrower at its
address set forth in this Agreement. EACH OF THE PARTIES HERETO
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF ANY
DISPUTE BETWEEN THE BORROWER AND THE AGENT AND/OR THE LENDERS
WITH RESPECT TO THE FINANCING DOCUMENTS AND/OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREBY.
SECTION 9.2. RIGHTS AND REMEDIES CUMULATIVE. No right
or remedy conferred upon or reserved to the Agent and/or the
Lenders in any of the Financing Documents is intended to be
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exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given under any of
the Financing Documents or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or
remedy under any of the Financing Documents, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 9.3. DELAY OR OMISSION NOT WAIVER. No delay in
exercising or failure to exercise by the Agent and/or the Lenders
of any right or remedy accruing upon any Default or Event of
Default shall impair any such right or remedy or constitute a
waiver of any such Default or Event of Default or an acquiescence
therein. Every right and remedy given by any of the Financing
Documents or by law to the Agent and/or any of the Lenders may
be exercised from time to time, and as often as may be deemed
expedient, by the Agent and/or any of the Lenders.
SECTION 9.4. WAIVER OF STAY OR EXTENSION LAWS. The
Borrower covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead or in any
manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of any of the Financing Documents; and the Borrower
(to the extent that it may lawfully do so) hereby expressly
waives all benefit and advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any
power herein granted to the Agent and/or any of the Lenders, but
will suffer and permit the execution of every such power as
though no such law had been enacted, except to the extent the
Agent or any Lender is guilty of willful misconduct or gross
negligence.
SECTION 9.5. AMENDMENTS, ETC. No amendment,
modification, termination, or waiver of any provision of any of
the Financing Documents nor consent to any departure by the
Borrower therefrom shall in any event be effective unless the
same shall be in a written notice given to the Borrower by the
Agent and consented to in writing by the Majority Lenders (or by
the Agent acting alone if any specific provision of this
Agreement provides that the Agent, acting alone, may grant such
amendment, modification, termination, waiver or departure) and
the Agent shall give any such notice if the Majority Lenders so
consent or direct the Agent to do so; provided, however, that any
such amendment, modification, termination, waiver or consent
shall require a written notice given to the Borrower by the Agent
and consented to in writing by all of the Lenders if the effect
thereof is to (i) change any of the provisions affecting the
interest rate on the Loans, (ii) extend or modify the Commitment,
(iii) discharge or release the Borrower from its obligation to
repay all principal due under the Loans or release any collateral
or guaranty for the Loans, (iv) change any Lender's Pro Rata
Share of the Commitment or the Loans, (v) modify this SECTION
9.5, (vi) change the definition of Majority Lenders, (vii) extend
any scheduled due date for payment of principal, interest or fees
or (viii) permit the Borrower to assign any of its rights under
or interest in this Agreement, and then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given. Any amendment or modification
of this Agreement must be signed by the Borrower, the Agent and
at least all of the Lenders consenting thereto who shall then
hold the Pro Rata Shares of the Loans required for such amendment
or modification under this SECTION 9.5 and the Agent shall sign
any such amendment if such Lenders so consent or direct the Agent
to do so provided that any Lender dissenting therefrom shall be
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given an opportunity to sign any such amendment or modification.
Any amendment of any of the Security Documents must be signed by
each of the parties thereto. No notice to or demand on the
Borrower and no consent, waiver or departure from the terms of
this Agreement granted by the Agent and/or the Lenders in any
case shall entitle the Borrower to any other or further notice or
demand in similar or other circumstances.
SECTION 9.6. ADDRESSES FOR NOTICES, ETC. All notices,
requests, demands and other communications provided for hereunder
(other than those which, under the terms of this Agreement, may
be given by telephone, which shall be effective when received
verbally) shall be in writing (including telecopied
communication) and mailed (provided that in the case of items
referred to in the next-to-last sentence of SECTION 9.1 and the
items set forth below as requiring a copy to legal counsel for
the Borrower, the Agent or a Lender, such items shall be mailed
by overnight courier for delivery the next Business Day),
telecopied or delivered to the applicable party at the addresses
indicated below:
If to the Borrower:
PCD Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxx, Xx.
Telecopy: (000) 000-0000
With a copy to (if given pursuant to any of SECTIONS 5.3.1,
5.3.5, 5.3.9, 5.3.10 and 5.3.11):
Hill & Xxxxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Esquire
Telecopy: (000) 000-0000
If to Fleet National Bank as the Agent and/or a Lender:
Fleet National Bank
Mailstop: MA/OF/D07
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Senior Vice President
Telecopy: (000) 000-0000
With a copy to (if given pursuant to any of SECTIONS 5.3.1,
5.3.5, 5.3.9, 5.3.10 and 5.3.11)
Xxxxxxxx, Xxxxx & Xxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
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Attention: Xxxxxxx Xxxxxx III, Esquire
Telecopy: (000) 000-0000
If to any other Lender, to the address set forth on
EXHIBIT 1.9.
or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party
complying as to the delivery with the terms of this Section. All
such notices, requests, demands and other communications shall be
effective when received. Requests, certificates, other items
provided pursuant to SECTION 5.3 and other routine mailings or
notices need not be accompanied by a copy to legal counsel for
the Lenders or the Borrower.
SECTION 9.7. COSTS, EXPENSES AND TAXES. The Borrower
agrees to pay on demand the reasonable fees and out-of-pocket
expenses of Messrs. Xxxxxxxx, Xxxxx & Xxxxxx, counsel for the
Agent and of any local counsel retained by the Agent in
connection with the preparation, execution, delivery and
administration (excluding expenses of any Lender's sale of a
participation in or sale or assignment of all or a portion of
such Lender's Commitment or Loans other than any such sale
pursuant to SECTIONS 2.2.3 or 2.9.7) of the Financing Documents
and the Loans. The Borrower agrees to pay on demand all
reasonable costs and expenses (including without limitation
reasonable attorneys' fees) incurred by the Agent and/or any
Lender, upon or after the occurrence and during the continuance
of any Default or Event of Default, if any, in connection with
the enforcement of any of the Financing Documents and any
amendments, waivers, or consents with respect thereto. In
addition, the Borrower shall pay on demand any and all stamp and
other taxes and fees payable or determined to be payable in
connection with the execution and delivery of the Financing
Documents, and agrees to save the Lenders and the Agent harmless
from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes
or fees, except those resulting from the Lenders' or Agent's
gross negligence or willful misconduct.
SECTION 9.8. PARTICIPATIONS. Subject to compliance with
the proviso in the first sentence of SECTION 9.11, any Lender may
sell participations in all or part of the Loans made by it and/or
its Pro Rata Share of the Commitment or any other interest herein
to a financial institution having at least $500,000,000 of
assets, in which event the participant shall not have any rights
under any of the Financing Documents (the participant's rights
against such Lender in respect of that participation to be those
set forth in the Agreement executed by such Lender in favor of
the participant relating thereto) and all amounts payable by the
Borrower hereunder or thereunder shall be determined as if such
Lender had not sold such participation. Such Lender may furnish
any information concerning the Borrower and any Subsidiary in the
possession of such Lender from time to time to participants
(including prospective participants); provided that such Lender
and any participant comply with the proviso in SECTION 9.11.7 as
if any such participant was a Substituted Lender.
SECTION 9.9. BINDING EFFECT; ASSIGNMENT. This Agreement
shall be binding upon and inure to the benefit of the Borrower,
the Agent and the Lenders and their respective successors and
assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the
prior written consent of the Agent and the Lenders. This
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Agreement and all covenants, representations and warranties made
herein and/or in any of the other Financing Documents shall
survive the making of the Loans, the execution and delivery of
the Financing Documents and shall continue in effect so long as
any amounts payable under or in connection with any of the
Financing Documents or any other Indebtedness of the Borrower to
the Agent and/or any Lender remains unpaid or the Commitment
remains outstanding; provided, however, that SECTIONS 2.2.3 and
9.7 shall, except to the extent agreed to in a pay-off letter by
the Agent and the Lenders in their complete discretion, survive
and remain in full force and effect for 90 days following
repayment in full of all amounts payable under or in connection
with all of the Financing Documents and any other such
Indebtedness.
SECTION 9.10. ACTUAL KNOWLEDGE. For purposes of this
Agreement, neither the Agent nor any Lender shall be deemed to
have actual knowledge of any fact or state of facts unless the
senior loan officer or any other officer responsible for the
Borrower's account established pursuant to this Agreement at the
Agent or such Lender, shall, in fact, have actual knowledge of
such fact or state of facts or unless written notice of such fact
shall have been received by the Agent or such Lender in
accordance with SECTION 9.6.
SECTION 9.11. SUBSTITUTIONS AND ASSIGNMENTS. Upon the
request of any Lender, the Agent and such Lender may assign all
or any portion of its Pro Rata Share of the Commitment and the
Loans, without the prior consent of the Borrower, to (i) a
Federal Reserve Bank, (ii) an Affiliate and (iii) another Lender,
and in all other instances only with the prior consent of the
Borrower, which consent shall not be unreasonably withheld,
conditioned or delayed, and may, subject to the terms and
conditions hereinafter set forth, take the actions set forth
below to substitute one or more financial institutions having at
least $500,000,000 in assets (a "Substituted Lender") as a Lender
or Lenders hereunder having an amount of the Loans as specified
in the relevant Substitution Agreement executed in connection
therewith; provided that no Lender, Selling Lender or Substituted
Lender shall have a Pro Rata Share of the Commitment and the
Loans in the aggregate of less than $5,000,000 and Fleet and/or
its Affiliates shall retain for their own account at least 15% of
the Commitment.
SECTION 9.11.1. In connection with any such
substitution the Substituted Lender and the Agent shall enter
into a Substitution Agreement in the form of EXHIBIT 9.11.1
hereto (a "Substitution Agreement") pursuant to which such
Substituted Lender shall be substituted for the Lender requesting
the substitution in question (any such Lender being hereinafter
referred to as a "Selling Lender") to the extent of the reduction
in the Selling Lender's portion of the Loans specified therein.
In addition, such Substituted Lender shall assume such of the
obligations of each Selling Lender under the Financing Documents
as may be specified in such Substitution Agreement and this
Agreement shall be amended by execution and delivery of each
Substitution Agreement to include such Substituted Lender as a
Lender for all purposes under the Financing Documents and to
substitute for the then existing EXHIBIT 1.9 to this Agreement a
new EXHIBIT 1.9 in the form of Schedule A to such Substitution
Agreement setting forth the portion of the Loans belonging to
each Lender following execution thereof. Each Lender and the
Borrower shall countersign and accept delivery of each
Substitution Agreement. Each Lender shall be responsible for the
payment of its legal fees, if any, in connection with any such
substitution and assignment.
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SECTION 9.11.2. Without prejudice to any other
provision of this Agreement, each Substituted Lender shall, by
its execution of a Substitution Agreement, agree that neither the
Agent nor any Lender is any way responsible for or makes any
representation or warranty as to: (a) the accuracy and/or
completeness of any information supplied to such Substituted
Lender in connection therewith, (b) the financial condition,
creditworthiness, affairs, status or nature of the Borrower
and/or any of the Subsidiaries or the observance by the Borrower,
or any other party of any of its obligations under this Agreement
or any of the other Financing Documents or (c) the legality,
validity, effectiveness, adequacy or enforceability of any of the
Financing Documents.
SECTION 9.11.3. The Agent shall be entitled to rely on
any Substitution Agreement delivered to it pursuant to this
SECTION 9.11 which is complete and regular on its face as to its
contents and appears to be signed on behalf of the Substituted
Lender which is a party thereto, and the Agent shall have no
liability or responsibility to any party as a consequence of
relying thereon and acting in accordance with and countersigning
any such Substitution Agreement. The effective date of each
Substitution Agreement shall be the date specified as such
therein and each Lender prior to such effective date shall, for
all purposes hereunder, be deemed to have and possess all of
their respective rights and obligations hereunder up to 12:00
o'clock Noon on the effective date thereof.
SECTION 9.11.4. Upon delivery to the Agent of any
Substitution Agreement pursuant to and in accordance with this
SECTION 9.11 and acceptance thereof by the Agent (which delivery
shall be evidenced and accepted exclusively and conclusively by
the Agent's countersignature thereon pursuant to the terms hereof
without which such Substitution Agreement shall be ineffective):
(i) except as provided hereunder and in SECTION 9.11.5, the
respective rights of each Selling Lender and the Borrower against
each other under the Financing Documents with respect to the
portion of the Loans being assigned or delegated shall be
terminated and each Selling Lender and the Borrower shall each be
released from all further obligations to the other hereunder with
respect thereto (all such rights and obligations to be so
terminated or released being referred to in this SECTION 9.11 as
"Discharged Rights and Obligations"); and (ii) the Borrower and
the Substituted Lender shall each acquire rights against each
other and assume obligations towards each other which differ from
the Discharged Rights and Obligations only in so far as the
Borrower and the Substituted Lender have assumed and/or acquired
the same in place of the Selling Lender in question; and (iii)
the Agent, the Substituted Lender and the other Lenders shall
acquire the same rights and assume the same obligations between
themselves as they would have acquired and assumed had such
Substituted Lender been an original party to this Agreement as a
Lender possessing the Discharged Rights and Obligations acquired
and/or assumed by it in consequence of the delivery of such
Substitution Agreement to the Agent.
SECTION 9.11.5. Discharged Rights and Obligations
shall not include, and there shall be no termination or release
pursuant to this SECTION 9.11 of (i) any rights or obligations
arising pursuant to any of the Financing Documents in respect of
the period or in respect of payments hereunder made during the
period prior to the effective date of the relevant Substitution
Agreement or, (ii) any rights or obligations relating to the
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payment of any amount which has fallen due and not been paid
hereunder prior to such effective date or rights or obligations
for the payment of interest, damages or other amounts becoming
due hereunder as a result of such nonpayment.
SECTION 9.11.6. With respect to any substitution of a
Substituted Lender taking place after the Closing Date, the
Borrower shall issue to such Substituted Lender and to such
Selling Lender, new Notes reflecting the inclusion of such
Substituted Lender as a Lender and the reduction in the
respective Loans of such Selling Lender, such new Notes to be
issued against receipt by the Borrower of the existing Notes of
such Lender. The Selling Lender or the Substituted Lender shall
pay to the Agent for its own account an assignment fee in the
amount of $2,500 for each assignment hereunder, which shall be
payable at or before the effective date of the assignment.
SECTION 9.11.7. Each Lender may furnish to any
financial institution having at least $500,000,000 in assets
which such Lender proposes to make a Substituted Lender or to a
Substituted Lender any information concerning such Lender, the
Borrower and any Subsidiary in the possession of that Lender from
time to time; provided that any Lender providing any confidential
information about the Borrower and/or any Subsidiary to any such
financial institution shall first obtain such financial
institution's agreement to keep confidential any such
confidential information.
SECTION 9.12. PAYMENTS PRO RATA. The Agent agrees that
promptly after its receipt of each payment from or on behalf of
the Borrower in respect of any obligations of the Borrower
hereunder it shall distribute such payment to the Lenders pro
rata based upon their respective Pro Rata Shares, if any, of the
obligations with respect to which such payment was received.
Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff under SECTION
2.5.2 or otherwise or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Financing
Documents, or otherwise), which is applicable to the payment of
the Obligations of a sum which with respect to the related sum or
sums received by other Lenders is in a greater proportion than
the total amount of such Obligation then owed and due to such
Lender bears to the total amount of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt,
except for any amounts received pursuant to SECTION 2.2.3, then
such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest
in the Obligations of the Borrower to such Lenders in such amount
as shall result in a proportional participation by all the
Lenders in such amount; provided further, however, that if all or
any portion of such excess amount is thereafter recovered from
such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without
interest.
SECTION 9.13. INDEMNIFICATION. The Borrower irrevocably
agrees to and does hereby indemnify and hold harmless Agent and
each of the Lenders, their agents or employees and each Person,
if any, who controls any of the Agent and the Lenders within the
meaning of Section 15 of the Securities Act of 1933, as amended,
and each and all and any of them (the "Indemnified Parties"),
against any and all losses, claims, actions, causes of action,
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damages or liabilities (including any amount paid in settlement
of any action, commenced or threatened and any amount described
in SECTION 8.4) (collectively, the "Damages"), joint or several,
to which they, or any of them, may become subject under statutory
law or at common law, and to reimburse the Indemnified Parties
for any legal or other out-of-pocket expenses reasonably incurred
by it or them in connection with investigating, preparing for or
defending against any of the Indemnified Parties, insofar as such
losses, claims, damages, liabilities or actions arise out of or
are related to any act or omission of the Borrower and/or any
Subsidiary with respect to (i) the Related Transaction, as it may
be modified from time to time by any of the parties thereto, (ii)
this Agreement, any of the Notes, any of the Financing Documents,
any of the Loans and/or any use made or proposed to be made with
the proceeds of said Loans, (iii) any acquisition or proposed
acquisition or any other similar business combination or
proposed business combination by the Borrower and/or any of its
Subsidiaries and/or its Affiliates (whether by acquisition or
exchange of capital stock or other securities or by acquisition
of all or substantially all of the assets of any Person), (iv)
any offering of securities by the Borrower and/or any Subsidiary
after the date hereof and/or in connection with the Securities
and Exchange Act of 1933 or (v) any failure to comply with any
applicable federal, state or foreign governmental law, rule,
regulation, order or decree, including without limitation, any
Damages which arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact with respect to
matters relative to any of the foregoing contained in any
document distributed in connection therewith, or the omission or
alleged omission to state in any of the foregoing a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but
excluding any Damages to the extent arising from or due to, as
determined in a final nonappealable judgment by a court of
competent jurisdiction, the gross negligence or willful
misconduct of any of the Indemnified Parties; provided, however,
that notwithstanding the foregoing, no Indemnified Party shall
have any liability (whether direct or indirect, in contract or
tort of otherwise) to the Borrower or any Subsidiaries or to
their respective security holders or creditors except for direct
(as opposed to consequential damages) determined in a final
nonappealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation
or proceeding to which the indemnity described in this paragraph
applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the
Borrower or any Subsidiaries or to their respective security
holders or creditors or an Indemnified Party or an Indemnified
Party is otherwise a party thereto and whether or not the Related
Transaction and the transactions contemplated by the Financing
Documents are consummated.
Promptly upon receipt of notice of the commencement of any
action, or information as to any threatened action against any of
the Indemnified Parties in respect of which indemnity or
reimbursement may be sought from the Borrower on account of the
agreement contained in this SECTION 9.13, notice shall be given
to the Borrower in writing of the commencement or threatening
thereof, together with a copy of all papers served, but the
omission so to notify the Borrower of any such action shall not
release the Borrower from any liability which it may have to such
Indemnified Parties unless, and only to the extent that, such
omission materially prejudiced Borrower's ability to defend
against such action.
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In case any such action shall be brought against any of the
Indemnified Parties, the Borrower shall be entitled to
participate in (and, to the extent that it shall wish, to select
counsel and to direct) the defense thereof at its own expense.
Any of the Indemnified Parties shall have the right to employ its
or their own counsel in any case, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party
unless the employment of such counsel shall have been authorized
in writing by the Borrower in connection with the defense of such
action or the Borrower shall not have employed counsel to have
charge of the defense of such action or such Indemnified Party
shall have received an opinion from an independent counsel that
there may be defenses available to it which are different from or
additional to those available to the Borrower (in which case the
Borrower shall not have the right to direct the defense of such
action on behalf of such Indemnified Party), in any of which
events the same shall be borne by the Borrower. If any
Indemnified Party settles any claim or action with respect to
which the Borrower has agreed to indemnify such Indemnified Party
pursuant to the terms hereof, the Borrower shall have no
liability pursuant to this SECTION 9.13 to such Indemnified Party
with respect to such claim or action unless the Borrower shall
have consented in writing to the terms of such settlement.
The provisions of SECTION 9.13 shall be effective only to
the fullest extent permitted by law. The provisions of this
SECTION 9.13 shall continue in effect and shall survive (among
other events), until the applicable statute of limitations has
expired, any termination of this Agreement, foreclosure, a deed
in lieu transaction, payment and satisfaction of the Obligations
of Borrower, and release of any collateral for the Loans.
SECTION 9.14. GOVERNING LAW. This Agreement and each
Note shall be governed by, and construed in accordance with, the
laws of The Commonwealth of Massachusetts without regard to such
state's conflict of laws rules.
SECTION 9.15. SEVERABILITY OF PROVISIONS. Any provision
of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction.
SECTION 9.16. HEADINGS. Article and Section headings in
this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any
other purpose.
SECTION 9.17. COUNTERPARTS. This Agreement may be
executed and delivered in any number of counterparts each of
which shall be deemed an original, and this Agreement shall be
effective when at least one counterpart hereof has been executed
by each of the parties hereto.
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as a sealed instrument by their
respective officers thereunto duly authorized, as of December 26,
1997.
In the presence of: PCD INC.
/s/ Xxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------- ------------------------
Xxxxxx Xxxxxxx Xxxx X. Xxxxxx, Xx.
Chairman of the Board
In the presence of: FLEET NATIONAL BANK, as Agent for
the Lenders and as a Lender
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------- ------------------------
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxx
Senior Vice President
STATE STREET BANK AND TRUST
COMPANY, as a Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Xxxxx X. Xxxxxxx
Vice President
IMPERIAL BANK, as
a Lender
By: /s/ Xxx Xxx
------------------------
Xxx Xxx
FVP
EASTERN BANK, as a Lender
By: /s/ Xxxx X. Xxxxxx
------------------------
Xxxx X. Xxxxxx
Vice President
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