CREDIT AGREEMENT
among
XXXXXXXXXX TECHNOLOGY INCORPORATED,
THE LENDERS,
and
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
Dated as of December 8, 1995
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1. Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2. Letter of Credit Subfacility . . . . . . . . . . . . . . . . . . . 12
2.2.1. Obligation to Issue . . . . . . . . . . . . . . . . . . . 12
2.2.2. Procedure for Issuance of Facility Letters of Credit. . . 12
2.2.3. Participation in Facility Letters of Credit . . . . . . . 13
2.2.4. Facility Letter of Credit Fee . . . . . . . . . . . . . . 16
2.2.5. Reimbursement for Draws Under Facility Letters of Credit. 17
2.2.6. Issuing Lender Reporting Requirements . . . . . . . . . . 18
2.2.7. Indemnification; Assumption of Risk . . . . . . . . . . . 18
2.3. Required Payments; Termination . . . . . . . . . . . . . . . . . . 20
2.4. Ratable Loans; Types of Advances; Applicable Margin. . . . . . . . 20
2.5. Commitment Fee; Reductions in Aggregate Commitment . . . . . . . . 21
2.6. Minimum Amount of Each Advance . . . . . . . . . . . . . . . . . . 22
2.7. Optional Principal Payments. . . . . . . . . . . . . . . . . . . . 22
2.8. Method of Selecting Types and Interest Periods for New Advances. . 22
2.9. Conversion and Continuation of Outstanding Advances. . . . . . . . 23
2.10. Changes in Interest Rate, etc. . . . . . . . . . . . . . . . . . . 23
2.11. Rates Applicable After Default . . . . . . . . . . . . . . . . . . 24
2.12. Method of Payment. . . . . . . . . . . . . . . . . . . . . . . . . 24
2.13. Notes; Telephonic Notices. . . . . . . . . . . . . . . . . . . . . 24
2.14. Interest Payment Dates; Interest and Fee Basis . . . . . . . . . . 25
2.15. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.16. Lending Installations. . . . . . . . . . . . . . . . . . . . . . . 25
2.17. Non-Receipt of Funds by the Agent. . . . . . . . . . . . . . . . . 25
2.18. Withholding Tax Exemption. . . . . . . . . . . . . . . . . . . . . 26
ARTICLE III. CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . 27
3.1. Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2. Changes in Capital Adequacy Regulations. . . . . . . . . . . . . . 28
3.3. Availability of Types of Advances. . . . . . . . . . . . . . . . . 28
3.4. Funding Indemnification. . . . . . . . . . . . . . . . . . . . . . 28
3.5. Lender Statements; Survival of Indemnity . . . . . . . . . . . . . 29
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ARTICLE IV. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . 29
4.1. Initial Advance. . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2. Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . 31
5.1. Corporate Existence and Standing . . . . . . . . . . . . . . . . . 31
5.2. Authorization and Validity . . . . . . . . . . . . . . . . . . . . 31
5.3. No Conflict; Government Consent. . . . . . . . . . . . . . . . . . 31
5.4. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 32
5.5. Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . 32
5.6. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.7. Litigation and Contingent Obligations. . . . . . . . . . . . . . . 32
5.8. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.9. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.10. Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . 33
5.11. Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.12. Material Agreements. . . . . . . . . . . . . . . . . . . . . . . . 33
5.13. Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . 33
5.14. Ownership of Properties. . . . . . . . . . . . . . . . . . . . . . 33
5.15. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . 34
5.16. Public Utility Holding Company Act . . . . . . . . . . . . . . . . 34
ARTICLE VI. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.1. Financial Reporting. . . . . . . . . . . . . . . . . . . . . . . . 34
6.2. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.3. Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . 36
6.4. Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . 36
6.5. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.6. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.7. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 36
6.8. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . 36
6.9. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.10. Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.11. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.12. Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.13. Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.14. Sale of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 38
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6.15. Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . 38
6.16. Investments and Acquisitions . . . . . . . . . . . . . . . . . . . 38
6.17. Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . 40
6.18. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.19. Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . 41
6.19.1. Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . 41
6.19.2. EBIT/Interest Ratio . . . . . . . . . . . . . . . . . . . 41
6.19.3. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . 42
6.20. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.21. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII. DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES . . . . . . . . 45
8.1. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.2. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.3. Preservation of Rights. . . . . . . . . . . . . . . . . . . . . 46
ARTICLE IX. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 46
9.1. Survival of Representations. . . . . . . . . . . . . . . . . . . . 46
9.2. Governmental Regulation. . . . . . . . . . . . . . . . . . . . . . 47
9.3. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.4. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.5. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.6 Several Obligations; Benefits of this Agreement. . . . . . . . . . 47
9.7. Expenses; Indemnification. . . . . . . . . . . . . . . . . . . . . 47
9.8. Numbers of Documents . . . . . . . . . . . . . . . . . . . . . . . 48
9.9. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.10. Severability of Provisions . . . . . . . . . . . . . . . . . . . . 48
9.11. Nonliability of Lenders. . . . . . . . . . . . . . . . . . . . . . 48
9.12. Choice of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.13. Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . . . . 48
9.14. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 49
9.15. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . 49
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ARTICLE X. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.1. Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.2. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.3. General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.4. No Responsibility for Loans, Recitals, etc . . . . . . . . . . . . 50
10.5. Action on Instructions of Lenders. . . . . . . . . . . . . . . . . 50
10.6. Employment of Agents and Counsel . . . . . . . . . . . . . . . . . 50
10.7. Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . . 51
10.8. Agent's Reimbursement and Indemnification. . . . . . . . . . . . . 51
10.9. Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . 51
10.10. Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . 51
10.11. Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XI. SETOFF; RATABLE PAYMENTS. . . . . . . . . . . . . . . . . . . . 52
11.1. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.2. Ratable Payments . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . 53
12.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 53
12.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.2.1. Permitted Participants; Effect. . . . . . . . . . . . . . 53
12.2.2. Voting Rights . . . . . . . . . . . . . . . . . . . . . . 54
12.2.3. Benefit of Setoff . . . . . . . . . . . . . . . . . . . . 54
12.3. Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
12.3.1. Permitted Assignments . . . . . . . . . . . . . . . . . . 54
12.3.2. Effect; Effective Date. . . . . . . . . . . . . . . . . . 55
12.4. Dissemination of Information . . . . . . . . . . . . . . . . . . . 55
12.5. Tax Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE XIII. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
13.1. Giving Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
13.2. Change of Address. . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE XIV. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . 56
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EXHIBITS
EXHIBIT "A" - Note . . . . . . . . . . . . . . . . . . . . . . . . . . 58
EXHIBIT "B" - Form of Opinion. . . . . . . . . . . . . . . . . . . . . 60
EXHIBIT "C" - Compliance Certificate . . . . . . . . . . . . . . . . . 62
EXHIBIT "D" - Assignment Agreement . . . . . . . . . . . . . . . . . . 65
EXHIBIT "E" - Loan/Credit Related Money Transfer Instruction . . . . . 76
EXHIBIT "F" - Subsidiary Guaranty. . . . . . . . . . . . . . . . . . . 77
SCHEDULES
SCHEDULE "1" - Subsidiaries and Other Investments . . . . . . . . . . . 81
SCHEDULE "2" - Indebtedness and Liens . . . . . . . . . . . . . . . . . 82
SCHEDULE "3" - Litigation . . . . . . . . . . . . . . . . . . . . . . . 84
SCHEDULE "4" - Investment Goals and Guidelines. . . . . . . . . . . . . 85
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XXXXXXXXXX TECHNOLOGY INCORPORATED
CREDIT AGREEMENT
This Agreement, dated as of December 8, 1995, is among XXXXXXXXXX
TECHNOLOGY INCORPORATED, the LENDERS and THE FIRST NATIONAL BANK OF CHICAGO, as
Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
partnership interests of a partnership.
"Advance" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by the Lenders to the Borrower of the same Type and, in
the case of Eurodollar Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means The First National Bank of Chicago in its capacity as agent
for the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.
"Aggregate Outstandings" means, at any date of determination, the aggregate
of the Outstandings of all the Lenders as of such date of determination.
"Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the sum
of Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Commitment Fee" is defined in Section 2.5.
"Applicable Margin" is defined in Section 2.4.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the Chief Financial Officer, Chief
Executive Officer, Chief Operating Officer, Treasurer or Assistant Treasurer of
the Borrower, acting singly.
"Borrower" means Xxxxxxxxxx Technology Incorporated, a Minnesota
corporation, and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Capital Expenditures" means, for any period, the net additions to
property, plant and equipment and other capital expenditures of the Borrower and
its Subsidiaries for such period
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(including any such addition by way of acquisition of or investment in a Person,
to the extent reflected as an addition to property, plant and equipment), as the
same are or would be set forth in a consolidated statement of cash flows of the
Borrower and its Subsidiaries for such period, net of any Capital Expenditures
in connection with the Eau Claire Facilities through the end of the second
quarter of the Borrower's fiscal 1997.
"Capitalization" means, as of any date of determination, Total Debt of the
Borrower and its Subsidiaries plus total equity in the Borrower (determined in
accordance with Agreement Accounting Principles).
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans and to participate in Facility Letters of Credit as provided herein not
exceeding the amount set forth opposite its signature below or as set forth in
any Notice of Assignment relating to any assignment that has become effective
pursuant to Section 12.3.2, as such amount may be modified from time to time
pursuant to the terms hereof.
"Compliance Certificate" means a compliance certificate in substantially
the form of Exhibit "C" hereto, with appropriate insertions, signed by a senior
financial officer of the Borrower showing the calculations necessary to
determine compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists, stating
the nature and status thereof, and, for quarters through the second quarter of
the Borrower's fiscal 1997, setting forth Capital Expenditures for the most
recently ended quarter and year-to-date for the Eau Claire Facilities broken out
by facility.
"Condemnation" is defined in Section 7.8.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any
Page 3
creditor of such other Person against loss, including, without limitation, any
comfort letter, operating agreement, take-or-pay contract, or application for a
Letter of Credit.
"Continuing Director" means an individual who is a member of the Board of
Directors of the Borrower on the date of this Agreement or who shall have become
a member of the Board of Directors of the Borrower subsequent to such date and
who shall have been nominated or elected by the Board of Directors of the
Borrower at a time that a majority of the members of the Board of Directors of
the Borrower are Continuing Directors.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as said corporate base rate changes.
"Default" means an event described in Article VII.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eau Claire Facilities" means, collectively, (i) the manufacturing
(assembly) facility located in Eau Claire, Wisconsin, owned by the Borrower as
of the date of this Agreement which the Borrower intends to complete for an
aggregate expenditure not exceeding $20,000,000, and (ii) the photo-etching
facility to be built by the Borrower in Eau Claire, Wisconsin, for an aggregate
expenditure not exceeding $50,000,000.
"Eurodollar Advance" means an Advance which bears interest at a Eurodollar
Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the rate determined by the Agent to be the rate at
which deposits in U.S. dollars are offered by First Chicago to first-class banks
in the London interbank market at approximately 11 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the approximate
amount of First Chicago's relevant Eurodollar Loan and having a maturity
approximately equal to such Interest Period. First Chicago shall use its best
efforts to offer to first-class banks in the London interbank market a market
competitive rate.
Page 4
"Eurodollar Loan" means a Loan which bears interest at a Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, a rate per annum equal to the sum of (i) (a) the
Eurodollar Base Rate applicable to such Interest Period, divided by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to such
Interest Period, if any, plus (ii) the Applicable Margin.
"Facility Letter of Credit" means a Letter of Credit issued under this
Agreement pursuant to Section 2.2.1.
"Facility Letter of Credit Commitment" means $5,000,000.
"Facility Termination Date" means December 8, 1998.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors.
"Fixed Charge Coverage Ratio" means, as of the fiscal quarter-end of
determination thereof, the ratio of (i) the sum of earnings before Interest
Expense, taxes, depreciation and amortization and other non-cash charges
(determined in accordance with Agreement Accounting Principles) and Rentals LESS
Capital Expenditures, all for the most recently ended twelve-month period, to
(ii) the sum of payments of Interest Expense and Rentals, both for the most
recently ended twelve-month period, and current maturities of long-term debt as
of such fiscal quarter-end; all calculated for the Borrower and its Subsidiaries
on a consolidated basis.
"Floating Rate" means, for any day, a rate per annum equal to the Alternate
Base Rate for such day, changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
Page 5
"Indebtedness" of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
Capitalized Lease Obligations, (vi) net liabilities under interest rate swap,
exchange or cap agreements, and (vii) Contingent Obligations.
"Interest Expense" means, for any period of determination, all interest
(without duplication), whether paid in cash or accrued as a liability, on
Indebtedness of the Borrower and its Subsidiaries on a consolidated basis during
such period (including imputed interest on Capitalized Lease Obligations) net of
capitalized interest.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three, or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on (but
exclude) the day which corresponds numerically to such date one, two, three, or
six months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third, or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third,
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, the stock, partnership
interests, limited liability company memberships, notes, debentures or other
securities of any other Person made by such Person.
"Issuing Lender" means First Chicago and any other Lender designated by the
Borrower from time to time as an issuer of Facility Letters of Credit pursuant
to Section 2.2, PROVIDED that (i) no Lender shall be designated an Issuing
Lender without its consent and (ii) any Lender may revoke its designation as an
Issuing Lender at any time (PROVIDED further that such revocation shall not
affect any Facility Letters of Credit previously issued by such revoking Lender
and outstanding at the time of such revocation).
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
Page 6
"Lending Installation" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Participation Amount" means, for each Lender at any date
of determination, such Lender's Percentage of the aggregate undrawn amount
available (whether or not the conditions which would allow a draw thereunder
have been met) to the beneficiaries thereof under all outstanding Facility
Letters of Credit as of such date of determination.
"Leverage Ratio" means, as of any date of determination, the ratio of (i)
Total Debt as of such date to (ii) Capitalization as of such date; all
calculated for the Borrower and its Subsidiaries on a consolidated basis.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, and any applications for
Facility Letters of Credit executed and delivered by the Borrower pursuant to
Section 2.2.2.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or reasonably foreseeable prospects of the Borrower and its Subsidiaries taken
as a whole, (ii) the ability of the Borrower to perform its obligations under
the Loan Documents, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Note" means a promissory note, in substantially the form of Exhibit "A"
hereto, duly executed by the Borrower and payable to the order of a Lender in
the amount of its
Page 7
Commitment, including any amendment, modification, renewal or replacement of
such promissory note.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Lenders or to any
Lender, the Agent or any indemnified party hereunder arising under the Loan
Documents.
"Outstandings" means, for each Lender at any date of determination, the sum
of (a) the aggregate outstanding principal amount of all Loans made by such
Lender as of the date of determination, plus (b) such Lender's Letter of Credit
Participation Amount as of the date of determination, plus (c) such Lender's
ratable share of any Unreimbursed Drawings outstanding as of the date of
determination.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September, and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage" means, for any Lender, 100% times a fraction (a) the numerator
of which is such Lender's Commitment, and (b) the denominator of which is the
Aggregate Commitment.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Prepayment Event" means either (a) the acquisition by any Person (other
than a holding company owning 100% of the outstanding shares of voting stock of
the Borrower after giving effect to such acquisition), or two or more Persons
acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of more than 50% of the outstanding shares of voting stock of the Borrower
(or more than 50% of the outstanding shares of any holding company owning 100%
of the outstanding shares of voting stock of the
Page 8
Borrower), or (b) individuals who are Continuing Directors fail to constitute a
majority of the Board of Directors of the Borrower.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any lease of Property having an original term (including any
required renewals or any renewals at the option of the lessor or lessee) of one
year or more but does not include any amounts payable under Capitalized Leases
of such Person.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code
Page 9
and of Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any such waiver of the notice requirement in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 51% of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the total of the aggregate
unpaid principal amount of the outstanding Advances, Letter of Credit
Participation Amounts, and ratable participations in Unreimbursed Drawings.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on eurocurrency
liabilities, if any.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Subsidiary Guaranty" means a guaranty in the form of Exhibit "F" attached
hereto, executed by a Subsidiary in accordance with Section 6.21 in favor of the
Agent, for the ratable benefit of the Lenders, as it may be amended or modified
and in effect from time to time.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and
its Subsidiaries as reflected in the financial statements referred to in
clause (i) above.
Page 10
"Total Debt" means Indebtedness for borrowed money, guarantees, Letters of
Credit, obligations under non-compete agreements and Capitalized Lease
Obligations of the Borrower and its Subsidiaries.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Unreimbursed Drawings" means all amounts drawn and paid, and all amounts
which the Agent determines have been drawn and which have been paid by Issuing
Lenders under any Facility Letters of Credit that have not been reimbursed (with
the proceeds of an Advance or otherwise) by the Borrower.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. COMMITMENT. From and including the date of this Agreement and prior
to the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower from time
to time in amounts (combined with such Lender's Letter of Credit Participation
Amount) not to exceed in the
Page 11
aggregate at any one time outstanding the amount of its Commitment and PROVIDED
that, after giving effect to the making of any Loan, the Aggregate Outstandings
do not exceed the Aggregate Commitment. Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to lend hereunder shall expire on the
Facility Termination Date.
2.2. LETTER OF CREDIT SUBFACILITY
2.2.1. OBLIGATION TO ISSUE. Subject to the terms and conditions of
this Agreement, each Issuing Lender agrees to issue Facility Letters of
Credit for the account of the Borrower from time to time in amounts such
that, after giving effect to the issuance of any Facility Letter of Credit
(i) the aggregate undrawn amount available (whether or not the conditions
which would allow a draw thereunder have been met) to the beneficiaries
thereof under all outstanding Facility Letters of Credit does not exceed
the Facility Letter of Credit Commitment, and (ii) the Aggregate
Outstandings do not exceed the Aggregate Commitment. Each Facility Letter
of Credit shall be denominated in U.S. dollars. The issuance of a Facility
Letter of Credit shall be deemed to be a utilization of the Aggregate
Commitment for all purposes under this Agreement. No Facility Letter of
Credit may have an expiry date occurring after the Facility Termination
Date. Notwithstanding anything in this Agreement to the contrary, no
Issuing Lender shall be required to issue a Facility Letter of Credit
supporting an underwriting, remarketing, or placement by such Issuing
Lender or any Affiliate of such Issuing Lender.
2.2.2. PROCEDURE FOR ISSUANCE OF FACILITY LETTERS OF CREDIT. (a)
The Borrower shall give the applicable Issuing Lender and the Agent written
notice of any requested issuance of a Facility Letter of Credit under this
Agreement (except that, in lieu of such written notice, the Borrower may
give the Agent and the applicable Issuing Lender telephonic notice of such
request if confirmed in writing by delivery to the applicable Issuing
Lender and the Agent [i] immediately of a telecopy of the written notice
required hereunder which has been signed by an authorized officer of the
Borrower and [ii] promptly [but in no event later than the requested date
of issuance] of the written notice required hereunder containing the
original signature of an authorized officer of the Borrower) not later than
10:00 a.m. (Chicago time) at least two Business Days' prior to the
requested date of issuance, together with such other documents and
materials as the applicable Issuing Lender may require (including, without
limitation and at such Issuing Lender's discretion, a duly executed
application for a Letter of Credit on such Issuing Lender's standard form
for such transactions). Such notice shall be irrevocable and shall specify
the stated amount of the Facility Letter of Credit requested (which stated
amount shall not be less than $25,000), the effective date (which day shall
be a Business Day) of issuance of such requested Facility Letter of Credit,
the date on which such requested Facility Letter of
Page 12
Credit is to expire (which date shall be a Business Day occurring on or
before the Facility Termination Date), the name of the Issuing Lender
chosen by the Borrower as the issuer of the requested Facility Letter of
Credit, the purpose for which such Facility Letter of Credit is to be
issued, and the Person for whose benefit the requested Facility Letter of
Credit is to be issued. At the time such request is made, the Borrower
shall also provide the applicable Issuing Lender and the Agent with a copy
of the form of the Facility Letter of Credit it is requesting be issued, if
any, which proposed Facility Letter of Credit shall be reasonably
satisfactory to such Issuing Lender as to form and content. Prior to the
close of business on the second Business Day following the Business Day on
which the Agent first received such notice, the Agent shall confirm by
written notice (including via facsimile), or telephone notice confirmed
promptly thereafter in writing, to such Issuing Lender whether such Issuing
Lender is authorized to issue the requested Facility Letter of Credit in
accordance with subsection 2.2.2(b) below.
(b) The Agent shall determine, as of the close of business on the day
it receives a notice from the Borrower pursuant to subsection 2.2.2(a)
above, whether after giving effect to the issuance of the requested
Facility Letter of Credit (i) the aggregate undrawn amount available
(whether or not the conditions which would allow a draw thereunder have
been met) to the beneficiaries thereof under all outstanding Facility
Letters of Credit would exceed the Facility Letter of Credit Commitment,
and (ii) the Aggregate Outstandings would exceed the Aggregate Commitment.
If, and only if, the stated amount of the requested Facility Letter of
Credit would not exceed such limitations, and subject to the terms and
conditions of this Section 2.2 and provided that the applicable conditions
set forth in Section 4.2 hereof have been satisfied, the Issuing Lender
shall, on the requested date, issue a Facility Letter of Credit on behalf
of the Borrower in accordance with the Issuing Lender's usual and customary
business practices.
(c) Each Issuing Lender shall give the Agent written or telex
notice, or telephonic notice confirmed promptly thereafter in writing, of
the issuance of a Facility Letter of Credit.
(d) An Issuing Lender shall not extend or amend any Facility Letter
of Credit unless the requirements of this Section 2.2.2 are met as though a
new Facility Letter of Credit was being requested and issued.
2.2.3. PARTICIPATION IN FACILITY LETTERS OF CREDIT.
(a) Immediately upon the issuance of each and every Facility Letter
of Credit, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the applicable Issuing Lender,
without recourse or
Page 13
warranty, an undivided interest and participation to the extent of each
Lender's Percentage in each Facility Letter of Credit (including, without
limitation, all obligations of the Borrower with respect thereto and any
security therefor other than amounts owing pursuant to the last sentence of
Section 2.2.4(c) and any security therefor).
(b) In the event that an Issuing Lender makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such
amount to such Issuing Lender pursuant to Section 2.2.5 hereof (with the
proceeds of an Advance or otherwise), the Issuing Lender shall promptly
notify the Agent, which shall promptly notify each Lender, of such failure
(by facsimile, or telephone promptly confirmed in writing), and each Lender
shall promptly and unconditionally pay to the Agent for the account of such
Issuing Lender the amount of such Lender's Percentage of such payment in
same day funds. If the Agent so notifies a Lender prior to noon (Chicago
time) on any Business Day, such Lender shall make available to the Agent
for the account of the applicable Issuing Lender its Percentage of the
amount of such payment on such Business Day in same day funds. If and to
the extent such Lender shall not have so made its Percentage of the amount
of such payment available to the Agent for the account of such Issuing
Lender, such Lender agrees to pay to the Agent for the account of such
Issuing Lender forthwith on demand such amount together with interest
thereon, for each day from the date such payment was first due until the
date such amount is paid to the Agent for the account of the applicable
Issuing Lender, at the Federal Funds Effective Rate. The failure of any
Lender to make available to the Agent for the account of an Issuing Lender
its Percentage of any such payment shall not relieve any other Lender of
its obligation hereunder to make available to the Agent for the account of
an Issuing Lender its Percentage of any payment on the date such payment is
to be made.
(c) Whenever an Issuing Lender receives a payment on account of an
Unreimbursed Drawing, including any interest thereon, as to which the Agent
has received payments from the Lenders for the account of such Issuing
Lender pursuant to this Section 2.2.5, it shall promptly pay to the Agent
and the Agent shall promptly pay to each Lender which has funded its
participating interest therein, in the kind of funds so received, an amount
equal to such Lender's Percentage thereof. Each such payment shall be made
by the Issuing Lender on the Business Day on which it receives the funds
paid to it pursuant to the preceding sentence, if received prior to noon
(Chicago time) on such Business Day, and otherwise on the next succeeding
Business Day.
(d) Upon the request of either the Agent or any Lender, an Issuing
Lender shall furnish to the Agent or such Lender copies of any Letter of
Credit application to which such Issuing Lender is a party and such other
documentation as may reasonably
Page 14
be requested by the Agent or such Lender. Promptly after the issuance of
each Facility Letter of Credit, the applicable Issuing Lender shall send a
copy of such Facility Letter of Credit to the Agent and each Lender by
telefacsimile.
(e) The obligations of a Lender to make payments to the Agent for the
account of each Issuing Lender with respect to a Facility Letter of Credit
shall be irrevocable, not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any
of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a
beneficiary named in a Facility Letter of Credit or any
transferee of any Facility Letter of Credit (or any Person
for whom any such transferee may be acting), the Agent, the
Issuing Lender, any Lender, or any other Person, whether in
connection with this Agreement, any Facility Letter of
Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying
transactions between the Borrower or any Affiliate of the
Borrower and the beneficiary named in any Facility Letter of
Credit);
(iii) any draft, certificate of any other document presented under
the Facility Letter of Credit proving to be forged,
fraudulent or invalid in any respect, or insufficient in
accordance with the Uniform Customs and Practice for
Documentary Credits (1993 revision), International Chamber
of Commerce, Publication 500, or any statement therein being
untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the
Loan Documents; or
(v) the occurrence of any Default or Unmatured Default;
PROVIDED, that the Lenders shall not be required to fund their
participations in a Facility Letter of Credit if the corresponding payment
made by the applicable Issuing Lender under such Facility Letter of Credit
was made as a result of such Issuing Lender's gross negligence or wilful
misconduct or failure to negotiate a draft in accordance with the standard
of care required by the Uniform Customs and Practice
Page 15
for Documentary Credits (1993 revision), International Chamber of Commerce,
Publication 500.
(f) In the event any payment by the Borrower received by an Issuing
Lender with respect to a Facility Letter of Credit and distributed by the
Agent to the Lenders on account of their participations is thereafter set
aside, avoided or recovered from that Issuing Lender in connection with any
receivership, liquidation, reorganization or bankruptcy proceeding, each
Lender which received such distribution shall, upon demand by that Issuing
Lender, contribute such Lender's Percentage of the amount set aside,
avoided or recovered together with interest at the rate required to be paid
by that Issuing Lender upon the amount required to be repaid by it.
2.2.4. FACILITY LETTER OF CREDIT FEE.
(a) The Borrower hereby agrees to pay the Issuing Lender and the
Lenders a fee (calculated for the actual number of days elapsed on the
basis of a year consisting of 360 days) on any undrawn portion of each
Facility Letter of Credit from time to time outstanding equal to the
greater of .625% per annum or $1,500 for each year or any part thereof
(b) The fee described in the foregoing clause (a) of this Section
2.2.4 shall be shared among the applicable Issuing Lender and the Lenders
as follows: in consideration of its issuance of a Facility Letter of
Credit, the applicable Issuing Lender shall be entitled to receive a fee
for its own account equal to .25% per annum on any undrawn portion of such
Facility Letter of Credit. Each Lender (including, without limitation, the
applicable Issuing Lender) shall be entitled to receive its Percentage of
(i) the fee paid pursuant to the foregoing clause (a) with respect to each
Facility Letter of Credit, MINUS (ii) the portion of such fee due to the
Issuing Lender in accordance with the immediately preceding sentence.
(c) All fees due under this Section 2.2.4 shall be payable in arrears
to the Agent for the account of the Issuing Lender and the Lenders at the
principal office of the Agent in Chicago, Illinois on each Payment Date, on
the Facility Termination Date, and on the expiration date of each Facility
Letter of Credit or when such Facility Letter of Credit is fully drawn,
whichever first occurs. The Borrower also hereby agrees to pay directly to
the applicable Issuing Lender with respect to each Facility Letter of
Credit issued for the Borrower's account the usual and customary
administrative and other charges of such Issuing Lender in connection with
any Facility Letter of Credit, including, without limitation, all such
charges for the issuance of any Facility Letter of Credit, the negotiation
of any draft paid pursuant to
Page 16
any Facility Letter of Credit and any amendments or supplements to any
Facility Letter of Credit.
2.2.5. REIMBURSEMENT FOR DRAWS UNDER FACILITY LETTERS OF CREDIT.
(a) Promptly upon receipt of notice from an Issuing Lender of any
drawing under a Facility Letter of Credit, the Borrower hereby agrees to
reimburse the Lenders ratably in accordance with their respective
Percentages by making a payment to such Issuing Lender for the amount of
each draft drawn or purporting to be drawn under any such Facility Letter
of Credit for the account of the Borrower which is paid by such Issuing
Lender, except to the extent that any of the foregoing arises solely from
the Issuing Lender's gross negligence, wilful misconduct or failure to
negotiate the draft in accordance with the standard of care required by the
Uniform Customs and Practice for Documentary Credits (1993 revision),
International Chamber of Commerce, Publication 500. Unless funded with an
Advance made pursuant to Section 2.2.5(b), amounts which the Borrower has
agreed to reimburse the Lenders pursuant to the preceding sentence shall be
due on demand and shall bear interest until paid at a rate per annum
(calculated for the actual number of days elapsed on the basis of year
consisting of 360 days) equal to the Floating Rate plus 2% per annum.
(b) The payment by an Issuing Lender of a draft drawn under or
purporting to be drawn under any Facility Letter of Credit shall be deemed
to constitute a Borrowing Notice for a Floating Rate Advance in the amount
of such draft and, subject to the terms and conditions of this Agreement
(including, without limitation, that (i) the provisions of Section 4.2
shall have been satisfied or waived and (ii) after giving effect to such
Advance, the Aggregate Outstandings will not exceed the Aggregate Available
Commitment), the Lenders shall make such Floating Rate Advance and the
Agent shall apply the proceeds thereof to the payment of the Borrower's
obligations under Section 2.2.5(a) with respect to such draft.
(c) The Borrower's obligation to make all payments due under Section
2.2.5(a) shall be absolute, unconditional and irrevocable, and such
payments shall be made strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without
limitation, any or all of the following circumstances:
(i) any determination of invalidity or unenforceability with respect
to any Facility Letter of Credit after payment by the Issuing
Lender; or
(ii) any lack of validity or enforceability of any or all or the Loan
Documents; or
Page 17
(iii) any amendment to, waiver of, any consent under or departure
from any or all of the Loan Documents; or
(iv) any exchange, release or nonperfection of any collateral
securing any Facility Letter of Credit, or any release or
amendment or waiver of or consent to departure from any
guaranty of any Facility Letter of Credit; or
(v) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a
beneficiary of any Facility Letter of Credit (or any
entities for whom such beneficiary may be acting), the
Lenders, the Issuing Lenders, the Agent or any other Person;
or
(vi) any statement or any other document presented under any
Facility Letter of Credit proving to be forged (unless the
Issuing Lender failed to discover such forging solely as a
result of its own gross negligence or wilful misconduct),
fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect
whatsoever.
(d) Each Issuing Lender shall use its best efforts to give prompt
notice to the Borrower of the presentation of a draft under a Facility
Letter of Credit; PROVIDED, that failure to give such notice shall not
limit or otherwise affect the Borrower's obligations under this Agreement
except as explicitly provided herein.
2.2.6. ISSUING LENDER REPORTING REQUIREMENTS. In addition to the
reports required by Section 2.2.2(c), each Issuing Lender shall, no later
than the tenth Business Day following the last day of each month, provide
to the Agent a schedule of Facility Letters of Credit issued by it, in form
and substance reasonably satisfactory to the Agent, showing the date of
issue, account party, amount, expiration date and the reference number of
each Facility Letter of Credit issued by it outstanding at any time during
such month and the aggregate amount payable by the Borrower during the
month pursuant. Copies of such reports shall be provided promptly to the
Borrower and each Lender by the Agent.
2.2.7. INDEMNIFICATION; ASSUMPTION OF RISK.
(a) The Borrower hereby agrees to indemnify and hold harmless the
Agent, each Issuing Lender and each Lender from and against any and all
claims, damages, losses, liabilities, costs or expenses of any kind which
any thereof may incur by reason of or in connection with the execution and
delivery, issuance or transfer of, or any payment or failure to pay under,
any Facility Letter of Credit; PROVIDED, the
Page 18
Borrower shall not be required to indemnify the Issuing Lender for any
claims, damages, losses, liabilities, costs or expenses to the extent
caused by the gross negligence, wilful misconduct, or failure to negotiate
the draft in accordance with the standard of care required by the Uniform
Customs and Practice for Documentary Credits (1993 revision), International
Chamber of Commerce, Publication 500 on the part of the Issuing Lender in
making payment under a Facility Letter of Credit.
(b) The Borrower assumes all risks of the acts or omissions of any
beneficiary of any Facility Letter of Credit issued for its account with
respect to its use or reliance on any such Facility Letter of Credit.
Neither the Lenders, the Issuing Lenders, nor the Agent shall be
responsible: for the validity or genuineness of certificates or other
documents delivered under or with any Facility Letter of Credit, even if
such certificates or other documents should in fact prove to be invalid,
fraudulent or forged; for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
wireless or otherwise, whether or not they are in code; for errors in
translation or for errors in interpretation of technical terms; for any
failure or inability by any Lender, any Issuing Lender or the Agent or
anyone else to perform under the foreign laws, customs or regulations or by
reason of any control or restriction rightfully or wrongfully exercised by
any government or group asserting or exercising governmental or paramount
powers; or for any other consequences arising from causes beyond any
Lender's, any Issuing Lender's or the Agent's control; nor shall any
Lender, any Issuing Lender, or the Agent be responsible for any error,
neglect, or default of any correspondent of such Person; and none of the
above shall affect, impair or prevent the vesting of any of the rights or
powers of any Lender, any Issuing Lender or the Agent under any of the Loan
Documents. Each Issuing Lender may accept statements, certificates or
other documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary. In furtherance and not in limitation of the
foregoing provisions, the Borrower agrees that any action taken by any
Lender, any Issuing Lender or the Agent in good faith in connection with
any Facility Letter of Credit, or the relative drafts, certificates or
other documents, shall be binding on the Borrower and shall not result in
any liability of such Lender, such Issuing Lender or the Agent to the
Borrower except as provided in the parenthetical phrase which appears in
Section 2.2.5(c)(vi) or otherwise resulting solely from the gross
negligence or wilful misconduct of the Issuing Lender, the Agent or any
Lender or the failure of the Issuing Lender to negotiate a Facility Letter
of Credit in accordance with the standard of care required by the Uniform
Customs and Practice for Documentary Credits (1993 revision), International
Chamber of Commerce, Publication 500; and the Borrower makes like agreement
as to any inaction or omission.
Page 19
2.3. REQUIRED PAYMENTS; TERMINATION. (a) The Borrower will promptly give
notice to the Agent and the Lenders of the occurrence of a Prepayment Event.
If, within 60 days after the later of the occurrence of a Prepayment Event or
the date on which the Agent and the Lenders have received notice from the
Borrower that a Prepayment Event has occurred, the Agent on behalf of the
Required Lenders notifies the Borrower in writing that the Required Lenders
desire the prepayment and cancellation of this Agreement (such notice
hereinafter a "Cancellation Notice"), then (i) the Borrower shall within 60 days
after its receipt of such Cancellation Notice prepay in full the entire
principal amount, if any, outstanding on the Notes and all of the other
Obligations and provide cash collateral for all outstanding Facility Letters of
Credit, and (ii) on the earlier of (1) the date that the Borrower prepays the
Notes and all of the other Obligations pursuant to clause (i) of this sentence,
or (2) the 60th day after the Borrower receives such Cancellation Notice, the
outstanding balance of the Notes and all other Obligations shall mature and be
due and payable in full and the Aggregate Commitment and the Commitment of each
Lender shall be automatically and permanently terminated and reduced to zero.
As of the date of such Cancellation Notice, the Borrower shall no longer be
permitted to borrow additional Advances or request additional Facility Letters
of Credit under this Agreement.
(b) Any outstanding Advances, Unreimbursed Drawings, and all other unpaid
Obligations shall be paid in full by the Borrower on the Facility Termination
Date.
2.4. RATABLE LOANS; TYPES OF ADVANCES; APPLICABLE MARGIN. Each Advance
hereunder shall consist of Loans made from the several Lenders ratably in
proportion to the ratio that their respective Commitments bear to the Aggregate
Commitment. The Advances may be Floating Rate Advances or Eurodollar Advances,
or a combination thereof, selected by the Borrower in accordance with Sections
2.8 and 2.9. The Applicable Margin shall be based on the Leverage Ratio in
accordance with the table below. The Leverage Ratio shall be determined from
the audited and unaudited financial statements delivered by the Borrower
pursuant to Sections 6.1(i) and (ii) and the Compliance Certificate delivered
from time to time pursuant to Section 6.1(iv). The adjustment, if any, to the
Applicable Margin shall be effective beginning on the third Business Day after
the delivery of such financial statements. The initial Applicable Margin
hereunder shall be determined from the financial statements of the Borrower for
the most recent fiscal quarter ending on or before the date of execution of this
Agreement. In the event that the Borrower shall at any time fail to furnish to
the Lenders in timely fashion the financial statements required to be delivered
pursuant to Sections 6.1(i) and 6.1(ii) and the Compliance Certificate to be
delivered pursuant to Section 6.1(iv), the maximum Applicable Margin shall
apply until such time as such financial statements and Compliance Certificate
are so delivered.
RATIO APPLICABLE MARGIN
-------------------------------------------------
less than or equal to
Page 20
.25 to 1.0 .375%
less than or equal to
.35 to 1.0 but
greater than .25 to 1.0 .45%
greater than .35 to 1.0 .60%
2.5. COMMITMENT FEE; REDUCTIONS IN AGGREGATE COMMITMENT. The Borrower
agrees to pay to the Agent for the account of each Lender a commitment fee in
the amount of the Applicable Commitment Fee on the daily unutilized portion of
such Lender's Commitment from the date hereof to and including the Facility
Termination Date, payable on each Payment Date hereafter and on the Facility
Termination Date. The Applicable Commitment Fee shall be a per annum fee based
on the Leverage Ratio in accordance with the table below. The Leverage Ratio
shall be determined from the audited and unaudited financial statements
delivered by the Borrower pursuant to Sections 6.1(i) and (ii) and the
Compliance Certificate delivered from time to time pursuant to Section 6.1
(iv). The adjustment, if any, to the Applicable Commitment Fee shall be
effective beginning on the third Business Day after the delivery of such
financial statements. The initial Applicable Commitment Fee hereunder shall be
determined from the financial statements of the Borrower for the most recent
fiscal quarter ending on or before the date of execution of this Agreement. In
the event that the Borrower shall at any time fail to furnish to the Lenders in
timely fashion the financial statements required to be delivered pursuant to
Sections 6.1(i) and 6.1(ii) and the Compliance Certificate to be delivered
pursuant to Section 6.1(iv), the maximum Applicable Commitment Fee shall apply
until such time as such financial statements and Compliance Certificate are so
delivered.
RATIO APPLICABLE COMMITMENT FEE
--------------------------------------------------------
less than or equal to
.25 to 1.0 .125%
less than or equal to
.35 to 1.0 but
greater than .25 to 1.0 .15%
greater than .35 to 1.0 .20%
The Borrower may permanently reduce the Aggregate Commitment in whole, or in
part ratably among the Lenders in integral multiples of $1,000,000, upon at
least three Business Days' written notice to the Agent, which notice shall
specify the amount of any such reduction, provided, however, that the amount of
the Aggregate Commitment may not be
Page 21
reduced below the aggregate principal amount of the outstanding Advances. All
accrued commitment fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Loans hereunder.
2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Advance shall be in
the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$100,000 (and in multiples of $100,000 if in excess thereof), provided, however,
that any Floating Rate Advance may be in the amount of the unused Aggregate
Commitment.
2.7. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances, or, in a
minimum aggregate amount of $100,000 or any integral multiple of $100,000 in
excess thereof, any portion of the outstanding Floating Rate Advances upon prior
notice to the Agent (a) by 11:00 a.m. on the intended date of such payment at
such times as the Agent is the sole Lender and (b) one Business Day before the
intended date of such payment when there are two or more Lenders. A Eurodollar
Advance may not be paid prior to the last day of the applicable Interest Period.
2.8. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable to each Advance from time to time. The
Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than (a) noon (Chicago time) at such times as the Agent is the sole Lender
and (b) 11:00 a.m. (Chicago time) when there are two or more Lenders, in either
event on the Borrowing Date of each Floating Rate Advance; and not later than
11:00 a.m. (Chicago time) at least three Business Days before the Borrowing Date
for each Eurodollar Advance; specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans, in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will
make the funds so received from the Lenders available to the Borrower at the
Agent's aforesaid address.
Page 22
2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances. Each Eurodollar
Advance of any Type shall continue as a Eurodollar Advance of such Type until
the end of the then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate Advance
unless the Borrower shall have given the Agent a Conversion/Continuation Notice
requesting that, at the end of such Interest Period, such Eurodollar Advance
either continue as a Eurodollar Advance of such Type for the same or another
Interest Period or be converted into an Advance of another Type. Subject to the
terms of Section 2.6, the Borrower may elect from time to time to convert all or
any part of an Advance of any Type into any other Type or Types of Advances;
provided that any conversion of any Eurodollar Advance shall be made on, and
only on, the last day of the Interest Period applicable thereto. The Borrower
shall give the Agent irrevocable notice (a "Conversion/Continuation Notice") of
each conversion of an Advance or continuation of a Eurodollar Advance not later
than (a) noon (Chicago time) at such times as the Agent is the sole Lender and
(b) 11:00 a.m. (Chicago time) when there are two or more Lenders, in either
event in the case of a conversion into a Floating Rate Advance; and not later
than 11 a.m. (Chicago time) at least three Business Days, + in the case of a
conversion into or continuation of a Eurodollar Advance, prior to the date of
the requested conversion or continuation; specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion
into or continuation of a Eurodollar Advance, the duration of
the Interest Period applicable thereto.
2.10. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a Eurodollar
Advance into a Floating Rate Advance pursuant to Section 2.9 to but excluding
the date it becomes due or is converted into a Eurodollar Advance pursuant to
Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance shall bear interest from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such
Page 23
Interest Period at the interest rate determined as applicable to such Eurodollar
Advance. No Interest Period may end after the Facility Termination Date.
2.11. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in Section 2.8 or 2.9, during the continuance of a Default or
Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of
a Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurodollar Advance
shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum and (ii)
each Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate otherwise applicable to the Floating Rate Advance plus 2% per
annum.
2.12. METHOD OF PAYMENT. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. At such times as
the Borrower maintains an account with First Chicago, the Agent is hereby
authorized to charge such account with First Chicago for each payment of
principal, interest and fees as it becomes due hereunder.
2.13. NOTES; TELEPHONIC NOTICES. Each Lender is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so record
shall not affect the Borrower's obligations under such Note. The Borrower
hereby authorizes the Lenders and the Agent to extend, convert or continue
Advances, effect selections of Types of Advances and to transfer funds based on
telephonic notices made by any person or persons the Agent or any Lender in good
faith believes to be acting on behalf of the Borrower. The Borrower agrees to
deliver promptly to the Agent a written confirmation, if such confirmation is
requested by the Agent or any Lender, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any material respect
from the action taken by the Agent and the Lenders, the records of the Agent and
the Lenders shall govern absent manifest error.
Page 24
2.14. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and at maturity.
Interest accrued on each Eurodollar Advance shall be payable on the last day of
its applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest
accrued on each Eurodollar Advance having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period. Interest and commitment fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (local time) at the place of payment.
If any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.15. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.16. LENDING INSTALLATIONS. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made. Each Lender shall use its best efforts to minimize any additional cost
(if any) to the Borrower as a result of a change of Lending Installation
(including, if appropriate, a return to a prior Lending Installation at such
time as the circumstances giving rise to a change of Lending Installation are no
longer in effect), but no Lender shall be required to take or omit to take any
action which action or omission would be economically or legally disadvantageous
to such Lender.
2.17. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of
Page 25
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Agent, the recipient of such payment shall, on demand
by the Agent, repay to the Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the date
such amount was so made available by the Agent until the date the Agent recovers
such amount at a rate per annum equal to (i) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day or (ii) in the case of payment by
the Borrower, the interest rate applicable to the relevant Loan.
2.18. WITHHOLDING TAX EXEMPTION. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to each of
the Borrower and the Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes. Each Lender
which so delivers a Form 1001 or 4224 further undertakes to deliver to each of
the Borrower and the Agent two additional copies of such form (or a successor
form) on or before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the Agent, in
each case certifying that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises the Borrower and the Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
Page 26
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. YIELD PROTECTION. If after the date of this Agreement any law or
any governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the
Borrower (excluding federal taxation of the overall net income of
any Lender or applicable Lending Installation), or changes the
basis of taxation of payments to any Lender in respect of its
Loans or its participation in Facility Letters of Credit or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation
(other than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar Advances),
or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining loans or issuing or participating
in Letters of Credit or reduces any amount receivable by any
Lender or any applicable Lending Installation in connection with
loans or Letters of Credit, or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of loans held, Letters of Credit issued
or participated in, or interest received by it, by an amount
deemed material by such Lender,
then, within 30 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans, its participation in Facility Letters of Credit, and its
Commitment. No Lender shall be entitled to demand compensation or be
compensated under this Section 3.1 to the extent that such compensation relates
to any period of time more than 60 days prior to the date upon which such Lender
first notified the Borrower of the occurrence of the event entitling such Lender
to such compensation (unless, and to the extent, that any such compensation so
demanded shall relate to the application of any event so notified to the
Borrower that by its terms is retroactive).
Page 27
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 30 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans, its
obligation to make Loans hereunder, or its issuance of or participation in
Facility Letters of Credit (after taking into account such Lender's policies as
to capital adequacy), PROVIDED that no Lender shall be entitled to demand
compensation or be compensated under this Section 3.2 to the extent that such
compensation relates to any period of time more than 60 days prior to the date
upon which such Lender first notified the Borrower of the Change entitling such
Lender to such compensation (unless, and to the extent, that any such
compensation so demanded shall relate to the application of any event so
notified to the Borrower that by its terms is retroactive). "Change" means (i)
any change after the date of this Agreement in the Risk-Based Capital Guidelines
or (ii) any adoption of or change in any other law, governmental or quasi-
governmental rule, regulation, policy, guideline, interpretation, or directive
(whether or not having the force of law) after the date of this Agreement which
affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to a Type of Advance does not
accurately reflect the cost of making or maintaining such Advance, then the
Agent shall suspend the availability of the affected Type of Advance and require
any Eurodollar Advances of the affected Type to be repaid.
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including,
Page 28
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the Eurodollar Advance.
3.5. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
unavailability of a Type of Advance under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender as to the amount due, if any, under Sections
3.1, 3.2 or 3.4. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement shall be payable on demand
after receipt by the Borrower of the written statement. The obligations of the
Borrower under Sections 3.1, 3.2 and 3.4 shall survive payment of the
Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. INITIAL ADVANCE. The Lenders shall not be required to make the
initial Advance or issue the initial Facility Letter of Credit hereunder unless
the Borrower has furnished to the Agent with sufficient copies for the Lenders:
(i) Copies of the articles of incorporation of the Borrower, together
with all amendments, and a certificate of good standing, both
certified by the appropriate governmental officer in its
jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of the
Borrower, of its by-laws and of its Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed
necessary by counsel for any Lender) authorizing the execution of
the Loan Documents.
(iii) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower, which shall identify by name and title
and bear the
Page 29
signature of the officers of the Borrower authorized to sign the
Loan Documents and to make borrowings and request Facility
Letters of Credit hereunder, upon which certificate the Agent and
the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing Date or date of
issuance of a Facility Letter of Credit (whichever occurs
earlier) no Default or Unmatured Default has occurred and is
continuing.
(v) A written opinion of the Borrower's counsel, addressed to the
Lenders in substantially the form of Exhibit "B" hereto.
(vi) Notes payable to the order of each of the Lenders.
(vii) A duly completed Compliance Certificate.
(viii) Written money transfer instructions, in substantially the form of
Exhibit "E" hereto, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(ix) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. EACH ADVANCE. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances) or issue any Facility Letter of Credit, unless on the
applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Borrowing Date or date of issuance
except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such
representation or warranty shall be true and correct on and as of
such earlier date.
(iii) All legal matters incident to the making of such Advance or
issuance of such Facility Letter of Credit shall be satisfactory
to the Lenders and their counsel.
Page 30
Each Borrowing Notice with respect to each such Advance or request for
issuance of a Facility Letter of Credit shall constitute a representation and
warranty by the Borrower that the conditions contained in Sections 4.2(i) and
(ii) have been satisfied. Any Lender may require a duly completed Compliance
Certificate as a condition to making an Advance or issuing a Facility Letter of
Credit.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. CORPORATE EXISTENCE AND STANDING. Each of the Borrower and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which the
failure to have such authority could reasonably be expected to have a Material
Adverse Effect.
5.2. AUTHORIZATION AND VALIDITY. The Borrower has the corporate power
and authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Borrower
of the Loan Documents and the performance of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and delivery
by the Borrower of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries or the Borrower's or any
Subsidiary's articles of incorporation or by-laws or the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the Property of the Borrower or
a Subsidiary pursuant to the terms of any such indenture, instrument or
agreement. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
Page 31
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
any of the Loan Documents.
5.4. FINANCIAL STATEMENTS. The September 25, 1994 audited consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower and
its Subsidiaries at such date and the consolidated results of their operations
for the period then ended.
5.5. MATERIAL ADVERSE CHANGE. Since September 25, 1994, there has been
no change in the business, Property, reasonably foreseeable prospects, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
5.6. TAXES. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided. The United States income tax returns of the
Borrower and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended September 30, 1990. No tax liens have been filed
and no claims are being asserted with respect to any such taxes. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are adequate.
5.7. LITIGATION AND CONTINGENT OBLIGATIONS. Except as set forth on
Schedule "3" hereto, there is no litigation, arbitration, governmental
investigation, proceeding or governmental or quasi-governmental inquiry pending
or, to the best of the knowledge of any of their officers, threatened against or
affecting the Borrower or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect. Other than any liability incident
to such litigation, arbitration or proceedings, the Borrower has no material
Contingent Obligations not provided for or required to be disclosed in the
financial statements referred to in Section 5.4.
5.8. SUBSIDIARIES. Schedule "1" hereto, as amended or supplemented by
the Borrower from time to time, contains an accurate list of all of the
presently existing Subsidiaries of the Borrower, setting forth their respective
jurisdictions of incorporation and the percentage of their respective capital
stock owned by the Borrower or other Subsidiaries. All of the issued and
outstanding shares of capital stock of such Subsidiaries have been duly
authorized and issued and are fully paid and non-assessable.
Page 32
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not
in the aggregate exceed $0. Each Plan complies in all material respects with
all applicable requirements of law and regulations, no Reportable Event has
occurred with respect to any Plan, neither the Borrower nor any other members of
the Controlled Group has withdrawn from any Plan or initiated steps to do so,
and no steps have been taken to reorganize or terminate any Plan.
5.10. ACCURACY OF INFORMATION. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
5.11. REGULATION U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
5.12. MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or other
corporate restriction which at the time entered into could reasonably have been
expected to have a Material Adverse Effect. Neither the Borrower nor any
Subsidiary is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in (i) any agreement to which
it is a party, which default could reasonably be expected to have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing
Indebtedness.
5.13. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, the failure to comply
with which could reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary has received any notice to the effect
that its operations are not in material compliance with any of the requirements
of applicable federal, state and local environmental, health and safety statutes
and regulations or the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse Effect.
5.14. OWNERSHIP OF PROPERTIES. Except as set forth on Schedule "2"
hereto, on the date of this Agreement, the Borrower and its Subsidiaries will
have good title, free of all Liens other than those permitted by Section 6.18,
to all of the Property and assets reflected in the financial statements as owned
by it.
Page 33
5.15. INVESTMENT COMPANY ACT. Neither the Borrower nor any
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
5.16. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in
generally accepted principles of accounting and required or
approved by the Borrower's independent certified public
accountants) audit report certified by independent certified
public accountants, acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a consolidated
basis for itself and the Subsidiaries, including balance sheets
as of the end of such period, a statement of operations, a
statement of shareholders' investment and a statement of cash
flows, accompanied by (a) any management letter prepared by said
accountants, and (b) a certificate of said accountants that, in
the course of their examination necessary for their certification
of the foregoing, they have obtained no knowledge of any Default
or Unmatured Default, or if, in the opinion of such accountants,
any Default or Unmatured Default shall exist, stating the nature
and status thereof.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and the
Subsidiaries, consolidated unaudited balance sheets as at the
close of each such period, a statement of operations and a
statement of cash flows for the period from the beginning of such
fiscal year
Page 34
to the end of such quarter, all certified as to truth and
accuracy in all material respects (subject to year-end
adjustments) by a senior financial officer.
(iii) Together with the financial statements required hereunder and
additionally, for purposes of determining the Applicable Margin
and the Applicable Commitment Fee, within 45 days after the close
of the fourth quarterly period of each fiscal year (which
preliminary determination shall be subject to adjustment upon
receipt of audited annual financial statements and shall not be
deemed to constitute a misrepresentation or breach if prepared in
good faith and the audited numbers differ from the unaudited
fourth quarter results), a Compliance Certificate.
(iv) Within 270 days after the close of each fiscal year, a statement
of the Unfunded Liabilities of each Single Employer Plan, if any,
certified as correct by an actuary enrolled under ERISA.
(v) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial
officer of the Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with respect thereto.
(vi) As soon as possible and in any event within 10 days after receipt
by the Borrower, a copy of (a) any notice or claim to the effect
that the Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the release by the Borrower, any of
its Subsidiaries, or any other Person of any toxic or hazardous
waste or substance into the environment, and (b) any notice
alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the Borrower
or any of its Subsidiaries, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(vii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(viii) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files with
the Securities and Exchange Commission.
(ix) Such other information (including non-financial information) as
the Agent or any Lender may from time to time reasonably request.
Page 35
6.2. USE OF PROCEEDS. The Borrower will, and will cause each
Subsidiary to, (i) use the proceeds of the Advances for working capital and
general corporate purposes, to purchase equipment, and to repay outstanding
Advances, and (ii) use the Facility Letters of Credit for ordinary and
customary business purposes. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances to purchase or carry
any "margin stock" (as defined in Regulation U) or to make any Acquisition.
6.3. NOTICE OF DEFAULT. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. CONDUCT OF BUSINESS. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction
of incorporation and maintain all requisite authority to conduct its business
in each jurisdiction in which the failure to maintain such authority could
reasonably be expected to have a Material Adverse Effect.
6.5. TAXES. The Borrower will, and will cause each Subsidiary to, pay
when due all taxes, assessments and governmental charges and levies upon it or
its income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside.
6.6. INSURANCE. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, the
failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
6.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition (normal wear and tear
excepted) and make all necessary and proper repairs, renewals and replacements,
so that in either case its business carried on in connection therewith may be
properly conducted at all times.
Page 36
6.9. INSPECTION. The Borrower will, and will cause each Subsidiary to,
permit the Lenders, by their respective representatives and agents, to inspect
any of the Property, corporate books and financial records of the Borrower and
each Subsidiary, to examine and make copies of the books of accounts and other
financial records of the Borrower and each Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and each Subsidiary with, and to
be advised as to the same by, their respective officers at such reasonable times
and intervals as the Lenders may designate upon reasonable advance notice.
6.10. DIVIDENDS. The Borrower will not, during any fiscal year of
the Borrower, pay any dividends (other than dividends or distributions
payable in shares of any stock of the Borrower) on any shares of any class of
stock of the Borrower or directly or indirectly apply any assets of the
Borrower to the redemption, retirement, purchase or other acquisition of any
shares of any class of stock of the Borrower if, after giving effect to such
payment, distribution or application, (i) an Unmatured Default or Default
shall have occurred and be continuing, or (ii) the aggregate amount of such
dividends, distributions and application of assets paid or made during such
fiscal year would exceed twenty-five percent (25%) of the consolidated net
income of the Borrower for the fiscal year immediately preceding the year in
which any dividend is paid, or any such distribution or application of assets
is made, and the right to make such payments, distributions and application
of assets shall be noncumulative from fiscal to fiscal year. For purposes of
this Section, "consolidated net income" of the Borrower for any period shall
mean the amount of consolidated net income before extraordinary items of the
Borrower and its Subsidiaries for the period determined in accordance with
Agreement Accounting Principles.
6.11. INDEBTEDNESS. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing on the date hereof and described in
Schedule "2" hereto and any refinancings of such Indebtedness.
(iii) Rate Hedging Obligations related to the Loans.
(iv) Contingent Obligations permitted under Section 6.17.
(v) Indebtedness securing Liens permitted under Section 6.18(vi).
(vi) Indebtedness from the Borrower to its stockholders in an
aggregate principal amount not exceeding $75,000 at any one time
outstanding.
Page 37
(vii) Short-term trade debt incurred in the ordinary course of
business in amounts and on terms customary to similarly situated
business enterprises.
(viii) Indebtedness arising from advances from the Borrower to HTI
Export Ltd. for the purpose of meeting foreign sales
corporation transaction requirements in an aggregate amount
outstanding at any one time not exceeding $20,000,000 with a
duration for each such advance of not more than one Business Day.
(ix) Additional Indebtedness not otherwise permitted under this
Section 6.11 in an aggregate amount not exceeding $25,000,000 at
any one time outstanding.
6.12. MERGER. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, (i) unless
the Borrower is the surviving entity and (ii) except that a Subsidiary may merge
or consolidate with the Borrower or a Wholly-Owned Subsidiary.
6.13. SALE OF ASSETS. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property, to any other
Person except for (i) leases, sales, or other dispositions of inventory in the
ordinary course of business, (ii) leases, sales, or other dispositions by a
Subsidiary of any of its Property to the Borrower or any Wholly-Owned Subsidiary
of the Borrower, (iii) dispositions of Property that is no longer used or useful
by or in the Borrower's or the disposing Subsidiary's business, (iv) sales and
leasebacks permitted under Section 6.15, (v) contributions of assets to
Subsidiaries other than HTI Export Ltd., (vi) leases, sales or other
dispositions of its Property that, together with all other Property of the
Borrower and its Subsidiaries previously leased, sold or disposed of (other than
dispositions permitted under clause (i) through (v) hereinabove) as permitted by
this clause (vi) during the twelve-month period ending with the month in which
any such lease, sale or other disposition occurs, do not constitute a
Substantial Portion of the Property of the Borrower and its Subsidiaries, and
(vii) dispositions of the assets of dissolved Subsidiaries to the Borrower or
any Subsidiary.
6.14. SALE OF ACCOUNTS. The Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse.
6.15. SALE AND LEASEBACK. The Borrower will not, nor will it permit
any Subsidiary to, sell or transfer any of its Property in order to
concurrently or subsequently lease as lessee such or similar Property, except
the Eau Claire Facilities.
6.16. INVESTMENTS AND ACQUISITIONS. The Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans
Page 38
and advances to, and other Investments in, Subsidiaries), or commitments
therefor, or to create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any Person, except:
(i) Short-term obligations of, or fully guaranteed by, the United
States of America.
(ii) Commercial paper rated A-1 or better by Standard and Poor's
Ratings Group, a division of McGraw Hill, or P-1 or better by
Xxxxx'x Investors Service, Inc.
(iii) Demand deposit accounts maintained in the ordinary course of
business.
(iv) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and
surplus in excess of $100,000,000.
(v) Investments in marketable obligations maturing within 270 days
from the date of acquisition thereof of any state, territory or
possession of the United States of America or any political
subdivisions of any of the foregoing, or the District of
Columbia; which obligations are accorded a rating of A, or
better, by Standard and Poor's Ratings Group and A, or better, by
Xxxxx'x Investors Service, Inc.
(vi) Money market funds organized and existing under the laws of and
doing business in any state of the United States managed,
operated or maintained by fund managers of recognized national
standing and investing primarily in investments described in
clauses (i), (ii), (iv) and (v) above.
(vii) Creation of new Subsidiaries and Investments in existing or new
Subsidiaries (other than HTI Export Ltd.) and Acquisitions that
become Subsidiaries, in each case in accordance with Section
6.21.
(viii) Advances in the form of progress payments, prepaid rent, or
security deposits or any similar advances made in the ordinary
course of business.
(ix) Advances from the Borrower to HTI Export Ltd. for the purpose of
meeting foreign sales corporation transaction requirements in an
aggregate amount outstanding at any one time not exceeding
$20,000,000 with a duration for each such advance of not more
than one Business Day.
Page 39
(x) Advances in the ordinary course of business to officers,
directors, or employees incidental to the business of the
Borrower or its Subsidiaries not exceeding $10,000 to any one
officer, director, or employee and $200,000 in the
aggregate and the Borrower may make advances not
exceeding $100,000 in any one case to employees of the Borrower
rendering services to the Borrower outside the United States of
America on a substantially permanent basis.
(xi) Investments in common stocks and other equity interests in
any Person OTHER than a Subsidiary or a Person which, after
giving effect to a transaction, will be a Subsidiary of the
Borrower, and other Investments not expressly permitted under
this Section 6.16, not to exceed $5,000,000 in the aggregate
at any one time outstanding for both such types of Investments
combined (calculated as the value of each Investment of the
Borrower when made and without regard to any appreciation or
depreciation thereof thereafter).
(xii) Other Investments in existence on the date hereof and described
in Schedule "1" hereto.
(xiii) Other Investments which comply with the Borrower's Investment
Goals and Guidelines as set forth in Schedule "4" hereto.
6.17. CONTINGENT OBLIGATIONS. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Contingent Obligation
(including, without limitation, any Contingent Obligation with respect to the
obligations of a Subsidiary), except (i) Letters of Credit used for ordinary and
customary business purposes, (ii) by endorsement of instruments for deposit or
collection in the ordinary course of business, (iii) guarantees by the Borrower
of any obligations of a Subsidiary arising in connection with the Eau Claire
Facilities, (iv) guarantees by the Borrower of an aggregate amount not exceeding
$5,000,000, and (v) indemnifications of directors, officers, and employees of
the Borrower and its Subsidiaries in the ordinary course of business.
6.18. LIENS. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested
in good faith and by appropriate proceedings and for which
adequate reserves in accordance with generally accepted
principles of accounting shall have been set aside on its books.
Page 40
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more
than 60 days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
(iii) Liens arising 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.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in
the business of the Borrower or the Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule "2"
hereto.
(vi) Liens created or assumed after the date of this Agreement in
connection with the acquisition of the underlying property or
securing payment of all or part of the purchase price for such
property or securing Indebtedness incurred solely for the purpose
of financing the acquisition of such property or arising in
connection with Capitalized Leases on such property; PROVIDED,
that such acquisitions or Capitalized Leases do not violate any
other provision of this Agreement.
(vii) Liens incidental to the conduct of its business or the ownership
of its Property which were not incurred in connection with the
borrowing of money or the acquisition of Property on credit and
which do not in the aggregate materially detract from the value
of its Property or materially impair the use thereof in the
operation of its business.
(viii) Judgment Liens which secure payment of legal obligations that
would not otherwise constitute a Default under Section 7.9.
6.19. FINANCIAL COVENANTS.
6.19.1. LEVERAGE RATIO. The Borrower will maintain, as at the
last day of each fiscal quarter, a Leverage Ratio of not more than
.35 to 1.0.
6.19.2. EBIT/INTEREST RATIO. The Borrower will maintain, as
at the last day of each fiscal quarter, a ratio of (i) earnings before
interest and taxes for the most
Page 41
recently ended twelve-month period to (ii) Interest Expense for the most
recently ended twelve-month period of not less than 4.0 to 1.0.
6.19.3. FIXED CHARGE COVERAGE RATIO. The Borrower will maintain, as
at the last day of each fiscal quarter, a Fixed Charge Coverage Ratio of
not less than (a) 1.25 to 1.0 for each fiscal quarter ending before
March 31, 1998 and (b) 1.4 to 1.0 for each fiscal quarter ending on and
after March 31, 1998.
6.20. AFFILIATES. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation,
the purchase or sale of any Property or service) with, or make any payment
or transfer to, any Affiliate (other than the Borrower and any Subsidiary)
except in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair
and reasonable terms no less favorable to the Borrower or such Subsidiary
than the Borrower or such Subsidiary would obtain in a comparable arms-
length transaction.
6.21. SUBSIDIARIES. The Borrower shall cause the Obligations to
be and remain guarantied in writing by each Subsidiary (other than HTI
Export Ltd.) pursuant to a Subsidiary Guaranty. Upon execution of a
Subsidiary Guaranty by any Subsidiary created or acquired after the date of
this Agreement, the Borrower shall also cause to be delivered to the Agent
such items evidencing legal existence, validity, power, and authorization
(including, without limitation, an opinion of counsel subject to customary
qualifications, including without limitation reservations for fraudulent
conveyance issues) comparable to the items required with respect to the
Borrower pursuant to Sections 4.1(i), (ii), (iii), and (v) as the Agent
may reasonably require.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent as
to any material matter under or in connection with this Agreement, any Loan, any
Facility Letter of Credit, or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made.
Page 42
7.2. Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any commitment fee or other obligations under any
of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.20,
or 6.21.
7.4. The breach by the Borrower (other than a breach which constitutes
a Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of
this Agreement which is not remedied within thirty days after the earlier to
occur of (i) the date on which an officer of the Borrower who is either an
Authorized Officer or has responsibilities in connection with monitoring
compliance with this Agreement first has knowledge of such breach and (ii) the
giving of written notice by the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay any
Indebtedness in the aggregate in excess of $500,000 when due; or the default by
the Borrower or any of its Subsidiaries in the performance of any term,
provision or condition contained in any agreement under which any Indebtedness
in the aggregate in excess of $500,000 was created or is governed, or any other
event shall occur or condition exist, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any Indebtedness of the Borrower or
any of its Subsidiaries in the aggregate in excess of $500,000 shall be declared
to be due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or the Borrower or any
of its Subsidiaries shall not pay, or admit in writing its inability to pay, its
debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
any Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate action to authorize or effect any of the foregoing
actions set forth in this Section 7.6 or (vi) fail to contest in good faith any
appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed
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for the Borrower or any of its Subsidiaries or any Substantial Portion of its
Property, or a proceeding described in Section 7.6(iv) shall be instituted
against the Borrower or any of its Subsidiaries and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of the Borrower and its Subsidiaries which,
when taken together with all other Property of the Borrower and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 60 days
to pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of $1,000,000, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $1,000,000 or any Reportable Event shall occur in
connection with any Plan.
7.11. The Borrower or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan in an amount which,
when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower or any other member of the Controlled Group as withdrawal
liability (determined as of the date of such notification), exceeds $1,000,000.
7.12. The Borrower or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $1,000,000.
7.13. The Borrower or any of its Subsidiaries shall be the subject
of any proceeding or investigation pertaining to the release by the Borrower or
any of its Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, or any violation of any federal, state or local
environmental, health or safety
Page 44
law or regulation, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
7.14. Nonpayment by the Borrower of any Rate Hedging Obligation or the
breach by the Borrower of any term, provision or condition contained in any
agreement, device or arrangement giving rise to any Rate Hedging Obligation.
7.15. Twenty-five percent (25%) or more of the value of any class of
equity interests in the Borrower shall be held by "benefit plan investors"
within the meaning of 29 C.F.R. Section 2510.3-101(f).
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. ACCELERATION. If any Default described in Section 7.6 or 7.7 occurs
with respect to the Borrower, the obligations of the Lenders to make Loans and
issue Facility Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent or any Lender. If any other Default occurs, the
Required Lenders may terminate or suspend the obligations of the Lenders to make
Loans and issue Facility Letters of Credit hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrower hereby expressly waives.
If, within 14 days after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans and to issue
Facility Letters of Credit hereunder as a result of any Default (other than any
Default as described in Section 7.6 or 7.7 with respect to the Borrower) and
before any judgment or decree for the payment of the Obligations due shall have
been obtained or entered, the Required Lenders (in their sole discretion) shall
so direct, the Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. AMENDMENTS. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
Page 45
(i) Extend the maturity of any Loan or Note or the expiration date of
any Facility Letter of Credit or the due date of any Unreimbursed
Drawing or forgive all or any portion of the principal amount
thereof, or reduce the rate or extend the time of payment of
interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Reduce the amount or extend the payment date for, the mandatory
payments required under Section 2.2, or increase the amount of
the Commitment of any Lender hereunder, or permit the Borrower
to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
other party to this Agreement.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders or
the Agent to exercise any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or an acquiescence therein, and
the making of a Loan or issuance of a Facility Letter of Credit (with the
consent of the Lenders) notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Loan shall
not constitute any waiver or acquiescence. Any single or partial exercise of
any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 8.2, and
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent and the Lenders until the Obligations have been
paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties
of the Borrower contained in this Agreement shall survive delivery of the Notes
and the making of the Loans and issuance of Facility Letters of Credit herein
contemplated.
Page 46
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Taxes. Any taxes (excluding federal income taxes on the overall
net income of any Lender) or other similar assessments or charges made by any
governmental or revenue authority in respect of the Loan Documents shall be paid
by the Borrower, together with interest and penalties, if any.
9.4. HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.5. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
9.6. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any
of its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
9.7. EXPENSES; INDEMNIFICATION. The Borrower shall reimburse the
Agent for any costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent) paid or incurred by the Agent in
connection with the preparation, negotiation, execution, delivery, review,
amendment, modification, and administration of the Loan Documents. The Borrower
also agrees to reimburse the Agent and the Lenders for any costs, internal
charges and out-of-pocket expenses (including reasonable attorneys' fees and
time charges of attorneys for the Agent and the Lenders, which attorneys may be
employees of the Agent or the Lenders) paid or incurred by the Agent or any
Lender in connection with the collection and enforcement of the Loan Documents.
The Borrower further agrees to indemnify the Agent and each Lender, its
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent or
any Lender is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan or use of any
Page 47
Facility Letter of Credit hereunder except to the extent that any of the
foregoing arise from the gross negligence or willful misconduct of an
indemnified party. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
9.8. NUMBERS OF DOCUMENTS. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.9. ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Borrower and all its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower's
audited financial statements.
9.10. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11. NONLIABILITY OF LENDERS. The relationship between the Borrower
and the Lenders and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower. Neither the Agent nor any Lender undertakes any responsibility to
the Borrower to review or inform the Borrower of any matter in connection with
any phase of the Borrower's business or operations.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS,
BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY
Page 48
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. CONFIDENTIALITY . Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to other Lenders and their respective
Affiliates, (ii) to legal counsel, accountants, and other professional advisors
to that Lender or to a Transferee, (iii) to regulatory officials, (iv) to any
Person as requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which that
Lender is a party, and (vi) permitted by Section 12.4.
ARTICLE X
THE AGENT
10.1. APPOINTMENT. The First National Bank of Chicago is hereby
appointed Agent hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the agent of such Lender.
The Agent agrees to act as such upon the express conditions contained in this
Article X. The Agent shall not have a fiduciary relationship in respect of the
Borrower or any Lender by reason of this Agreement.
10.2. POWERS. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no
Page 49
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent in its capacity as agent for
the Lenders nor any of its directors, officers, agents or employees acting for
the Agent in such capacity shall be liable to the Borrower, the Lenders or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except for
its or their own gross negligence or willful misconduct.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (iii) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered to the Agent; (iv) the
validity, effectiveness or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith; or (v) the value,
sufficiency, creation, perfection or priority of any interest in any collateral
security. The Agent shall have no duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to the Agent at such time,
but is voluntarily furnished by the Borrower to the Agent (either in its
capacity as Agent or in its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
Page 50
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent. The obligations of the Lenders under this
Section 10.8 shall survive payment of the Obligations and termination of this
Agreement.
10.9. RIGHTS AS A LENDER. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a Lender.
10.10. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
Page 51
10.11. SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required Lenders shall have
the right to appoint, on behalf of the Borrower and the Lenders and with the
consent of the Borrower (which shall not be unreasonably withheld), a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Borrower and the Lenders, a successor Agent. If the Agent has resigned and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Borrower shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation of an
Agent, the provisions of this Article X shall continue in effect for the benefit
of such Agent in respect of any actions taken or omitted to be taken by it while
it was acting as the Agent hereunder and under the other Loan Documents.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
any Lender to or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to such Lender, whether or
not the Obligations, or any part hereof, shall then be due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans or its Percentage of Unreimbursed Drawings
(other than payments received pursuant to Sections 3.1, 3.2 or 3.4) in a greater
proportion than that
Page 52
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans or Unreimbursed Drawings held by the other
Lenders so that after such purchase each Lender will hold its ratable proportion
of Loans and Unreimbursed Drawings. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. Notwithstanding clause (ii) of this Section, any Lender may
at any time, without the consent of the Borrower or the Agent, assign all or any
portion of its rights under this Agreement and its Notes to a Federal Reserve
Bank; provided, however, that no such assignment shall release the transferor
Lender from its obligations hereunder. The Agent may treat the payee of any
Note as the owner thereof for all purposes hereof unless and until such payee
complies with Section 12.3 in the case of an assignment thereof or, in the case
of any other transfer, a written notice of the transfer is filed with the Agent.
Any assignee or transferee of a Note agrees by acceptance thereof to be bound by
all the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment or Letter of Credit Participation Amount of
such Lender or any other interest of such Lender
Page 53
under the Loan Documents, PROVIDED that each such sale shall be in a
minimum amount of $5,000,000. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
12.2.2. VOTING RIGHTS. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan, Commitment,
or Facility Letter of Credit in which such Participant has an interest
which forgives principal, interest or fees or reduces the interest rate or
fees payable with respect to any such Loan, Commitment, or Facility Letter
of Credit postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan, Commitment, or
Facility Letter of Credit, releases any guarantor of any such Loan or
Facility Letter of Credit or releases any substantial portion of
collateral, if any, securing any such Loan or Facility Letter of Credit.
12.2.3. BENEFIT OF SETOFF. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in Section
11.1 in respect of its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of setoff provided in
Section 11.1 with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in Section
11.1, agrees to share with each Lender, any amount received pursuant to
the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the
Loan Documents, PROVIDED that, unless such Lender assigns all of its
rights and obligations under the Loan Documents to a Purchaser, each
such assignment shall
Page 54
be in a minimum amount of $10,000,000 and, after giving effect to such
assignment, such Lender retains a Commitment of not less than
$10,000,000. Such assignment shall be substantially in the form of
Exhibit "D" hereto or in such other form as may be agreed to by the
parties thereto. The written consent of the Borrower and the Agent
shall be required prior to an assignment becoming effective with
respect to a Purchaser which is not a Lender or an Affiliate thereof;
provided, however, that if a Default has occurred and is continuing,
the consent of the Borrower shall not be required. Such consent shall
not be unreasonably withheld.
12.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent
of a notice of assignment, substantially in the form attached as
Exhibit "I" to Exhibit "D" hereto (a "Notice of Assignment"), together
with any consents required by Section 12.3.1, and (ii) payment of a
$4,000 fee to the Agent for processing such assignment (which fee
shall in no event be payable by the Borrower), such assignment shall
become effective on the effective date specified in such Notice of
Assignment. The Notice of Assignment shall contain a representation
by the Purchaser to the effect that none of the consideration used to
make the purchase of the Commitment and Loans under the applicable
assignment agreement are "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent
as if it were an original party hereto, and no further consent or
action by the Borrower, the Lenders or the Agent shall be required to
release the transferor Lender with respect to the percentage of the
Aggregate Commitment, Loans, and Letter of Credit Participation
Amounts assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor
Lender and new Notes or, as appropriate, replacement Notes, are issued
to such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.
12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries; PROVIDED
that each Transferee and prospective Transferee agrees to be bound by Section
9.15 of this Agreement.
12.5. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States
Page 55
or any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 2.18.
ARTICLE XIII
NOTICES
13.1. GIVING NOTICE. Except as otherwise permitted by Section 2.13
with respect to borrowing notices, all notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
13.2. CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by telex or telephone, that it has taken
such action.
Page 56
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
XXXXXXXXXX TECHNOLOGY
INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Xxxx X. Xxxxxxxx
Chief Financial Officer
00 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Telecopier: (000) 000-0000
Commitments
-----------
$25,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, INDIVIDUALLY AND AS AGENT
By: /s/ J. Xxxxxxx Xxxxx
----------------------------------
J. Xxxxxxx Xxxxx
Managing Director
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Midwest Banking
Telecopier: (000) 000-0000
-----------
-----------
$25,000,000
EXHIBIT "A"
NOTE
$_______________________ ______________, 19__
HUTCHINSON TECHNOLOGY INCORPORATED, a Minnesota corporation (the
"Borrower"), promises to pay to the order of _______________________ (the
"Lender") the lesser of the principal sum of_____________ Dollars or the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Article II of the Credit Agreement (as the same may be
amended or modified, the "Agreement") hereinafter referred to, in immediately
available funds at the main office of The First National Bank of Chicago in
Chicago, Illinois, as Agent, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay the principal of and accrued and unpaid interest on the Loans
in full on the Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Credit Agreement, dated as of December 8, 1995 among the
Borrower, The First National Bank of Chicago, individually and as Agent, and the
lenders named therein, including the Lender, to which Agreement, as it may be
amended from time to time, reference is hereby made for a statement of the terms
and conditions governing this Note, including the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
XXXXXXXXXX TECHNOLOGY
INCORPORATED
By:
----------------------------------
Print Name:
--------------------------
Title:
--------------------------------
Page 58
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF XXXXXXXXXX TECHNOLOGY INCORPORATED,
DATED ________________, 19__
MATURITY
PRINCIPAL MATURITY PRINCIPAL
AMOUNT OF OF INTEREST AMOUNT UNPAID
DATE LOAN PERIOD PAID BALANCE
-------------------------------------------------------------------------------
Page 59
EXHIBIT "B"
FORM OF OPINION
December 8, 1995
The Agent and the Lenders who are parties to the
Credit Agreement described below.
Gentlemen/Ladies:
We are counsel for Xxxxxxxxxx Technology Incorporated (the "Borrower"), and
have represented the Borrower in connection with its execution and delivery of a
Credit Agreement among the Borrower, The First National Bank of Chicago,
individually and as Agent, and the Lenders named therein, providing for Advances
and Facility Letters of Credit in an aggregate principal amount not exceeding
$25,000,000 at any one time outstanding and dated as of December 8, 1995 (the
"Agreement"). All capitalized terms used in this opinion and not otherwise
defined shall have the meanings attributed to them in the Agreement.
We have examined the Borrower's articles of incorporation, by-laws,
resolutions, the Loan Documents and such other matters of fact and law which we
deem necessary in order to render this opinion. Based upon the foregoing, it is
our opinion that:
1. The Borrower and each Subsidiary are corporations duly incorporated,
validly existing and in good standing under the laws of their states of
incorporation and have all requisite authority to conduct their business in each
jurisdiction in which their business is conducted.
2. The execution and delivery of the Loan Documents by the Borrower and
the performance by the Borrower of the Obligations have been duly authorized by
all necessary corporate action and proceedings on the part of the Borrower and
will not:
(a) require any consent of the Borrower's shareholders;
(b) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or the Borrower's or any Subsidiary's articles of
incorporation or by-laws or any indenture, instrument or agreement binding
upon the Borrower or any of its Subsidiaries; or
(c) result in, or require, the creation or imposition of any Lien
pursuant to the provisions of any indenture, instrument or agreement
binding upon the Borrower or any of its Subsidiaries.
Page 60
3. The Loan Documents have been duly executed and delivered by the
Borrower and constitute legal, valid and binding obligations of the Borrower
enforceable in accordance with their terms except to the extent the enforcement
thereof may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and subject also to the availability
of equitable remedies if equitable remedies are sought.
4. Except as disclosed in Schedule "3" to the Credit Agreement, there is
no litigation or proceeding against the Borrower or any of its Subsidiaries
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect.
5. No approval, authorization, consent, adjudication or order of any
governmental authority, which has not been obtained by the Borrower or any of
its Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement or in connection with the payment
by the Borrower of the Obligations.
This opinion may be relied upon by the Agent, the Lenders and their
participants, assignees and other transferees.
Very truly yours,
-------------------------------------
Page 61
EXHIBIT "C"
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of December 8, 1995 (as amended, modified, renewed or
extended from time to time, the "Agreement") among the Borrower, the lenders
party thereto and The First National Bank of Chicago, as Agent for the Lenders.
Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES ON BEHALF OF THE BORROWER THAT:
1. I am the duly elected ________________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower's compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
The foregoing Certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this __ day of _________, 19__.
_______________________________________
in [his/her] capacity as ______________
and not in [his/her] personal capacity
Page 62
[SAMPLE]
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of with
Provisions of Section 6.19 of
the Agreement
SECTION 6.19.1 - LEVERAGE RATIO
(AT FISCAL QUARTER END)
A. Total Debt:
(i) Indebtedness for Borrowed Money $____________
(ii) Guarantees $____________
(iii) Letters of Credit $____________
(iv) Non-Compete obligations $____________
(v) Capitalized Lease Obligations $____________
Sum of (i) through (v) A = $______________
B. Capitalization:
(i) Total Debt (A ABOVE) $____________
(ii) Total equity (GAAP at 12/31/94) $____________
Sum of (i) and (ii) B = $______________
C. Ratio of A to B :1.00
-------------
MAXIMUM PERMITTED: .35:1.0
SECTION 6.19.2 - EBIT/INTEREST RATIO
(MOST RECENTLY ENDED TWELVE-MONTH PERIOD AT FISCAL QUARTER END)
D. Earnings before interest and taxes D = $______________
E. Interest Expense E = $______________
F. Ratio of E to F :1.00
-------------
MINIMUM PERMITTED: 4.0:1.0
Page 63
SECTION 6.19.3 - FIXED CHARGE COVERAGE RATIO
G. Numerator (MOST RECENTLY ENDED TWELVE-MONTH PERIOD AT FISCAL QUARTER END):
(a) (i) EBITDA (GAAP at 12/31/94) $____________
(ii) Rentals $____________
Sum of (i) and (ii) a = $____________
(b) Capital Expenditures b = $____________
Numerator: (a) MINUS (b) G = $______________
H. Denominator:
(a) Interest Expense (LAST TWELVE MONTHS) $____________
(b) Rentals (LAST TWELVE MONTHS) $____________
(c) Current maturities of long-term debt $____________
Denominator: sum of (a), (b), and (c) H = $______________
I. The ratio of G to H :1.00
-------------
MINIMUM PERMITTED: 1.25 TO 1.0 BEFORE 3/31/98
1.4 TO 1.0 ON AND AFTER 3/31/98
[THROUGH 2Q97] EAU CLAIRE FACILITIES CAPITAL EXPENDITURES
Manufacturing (Assembly) Facility Quarter $____________
Year to Date $____________
MAXIMUM EXPENDITURE: $20,000,000
Photo-Etching Facility Quarter $____________
Year to Date $____________
MAXIMUM EXPENDITURE: $50,000,000
Page 64
EXHIBIT "D"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between _______
____________ (the "Assignor") and _________________________ (the "Assignee") is
dated as of __________, 19__. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement (other than rights and obligations of the Assignor in its capacity as
an Issuing Lender) such that after giving effect to such assignment the Assignee
shall have purchased pursuant to this Assignment Agreement the percentage
interest specified in Item 3 of Schedule 1 of all outstanding rights and
obligations under the Credit Agreement relating to the facilities listed in Item
3 of Schedule 1 and the other Loan Documents. The aggregate Commitment (or
Loans and Letter of Credit Participation Amounts, if the applicable Commitment
has been terminated) purchased by the Assignee hereunder is set forth in Item 4
of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit "I" attached hereto
has been delivered to the Agent. Such Notice of Assignment must include any
consents required to be delivered to the Agent by Section 12.3.1 of the Credit
Agreement. In no event will the Effective Date occur if the payments required
to be made by the Assignee to the Assignor on the Effective Date under Sections
4 and 5 hereof are not made on the proposed Effective Date. The Assignor will
notify the Assignee of the proposed Effective Date no later than the Business
Day prior to the proposed Effective Date. As of the Effective Date, (i) the
Assignee shall have the rights and obligations of a Lender under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and be released from
its corresponding obligations under the Loan Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal, interest
and fees with
Page 65
respect to the interest assigned hereby. The Assignee shall advance funds
directly to the Agent with respect to all Loans and reimbursement payments made
on or after the Effective Date with respect to the interest assigned hereby. [In
consideration for the sale and assignment of Loans and Letter of Credit
Participation Amounts hereunder, (i) the Assignee shall pay the Assignor, on the
Effective Date, an amount equal to the principal amount of the portion of all
Floating Rate Loans assigned to the Assignee hereunder and (ii) with respect to
each Eurodollar Loan made by the Assignor and assigned to the Assignee hereunder
which is outstanding on the Effective Date, (a) on the last day of the Interest
Period therefor or (b) on such earlier date agreed to by the Assignor and the
Assignee or (c) on the date on which any such Eurodollar Loan either becomes due
(by acceleration or otherwise) or is prepaid (the date as described in the
foregoing clauses (a), (b) or (c) being hereinafter referred to as the "Payment
Date"), the Assignee shall pay the Assignor an amount equal to the principal
amount of the portion of such Eurodollar Loan assigned to the Assignee which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that
the Payment Date for such Eurodollar Loan shall be the Effective Date, they
shall agree to the interest rate applicable to the portion of such Loan assigned
hereunder for the period from the Effective Date to the end of the existing
Interest Period applicable to such Eurodollar Loan (the "Agreed Interest Rate")
and any interest received by the Assignee in excess of the Agreed Interest Rate
shall be remitted to the Assignor. In the event interest for the period from
the Effective Date to but not including the Payment Date is not paid by the
Borrower with respect to any Eurodollar Loan sold by the Assignor to the
Assignee hereunder, the Assignee shall pay to the Assignor interest for such
period on the portion of such Eurodollar Loan sold by the Assignor to the
Assignee hereunder at the applicable rate provided by the Credit Agreement. In
the event a prepayment of any Eurodollar Loan which is existing on the Payment
Date and assigned by the Assignor to the Assignee hereunder occurs after the
Payment Date but before the end of the Interest Period applicable to such
Eurodollar Loan, the Assignee shall remit to the Assignor the excess of the
prepayment penalty paid with respect to the portion of such Eurodollar Loan
assigned to the Assignee hereunder over the amount which would have been paid if
such prepayment penalty was calculated based on the Agreed Interest Rate. The
Assignee will also promptly remit to the Assignor (i) any principal payments
received from the Agent with respect to Eurodollar Loans prior to the Payment
Date and (ii) any amounts of interest on Loans and fees received from the Agent
which relate to the portion of the Loans assigned to the Assignee hereunder for
periods prior to the Effective Date, in the case of Floating Rate Loans or fees,
or the Payment Date, in the case of Eurodollar Loans, and not previously paid by
the Assignee to the Assignor.]* In the event that either party hereto receives
any payment to which the other party hereto is entitled under this Assignment
Agreement, then the party receiving such amount shall promptly remit it to the
other party hereto.
_____________________________
* Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Exhibit.
Page 66
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a
fee on each day on which a payment of interest, commitment fees, or letter of
credit fees is made under the Credit Agreement with respect to the amounts
assigned to the Assignee hereunder (other than a payment of interest or
commitment fees for the period prior to the Effective Date or, in the case of
Eurodollar Loans, the Payment Date, which the Assignee is obligated to deliver
to the Assignor pursuant to Section 4 hereof). The amount of such fee shall be
the difference between (i) the interest or fee, as applicable, paid with respect
to the amounts assigned to the Assignee hereunder and (ii) the interest or fee,
as applicable, which would have been paid with respect to the amounts assigned
to the Assignee hereunder if each interest rate was ___ of 1% less than the
interest rate paid by the Borrower or if the commitment fee was ___ of 1% less
than the commitment fee paid by the Borrower or if the letter of credit fee was
___ of 1% less than the letter of credit fee paid by the Borrower, as
applicable. In addition, the Assignee agrees to pay ___% of the recordation fee
required to be paid to the Agent in connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or Facility Letters of Credit or (vii) any
mistake, error of judgment, or action taken or omitted to be taken in connection
with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, (iii) appoints and authorizes the Agent to take
such
Page 67
action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto, (iv) agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender,
(v) agrees that its payment instructions and notice instructions are as set
forth in the attachment to Schedule 1, (vi) confirms that none of the funds,
monies, assets or other consideration being used to make the purchase and
assumption hereunder are "plan assets" as defined under ERISA and that its
rights, benefits and interests in and under the Loan Documents will not be
"plan assets" under ERISA, [and (vii) attaches the forms prescribed by
the Internal Revenue Service of the United States certifying that the
Assignee is entitled to receive payments under the Loan Documents without
deduction or withholding of any United States federal income taxes].**
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 12.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
_____________________________
** to be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
Page 68
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
Page 69
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By: _____________________________
Title: _____________________________
_____________________________
_____________________________
[NAME OF ASSIGNEE]
By: _____________________________
Title: _____________________________
_____________________________
_____________________________
Page 70
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
Credit Agreement dated as of December 8, 1995 by and among Xxxxxxxxxx
Technology Incorporated, The First National Bank of Chicago, as Agent, and
the Lenders party thereto.
2. Date of Assignment Agreement: __________, 19__
3. Amounts (As of Date of Item 2 above):
Loan Letter of Credit
Facility Facility
a. Total of Commitments
(Loans/Facility Letter of Credit)*
under Credit Agreement $______________ [$______________]*
b. Assignee's Percentage
of each Facility purchased
under the Assignment
Agreement** _______________%
c. Amount of Assigned Share in
each Facility purchased under
the Assignment
Agreement $______________ [$______________]*
4. Assignee's Aggregate (Loan Amount/
Letter of Credit Participation
Amount)* Commitment Amount
Purchased Hereunder: $_______________
5. Proposed Effective Date: _______________________
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: __________________________________ By: ______________________________
Title: _______________________________ Title: ___________________________
_____________________________
* If a Commitment has been terminated, insert outstanding Loans and Facility
Letters of Credit in place of Commitment
** Percentage taken to 10 decimal places
Page 71
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
Page 72
EXHIBIT "I"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
____________, 19__
To: Xxxxxxxxxx Technology Incorporated
00 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
The First National Bank of
Chicago, Individually and as Agent
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement") described
in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
the Borrower and the Agent pursuant to Section 12.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ________, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the Assignment
shall be the later of the date specified in Item 5 of Schedule 1 or two Business
Days (or such shorter period as agreed to by the Agent) after this Notice of
Assignment and any consents and fees required by Sections 12.3.1 and 12.3.2 of
the Credit Agreement have been delivered to the Agent, provided that the
Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied. The Effective Date shall not
occur until the Borrower has indicated in writing its consent to the assignment
contemplated hereunder in accordance with Section 12.3.1 of the Credit
Agreement.
Page 73
4. The Assignor and the Assignee hereby give to the Borrower and the
Agent notice of the assignment and delegation referred to herein. The Assignor
will confer with the Agent before the date specified in Item 5 of Schedule 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to satisfy
the conditions precedent agreed to by the Assignor and the Assignee. At the
request of the Agent, the Assignor will give the Agent written confirmation of
the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $4,000 required by Section 12.3.2 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause the Borrower to
execute and deliver new Notes or, as appropriate, replacements notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Note received by it from the Borrower
upon its receipt of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions
are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
Page 74
9. The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to the Borrower or the
Loan Documents to the Assignee until the Assignee becomes a party to the Credit
Agreement.*
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: __________________________________ By: ______________________________
Title: _______________________________ Title: ___________________________
ACKNOWLEDGED AND CONSENTED TO ACKNOWLEDGED AND CONSENTED TO
BY THE FIRST NATIONAL BANK OF CHICAGO BY XXXXXXXXXX TECHNOLOGY
INCORPORATED
By: __________________________________ By: ______________________________
Title: _______________________________ Title: ___________________________
[Attach photocopy of Schedule 1 to Assignment]
_____________________________
* May be eliminated if Assignee is a party to the Credit Agreement prior to
the Effective Date.
Page 75
EXHIBIT "E"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated December 8, 1995 (as the same may be amended or
modified, the "Credit Agreement"), among Xxxxxxxxxx Technology Incorporated
(the "Borrower"), the Agent, and the Lenders named therein. Terms used
herein and not otherwise defined shall have the meanings assigned thereto
in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the following
standing money transfer instructions with respect to the proceeds of Advances or
other extensions of credit from time to time until receipt by the Agent of a
specific written revocation of such instructions by the Borrower, provided,
however, that the Agent may otherwise transfer funds as hereafter directed in
writing by the Borrower in accordance with Section 13.1 of the Credit Agreement
or based on any telephonic notice made in accordance with Section 2.13 of the
Credit Agreement.
Facility Identification Number(s)__________________________________________
Customer/Account Name______________________________________________________
Transfer Funds To__________________________________________________________
________________________________________________
________________________________________________
For Account No.____________________________________________________________
Reference/Attention To_____________________________________________________
Authorized Officer (Customer Representative) Date__________________________
______________________________ ________________________________________
(Please Print) Signature
Bank Officer Name Date _________________________
______________________________ ________________________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
Page 76
EXHIBIT "F"
SUBSIDIARY GUARANTY
The undersigned, a subsidiary of XXXXXXXXXX TECHNOLOGY INCORPORATED (the
"Borrower"), hereby requests the Lenders party to that certain Credit Agreement
dated as of December 8, 1995 (as the same may be amended or modified and in
effect from time to time, the "Credit Agreement") by and among the Borrower, The
First National Bank of Chicago, individually and as agent (in such capacity the
"Agent"), and the lenders named therein (the "Lenders"), to extend credit or to
permit credit to remain outstanding to the Borrower as the Borrower may desire
and as each Lender may extend or permit from time to time in its sole
discretion, whether to the Borrower alone or to the Borrower and others, and, in
consideration of any credit granted or continued, the undersigned hereby
absolutely and unconditionally guarantees prompt payment when due, whether at
stated maturity, upon acceleration or otherwise, and at all times thereafter, of
any and all existing and future indebtedness and liability of every kind, nature
and character, direct or indirect, absolute or contingent (including all
renewals, extensions and modifications thereof and all attorneys' fees incurred
by the Lenders in connection with the collection or enforcement thereof), of the
Borrower to the Lenders under the Credit Agreement or any other Loan Document
(as that term is defined in the Credit Agreement) or any Rate Hedging
Obligations (as that term is defined in the Credit Agreement) owing to any
Lender, in each case howsoever and whensoever created, arising, evidenced or
acquired (collectively, the "Guaranteed Debt").
The undersigned waives notice of the acceptance of this Guaranty and of the
extension or continuation of the Guaranteed Debt or any part thereof. The
undersigned further waives presentment, protest, notice, the benefit of any
statutes of limitations, demand or action on delinquency in respect of the
Guaranteed Debt or any part thereof, including any right to require the Lenders
to xxx the Borrower, any other guarantor or any other person obligated with
respect to the Guaranteed Debt or any part thereof, or otherwise to enforce
payment thereof against any collateral securing the Guaranteed Debt or any part
thereof. The undersigned hereby agrees that, if at any time any payment of any
portion of the Guaranteed Debt is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, the undersigned's obligations hereunder with respect to such payment
shall be reinstated at such time as though such payment had not been made and
whether or not the Lenders are in possession of this Guaranty.
This Guaranty shall continue in effect until, subject to the last sentence
of the immediately preceding paragraph, the Guaranteed Debt has been
indefeasibly paid in full and all commitments of the Lenders with respect
thereto have terminated.
Page 77
The validity and enforceability of this Guaranty shall not be impaired or
affected by any of the following: (a) any extension, modification or renewal
of, or indulgence with respect to, or substitutions for, the Guaranteed Debt or
any part thereof or any agreement relating thereto at any time; (b) any failure
or omission to enforce any right, power or remedy with respect to the Guaranteed
Debt or any part thereof or any agreement relating thereto, or any collateral
securing the Guaranteed Debt or any part thereof; (c) any waiver of any right,
power or remedy or of any default with respect to the Guaranteed Debt or any
part thereof or any agreement relating thereto or with respect to any collateral
securing the Guaranteed Debt or any part thereof; (d) any release, surrender,
compromise, settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any part
thereof, any other guaranties with respect to the Guaranteed Debt or any part
thereof, or any other obligation of any person or entity with respect to the
Guaranteed Debt or any part thereof; (e) the enforceability or validity of the
Guaranteed Debt or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to any collateral
securing the Guaranteed Debt or any part thereof; (f) the application of
payments received from any source to the payment of indebtedness of the Borrower
or the undersigned other than the Guaranteed Debt, any part thereof or amounts
which are not covered by this Guaranty even though the Lenders might lawfully
have elected to apply such payments to any part or all of the Guaranteed Debt or
to amounts which are not covered by this Guaranty; (g) any change of ownership
of the Borrower or the insolvency, bankruptcy or any other change in the legal
status of the Borrower; (h) the change in or the imposition of any law, decree,
regulation or other governmental act which does or might impair, delay or in any
way affect the validity, enforceability or the payment when due of the
Guaranteed Debt; (i) the failure of the Borrower or the undersigned to maintain
in full force, validity or effect or to obtain or renew when required all
governmental and other approvals, licenses or consents required in connection
with the Guaranteed Debt or this Guaranty, or to take any other action required
in connection with the performance of all obligations pursuant to the Guaranteed
Debt or this Guaranty; or (j) the existence of any claim, setoff or other rights
which the undersigned may have at any time against the Borrower in connection
herewith or an unrelated transaction; all whether or not the undersigned shall
have had notice or knowledge of any act or omission referred to in the foregoing
clauses (a) through (j) of this paragraph. It is agreed that the undersigned's
liability hereunder is several and independent of any other guaranties or other
obligations at any time in effect with respect to the Guaranteed Debt or any
part thereof and that the undersigned's liability hereunder may be enforced
regardless of the existence, validity, enforcement or non-enforcement of any
such other guaranties or other obligations or any provision of any applicable
law or regulation purporting to prohibit payment by the Borrower of the
Guaranteed Debt in the manner agreed upon between the Lender and the Borrower.
Credit may be granted or continued from time to time by the Lenders to the
Borrower without notice to or authorization from the undersigned regardless of
the Borrower's financial
Page 78
or other condition at the time of any such grant or continuation. The Lenders
shall have no obligation to disclose or discuss with the undersigned their
assessment of the financial condition of the Borrower.
Until the Guaranteed Debt is paid in full, the undersigned shall not
exercise any right of subrogation with respect to payments made by the
undersigned pursuant to this Guaranty. The undersigned waives any benefit of
the collateral, if any, which may from time to time secure the Guaranteed Debt
or any part thereof and authorizes the Lenders to take any action or exercise
any remedy with respect thereto, which the Lenders in their discretion shall
determine, without notice to the undersigned. In the event the Agent or any
Lender in its sole discretion elects to give notice of any action with respect
to the collateral, if any, securing the Guaranteed Debt or any part thereof, ten
days written notice mailed to the undersigned by ordinary mail at the address
shown hereon shall be deemed reasonable notice of any matters contained in such
notice.
In the event that acceleration of the time for payment of any of the
Guaranteed Debt is stayed, upon the insolvency, bankruptcy or reorganization of
the Borrower, or otherwise, all such amounts shall nonetheless be payable by the
undersigned forthwith upon demand by the Lenders.
Without limiting the rights of the Lenders under applicable law, the
undersigned authorizes each Lender to apply or offset any sums posted to the
credit of the undersigned with any office, branch, subsidiary or affiliate of
such Lender to the payment when due of any amount owing by the undersigned under
this Guaranty.
No provision of this Guaranty may be amended, supplemented or modified, or
any of the terms and provisions hereof waived, except by a written instrument
executed by the Lenders (or the Agent with the consent of the Lenders) and the
undersigned. No failure on the part of the Lenders to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
The undersigned shall pay all reasonable costs, fees and expenses
(including reasonable attorneys' fees) incurred by the Agent or the Lenders in
collecting or enforcing the undersigned's obligations under this Guaranty.
The provisions of this Guaranty are severable, and in any action or
proceeding involving any state corporate law, or any state or federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of the undersigned hereunder would
otherwise be held or determined to be avoidable, invalid or unenforceable on
account of the amount of the undersigned's liability under this Guaranty,
Page 79
then, notwithstanding any other provision of this Guaranty to the contrary, the
amount of such liability shall, without any further action by the undersigned,
the Agent, or the Lenders be automatically limited and reduced to the highest
amount which is valid and enforceable as determined in such action or
proceeding.
This Guaranty shall (i) bind the undersigned and the heirs, personal
representatives, successors and assigns of the undersigned, (ii) inure to the
benefit of the Lenders, its successors and assigns and (iii) be governed by the
internal laws of the State of Illinois. The undersigned hereby irrevocably
submits to the non-exclusive jurisdiction of any United States federal or
Illinois state court sitting in Chicago in any action or proceeding arising out
of or relating to this Guaranty, and the undersigned hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in any such court. THE UNDERSIGNED HEREBY WAIVES ANY RIGHT TO A JURY
TRIAL IN ANY ACTION ARISING HEREUNDER.
[SUBSIDIARY]
By: ___________________________________
Print Name: ___________________________
Title: ________________________________
Chicago, Illinois, ______________, 19__.
Address: _________________________________
_________________________________
_________________________________
Attention: _________________________________
Page 80
SCHEDULE "1"
SUBSIDIARIES AND OTHER INVESTMENTS
(SEE SECTIONS 5.8 AND 6.16)
INVESTMENT OWNED AMOUNT OF PERCENT JURISDICTION OF
IN BY INVESTMENT OWNERSHIP ORGANIZATION
---------- ----- ---------- --------- ---------------
Hutchinson Hutchinson N/A 100% Minnesota
Technology Technology
Asia, Inc. Incorporated
HTI Export Hutchinson N/A 100% Virgin Islands of
Ltd. Technology the United States
Incorporated (Inactive)
HTI Export HTI Export N/A 100% by Barbados
Ltd. Ltd. Virgin Islands
of United States
Subsidiary
SCHEDULE "2"
INDEBTEDNESS AND LIENS
(SEE SECTION 5.14, 6.11 AND 6.18)
(NOVEMBER 19 1995)
INDEBTEDNESS INDEBTEDNESS PROPERTY MATURITY AMOUNT OF
INCURRED BY OWED TO ENCUMBERED (IF ANY) OF INDEBTEDNESS INDEBTEDNESS
------------ ------------ ------------------- --------------- ------------
1. Notes Purchase Northwestern Unsecured 7-9-97 $388,571.48
Agreement for National Life
$2,000,000
2. Notes Purchase Northwestern Unsecured 10-28-95 $1,237,500.00
Agreement for National Life
$3,750,000
3. Notes Purchase Northern Life Unsecured 7-9-97 $437,142.91
Agreement for Insurance Co.
$2,250,000
4. Notes Purchase Northern Life Unsecured 10-28-98 $1,072,500.00
Agreement for Insurance Co.
$3,250,000
5. Notes Purchase North Atlantic Unsecured 7-9-97 $194,285.74
Agreement for Life Insurance
$1,000,000
6. Notes Purchase North Atlantic Unsecured 10-28-98 $660,000.00
Agreement for Life Insurance
$2,000,000
7. Notes Purchase Ministers Life Unsecured 7-9-97 $145,714.32
Agreement for (Now held by Var & Co.)
$750,000
8. Notes Purchase FB Annuity, Co. Unsecured 7-9-97 $97,142.84
Agreement for
$500,000
9. Notes Purchase Farm Bureau Life Unsecured 7-9-97 $97,142.84
Agreement for Insurance Co.
$500,000
10. Notes Purchase American Investors Life Unsecured 10-28-98 $330,000.00
Agreement for Ins. Co. (Now held by
$1,000,000 Northwestern National Life)
11. Revenue Bonds City of Hutchinson, MN. Secured by 6-04 $1,700,000.00
for $2,000,000 Variable Rate Demand equipment
Industrial Development
Revenue Refunding Bonds;
Xxxxxx Bank, Under the
Reimbursement Agreement.
12. Working Capital Norwest Bank and Unsecured Zero Balance Zero Balance
Line Of Credit Xxxxxx Bank
For $20,000,000
13. Note Purchase Teachers Insurance & Unsecured 02-15-04 $20,000,000.00
Agreement for Annunity Association.
$20,000,000
14. Note Purchase Central Life Assurance Co. Unsecured 02-15-04 $5,000,000.00
Agreement for
$5,000,000
15. Note Purchase Modern Woodmen Unsecured 02-15-04 $5,000,000.00
Agreement for Of America -------------
$5,000,000
Total Debt $36,360,000.13
(SCHEDULE "2" CONT.)
LIENS in favor of the following in connection with Equipment Leases:
COMMUNITY FIRST FINANCIAL, INC.
FORD MOTOR CREDIT CO.
XXXXXX TRUST AND SAVINGS BANK
IBM CREDIT CORPORATION
KUBOTA TRACTOR CORPORATION
MC MACHINERY SYSTEMS INC.
METLIFE CAPITAL LIMITED PARTNERSHIP
MITSUBISHI INTERNATIONAL CORPORATION
XXXXXX INTERNATIONAL DYNACHEM ELECTRONIC MATERIALS
NORSTAN FINANCIAL SERVICES INC.
NORWEST EQUIPMENT FINANCE INC.
SANWA LEASING CORPORATION
US BANCORP LEASING AND FINANCIAL
WINTHROP RESOURCES CORPORATION
KUBOTA TRACTOR CORPORATION
XXXXXX TRUST AND SAVINGS BANK
SANWA LEASING CORPORATION
XXXXXX TRUST AND SAVINGS BANK
METLIFE CAPITAL LIMITED PARTNERSHIP
NORWEST EQUIPMENT FINANCE INC.
SANWA LEASING CORPORATION
SCHEDULE "3"
LITIGATION
(SEE SECTION 5.7)
None
SCHEDULE "4"
INVESTMENT GOALS AND GUIDELINES
(SEE SECTION 6.16(xiii))
XXXXXXXXXX TECHNOLOGY INC.
INVESTMENT GOALS AND GUIDELINES
EFFECTIVE AS OF APRIL 1992
I. OBJECTIVES
1. Preservation and safety of capital.
2. Maintain necessary liquidity.
3. Maximize the rate of return within the stated guidelines.
II. PERFORMANCES
1. Provide the best after tax return while remaining consistent with the
objective of preservation and safety of capital and the maintenance of
liquidity.
2. Performance measures to be established and measured in accordance with
the Association for Investment Management and Research standards.
III. AUTHORIZED SECURITIES
1. U.S. Treasury and Federal Agency Securities:
A. Readily marketable direct obligations issued by the United
States Of America or by any agency backed by the full faith
and credit of U.S.A.
B. Maturing with one year.
2. Certificates of Deposit, Time Deposits, Bankers Acceptances, and
Demand Deposits.
A. Commercial bank or trust must be member of Federal Reserve
System and:
* Have combined capital and surplus of at least $250 million.
* Have deposits in excess of $100 million.
* Long term debt obligations of the institutions which are
rated at least "A" by Moody's or Standard and Poors.
B. Maturity within one year.
3. Commercial Paper
A. Open market commercial paper of U.S. Corporations maturing
within 270 days.
B. Rating of at least P-2 by Moody's and A-2 by Standard and
Poors.
4. Tax Exempt Obligations
A. With long-term rating of at least A3 (Moody's) or A-(S&P).
B. With short-term rating of at least P-1 or A-1.
5. Corporate Debt Securities
A. With long-term rating of at least A3 (Moody's) or A-(S&P).
6. Repurchase and Reverse Repurchase Agreements
