CREDIT AGREEMENT
among
ZENITH ELECTRONICS CORPORATION, as Borrower,
THE LENDERS SIGNATORY HERETO,
CITIBANK, N.A. as Issuing Bank
and
CITICORP NORTH AMERICA, INC., as Agent for the
Issuing Bank and the Lenders
March 31, 1997
CREDIT AGREEMENT
among
ZENITH ELECTRONICS CORPORATION, as Borrower,
THE LENDERS SIGNATORY HERETO,
CITIBANK, N.A. as Issuing Bank
and
CITICORP NORTH AMERICA, INC., As Agent
For the Foregoing Lenders
Index
Page
ARTICLE 1 DEFINITIONS 1
ARTICLE 2 THE LOANS AND THE LETTERS OF CREDIT 28
Section 2.1 Extension of Credit 28
Section 2.2 Manner of Borrowing and Disbursement of Loans. 30
Section 2.3 Interest 35
Section 2.4 Fees 36
Section 2.5 Prepayment/Reduction of Commitment 37
Section 2.6 Repayment 38
Section 2.7 Notes; Loan Accounts 39
Section 2.8 Manner of Payment 40
Section 2.9 Reimbursement 42
Section 2.10 Pro Rata Treatment 42
Section 2.11 Application of Payments 43
Section 2.12 Use of Proceeds 44
Section 2.13 All Obligations to Constitute One Obligation 45
Section 2.14 Maximum Rate of Interest 45
Section 2.15 Letters of Credit 45
ARTICLE 3 CONDITIONS PRECEDENT 50
Section 3.1 Conditions Precedent to Initial Advance 51
Section 3.2 Conditions Precedent to Each Advance 55
Section 3.3 Conditions Precedent to Each Letter of Credit. 56
ARTICLE 4 REPRESENTATIONS AND WARRANTIES 57
Section 4.1 General Representations and Warranties 57
Section 4.2 Representations and Warranties Relating to Inventory 67
Section 4.3 Survival of Representations and Warranties, etc 67
ARTICLE 5 GENERAL COVENANTS 67
Section 5.1 Preservation of Existence and Similar Matters. 67
Section 5.2 Compliance with Applicable Law 68
Section 5.3 Maintenance of Properties 68
Section 5.4 Accounting Methods and Financial Records 68
Section 5.5 Insurance 68
Section 5.6 Payment of Taxes and Claims 69
Section 5.7 Visits and Inspections 69
Section 5.8 Conduct of Business 70
Section 5.9 ERISA 70
Section 5.10 Lien Perfection 70
Section 5.11 Location of Collateral; Consignment of Inventory 70
Section 5.12 Protection of Collateral 71
Section 5.13 Assignments, Records and Schedules of Accounts 72
Section 5.14 Administration of Accounts 72
Section 5.15 The Blocked Account 73
Section 5.16 Further Assurances 75
Section 5.17 Broker's Claims 75
Section 5.18 Indemnity 75
Section 5.19 Environmental Matters 76
Section 5.20 Lease Transactions 76
Section 5.21 Warehouse Arrangement 76
ARTICLE 6 INFORMATION COVENANTS 77
Section 6.1 Monthly Financial Statements and Information 77
Section 6.2 Annual Financial Statements and Information;
Certificate of No Default 77
Section 6.3 Performance Certificates 78
Section 6.4 Access to Accountants 78
Section 6.5 Additional Reports 79
Section 6.6 Notice of Litigation and Other Matters 80
ARTICLE 7 NEGATIVE COVENANTS 82
Section 7.1 Indebtedness 82
Section 7.2 Guaranties 83
Section 7.3 Liens 83
Section 7.4 Restricted Payments and Purchases 83
Section 7.5 Investments 83
Section 7.6 Affiliate Transactions 84
Section 7.7 Liquidation; Change in Ownership, Name, or
Year; Disposition or Acquisition of Assets; Etc 85
Section 7.8 Minimum EBITDA 87
Section 7.9 Current Ratio 87
Section 7.10 Fixed Charge Coverage Ratio 87
Section 7.11 Capital Expenditures 88
Section 7.12 Interest Coverage Ratio 88
Section 7.13 Funded Debt/Total Capitalization Ratio 89
Section 7.14 Tuning Patent Royalties; LGE Payable 89
Section 7.15 Sales and Leasebacks 90
Section 7.16 Amendment and Waiver 90
Section 7.17 ERISA Liability 90
Section 7.18 Payment Instructions 90
Section 7.19 Prepayments 90
Section 7.20 Negative Pledge 91
ARTICLE 8 DEFAULT 91
Section 8.1 Events of Default 91
Section 8.2 Remedies 95
ARTICLE 9 THE AGENT 97
Section 9.1 Appointment and Authorization 97
Section 9.2 Interest Holders 97
Section 9.3 Consultation with Counsel 98
Section 9.4 Documents 98
Section 9.5 Agent and Affiliates 98
Section 9.6 Responsibility of the Agent 98
Section 9.7 Action by Agent 98
Section 9.8 Notice of Default or Event of Default 99
Section 9.9 Responsibility Disclaimed 99
Section 9.10 Indemnification 100
Section 9.11 Credit Decision 100
Section 9.12 Successor Agent 100
Section 9.13 Agent May File Proofs of Claim 101
Section 9.14 Collateral 101
Section 9.15 Release of Collateral 102
Section 9.16 Securitization Documents 102
ARTICLE 10 MISCELLANEOUS 102
Section 10.1 Notices 102
Section 10.2 Expenses 104
Section 10.3 Waivers 105
Section 10.4 Set-Off 105
Section 10.5 Assignment 106
Section 10.6 Counterparts 108
Section 10.7 Governing Law 108
Section 10.8 Severability 108
Section 10.9 Headings 108
Section 10.10 Source of Funds 108
Section 10.11 Entire Agreement 109
Section 10.12 Amendments and Waivers 109
Section 10.13 Other Relationships 110
Section 10.14 Pronouns 110
Section 10.15 Disclosure 110
Section 10.16 Replacement of Lender 110
ARTICLE 11 YIELD PROTECTION 111
Section 11.1 Eurodollar Rate Basis Determination 111
Section 11.2 Illegality 111
Section 11.3 Increased Costs 112
Section 11.4 Effect On Other Advances 113
Section 11.5 Capital Adequacy 113
ARTICLE 12 JURISDICTION, VENUE ANDWAIVER OF JURY TRIAL 114
Section 12.1 Jurisdiction and Service of Process 114
Section 12.2 Consent to Venue 115
Section 12.3 Waiver of Jury Trial 115
EXHIBITS
Exhibit A - Form of Assignment and Assumption Agreement
Exhibit B - Form of Blocked Account Letter
Exhibit C - Form of Borrowing Base Certificate
Exhibit D - Form of Request for Advance
Exhibit E - Form of Request for Issuance of Letter
of Credit Exhibit F - Form of Revolving Loan Note
Exhibit G - Copy of Security Agreement
Exhibit H - Form of Term Loan Notes
Exhibit I - Form of Loan Certificate
Exhibit J - Form of Distribution Instructions Letter
Exhibit K - Form of Performance Certificate
Exhibit L - Form of Subsidiary Guaranty
Exhibit M - Form of Subsidiary Security Agreement
SCHEDULES
Schedule 1 - Commitment Ratios
Schedule 2 - Salomon Lease Transaction
Schedule 3 - Liens
Schedule 4.1(c)-1 - Subsidiaries
Schedule 4.1(c)-2 - Partnerships/Joint Ventures
Schedule 4.1(d) - Outstanding Capital Stock Ownership
Schedule 4.1(h) - Material Contracts; Collective Bargaining
Schedule 4.1(l) - Investments/Guaranties as of the Agreement Date
Schedule 4.1(m) - Litigation
Schedule 4.1(o) - Intellectual Property
Schedule 4.1(u) - Insurance
Schedule 4.1(w)-1 - Leased Real Property
Schedule 4.1(w)-2 - Owned Real Property
Schedule 4.1(x) - Environmental Matters
Schedule 5.11 - Location of Collateral
Schedule 5.15 - Bank Accounts
Schedule 7.1 - Existing Letters of Credit
Schedule 7.6 - Affiliate Transactions
CREDIT AGREEMENT
among
ZENITH ELECTRONICS CORPORATION, as Borrower,
THE LENDERS SIGNATORY HERETO,
Citibank, N.A. as Issuing Bank
and
CITICORP NORTH AMERICA, INC., As Agent
For the Foregoing Lenders, dated as
of the 31st day of March, 1997:
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the
Lenders (a) finance the working capital
requirements of the Borrower and (b) provide funds
to the Borrower to repay its outstanding
indebtedness, for capital expenditures and for
other corporate purposes; and
WHEREAS, the Lenders are willing to make
funds available for such purposes upon the terms
and subject to the conditions set forth herein;
and
WHEREAS, the Borrower has requested that the
Issuing Bank commit to provide the Borrower with
letters of credit for general corporate purposes,
and the Issuing Bank is willing to issue letters
of credit upon the terms and subject to the
conditions contained herein; and
NOW, THEREFORE, in consideration of the
premises and the covenants and agreements
contained herein, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
For the purposes of this Agreement:
"Account Debtor" shall mean any Person who is
obligated under an Account.
"Accounts" shall mean all accounts, contract
rights, chattel paper, instruments, drafts,
acceptances and documents of the Borrower or any
of the Borrower's Subsidiaries arising from the
sale or lease of goods or the provision of
services or the license of Intellectual Property
by the Borrower or any of the Borrower's
Subsidiaries in the ordinary course of its
business, whether secured or unsecured, and
whether now existing or hereafter created or
arising, and "Account" shall mean any one of the
foregoing; provided, however, "Account" shall not
include any of the foregoing that are, now or in
the future, sold, transferred or otherwise
assigned to Finance Corp. pursuant to any
Receivables Purchase Agreement, unless and until
such accounts, chattel paper, instruments, drafts,
acceptances or documents are reassigned or
reconveyed to the Borrower.
"Advance" or "Advances" shall mean amounts of
the Loans advanced by the Lenders to the Borrower
pursuant to Section 2.2 hereof on the occasion of
any borrowing.
"Affiliate" shall mean any Person directly or
indirectly controlling, controlled by, or under
common control with the Borrower, and any Person
who is a director, officer, or partner of the
Borrower. For purposes of this definition,
"control", when used with respect to any Person,
includes, without limitation, the direct or
indirect beneficial ownership of ten percent (10%)
or more of the outstanding voting securities or
voting equity of such Person or the power to
direct or cause the direction of the management
and policies of such Person whether by contract or
otherwise.
"Agent" shall mean Citicorp North America,
Inc., a Delaware corporation, acting as Agent for
the Lenders and the Issuing Banks, and any
successor agent appointed pursuant to
Section 9.12.
"Agent's Office" shall mean the office of the
Agent located at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxx
0, Xxx Xxxx, XX 00000, or such other office as may
be designated pursuant to the provisions of
Section 10.1 of this Agreement.
"Aggregate Revolving Credit Obligations"
shall mean, as of any particular time, the sum of
(a) the aggregate principal amount of all
Revolving Loans then outstanding, plus (b) the
aggregate amount of all Letter of Credit
Obligations then outstanding, plus (c) the
aggregate amount of all Swing Loans then
outstanding.
"Agreement" shall mean this Agreement.
"Agreement Date" shall mean the date as of
which this Agreement is dated.
"Applicable Law" shall mean, in respect of
any Person, all provisions of constitutions,
statutes, rules, regulations, and orders of
governmental bodies or regulatory agencies
applicable to such Person, and all orders and
decrees of all courts and
arbitrators in proceedings or actions to which the
Person in question is a party or by which it is
bound.
"Assignment and Assumption Agreement" shall
mean that certain form of Assignment and
Assumption Agreement attached hereto as Exhibit A,
pursuant to which each Lender may, as further
provided in Section 10.5 hereof, sell or
participate a portion of its Loans or Commitment.
"Assignment of Notes" shall mean that certain
Assignment of Notes of even date herewith,
executed by the Borrower and microcircuits,
pursuant to which the Borrower and microcircuits
each pledge to the Agent, for its benefit and the
benefit of the Issuing Banks and the Lenders, all
of their respective right, title and interest in
and to the Finance Corp. Subordinated Notes and
certain other promissory notes held by the
Borrower, as the same may be amended or modified
from time to time.
"Authorized Signatory" shall mean such senior
personnel of the Borrower as may be duly
authorized and designated in writing by the
Borrower to execute documents, agreements, and
instruments on behalf of the Borrower.
"Available Letter of Credit Amount" shall mean,
as of any particular time, an amount equal to the
lesser of (a) $15,000,000, and (b) the Available
Revolving Loan Commitment.
"Available Revolving Loan Commitment" shall
mean, as of any particular time, (a) the amount of
the Revolving Loan Commitment minus (b) the
Aggregate Revolving Credit Obligations then
outstanding.
"Bankruptcy Code" shall mean the United
States Bankruptcy Code (11 U.S.C. Section 101 et
seq.), as now or hereafter amended, and any
successor statute.
"Base Rate" shall mean, at any time, a
fluctuating and floating rate per annum equal to
the higher of:
(i) the highest rate of interest
announced publicly by Citibank in New York,
New York from time to time, as Citibank's
base rate; and
(ii) the sum (adjusted to the
nearest one-quarter of one percent (0.25%)
or, if there is no nearest one-quarter of one
percent (0.25%), to the next higher
one-quarter of one percent (0.25%) of (A)
one-half of one percent (0.50%) per annum
plus (B) the rate per annum obtained by
dividing (I) the latest three-week moving
average of secondary market morning offering
rates in the United States for three-month
certificates of deposit of major United
States money market banks, such three-week
moving average (adjusted to the basis of a
year of 360 days) being determined weekly on
each Monday (or, if such day is not a
Business Day, on the next succeeding Business
Day) for the three-week period ending on the
previous Friday (or, if such day is not a
Business Day, on the next preceding Business
Day) by Citibank on the basis of such rates
reported by certificate of deposit dealers
to, and published by, the Federal Reserve
Bank of New York, or, if such publication
shall be suspended or terminated, on the
basis of quotations for such rates received
by Citibank from three (3) New York
certificate of deposit dealers of recognized
standing selected by Citibank, by (II) a
percentage equal to one hundred percent
(100%) minus the average of the daily
percentages specified during such three-week
period by the Federal Reserve Board (or any
successor) for determining the maximum
reserve requirement (including, but not
limited to, any emergency, supplemental or
other marginal reserve requirement) for
Citibank in respect of liabilities which
consist of or which include (among other
liabilities) three-month nonpersonal U.S.
Dollar time deposits in the United States
Plus (C) the average during such three-week
period of the daily net annual assessment
rates estimated by Citibank for determining
the then current annual assessment payable by
Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring
deposits of Citibank in the United States;
and
(iii) for any day one-half of
one percent (1/2%) per annum above the
weighted average of the rates on overnight
federal funds transactions with members of
the Federal Reserve System arranged by
Federal funds brokers, as published for such
day (or, if such day is not a Business Day,
for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such
rate is not so published for any day which is
a Business Day, the average of the quotation
for such day on such transactions received by
Citibank from three Federal funds brokers of
recognized standing selected by it;
but in no event higher than the maximum rate
permitted by Applicable Law. Each change in the
Base Rate shall take effect simultaneously with
the corresponding change in the applicable rate
described in clause (i), (ii) or (iii).
"Base Rate Advance" shall mean an Advance
which the Borrower requests to be made as a Base
Rate Advance or which is reborrowed as a Base Rate
Advance, in accordance with the provisions of
Section 2.2 hereof.
"Blocked Account" shall have the meaning set
forth in Section 5.15 hereof.
"Blocked Account Letter" shall mean any
letter agreement executed by a Blocked Account
depository bank and the Agent and acknowledged and
agreed to by the Borrower, in the form of Exhibit
B hereto, as such letter agreements may be
amended, supplemented or otherwise modified from
time to time.
"Borrower" shall mean Zenith Electronics
Corporation, a Delaware corporation.
"Borrowing Base" shall mean, at any
particular time, the sum of:
(b) up to 60% of the Value of Eligible
Finished Goods VCR Inventory; plus
(c) up to 50% of the Value of Eligible
Finished Goods TV and Other Inventory; plus
(d) up to 35% of the Value of Eligible
Picture Tube Inventory; minus
(e) the amount of reserves which the
Agent shall have established, in its
reasonable discretion, for such purposes as
the Agent shall have deemed necessary,
including, without limitation, for (i) price
adjustments and damages; (ii) obsolescence of
Inventory; (iii) special order goods and
deferred shipment sales; (iv) accrued but
unpaid ad valorem and personal property tax
liability; and (v) market value declines.
"Borrowing Base Certificate" shall mean a
certificate of an Authorized Signatory of the
Borrower substantially in the form of Exhibit C
attached hereto.
"Borrowing Base Deficiencies" shall mean any
condition wherein the Aggregate Revolving Credit
Obligations exceed the Borrowing Base as set forth
on the most recent Borrowing Base Certificate
delivered to the Agent and the Lenders or as
otherwise determined by the Agent.
"Business Day" shall mean any day excluding
Saturday, Sunday and any day which is a legal
holiday under the laws of the State of Illinois or
the State of New York or is a day on which banking
institutions located in either of such states are
closed; provided, however, that when used with
reference to a Eurodollar Advance (including the
making, continuing, prepaying or repaying of any
Eurodollar Advance), the term "Business Day" shall
also exclude any day in which banks are not open
for dealings in deposits of United States dollars
on the London interbank market.
"Capital Expenditures" shall mean, for any
period, on a consolidated basis for the Borrower
and the Borrower's Subsidiaries, the aggregate of
all expenditures made by the Borrower or any of
the Borrower's Subsidiaries during such period
that, in conformity with GAAP, are required to be
included in or reflected on the consolidated
balance sheet as a capital asset of the Borrower
or any of the Borrower's Subsidiaries, including
Capitalized Lease Obligations.
"Capital Stock" shall mean, as applied to any
Person, any capital stock of such Person,
regardless of class or designation, and all
warrants, options, purchase rights, conversion or
exchange rights, voting rights, calls or claims of
any character with respect thereto.
"Capitalized Lease Obligation" shall mean
that portion of any obligation of a Person as
lessee under a lease which at the time would be
required to be capitalized on the balance sheet of
such lessee in accordance with GAAP.
"Change of Control" shall mean any change in
the ownership of the Borrower's Capital Stock that
results in less than a majority of the Borrower's
outstanding Voting Stock being owned beneficially
by the LGE Group.
"Citibank" shall mean Citibank, N.A., a
national banking association.
"Cleanup Period" shall have the meaning set
forth in Section 2.6(c).
"Clearing Account" shall mean Account
No. 4072-6121 (or such other account number
established by the Agent for purposes of
Section 5.15 hereof) maintained by the Agent at
Citibank, N.A. pursuant to Section 5.15 of this
Agreement, and over which the Agent has the sole
and exclusive access and control for withdrawal
purposes pursuant to Section 5.15 hereof.
"Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
"Collateral" shall mean all property pledged
as collateral security for the Obligations
pursuant to the Security Documents or otherwise,
and all other property of the Borrower or any
Material Subsidiary that is now or hereafter in
the possession or control of the Agent, the
Issuing Banks or any Lender or on which the Agent,
the Issuing Banks or any Lender has been granted a
Lien.
"Commercial Letter of Credit" shall mean a
documentary letter of credit issued in respect of
the purchase of goods or services by the Borrower
in the ordinary course of its business.
"Commitment Ratios" shall mean the percentage
in which the Lenders are severally bound to make
Advances to the Borrower under the Revolving Loan
Commitment and the Term Loan Commitment, which, as
of the Agreement Date, are set forth (together
with dollar amounts thereof) on Schedule 1
attached hereto.
"Commitments" shall mean, collectively, the
Revolving Loan Commitment and the Term Loan
Commitment.
"Current Assets" shall mean, with respect to
the Borrower and the Borrower's Subsidiaries taken
on a consolidated basis, the aggregate amount of
all assets which would, in accordance with GAAP,
properly be classified as current assets;
provided, however, such method of determination
shall be modified where in conflict with the
following: Current Assets will include only those
assets which may, in the ordinary course of
business, be reasonably converted into cash within
a period of one (1) year from the date as of which
such computation is being made, and Current Assets
will also include, without double counting, all
Accounts of Finance Corp. as of such date
purchased from the Borrower or Microcircuits
pursuant to the Receivables Securitization, and
Current Assets will exclude (a) loans and advances
to or receivables due from employees or officers
of the Borrower, and (b) all deferred assets,
other than prepaid items such as insurance, taxes,
interest, commissions, rents, royalties, and
similar items.
"Current Liabilities" shall mean, with
respect to the Borrower and the Borrower's
Subsidiaries, taken on a consolidated basis, the
aggregate amount of all current obligations, as
determined in accordance with GAAP, but in any
event shall include the total amount of the LGE
Payable, the total amount of the Revolving Loans,
the current portion of the Term Loan and all
obligations under the Investor Certificates, each
in the amount outstanding on the date as of which
such computation is being made, and all
obligations except those having a maturity date
which is more than one (1) year from the date as
of which such computation is being made.
"Date of Issue" shall mean the date on which
an Issuing Bank issues a Letter of Credit pursuant
to Section 2.15 hereof.
"Default" shall mean any Event of Default,
and any of the events specified in Section 8.1
hereof regardless of whether there shall have
occurred any passage of time or giving of notice
(or both) that would be necessary in order to
constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum
interest rate equal to, (a) with respect to
outstanding principal, the sum of (i) the
applicable Interest Rate Basis, plus (ii) the
applicable Interest Rate Margin plus (iii) two
percent (2%), and (b) with respect to all other
Obligations, the sum of (i) the Base Rate, plus
(ii) the Interest Rate Margin plus (iii) two
percent (2%).
"Distribution Instructions Letter" shall have
the meaning set forth in Section 3.1 hereof.
"Dividends" shall mean, any direct or
indirect distribution, dividend, or payment to any
Person on account of any Capital Stock of the
Borrower or any of the Borrower's Subsidiaries.
"EBITDA" shall mean, with respect to the
Borrower on a consolidated basis for any period,
the Net Income for such period, plus, without
duplication and to the extent reflected as charges
in the statement of Net Income for such period,
the sum of (a) income taxes, (b) Interest Expense
and (c) depreciation and amortization expense.
"Eligible Finished Goods TV and Other
Inventory" shall mean, as of any particular time,
the portion of the Inventory which constitutes
finished goods and which: (a) is a television or
any other Inventory (except a video cassette
recorder) manufactured or purchased by the
Borrower; (b) in the opinion of the Agent, is not
obsolete, slow-moving, unmerchantable, and is
readily salable in its current form; (c) is new
and does not constitute any finished goods that
were returned to the Borrower due to defect or
damage; (d) fulfills each and every one of the
Inventory Eligibility Requirements; and (e) is not
Eligible Picture Tube Inventory or Eligible
Finished Goods VCR Inventory.
"Eligible Finished Goods VCR Inventory" shall
mean, as of any particular time, the portion of
the Inventory which constitutes finished goods and
which: (a) is a video cassette recorder
manufactured or purchased by the Borrower; (b) in
the opinion of the Agent, is not obsolete,
slow-moving, unmerchantable, and is readily
salable in its current form; (c) is new and does
not constitute any finished goods that were
returned to the Borrower due to defect or damage;
(d) fulfills each and every one of the Inventory
Eligibility Requirements; and (e) is not Eligible
Picture Tube Inventory or Eligible Finished Goods
TV and Other Inventory.
"Eligible Inventory" shall mean Eligible
Picture Tube Inventory, Eligible Finished Goods TV
and Other Inventory and Eligible Finished Goods
VCR Inventory.
"Eligible Picture Tube Inventory" shall
mean, as of any particular time, the portion of
the Inventory of the Borrower which constitutes
color television picture tubes and which: (a) was
manufactured or purchased by the Borrower; (b) in
the opinion of the Agent, is not obsolete,
slow-moving, unmerchantable, and is readily
salable in its current form; (c) is new and does
not constitute any finished goods that were
returned to the Borrower due to defect or damage;
(d) fulfills each and every one of the Inventory
Eligibility Requirements; and (e) is not Eligible
Finished Goods VCR Inventory or Eligible Finished
Goods TV and Other Inventory.
"Environmental Laws" shall mean any and all
applicable federal, state, local or municipal
laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any
Governmental Authority regulating, relating to or
imposing liability or standards of conduct
concerning environmental protection matters,
including without limitation, Hazardous Materials,
as now or may at any time during the term hereof
be in effect.
"Equipment" shall mean all machinery,
apparatus, equipment, fittings, furniture,
fixtures, motor vehicles and other tangible
personal property (other than Inventory) of every
kind and description used in the Borrower's
operations or owned by the Borrower or in which
the Borrower has an interest, whether now owned or
hereafter acquired by the Borrower and wherever
located, and all parts, accessories and special
tools and all increases and accessions thereto and
substitutions and replacements therefor.
"ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as in effect on the
Agreement Date and as such Act may be amended
thereafter from time to time.
"ERISA Affiliate" shall mean any "affiliate"
of the Borrower within the meaning of Section 414
of the Code.
"Escrow Amount" shall have the meaning set
forth in Section 3.1(a)(xxiii).
"Eurodollar Advance" shall mean an Advance
which the Borrower requests to be made as a
Eurodollar Advance or which is reborrowed as a
Eurodollar Advance, in accordance with the
provisions of Section 2.2 hereof.
"Eurodollar Advance Period" shall mean, for
each Eurodollar Advance, each one, two, three,
six, nine or, if available, twelve month period,
as selected by the Borrower pursuant to Section
2.2 hereof, during which the applicable Eurodollar
Rate (but not the applicable Interest Rate Margin)
shall remain unchanged. Notwithstanding the
foregoing, however: (i) any applicable Eurodollar
Advance Period which would otherwise end on a day
which is not a Business Day shall be extended to
the next succeeding Business Day, unless such
Business Day falls in another calendar month, in
which case such Eurodollar Advance Period shall
end on the next preceding Business Day; (ii) any
applicable Eurodollar Advance Period which begins
on a day for which there is no numerically
corresponding day in the calendar month during
which such Eurodollar Advance Period is to end
shall (subject to clause (i) above) end on the
last day of such calendar month; and (iii) no
Eurodollar Advance Period shall extend beyond the
Maturity Date or such earlier date as would
interfere with the repayment obligations of the
Borrower under Section 2.6 hereof. Interest shall
be due and payable with respect to any Advance as
provided in Section 2.3 hereof.
"Eurodollar Basis" shall mean a simple per
annum interest rate equal to the quotient of (i)
the Eurodollar Rate divided by (ii) one minus the
Eurodollar Reserve Percentage, stated as a
decimal. The Eurodollar Basis shall be rounded
upward to the nearest one sixteenth of one percent
(1/16%) and, once determined, shall remain
unchanged during the applicable Eurodollar Advance
Period, except for changes to reflect adjustments
in the Eurodollar Reserve Percentage.
"Eurodollar Rate" shall mean, for any
Eurodollar Advance Period, the average (rounded
upward to the nearest one sixteenth of one percent
(1/16%)) of the interest rates per annum at which
deposits in United States dollars for such
Eurodollar Advance Period are offered by the
principal office of Citibank in London, England to
prime banks in the London interbank market at
approximately 11:00 a.m. (New York time) two (2)
Business Days before the first day of such
Eurodollar Advance Period, in an amount
approximately equal to the principal amount of,
and for a length of time approximately equal to
the Eurodollar Advance Period for, the Eurodollar
Advance sought by the Borrower.
"Eurodollar Reserve Percentage" shall mean
the percentage which is in effect from time to
time under Regulation D of the Board of Governors
of the Federal Reserve System, as such regulation
may be amended from time to time, as the maximum
reserve requirement applicable with respect to
Eurocurrency Liabilities (as that term is defined
in Regulation D), whether or not any Lender has
any Eurocurrency Liabilities subject to such
reserve requirement at that time. The Eurodollar
Basis for any Eurodollar Advance shall be adjusted
as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" shall mean any of the
events specified in Section 8.1 hereof, provided
that any requirement for notice or lapse of time,
or both, has been satisfied.
"Fee Letter" shall mean that certain fee
letter of even date herewith executed by the
Borrower and addressed to the Agent.
"Finance Corp." shall mean Zenith Finance
Corporation, a Delaware corporation and a
Subsidiary of the Borrower.
"Finance Corp. Subordinated Note" shall mean
those certain subordinated promissory notes of
even date herewith issued by Finance Corp. in
favor of the Borrower and microcircuits,
respectively, pursuant to the Receivables
Securitization.
"Fixed Charge Coverage Ratio" shall mean,
with respect to the Borrower and the Borrower's
Subsidiaries on a consolidated basis for any
period, the ratio of (a) (i) EBITDA minus (ii) the
sum of (A) Capital Expenditures made during such
period and (B) taxes paid in cash during such
period (without giving effect to any tax refunds)
to (b) the sum of (i) scheduled payments of
principal required to be made with respect to
Funded Debt during such period, and (ii) cash
Interest Expense during such period.
"Foreign Exchange Agreement" shall mean a
foreign currency exchange hedging product
agreement providing foreign currency exchange
protection, and arising at any time between the
Borrower, on the one hand, and the Agent (or an
Affiliate of the Agent), or one or more of the
Lenders (or an Affiliate of a Lender), on the
other hand, as such agreement may be modified,
supplemented or amended, and in effect from time
to time.
"Funded Debt" shall mean, with respect to the
Borrower or any of the Borrower's Subsidiaries on
a consolidated basis, all obligations, liabilities
and indebtedness of the types described in
subsections (a) through (e) of the definition of
Indebtedness set forth herein, including, but not
limited to, all obligations under the Loan
Documents and the Subordinated Debentures, and all
obligations under the Investor Certificates.
"GAAP" shall mean, as in effect from time to
time, United States generally accepted accounting
principles consistently applied.
"Governmental Authority" shall mean any
nation or government, any state or other political
subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or
administrative functions of or pertaining
government.
"Gross Proceeds" shall mean, with respect to
any sale, lease, transfer or other disposition of
assets by the Borrower, the aggregate amount of
cash received by the Borrower for such assets,
prior to the deduction of sales commissions,
underwriting discounts, and other transaction
costs and expenses.
"Guaranty" or "guaranteed," as applied to an
obligation (each a "primary obligation"), shall
mean and include (a) any guaranty, direct or
indirect, in any manner, of any part or all of
such primary obligation, and (b) any agreement,
direct or indirect, contingent or otherwise, the
practical effect of which is to assure in any way
the payment or performance (or payment of damages
in the event of non-performance) of any part or
all of such primary obligation, including, without
limiting the foregoing, any reimbursement
obligations as to amounts drawn down by
beneficiaries of outstanding letters of credit,
and any obligation of any Person, whether or not
contingent, (i) to purchase any such primary
obligation or any property or asset constituting
direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or
payment of such primary obligation or (2) to
maintain working capital, equity capital or the
net worth, cash flow, solvency or other balance
sheet or income statement condition of any other
Person, (iii) to purchase property, assets,
securities or services primarily for the purpose
of assuring the owner or holder of any primary
obligation of the ability of the primary obligor
with respect to such primary obligation to make
payment thereof or (iv) otherwise to assure or
hold harmless the owner or holder of such primary
obligation against loss in respect thereof.
"Hazardous Materials" shall mean any
hazardous materials, hazardous wastes, hazardous
constituents, hazardous or toxic substances,
petroleum products (including crude oil or any
fraction thereof), friable asbestos containing
materials defined or regulated as such in or under
any Environmental Law.
"Immaterial Subsidiary" shall mean any
domestic or foreign Subsidiary of the Borrower,
now existing or hereafter created, which owns
assets (including stock but excluding intercompany
receivables) having an aggregate book value not
exceeding $750,000, and which is not material to
the conduct of the Borrower's business operations.
"Indebtedness" shall mean, with respect to
the Borrower and the Borrower's Subsidiaries, (a)
any obligation for borrowed money; (b) any
obligation evidenced by bonds, debentures, notes
or other similar instruments; (c) any obligation
to pay the deferred purchase price of property or
for services (other than in the ordinary course of
business); (d) any Capitalized Lease Obligation;
(e) any obligation or liability of others secured
by a Lien on property owned by the Borrower or
such Subsidiary, whether or not such obligation or
liability is assumed; (f) any obligation under any
Interest Hedge Agreement or Foreign Exchange
Agreement; (g) any Guaranty (except items of
shareholders' equity or Capital Stock or surplus
or general contingency or deferred tax reserves);
(h) any letter of credit issued for the account of
the Borrower or such Subsidiary; and (i) any other
obligation or liability which is required by GAAP
to be shown as a liability on a consolidated
balance sheet of the Borrower and its Subsidiaries
(other than reserves required under GAAP).
"Intellectual Property" means, with respect
to any Person, collectively, such Person's Patent
Property and Trademark Property.
"Intellectual Property Security Agreements"
shall mean that (a) certain Patent Collateral
Assignment and Security Agreement of even date
herewith between the Borrower and the Agent,
pursuant to which the Borrower grants to the
Agent, on its behalf and on behalf of the Issuing
Banks and the Lenders, a security interest in all
of the Borrower's right, title, and interest in
and to the Tuning Patents, all License Agreements,
all Tuning Patent Royalties and proceeds thereof,
and (b) certain Trademark Collateral Security
Agreement of even date herewith between the
Borrower and the Agent, pursuant to which the
Borrower grants to the Agent, on its behalf and on
behalf of the Issuing Banks and the Lenders, a
security interest in all of the Borrower's right,
title, and interest in and to its Trademark
Property.
"Interest Coverage Ratio" shall mean for any
period, the ratio of (a) the Borrower's EBITDA (on
a consolidated basis with the Borrower's
Subsidiaries) for such period, to (b) the
Borrower's cash Interest Expense (on a
consolidated basis with the Borrower's
Subsidiaries) for such period.
"Interest Expense" shall mean, for any
period, interest expense of the Borrower
(including interest on the LGE Payable) and the
Borrower's Subsidiaries, fees paid by the Borrower
and the Borrower's Subsidiaries under the
Securitization Documents for such period,
determined on a consolidated basis in accordance
with GAAP, and interest paid on the Investor
Certificates.
"Interest Hedge Agreements" shall mean the
obligations of any Person pursuant to any
arrangement with any other Person whereby,
directly or indirectly, such Person is entitled to
receive from time to time periodic payments
calculated by applying either a floating or a
fixed rate of interest on a stated notional amount
in exchange for periodic payments made by such
Person calculated by applying a fixed or a
floating rate of interest on the same notional
amount and shall include, without limitation,
interest rate swaps, caps, floors, collars and
similar agreements.
"Interest Rate Basis" shall mean the Base
Rate or the Eurodollar Basis, as appropriate.
"Interest Rate Margin" shall mean, (i) with
respect to Base Rate Advances, one and three-
quarters percent (1.75%), and (ii) with respect to
Eurodollar Advances, three percent (3.00%).
"Inventory" shall mean all goods, merchandise
and other personal property owned and held for
sale, and all raw materials, work or goods in
process, materials and supplies of every nature
which contribute to the finished products of the
Borrower and any of the Borrower's Subsidiaries in
the ordinary course of its business, whether now
owned or hereafter acquired by the Borrower and
any of the Borrower's Subsidiaries.
"Inventory Eligibility Requirements" shall
mean that the Inventory:
(a) is owned solely by the Borrower;
(b) conforms to all of the warranties and
representations regarding the same which are set
forth in this Agreement or any of the other Loan
Documents;
(c) is located in the continental United
States either (i) on real property owned by the
Borrower, or (ii) on leased premises in regard to
which the landlord thereof shall have executed and
delivered to the Agent an agreement, which shall
be in form and substance acceptable to the Agent,
waiving any lien rights such landlord may hold in
regard to the Borrower's property in favor of the
Lenders;
(d) is not subject to any claim of
reclamation, or Lien, adverse claim, interest or
right of any other Person;
(e) consists of finished goods (which may
include color television picture tubes) purchased
or manufactured by the Borrower in the ordinary
course of its business and does not consist of
Inventory in transit, work in process or raw
materials;
(f) has not been consigned to or by any
Person;
(g) is in good condition and meets all
standards imposed by any Person having regulatory
authority over such goods, its use and/or sale, is
not obsolete, and is currently saleable in the
normal course of the Borrower's business;
(h) does not include any Inventory scheduled
for return to vendors, excess Inventory, slow-
moving or obsolete Inventory, clearance Inventory,
damaged goods, display items, packaging materials,
labels, name plates or similar supplies, cash
discounts, sample Inventory or shrinkage;
(i) is not located at any vendor/trade show;
(j) is not in the possession of LGE;
(k) has not been removed from regular stock
for quality rework or other corporate engineering
matters;
(l) is personal property in which the
Borrower has granted a valid and continuing first
Lien in favor of the Agent and the Lenders
pursuant to the Security Documents, and as to
which all action necessary to perfect such
security interest shall have been taken; and
(m) is not covered, in whole or in part, by
any security agreement, financing statement,
equivalent security or Lien instrument or
continuation statement which is on file or of
record in any public office, except such as may
have been filed in favor of the Agent and the
Lenders pursuant to the Security Documents.
"Investor Certificates" shall have the
meaning ascribed thereto in the Pooling and
Servicing Agreement.
"Issuing Banks" shall mean Citibank, N.A.,
and any other Person who hereafter may be
designated as an Issuing Bank pursuant to an
Assignment and Assumption Agreement or otherwise;
and "Issuing Bank" shall mean any one of the
foregoing.
"Lease Transactions" shall mean,
collectively, the Salomon Lease Transaction and
the Subsequent Lease Transaction.
"Lenders" shall mean those lenders whose
names are set forth on the signature pages hereof
under the heading "Lenders" and any assignees of
the Lenders who hereafter become parties hereto
pursuant to and in accordance with Section 10.5
hereof; and "Lender" shall mean any one of the
foregoing Lenders.
"Letter of Credit Commitment" shall mean the
several obligations of the Issuing Banks to issue
Letters of Credit in an aggregate face amount from
time to time not to exceed $15,000,000.
"Letter of Credit Obligations" shall mean, at
any time, the sum of (a) an amount equal to the
aggregate undrawn and unexpired amount (including
the amount to which any such Letter of Credit can
be reinstated pursuant to the terms hereof) of the
then outstanding Letters of Credit and (b) an
amount equal to the aggregate drawn, but
unreimbursed drawings of any Letters of Credit.
"Letter of Credit Reserve Account" shall mean
any account maintained by the Agent for the
benefit of any Issuing Bank, the proceeds of which
shall be applied as provided in Section 8.2(d)
hereof.
"Letters of Credit" shall mean either Standby
Letters of Credit or Commercial Letters of Credit
issued by Issuing Banks on behalf of the Borrower
from time to time in accordance with Section 2.15
hereof.
"LGE" shall mean LG Electronics, Inc., a
corporation organized under the laws of the
Republic of Korea.
"LGE Group" shall mean LGE and any other
Person that, directly or indirectly, is controlled
by LGE. For purposes of this definition,
"controlled" with respect to LGE means the
possession, direct or indirect, of the power
either (a) to vote more than 50% of the Voting
Stock of such Person or (b) to direct or cause the
direction of the management and policies of such
Person, whether through the ownership of Voting
Stock, by contract or otherwise.
"LGE Payable" shall mean, at any time, the
aggregate outstanding account payable of the
Borrower to LGE arising from the Borrower's
purchases from LGE in the ordinary course of the
Borrower's business.
"License Agreements" shall mean all
agreements, whether now or hereafter in existence,
between the Borrower, as licensor, and any other
Person, as licensee, pursuant to which the
Borrower grants to such Person any license or
other right in connection with any Tuning Patent.
"Lien" shall mean, with respect to any
property, any mortgage, lien, pledge, negative
pledge agreement, assignment, charge, security
interest, title retention agreement, levy,
execution, seizure, attachment, garnishment, or
other encumbrance of any kind in respect of such
property, whether or not xxxxxx, vested, or
perfected.
"Loan Account" shall have the meaning set
forth in Section 2.7 hereof.
"Loan Documents" shall mean this Agreement,
the Notes, the Security Documents, the Receivables
Intercreditor Agreement, the Blocked Account
Letters, the Set-Off Waiver Letter, the Fee
Letter, the Distribution Instruction Letter, all
reimbursement agreements relating to Letters of
Credit issued hereunder, all landlord or bailee
waiver agreements in favor of the Agent, all legal
opinions or reliance letters issued by counsel to
the Borrower in connection herewith, all Requests
for Advance, all Requests for Issuance of Letters
of Credit, all Borrowing Base Certificates,
Interest Hedge Agreements between the Borrower, on
the one hand, and the Agent (or an affiliate of
the Agent) or one or more of the Lenders (or an
affiliate of a Lender), on the other hand, Foreign
Exchange Agreements and all other documents,
instruments, certificates, and agreements executed
or delivered in connection with or contemplated by
this Agreement, including, without limitation, any
security agreements or guaranty agreements from
the Borrower's Subsidiaries to the Agent, the
Lenders and the Issuing Banks.
"Loans" shall mean, collectively, the amounts
advanced by the Lenders to the Borrower under the
Commitment, not to exceed the amount of the
Commitment, and evidenced by the Notes, and shall
include the Revolving Loans, the Term Loan, and
the Swing Loans.
"Majority Lenders" shall mean Lenders (whose
voting rights hereunder have not been restricted
pursuant to Section 2.2(e) hereof) the total of
whose Commitment Ratios equals or exceeds fifty-
one percent (51%) of the Commitment Ratios of all
Lenders entitled to vote hereunder.
"Material Subsidiaries" shall mean Zenith
Electronics Corporation of Texas, a Texas
corporation, Zenith Microcircuits Corporation, a
Delaware corporation, Zenith Video Tech
Corporation-Florida, a Delaware corporation,
Zenith Video Tech Corporation, a Delaware
corporation, and any other domestic Subsidiary of
the Borrower, now or hereafter created, which owns
assets (including stock but excluding intercompany
receivables) having an aggregate book value in
excess of $750,000; and "Material Subsidiary"
shall include any one of the foregoing; provided,
however, (i) Finance Corp. shall not be deemed to
be a "Material Subsidiary" at any time prior to
the termination of the Receivables Securitization,
and (ii) Zenith Electronics Corporation of Arizona
shall not be deemed to be a "Material Subsidiary"
unless it owns assets (including stock but
excluding intercompany receivables) having an
aggregate book value in excess of $1,500,000.
"Materially Adverse Effect" shall mean any
materially adverse effect (a) upon the business,
assets, liabilities, condition (financial or
otherwise), or results of operations of the
Borrower, or (b) upon the ability of the Borrower
to perform under this Agreement or any other Loan
Document by the Borrower, or (c) upon the rights,
benefits or interests of the Agent, the Lenders or
the Issuing Banks in or to this Agreement, any
other Loan Document or the Collateral, in each
case, resulting from any act, omission, situation,
status, event, or undertaking, either singly or
taken together.
"Maturity Date" shall mean March 31, 2000, or
such earlier date as payment of the Loans shall be
due (whether by acceleration or otherwise).
"Mexican Subsidiaries" shall mean Cable
Productos de Chihuahua, S.A. de C.V., Electro
Partes xx Xxxxxxxxx, X.X. de C.V., Partes de
Television xx Xxxxxxx, X.X. de C.V., Radio
Componentes de Mexico, S.A. de C.V., and Zenco de
Chihuahua, S.A. de C.V., and "Mexican Subsidiary"
shall mean any one of the foregoing.
"Microcircuits" shall mean Zenith
Microcircuits Corporation, a Delaware corporation.
"Multiemployer Plan" shall have the meaning
set forth in Section 4001(a)(3) of ERISA.
"Necessary Authorizations" shall mean all
material authorizations, consents, permits,
approvals, licenses, and exemptions from, and all
filings and registrations with, and all reports
to, any Governmental Authority whether federal,
state, local, and all agencies thereof, which are
required for the conduct of the businesses and the
ownership (or lease) of the properties and assets
of the Borrower.
"Net Cash Proceeds" shall mean, with respect
to any sale, lease, transfer or other disposition
of assets by the Borrower or any issuance by the
Borrower of any Capital Stock or the incurrence by
the Borrower of any Funded Debt (other than the
Obligations), the aggregate amount of cash
received for such assets or Capital Stock, or as a
result of such Funded Debt, net of reasonable and
customary transaction costs properly attributable
to such transaction and payable by the Borrower in
connection with such sale, lease, transfer or
other disposition of assets or the issuance of any
Capital Stock or the incurrence of any Funded
Debt, including without limitation, sales
commissions and underwriting discounts.
"Net Income" shall mean, for any period, the
consolidated net income (or deficit) of the
Borrower and the Borrower's Subsidiaries for such
period, determined in accordance with GAAP.
"Notes" shall mean, collectively, the Term
Loan Notes and the Revolving Loan Notes.
"Obligations" shall mean (a) all payment and
performance obligations of the Borrower to the
Lenders, the Issuing Banks, and the Agent under
this Agreement and the other Loan Documents
(including all Letter of Credit Obligations and
including any interest, fees and expenses that,
but for the provisions of the Bankruptcy Code,
would have accrued), as they may be amended from
time to time, or as a result of making the Loans
or issuing the Letters of Credit, (b) the
obligation to pay an amount equal to the amount of
any and all damages which the Issuing Banks, the
Lenders and the Agent, or any of them, may suffer
by reason of a breach by the Borrower of any
obligation, covenant, or undertaking with respect
to this Agreement or any other Loan Document, and
(c) any obligations of the Borrower to the Agent
(or an affiliate of the Agent) or any Lender (or
an affiliate of a Lender) under any Interest Hedge
Agreement or Foreign Exchange Agreement permitted
hereunder.
"Patent Property" shall mean:
(ii) all of the Borrower's patents
(including the Tuning Patents), patent
applications (including, without limitation,
all patents and patent applications in
preparation for filing) and patent
disclosures throughout the world, including
without limitation, each patent and patent
application referred to in Part A-1 of
Schedule 4.1(o);
(iii) all reissues, divisions,
continuations, continuations-in-part,
revisions, extensions, renewals and
reexaminations of any of the items described
in clause (a) of this definition; and
(iv) all patent licenses of the Borrower
(whether as licensee or licensor), including
each patent license referred to in Part A-2
of Schedule 4.1(o).
"Payment Date" shall mean the last day of
each Eurodollar Advance Period for a Eurodollar
Advance.
"Permitted Amount" shall have the meaning set
forth in Section 7.11.
"Permitted Liens" shall mean, as applied to
any Person:
(a) Any Lien in favor of the Agent, the
Issuing Banks or the Lenders given to secure the
Obligations;
(b) (i) Liens on real estate for real
estate taxes not yet delinquent and (ii) Liens for
taxes, assessments, judgments, governmental
charges or levies, or claims not yet delinquent or
the non-payment of which is being diligently
contested in good faith by appropriate proceedings
and for which adequate reserves have been set
aside on such Person's books;
(c) Liens of carriers, warehousemen,
mechanics, laborers, suppliers, workers and
materialmen incurred in the ordinary course of
business for sums not yet due or being diligently
contested in good faith, if such reserve or
appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of
business in connection with worker's compensation
and unemployment insurance or other types of
social security benefits;
(e) Easements, rights-of-way, restrictions,
and other similar encumbrances on the use of real
property which do not interfere with the ordinary
conduct of the business of such Person;
(f) Purchase money security interests
provided that such Lien attaches only to the asset
so purchased by the Borrower and secures only
Indebtedness incurred by the Borrower in order to
purchase such asset, but only to the extent
permitted by Section 7.1(d) hereof;
(g) Deposits to secure the performance of
bids, trade contracts, tenders, sales, leases,
statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like
nature incurred in the ordinary course of
business;
(h) Liens on assets of the Borrower on the
Agreement Date as more fully set forth on Schedule
3, attached hereto; and
(i) Liens in favor of, or for the benefit
of, the Receivables Trustee under the Zenith Trade
Receivables Master Trust 1997 (as defined in the
Securitization Documents), or the holders of
certificates issued pursuant to the Securitization
Documents as provided for therein, or Finance
Corp. pursuant to the Receivables Purchase
Agreements.
"Person" shall mean an individual,
corporation, partnership, trust, joint stock
company, limited liability company, unincorporated
organization, or a government or any agency or
political subdivision thereof.
"Plan" shall mean an employee benefit plan
within the meaning of Section 3(3) of ERISA or any
other plan maintained for employees of any Person
or any Affiliate of such Person.
"Pledge Agreement" shall mean that certain
Pledge Agreement of even date herewith executed by
the Borrower in favor of the Agent, pursuant to
which the Borrower pledges to the Agent, for its
benefit and for the benefit of the Issuing Banks
and the Lenders, all of the Borrower's right,
title and interest in and to the Capital Stock of
its domestic Subsidiaries, and shall include any
supplement thereto executed in accordance with
Section 7.7(g) hereof, as the same may be amended,
supplemented or modified from time to time.
"Pooling and Servicing Agreement" shall mean
that Pooling and Servicing Agreement of even date
herewith executed by and among the Borrower,
Finance Corp., and the Receivables Trustee,
together with the Series 1997-1 Supplement
thereto, as the same may be amended, supplemented
or otherwise modified from time to time.
"Property" shall mean any real property or
personal property, plant, building, facility,
structure, underground storage tank or unit,
equipment, Inventory or other asset owned, leased
or operated by the Borrower or any of the
Borrower's Subsidiaries (including, without
limitation, any surface water thereon or adjacent
thereto, and soil and groundwater thereunder).
"Receivables Intercreditor Agreement" shall
mean the Intercreditor Agreement, dated the date
hereof, by and among the Agent (in its capacity as
agent under this Agreement and in its capacity as
agent for Corporate Receivables Corporation,
Incorporated under a certificate purchase
agreement), Finance Corp., the Receivables
Trustee, Microcircuits, and the Borrower, as the
same may be amended, supplemented or otherwise
modified from time to time.
"Receivables Purchase Agreements" shall mean
the Receivables Purchase Agreement, dated the date
hereof, between the Borrower and Finance Corp. and
the Receivables Purchase Agreement, dated the date
hereof, between Microcircuits and Finance Corp.
"Receivables Securitization" shall mean the
transactions described and contemplated in the
Securitization Documents.
"Receivables Trustee" shall mean Bankers
Trust Company, or any other Person serving as
trustee under the Zenith Trade Receivables Master
Trust 1997.
"Reimbursement Obligations" shall mean the
payment obligations of the Borrower under Section
2.15(d) hereof.
"Replacement Event" shall have the meaning
ascribed thereto in Section 10.16 hereof.
"Reportable Event" shall have the meaning set
forth in Section 4043(c) of ERISA and the
regulations thereunder, but shall not include any
event which is not subject to the thirty (30) day
notice requirement of such regulations other than
29 Code of Federal Regulations Sections 2615.11,
2615.12 and 2615.19.
"Request for Advance" shall mean any
certificate signed by an Authorized Signatory
requesting an Advance hereunder which will
increase the aggregate amount of the Loans
outstanding, which certificate shall be
denominated a "Request for Advance," and shall be
in substantially the form of Exhibit D attached
hereto. Each Request for Advance shall, among
other things, specify the date of the Advance,
which shall be a Business Day, the amount of the
Advance, and the type of Advance.
"Request for Issuance of Letter of Credit"
shall mean any certificate signed by an Authorized
Signatory requesting that an Issuing Bank issue a
Letter of Credit hereunder, which certificate
shall be in substantially the form of Exhibit E
attached hereto, and shall, among other things,
(a) specify that the requested Letter of Credit is
either a Commercial Letter of Credit or a Standby
Letter of Credit, (b) the stated amount of the
Letter of Credit (which shall be in United States
Dollars), (c) the effective date (which shall be a
Business Day) for the issuance of such Letter of
Credit, (d) the date on which such Letter of
Credit is to expire (which shall be a Business Day
and which shall be subject to Section 2.15(a)
hereof), (e) the Person for whose benefit such
Letter of Credit is to be issued, (f) other
relevant terms of such Letter of Credit, and (g)
the Available Letter of Credit Amount as of the
scheduled date of issuance of such Letter of
Credit.
"Restricted Payment" shall mean (a) Dividends
and (b) any payment of any management, consulting
or similar fees payable by the Borrower or any of
the Borrower's Subsidiaries to any Affiliate.
"Restricted Purchase" shall mean any payment
on account of the purchase, redemption, or other
acquisition or retirement of any shares of Capital
Stock of the Borrower or any Subsidiary of the
Borrower.
"Revolving Loan Commitment" shall mean the
several obligations of the Lenders to advance the
aggregate amount of up to $65,000,000 to the
Borrower on or after the Agreement Date, in
accordance with their respective Commitment Ratios
relating to the Revolving Loan, pursuant to the
terms hereof, and as such amount may be reduced
from time to time, pursuant to the terms hereof.
"Revolving Loan Notes" shall mean those
certain promissory notes of even date in the
aggregate principal amount of $65,000,000, issued
by the Borrower to each of the Lenders and
substantially in the form of Exhibit F attached
hereto, and any extensions, renewals or amendments
to, or replacements of, the foregoing.
"Revolving Loans" shall mean, collectively,
the amounts advanced from time to time by the
Lenders to the Borrower under the Revolving Loan
Commitment, not to exceed the amount of the
Revolving Loan Commitment, and evidenced by the
Revolving Loan Notes.
"Salomon Lease Transaction" shall mean those
certain leveraged lease financings of certain of
the Borrower's and Zenith Electronics Corporation
of Texas's manufacturing equipment used in the
production of color television picture tubes,
computer display tubes and color projection
television tubes, and of certain plastic molding
equipment, arranged for the Borrower and Zenith
Electronic Corporation of Texas by Salomon
Brothers and consummated on or prior to the
Agreement Date, as more fully described on
Schedule 2 hereto.
"Securitization Documents" shall mean the
Receivables Purchase Agreements, the Receivables
Intercreditor Agreement, the Pooling and Servicing
Agreement, the Finance Corp. Subordinated Notes,
and any other agreement, document or instrument
entered into by the Borrower, Microcircuits,
Finance Corp. or the Agent in connection with the
Receivables Securitization.
"Security Agreement" shall mean that certain
Security Agreement of even date herewith between
the Borrower and the Agent, on its behalf and on
behalf of the Issuing Banks and the Lenders, a
copy of which is attached as Exhibit G hereto, as
the same may be amended or modified from time to
time hereafter.
"Security Documents" shall mean,
collectively, the Security Agreement, the Pledge
Agreement, the Assignment of Notes, the
Intellectual Property Security Agreements, the
Subsidiary Guaranty, the Subsidiary Security
Agreement, all UCC-1 financing statements and any
other document, instrument or agreement granting
Collateral for the Obligations, as the same may be
amended or modified from time to time.
"Set-Off Waiver Letter" shall mean that
certain letter agreement of even date herewith
executed by LGE in favor of the Agent and pursuant
to which LGE waives all rights to set-off against
amounts owed to the Borrower, in form and
substance satisfactory to the Agent.
"Settlement Date" shall have the meaning set
forth in Section 2.2(f).
"Standby Letter of Credit" shall mean a
Letter of Credit issued to support obligations of
the Borrower incurred in the ordinary course of
its business, and which is not a Commercial Letter
of Credit.
"Subordinated Debentures" shall mean,
collectively, (a) those certain 8.5% Senior
Subordinated Convertible Debentures issued by the
Borrower, due January 18, 2001 in an aggregate
principal amount not exceeding $20,000,000, and
governed by that certain Debenture Purchase
Agreement dated as of January 11, 1994, between
the Borrower and the institutional investor named
therein (as amended prior to the Agreement Date),
(b) those certain 6.25% Convertible Subordinated
Debentures issued by the Borrower, due April 1,
2011 in an aggregate principal amount not
exceeding $115,000,000, and governed by that
certain Indenture dated as of April 1, 1986,
between the Borrower and The First National Bank
of Boston, as trustee (as amended prior to the
Agreement Date) and (c) those certain 8.5% Senior
Subordinated Convertible Debentures issued by the
Borrower, due November 19, 2000 in an aggregate
principal amount not exceeding $55,000,000, and
governed by that certain Debenture Purchase
Agreement dated as of November 19, 1993, between
the Borrower and the institutional investor named
therein (as amended prior to the Agreement Date).
"Subsequent Lease Transaction" shall mean one
or more lease financings of certain of the
Borrower's manufacturing equipment or real estate
to be arranged for the Borrower after the
Agreement Date, on terms reasonably satisfactory
to the Agent.
"Subsidiary" shall mean, as applied to any
Person, (a) any corporation of which fifty percent
(50%) or more of the outstanding stock (other than
directors' qualifying shares) having ordinary
voting power to elect a majority of its board of
directors, regardless of the existence at the time
of a right of the holders of any class or classes
of securities of such corporation to exercise such
voting power by reason of the happening of any
contingency, or any partnership of which fifty
percent (50%) or more of the outstanding
partnership interests is at the time owned by such
Person, or by one or more Subsidiaries of such
Person, or by such Person and one or more
Subsidiaries of such Person, and (b) any other
entity which is controlled or capable of being
controlled by such Person, or by one or more
Subsidiaries of such Person, or by such Person and
one or more Subsidiaries of such Person.
"Subsidiary Guaranty" shall mean that certain
Guaranty Agreement executed by each Material
Subsidiary of even date herewith with respect to
the Obligations, and shall include any supplement
to the Guaranty Agreement executed in accordance
with Section 7.7(g) hereof, as the same may be
modified, amended or supplemented from time to
time.
"Subsidiary Security Agreement" shall mean
that certain Subsidiary Security Agreement
executed by and among each Material Subsidiary and
the Agent of even date herewith, and shall include
any supplement thereto executed in accordance with
Section 7.14 hereof, as the same may be
supplemented, modified or amended from time to
time.
"Super-Majority Lenders" shall mean Lenders
(whose voting rights hereunder have not been
restricted pursuant to Section 2.2(e) hereof) the
total of whose Commitment Ratios equals or exceeds
eighty-seven percent (87%) of the Commitment
Ratios of all Lenders entitled to vote hereunder.
"Swing Bank" shall mean Citicorp USA, Inc., a
Delaware corporation, or any other Lender who
shall agree with the Agent to act as Swing Bank.
"Swing Loans" shall mean any Loans made to
the Borrower by the Swing Bank from time to time,
in accordance with Section 2.2(f) hereof.
"Term Loan" shall mean, collectively, the
amounts advanced by the Lenders to the Borrower on
the Agreement Date under the Term Loan Commitment,
not to exceed the amount of the Term Loan
Commitment, and evidenced by the Term Loan Notes.
"Term Loan Commitment" shall mean the several
obligations of the Lenders to advance the sum of
$45,000,000 on the Agreement Date, in accordance
with their respective Commitment Ratios relating
to the Term Loan Commitment, to the Borrower
pursuant to the terms hereof.
"Term Loan Notes" shall mean those certain
Term Promissory Notes of even date herewith in the
aggregate principal amount of $45,000,000, in
substantially the form of Exhibit H attached
hereto, and any amendments, replacements,
extensions or renewals thereof.
"Total Capitalization" shall mean, as of any
date of calculation, the sum of (a) Funded Debt,
plus (b) the LGE Payable, plus (c) shareholders'
equity as shown on the consolidated balance sheet
of the Borrower.
"Trademark" shall have the meaning ascribed
to that term in the definition of Trademark
Property.
"Trademark Property" shall mean:
(b) all of the Borrower's trademarks,
trade names, corporate names, company names,
business names, fictitious business names,
trade styles, service marks, certification
marks, collective marks, logos, trade dress
other source of business identifiers, prints
and labels on which any of the foregoing have
appeared or appear, designs and general
intangibles of a like nature (all of the
foregoing items in this clause (a) being
collectively called a "Trademark"), now
existing anywhere in the world or hereafter
adopted or acquired, whether currently in use
or not, whether or not registered, all
registrations and recordings thereof and all
applications in connection therewith, whether
pending or in preparation for filing,
including registrations, recordings and
applications in the United States Patent and
Trademark Office or in any office or agency
of the United States of America or any State
thereof or any foreign country, including,
without limitation, those referred to in Part
B-1 of Schedule 4.1(o);
(c) all reissues, extensions, renewals,
translations, adaptations, derivations and
combinations of any of the items described in
clause (a) of this definition;
(d) all Trademark licenses and other
agreements providing the Borrower with the
right to use any of the types of items
referred to in clauses (a) and (b) of this
definition, including each Trademark license
referred to in Part B-2 of Schedule 4.1(o);
(e) all of the goodwill of the business
connected with the use of, and symbolized by
the items described in, clauses (a) and (b)
of this definition;
(f) the right to xxx third parties for
past, present and future infringements of any
Trademark property described in clauses (a)
or (b) of this definition and, to the extent
applicable in clause (c) of this definition;
and
(g) all proceeds of, and rights
associated with, the foregoing, including any
claim by the Borrower against third parties
for past, present or future infringement or
dilution of any Trademark, Trademark
registration or (to the extent applicable and
if permitted by applicable law) Trademark
license, referred to in clause (c) of this
definition, or for any injury to the goodwill
associated with the use of any such Trademark
or for breach or enforcement of any Trademark
license, and all rights corresponding thereto
throughout the world.
"Tuning Patent Royalties" shall mean all
amounts to be paid by any licensee to the Borrower
in connection with the license of any Tuning
Patent under any License Agreement.
"Tuning Patents" shall mean, collectively,
U.S. Patent No. 4,002,986, U.S. Patent No.
4,317,227, U.S. Patent No. 4,516,170, and U.S.
Patent No. 4,598,425, together with all
applications, reissues, divisions, continuations,
continuations-in-part, revisions, extensions,
renewals and reexaminations relating thereto; and
"Tuning Patent" shall mean any of the foregoing.
"Uniform Customs" shall mean the Uniform
Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended
from time to time.
"Value" shall mean, at any particular date:
(a) the lower of the fair market value of the
Eligible Inventory and its cost, valued in
accordance with the "First-In, First-Out" method
of accounting, minus (b) an amount which is equal
to the amount of reserves which, under FASB No.
48, "Revenue recognition when the right of return
exists," the Borrower shall be required to take in
regard to the amount identified in subparagraph
(a) hereof.
"Voting Stock" shall mean the Capital Stock
issued by a corporation, or equivalent interests
in any other Person, the holders of which are
ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or
persons performing similar functions) of such
Person, even if the right so to vote has been
suspended by the happening of such a contingency.
"Wholly-Owned Subsidiary" means any direct or
indirect Subsidiary of a Person where such
Person's ownership of such Subsidiary is through
ownership of 100% of all issued and outstanding
Capital Stock (or other ownership interests, but
excluding any directors qualifying shares) and
warrants, options or rights to purchase Capital
Stock (or other ownership interests) at all
levels.
Each definition of an agreement in this
Article 1 shall include such instrument or
agreement as modified, amended, or supplemented
from time to time with, if required, the prior
written consent of the Majority Lenders, except as
provided in Section 10.12 hereof, and except where
the context otherwise requires, definitions
imparting the singular shall include the plural
and vice versa. Except where otherwise
specifically restricted, reference to a party to a
Loan Document includes that party and its
successors and assigns. An Event of Default shall
"exist", "continue" or be "continuing" until such
Event of Default has been waived in writing in
accordance with Section 10.12 hereof. All terms
used herein which are defined in Article 9 of the
Uniform Commercial Code in effect in the State of
New York on the date hereof and which are not
otherwise defined herein shall have the same
meanings herein as set forth therein. All
accounting terms used herein without definition
shall be used as defined under GAAP. All
financial calculations hereunder shall, unless
otherwise stated, be determined for the Borrower
on a consolidated basis with its Subsidiaries.
ARTICLE 2
THE LOANS AND THE LETTERS OF CREDIT
ARTICLE 2Section .1 Extension of Credit.
Subject to the terms and conditions of, and in
reliance upon the representations and warranties
made in, this Agreement and the other Loan
Documents, the Lenders have extended and agree,
severally in accordance with their respective
Commitment Ratios and not jointly, to extend
credit in an aggregate principal amount not to
exceed ONE HUNDRED TEN MILLION DOLLARS
($110,000,000) to the Borrower, as hereinafter
provided.
(a) The Revolving Loans. The Lenders agree,
severally in accordance with their respective
Commitment Ratios relating to the Revolving Loan
Commitment and not jointly, upon the terms and
subject to the conditions of this Agreement, to
lend and relend to the Borrower, prior to the
Maturity Date, amounts which in the aggregate at
any one time outstanding do not exceed the lesser
of (i) the Borrowing Base and (ii) the Revolving
Loan Commitment. Subject to the terms and
conditions hereof and prior to the Maturity Date,
Advances under the Revolving Loan Commitment may
be repaid and reborrowed from time to time on a
revolving basis.
(b) The Term Loan. The Lenders agree,
severally in accordance with their respective
Commitment Ratios relating to the Term Loan
Commitment and not jointly, upon the terms and
subject to the conditions of this Agreement, to
lend to the Borrower on the Agreement Date, an
amount not to exceed, in the aggregate, the amount
of the Term Loan Commitment. Advances under the
Term Loan Commitment may be repaid and reborrowed
as provided in Section 2.2 hereof in order to
reborrow Base Rate Advances, or Eurodollar
Advances for new Eurodollar Advance Periods,
provided, however, that there shall be no increase
in the aggregate principal amount outstanding
under the Term Loan Commitment at any time after
the Agreement Date.
(c) The Letters of Credit. Subject to the
terms and conditions hereof each Issuing Bank
agrees, severally in accordance with their
respective Letter of Credit Commitments and not
jointly, to issue Letters of Credit for the
account of the Borrower pursuant to Section 2.15
hereof in an aggregate outstanding face amount (i)
for all Issuing Banks, not to exceed the Letter of
Credit Commitment at any time, and (ii) for any
individual Issuing Bank, not to exceed such
Issuing Bank's Letter of Credit Commitment.
(d) The Swing Loans. Subject to the terms
and conditions hereof, the Swing Bank, in its sole
discretion, may from time to time after the
Agreement Date but prior to the Maturity Date,
make Swing Loans to the Borrower in an aggregate
principal amount not to exceed at any time
outstanding the least of (i) the Swing Bank's pro
rata share (in accordance with its Commitment
Ratio) of the Available Revolving Loan Commitment,
(ii) the excess of (x) the Swing Bank's pro rata
share (in accordance with its Commitment Ratio) of
the Revolving Loan Commitment over (y) the sum of
the aggregate outstanding principal amount of
Swing Loans and Revolving Loans made by it and the
Swing Bank's pro rata share (in accordance with
its Commitment Ratio) of the outstanding Letter of
Credit Obligations, and (iii) $11,000,000.
(e) Overadvances; Borrowing Base
Deficiencies. If at any time the Aggregate
Revolving Credit Obligations exceed the Borrowing
Base, the Revolving Loan Commitment or any other
applicable limitation set forth in this Agreement,
such Aggregate Revolving Credit Obligations shall
nevertheless constitute Obligations that are
secured by the Collateral and are entitled to all
benefits thereof. In no event, however, shall the
Borrower have the right whatsoever to (i) receive
any Revolving Loan, (ii) receive any Swing Loan,
or (iii) request the issuance of any Letter of
Credit if, before or after giving effect thereto,
there shall exist a Default or a Borrowing Base
Deficiency. In the event that (1) the Lenders, in
their sole and absolute discretion, shall make any
Revolving Loans, or (2) any Issuing Bank shall, in
its sole and absolute discretion (subject to the
terms and conditions set forth in this Agreement),
agree to the issuance of any Letter of Credit, or
(3) the Swing Bank, in its sole and absolute
discretion (subject to the terms and conditions
set forth in this Agreement), shall make any Swing
Loan, which in any such case gives rise to a
Borrowing Base Deficiency, the Borrower shall
make, on demand, a payment on the Obligations to
be applied to the Revolving Loans, the Swing Loans
and the Letter of Credit Reserve Account, as
appropriate, in an aggregate principal amount
equal to such Borrowing Base Deficiency.
Additionally, in no event shall the Borrower have
the right to receive any Advance of a Revolving
Loan in an amount which exceeds the lesser of (i)
the Borrowing Base and (ii) the Available
Revolving Loan Commitment.
ARTICLE 2Section .2 Manner of Borrowing and
Disbursement of Loans.
2(j) Choice of Interest Rate, etc. Any
Advance shall, at the option of the Borrower, be
made either as a Base Rate Advance or as a
Eurodollar Advance (except for the first two (2)
Business Days after the Agreement Date, during
which period the Loans shall bear interest as a
Base Rate Advance); provided, however, that (i) if
the Borrower fails to give the Agent written
notice specifying whether an Advance is to be
repaid or reborrowed on a Payment Date, such
Advance shall be repaid and then reborrowed as a
Base Rate Advance on the Payment Date, and (ii)
the Borrower may not select a Eurodollar Advance
(A) with respect to the Swing Loans, (B) with
respect to an Advance, the proceeds of which are
to reimburse an Issuing Bank pursuant to Section
2.15 hereof, or (C) if, at the time of such
Advance, a Default or an Event of Default has
occurred and is continuing. Any notice given to
the Agent in connection with a requested Advance
hereunder shall be given to the Agent prior to
11:00 a.m. (New York time) in order for such
Business Day to count toward the minimum number of
Business Days required. The Agent shall, upon
reasonable request of the Borrower from time to
time, provide to the Borrower such information
with regard to the Eurodollar Rate Basis as may be
so requested.
(a) Base Rate Advances.
(i) Initial and Subsequent
Advances. The Borrower shall give the Agent
in the case of Base Rate Advances not later
than 11:00 a.m. (New York time) on the
Business Day of a proposed Advance,
irrevocable prior notice by telephone or
telecopy and shall confirm any such telephone
notice with a written Request for Advance;
provided, however, that the failure by the
Borrower to confirm any notice by telephone
or telecopy with a Request for Advance shall
not invalidate any notice so given.
(ii) Repayments and Reborrowings.
The Borrower may repay or prepay a Base Rate
Advance and (a) at any time reborrow all or a
portion of the principal amount thereof as
one or more Base Rate Advances, (b) upon at
least two (2) Business Days' irrevocable
prior written notice to the Agent, reborrow
all or a portion of the principal thereof as
one or more Eurodollar Advances, or (c) not
reborrow all or any portion of such Base Rate
Advance. Upon the date indicated by the
Borrower, such Base Rate Advance shall be so
repaid and, as applicable, reborrowed.
(iii) Miscellaneous.
Notwithstanding any other provision of this
Agreement which may be construed to the
contrary, each Base Rate Advance shall be in
a principal amount of no less than $1,000,000
and in an integral multiple of $100,000 in
excess thereof; provided, however, each Base
Rate Advance that is a Swing Loan shall be in
a principal amount of not less than $100,000
unless a lower amount is permitted by the
Swing Bank in its sole discretion from time
to time.
(b) Eurodollar Advances.
(i) Initial and Subsequent
Advances. The Borrower shall give the Agent
in the case of Eurodollar Advances at least
two (2) Business Days' irrevocable prior
notice by telephone or telecopy and shall
immediately confirm any such telephone notice
with a written Request for Advance; provided,
however, that the failure by the Borrower to
confirm any notice by telephone or telecopy
with a Request for Advance shall not
invalidate any notice so given. The Agent,
whose determination shall be conclusive,
shall determine the available Eurodollar
Bases as of the second (2nd) Business Day
prior to the date of the requested Advance
and shall promptly notify the Borrower of the
same and the Borrower shall promptly confirm
in writing receipt of such notification. The
Eurodollar Advance Period for each Eurodollar
Advance shall in all events be either one,
two, three, six, nine, or, if available,
twelve months. Failure by the Borrower to
confirm any telephonic notice in writing
shall not invalidate any notice so given.
Upon receipt of such notice from the
Borrower, the Agent shall promptly notify
each Lender by telephone or telecopy of the
contents thereof.
(ii) Repayments and Reborrowings.
At least two (2) Business Days prior to each
Payment Date for a Eurodollar Advance, the
Borrower shall give the Agent written notice
specifying whether all or a portion of any
Eurodollar Advance outstanding on the Payment
Date (a) is to be repaid and then reborrowed
in whole or in part as a new Eurodollar
Advance, in which case such notice shall also
specify the Eurodollar Advance Period which
the Borrower shall have selected for such new
Eurodollar Advance, (b) is to be repaid and
then reborrowed in whole or in part as a Base
Rate Advance, or (c) is to be repaid and not
reborrowed. Upon such Payment Date such
Eurodollar Advance will, subject to the
provisions hereof, be so repaid and, as
applicable, reborrowed.
(iii) Miscellaneous.
Notwithstanding any term or provision of this
Agreement which may be construed to the
contrary, each Eurodollar Advance shall be in
a principal amount of no less than $5,000,000
and in an integral multiple of $1,000,000 in
excess thereof, and at no time shall the
aggregate number of all Eurodollar Advances
then outstanding exceed four (4).
(c) Notification of Lenders. Upon
receipt of a (i) Request for Advance or a
telephone or telecopy request for Advance, (ii)
notification from an Issuing Bank that a draw has
been made under any Letter of Credit, or (iii)
notice from the Borrower with respect to any
outstanding Advance prior to the Payment Date for
such Advance, the Agent shall promptly notify each
Lender by telephone or telecopy of the contents
thereof and the amount of each Lender's portion of
any such Advance. Each Lender shall, not later
than 2:00 p.m. (New York time) on the date
specified for such Advance in such notice, make
available to the Agent at the Agent's office, or
at such account as the Agent shall designate, the
amount of such Lender's portion of the Advance in
immediately available funds.
(d) Disbursement. Prior to 3:00 p.m.
(New York time) on the date of an Advance
hereunder, the Agent shall, subject to the
satisfaction of the conditions set forth in
Article 3 hereof, disburse the amounts made
available to the Agent by the Lenders in like
funds by transferring the amounts so made
available by deposit into the Borrower's account
maintained with Citibank or by wire transfer
pursuant to the Borrower's instructions. Unless
the Agent shall have received notice from a Lender
prior to 12:30 p.m. (New York time) on the date of
any Advance that such Lender will not make
available to the Agent such Lender's ratable
portion of such Advance, the Agent may assume that
such Lender has made or will make such portion
available to the Agent on the date of such Advance
and the Agent may, in its sole discretion and in
reliance upon such assumption, make available to
the Borrower on such date a corresponding amount.
If and to the extent such Lender shall not have
so made such ratable portion available to the
Agent, such Lender agrees to repay to the Agent
forthwith on demand such corresponding amount
together with interest thereon, for each day from
the date such amount is made available to the
Borrower until the date such amount is repaid to
the Agent, (x) for the first two Business Days, at
the rate on overnight Federal funds transactions
with members of the Federal Reserve System
arranged by Federal funds brokers, as published
for such day by the Federal Reserve Bank of New
York, and (y) thereafter, at the Base Rate. If
such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall
constitute such Lender's portion of the applicable
Advance for purposes of this Agreement and if both
such Lender and the Borrower shall pay and repay
such corresponding amount, the Agent shall
promptly relend to the Borrower such corresponding
amount. If such Lender does not repay such
corresponding amount immediately upon the Agent's
demand therefor, the Agent shall notify the
Borrower and the Borrower shall immediately pay
such corresponding amount to the Agent. The
failure of any Lender to fund its portion of any
Advance shall not relieve any other Lender of its
obligation, if any, hereunder to fund its
respective portion of the Advance on the date of
such borrowing, but no Lender shall be responsible
for any such failure of any other Lender. In the
event that a Lender for any reason fails or
refuses to fund its portion of an Advance in
violation of this Agreement, then, until such time
as such Lender has funded its portion of such
Advance, or all other Lenders have received
payment in full (whether by repayment or
prepayment) of the principal and interest due in
respect of such Advance, such non-funding Lender
shall (i) have no right to vote regarding any
issue on which voting is required or advisable
under this Agreement or any other Loan Document,
and (ii) shall not be entitled to receive any
payments of principal, interest or fees from the
Agent (or the other Lenders) in respect of its
Loans.
(e) Special Provisions Pertaining to
Swing Loans.
(i) The Borrower shall give the Agent
written notice in the form of a Request for
Advance, or notice by telephone or telecopy no
later than 11:00 a.m. (New York time) on the date
on which the Borrower wishes to receive an Advance
of any Swing Loan followed immediately by a
Request for Advance; provided, however, that the
failure by the Borrower to confirm any notice by
telephone or telecopy with a Request for Advance
shall not invalidate any notice so given. If the
Swing Bank, in its sole discretion, elects to make
the requested Swing Loan, the Advance shall be
made on the date specified in the notice or the
Request for Advance and such notice or Request for
Advance shall specify (i) the amount of the
requested Advance, and (ii) instructions for the
disbursement of the proceeds of the requested
Advance. The Swing Bank shall have no duty or
obligation to make any Swing Loans hereunder and
the Swing Bank shall not make any Swing Loans
unless, on the date of the requested Advance
thereof, the Borrower satisfies each of the
conditions precedent to an Advance set forth in
Section 3.2 hereof. In the event the Swing Bank
in its sole and absolute discretion elects to make
any requested Swing Loan, the Swing Bank shall
make the proceeds of such Swing Loan available to
the Borrower by deposit of U.S. dollars in same
day funds by wire transfer in accordance with the
applicable notice or Request for Advance.
(ii) The Agent shall notify each Lender
no less frequently than weekly, as determined by
the Agent, of the principal amount of Swing Loans
outstanding as of 3:00 p.m. (New York City time)
as of such date and each Lender's pro rata share
thereof. Each Lender shall before 2:00 p.m. (New
York City time) on the next Business Day (the
"Settlement Date") make available to the Agent, in
immediate available funds, the amount of its pro
rata share of such principal amount of Swing Loans
outstanding. Upon such payment by a Lender, such
Lender shall be deemed to have made a Revolving
Loan to the Borrower, notwithstanding any failure
of the Borrower to satisfy the conditions in
Section 3.2. The Agent shall use such funds to
repay the principal amount of Swing Loans to the
Swing Bank. All interest due on the Swing Loans
prior to the Settlement Date shall be payable to
the Swing Bank. Additionally, If at any time any
Swing Loans are outstanding, any of the events
described in clauses (g) or (h) of Section 8.1
hereof shall have occurred, then each Lender shall
automatically upon the occurrence of such event
and without any action on the part of the Swing
Bank, the Borrower, the Agent or the Lenders be
deemed to have purchased an undivided
participation in the principal and interest of all
Swing Loans then outstanding in an amount equal to
such Lender's Commitment Ratio and each Lender
shall, notwithstanding such Event of Default,
immediately pay to the Agent for the account of
the Swing Bank in immediately available funds, the
amount of such Lender's participation (and upon
receipt thereof, the Swing Bank shall deliver to
such Lender a loan participation certificate dated
the date of receipt of such funds in such amount).
The disbursement of funds in connection with the
settlement of Swing Loans hereunder shall be
subject to the terms and conditions of
Section 2.2(e) hereof.
ARTICLE 1Section .2 Interest.
(a) On Loans. Interest on Advances
under the Revolving Loans and interest on the Term
Loan, subject to Section 2.3(b) hereof, shall be
payable as follows:
(i) On Base Rate Advances.
Interest on each Base Rate Advance shall be
computed for the actual number of days elapsed on
the basis of a hypothetical year of 360 days and
shall be payable monthly in arrears on the first
day of each calendar month, commencing on May 1,
1997. Interest on Base Rate Advances then
outstanding shall also be due and payable on the
Maturity Date. Interest shall accrue and be
payable on each Base Rate Advance made with
respect to the Revolving Loans and the Term Loan
at the simple per annum interest rate equal to the
sum of (A) the Base Rate, and (B) the applicable
Interest Rate Margin.
(ii) On Eurodollar Advances.
Interest on each Eurodollar Advance shall be
computed on the basis of a hypothetical 360-day
year for the actual number of days elapsed and
shall be payable in arrears on (x) the Payment
Date for such Advance, and (y) if the Eurodollar
Advance Period for such Advance is greater than
three (3) months, on each three month anniversary
of such Advance. Interest on Eurodollar Advances
then outstanding shall also be due and payable on
the Maturity Date. Interest shall accrue and be
payable on each Eurodollar Advance made with
respect to the Revolving Loans and the Term Loan
at a rate per annum equal to the sum of (A) the
Eurodollar Basis applicable to such Eurodollar
Advance, and (B) the applicable Interest Rate
Margin.
(b) Upon Default. Upon the occurrence
of an Event of Default and at the election of the
Majority Lenders, interest on the outstanding
Obligations shall accrue at the Default Rate from
the date of such Event of Default. Interest
accruing at the Default Rate shall be payable on
demand and in any event on the Maturity Date and
shall accrue until the earliest to occur of (i)
waiver of the applicable Event of Default in
accordance with Section 10.12 hereof, (ii)
agreement by the Majority Lenders to rescind the
charging of interest at the Default Rate, or (iii)
payment in full of the Obligations. The Lenders
shall not be required to (i) accelerate the
maturity of the Loans, (ii) terminate the
Commitments, or (iii) exercise any other rights or
remedies under the Loan Documents in order to
charge interest hereunder at the Default Rate.
(c) Computation of Interest. In
computing interest on any Advance, the date of
making the Advance shall be included and the date
of payment shall be excluded; provided, however,
that if an Advance is repaid on the date that it
is made, one (1) day's interest shall be due with
respect to such Advance.
Section 2.4 Fees.
(a) Fee Letter. The Borrower agrees to
pay to the Agent, for its benefit and the benefit
of the Lenders, such fees as are set forth in the
Fee Letter.
(b) Unused Line Fee. The Borrower
agrees to pay to the Lenders, in accordance with
the Lenders' Commitment Ratios relating to the
Revolving Loan Commitment, an unused line fee on
the Available Revolving Loan Commitment for each
day from the Agreement Date through the Maturity
Date (or the date of any earlier prepayment in
full of the Obligations), at a rate of one-half of
one percent (.50%) per annum. Such unused line
fee shall be computed on the basis of a
hypothetical year of 360 days for the actual
number of days elapsed, shall be payable quarterly
in arrears for each quarter on the first day of
the immediately succeeding calendar quarter,
commencing on May 1, 1997, and if then unpaid, on
the Maturity Date (or the date of any earlier
prepayment in full of the Obligations), and shall
be fully earned when due and non-refundable when
paid.
(c) Letter of Credit Fees.
(i) The Borrower shall pay to the
Lenders, in accordance with the Lenders'
respective Commitment Ratios relating to the
Revolving Loan Commitment, a fee on the stated
amount of any outstanding Letters of Credit for
each day from the Date of Issue through the
Maturity Date (or the date of any earlier
prepayment in full of the Obligations) at a rate
of three percent (3.0%) per annum on the amount of
the Letter of Credit Obligations. Such Letter of
Credit fee shall be computed on the basis of a
hypothetical year of 360 days for the actual
number of days elapsed, shall be payable monthly
in arrears for each month on the first day of the
succeeding calendar month, commencing on May 1,
1997, and if then unpaid, on the Maturity Date (or
the date of any earlier prepayment in full of the
Obligations), and shall be fully earned when due
and non-refundable when paid.
(ii) The Borrower shall also pay to
each Issuing Bank, (A) a fee on the stated amount
of each Letter of Credit issued by such Issuing
Bank for each day from the Date of Issue through
the expiration date of each such Letter of Credit
(or any earlier prepayment in full of the
Obligations) at a rate of one-quarter of one
percent (.25%) per annum, which fee shall be
computed on the basis of a hypothetical year of
360 days for the actual number of days elapsed,
shall be payable monthly in arrears for each month
on the first day of the next succeeding month,
commencing on May 1, 1997, and, if unpaid on the
Maturity Date (or any earlier prepayment in full
of the Obligations), and (B) a fee in the amount
of $125.00 for issuing, amending and renewing any
Letter of Credit, which fee shall be due and
payable on the date of each issuance, amendment or
renewal of any Letter of Credit. Each of the
foregoing fees shall be fully earned when due, and
non-refundable when paid.
ARTICLE 1Section .2 Prepayment/Reduction of
Commitment.
(a) The principal amount of any Base
Rate Advance may be prepaid in full or in part at
any time upon written notice to the Agent not
later than 11:00 a.m. (New York time) on the
Business Day of such prepayment, without penalty;
and the principal amount of any Eurodollar Advance
may be prepaid prior to the applicable Payment
Date, upon two (2) Business Days' prior written
notice to the Agent, provided that the Borrower
shall reimburse the Lenders and the Agent, on the
earlier of demand or the Maturity Date, for any
loss or out-of-pocket expense incurred by the
Lenders or the Agent in connection with such
prepayment, as set forth in Section 2.9 hereof.
Each notice of prepayment shall be irrevocable.
Upon receipt of any notice of prepayment, the
Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of
such Lender's portion of the prepayment.
Notwithstanding the foregoing, the Borrower shall
not make any prepayment of the Revolving Loans
unless and until the balance of the Swing Loans
then outstanding is zero. Other than with respect
to the Swing Loans and amounts required to be
applied to the Loans pursuant to Section 5.15
hereof, prepayments of principal hereunder (a)
with respect to Base Rate Advances, shall be in
minimum amounts of $1,000,000 and integral
multiples of $100,000 in excess thereof, and (b)
with respect to Eurodollar Rate Advances shall be
in minimum amounts of $5,000,000 and integral
multiples of $1,000,000 in excess thereof. Each
such prepayment of Advances outstanding under the
Term Loan shall permanently reduce the Term Loan
Commitment by a corresponding amount and shall be
applied to reduce the principal payments due under
Section 2.6(b) hereof in the inverse order of
maturity. Each such prepayment of Advances
outstanding under the Revolving Loan Commitment
shall not reduce the Revolving Loan Commitment.
(b) The Borrower shall have the right,
at any time and from time to time after the
Agreement Date and prior to the Maturity Date,
upon at least three (3) Business Days' prior
written notice to the Agent, without premium or
penalty, to cancel or reduce permanently all or a
portion of the Revolving Loan Commitment on a pro
rata basis among the Lenders in accordance with
the Commitment Ratios, provided that any such
partial reduction shall be made in an amount not
less than $5,000,000 and in integral multiples of
$1,000,000 in excess thereof. As of the date of
cancellation or reduction set forth in such
notice, the Revolving Loan Commitment shall be
permanently reduced to the amount stated in the
Borrower's notice for all purposes herein, and the
Borrower shall pay to the Agent for the account of
the Lenders the amount necessary to reduce the
principal amount of the Revolving Loans then
outstanding to not more than the amount of the
Revolving Loan Commitment as so reduced, together
with accrued interest on the amount so prepaid and
the unused line fee set forth in Section 2.4(b)
accrued through the date of the reduction with
respect to the amount reduced, and shall reimburse
the Agent and the Lenders for any loss or
out-of-pocket expense incurred by any of them in
connection with such payment as set forth in
Section 2.9.
ARTICLE 1Section .3 Repayment.
(a) The Revolving Loans. The principal
balance of all Revolving Loans then outstanding
shall be due and payable in full on the Maturity
Date and as may be required by Section 2.6(c)
hereof. Notwithstanding the foregoing, however,
in the event that at any time and for any reason
there shall exist a Borrowing Base Deficiency, the
Borrower shall immediately pay to the Agent an
amount equal to the Borrowing Base Deficiency,
which payment shall constitute a mandatory payment
of the Revolving Loans hereunder.
(b) The Term Loans. The outstanding
principal balance of the Term Loan shall be repaid
by the Borrower in quarterly installments each in
the amount of $2,250,000, commencing June 30,
1997, and at the end of each calendar quarter
thereafter, through the Maturity Date.
Additionally, the Term Loan shall be repaid as may
be required by Section 2.6(c) hereof. Any
remaining unpaid principal and interest on the
Term Loan shall be due and payable in full on the
Maturity Date.
(c) Other Mandatory Repayments.
(i) In the event that after the
Agreement Date, the Borrower shall issue any
Capital Stock, shall sell any of its assets (other
than sales of Inventory in the ordinary course of
its business or pursuant to the Lease Transactions
or the Receivables Securitization) or shall incur
any Funded Debt other than the Obligations, one
hundred percent (100%) of the Net Cash Proceeds
received by the Borrower from such issuance, sale
or incurrence shall be paid on the date of receipt
of the proceeds thereof by the Borrower to the
Lenders as a mandatory payment of the Revolving
Loans and the Term Loan, on a pro-rata basis. The
payment of the Term Loan due hereunder shall be
applied to reduce the Term Loan quarterly
principal installments set forth in Section 2.6(b)
in the inverse order of maturity. The Revolving
Loan Commitment shall be permanently reduced by
the amount of the payment of the Revolving Loans
due hereunder, whether or not such payment is
made. Nothing in this Section shall authorize the
Borrower to issue any Capital Stock, sell any
assets or incur any Funded Debt except as
expressly permitted by this Agreement.
(ii) Upon the completion of the
Subsequent Lease Transaction, one hundred percent
(100%) of the Net Cash Proceeds received by the
Borrower from such transaction shall be paid on
the date of receipt of the proceeds thereof by the
Borrower to the Lenders as a mandatory payment of
the Loans. Such Net Cash Proceeds in an aggregate
amount of up to $43,000,000 shall be applied as a
mandatory payment of the Revolving Loans, but
shall not reduce the Revolving Loan Commitment.
Such Net Cash Proceeds in excess of $43,000,000
shall be applied as a mandatory payment of the
Revolving Loans and the Term Loan, and shall
reduce the Revolving Loan Commitment, in the
manner set forth in Section 2.6(c)(i).
(iii) Notwithstanding any other
term or condition of this Agreement which may be
to the contrary, the Borrower shall reduce the
total outstanding amount of the Revolving Loans
(including the Swing Loans) to $30,000,000 for a
period of not less than forty-five (45)
consecutive days during each twelve (12) month
period (the "Cleanup Period"), commencing on the
Agreement Date and each anniversary of the
Agreement Date, during the term of this Agreement.
ARTICLE 1Section .4 Notes; Loan Accounts.
(a) The Loans shall be repayable in
accordance with the terms and provisions set forth
herein, and shall be evidenced by the Notes. One
each of the Revolving Loan Notes shall be payable
to the order of each Lender in accordance with the
respective Commitment Ratio of such Lender. One
each of the Term Loan Notes shall be payable to
the order of each Lender in accordance with the
respective Commitment Ratio of such Lender. The
Notes shall be issued by the Borrower to the
Lenders and shall be duly executed and delivered
by Authorized Signatories.
(b) The Agent may open and maintain on
its books in the name of the Borrower a loan
account with respect to the Loans and interest
thereon (the "Loan Account"). The Agent shall
debit such Loan Account for the principal amount
of each Advance made by it on behalf of the
Lenders, accrued interest thereon, and all other
amounts which shall become due from the Borrower
pursuant to this Agreement and shall credit Loan
Account for each payment which the Borrower shall
make in respect to the Obligations. The records
of the Agent with respect to such Loan Account
shall be conclusive evidence of the Loans and
accrued interest thereon, absent manifest error.
ARTICLE 1Section .5 Manner of Payment.
(a) When Payments Due.
(i) Each payment (including any
prepayment) by the Borrower on account of the
principal of or interest on the Loans, fees, and
any other amount owed to the Lenders or the Agent
under this Agreement, the Notes, or the other Loan
Documents shall be made not later than 12:00 noon
(New York time) on the date specified for payment
under this Agreement or any other Loan Document to
the Agent at the Agent's Office, for the account
of the Lenders or the Agent, as the case may be,
in lawful money of the United States of America in
immediately available funds. Any payment received
by the Agent after 12:00 noon (New York time)
shall be deemed received on the next Business Day.
In the case of a payment for the account of a
Lender, the Agent will promptly thereafter
distribute the amount so received in like funds to
such Lender. If the Agent shall not have received
any payment from the Borrower as and when due, the
Agent will promptly notify the Lenders
accordingly.
(ii) If any payment under this
Agreement or any of the Notes shall be specified
to be made upon a day which is not a Business Day,
it shall be made on the next succeeding day which
is a Business Day, and such extension of time
shall in such case be included in computing
interest and fees, if any, in connection with such
payment.
(b) No Deduction.
(i) The Borrower agrees to pay
principal, interest, fees, and all other amounts
due hereunder or under the Notes without set-off
or counterclaim or any deduction whatsoever. If
the Borrower shall hereafter be required by law to
deduct any taxes from or in respect of any sum
payable hereunder or under any Note to any Lender,
any Issuing Bank or the Agent, (A) the sum payable
shall be increased as may be necessary so that
after making all required deductions (including
deductions applicable to additional sums payable
under this Section 2.8(b)), such Lender, Issuing
Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had
no such deductions been made, (B) the Borrower
shall make such deductions and (C) the Borrower
shall pay the full amount deducted to the relevant
taxation authority or other authority in
accordance with applicable law.
(ii) Each Lender agrees to
deliver to the Borrower and the Agent from time to
time, a true and correct certificate executed in
duplicate by a duly authorized officer of such
Lender before or promptly upon the occurrence of
any event requiring a change in the most recent
certificate previously delivered by it to the
Borrower and the Agent pursuant to this Section
2.8(b). The execution and delivery hereof by a
Lender shall be deemed to be a certification that
such Lender falls within subsection (A) below, and
no further certificates need to be delivered by
such Lender until the occurrence of one of the
events set forth in the preceding sentence. Each
certificate required to be delivered pursuant to
this Section 2.8(b) shall certify as to one of the
following:
(A) that such Lender shall continue
to receive payments hereunder without
deduction or withholding of United States
federal income tax;
(B) that such Lender cannot
continue to receive payments hereunder
without deduction or withholding of United
States federal income tax as specified
therein but does not require additional
payments because it is entitled to recover
the full amount of any such deduction or
withholding from a source other than the
Borrower or from a tax credit or exemption;
or
(C) that such Lender is no longer
capable of receiving payments hereunder
without deduction or withholding of United
States federal income tax as specified
therein by reason of a change in law
(including the Code or applicable tax treaty)
after the later of the Agreement Date or the
date on which a Lender became a Lender
pursuant to Section 10.5 hereof and that it
is not capable of recovering the full amount
of the same from a source other than the
Borrower or from a tax credit or exemption.
(c) Inadequate Payments. If on the
date on which any amount shall be due and payable
by the Borrower in regard to the Obligations, the
amount received by the Agent from the Borrower or
withdrawn by the Agent from the Clearing Account
pursuant to Section 5.15(c) hereof shall not be
adequate to pay the amount which shall be so due
and payable, then the Agent shall be authorized,
but shall not be obligated, to make a Base Rate
Advance on behalf of the Lenders to the Borrower
by crediting the amount of such Base Rate Advance
to the Loan Account hereof pursuant to the
provisions of Section 2.7(b) hereof, whereupon the
Agent shall debit the Loan Account hereof in a
like amount in payment of the part of the
Obligations which shall then be due and payable.
No further authorization, direction or approval by
the Borrower shall be required to be given by the
Borrower for the Agent to take the action
described in this Section 2.8(c).
ARTICLE 1Section .6 Reimbursement. Whenever
any Lender shall sustain or incur any losses or
out-of-pocket expenses in connection with (i)
failure by the Borrower to borrow or reborrow any
Eurodollar Advance, or reborrow any Advance as a
Eurodollar Advance, in each case, after having
given notice of its intention to borrow in
accordance with Section 2.2 hereof (whether by
reason of the election of the Borrower not to
proceed or the non-fulfillment of any of the
conditions set forth in Article 3), or (ii)
prepayment of any Eurodollar Advance in whole or
in part, the Borrower agrees to pay to such
Lender, upon the earlier of such Lender's demand
or the Maturity Date, an amount sufficient to
compensate such Lender for all such losses and-
out-of-pocket expenses. Such Lender's good faith
determination of the amount of such losses and
out-of-pocket expenses, absent manifest error,
shall be binding and conclusive. Losses subject
to reimbursement hereunder shall include, without
limiting the generality of the foregoing, expenses
incurred by any Lender or any participant of such
Lender permitted hereunder in connection with the
re-employment of funds prepaid, repaid, not
borrowed, or paid, as the case may be, and any
lost profit of such Lender or any participant of
such Lender over the remainder of the Eurodollar
Advance Period for such prepaid Advance.
ARTICLE 1Section .7 Pro Rata Treatment.
(a) Advances. Each Advance with
respect to the Term Loan and the Revolving Loans
from the Lenders under this Agreement shall be
made pro rata on the basis of their respective
Commitment Ratios.
(b) Payments. Each payment and
prepayment of the principal of the Term Loan and
the Revolving Loans and each payment of interest
on the Term Loan and the Revolving Loans received
from the Borrower shall be made by the Agent to
the Lenders pro rata on the basis of their
respective unpaid principal amounts outstanding
immediately prior to such payment or prepayment
(except in cases when a Lender's right to receive
payments is restricted pursuant to Section 2.2(e)
hereof). If any Lender shall obtain any payment
(whether involuntary, through the exercise of any
right of set-off, or otherwise) on account of the
Term Loan or the Revolving Loans in excess of its
ratable share of the Loans under its Commitment
Ratio (or in violation of any restriction set
forth in Section 2.2(e) hereof), such Lender shall
forthwith purchase from the other Lenders such
participation in the Loans made by them as shall
be necessary to cause such purchasing Lender to
share the excess payment ratably with each of
them; provided, however, that if all or any
portion of such excess payment is thereafter
recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender
the purchase price to the extent of such recovery
without interest thereon unless the Lender
obligated to repay such amount is required to pay
interest. The Borrower agrees that any Lender so
purchasing a participation from another Lender
pursuant to this Section 2.10(b) may, to the
fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off)
with respect to such participation as fully as if
such Lender were the direct creditor of the
Borrower in the amount of such participation.
ARTICLE 1Section .8 Application of Payments.
(a) Payments Prior to Acceleration.
Prior to the acceleration of the Obligations under
Section 8.2 hereof, and other than with respect to
payments required to be made pursuant to Section
2.6(c) hereof (which shall be applied as set forth
in Section 2.6(c) hereof), if some but less than
all amounts due from the Borrower are received by
the Agent, the Agent shall distribute such amounts
in the following order of priority: FIRST, to the
payment of interest then due and payable on the
Swing Loans, the Revolving Loans and the Term
Loan; SECOND, to the payment of principal then due
and payable on the Swing Loans, THIRD, to the
payment of principal then due and payable on the
Revolving Loans; FOURTH, to the payment of
principal then due and payable under
Section 2.6(b) on the Term Loan; FIFTH, to the
payment of any fees then due and payable to the
Agent hereunder or under any other Loan Document;
SIXTH, to the payment of any fees then due and
payable to the Lenders and the Issuing Banks
hereunder or under any other Loan Documents;
SEVENTH, to the extent of any Letter of Credit
Obligations then outstanding, to the Letter of
Credit Reserve Account; EIGHTH, to the payment of
all other Obligations not otherwise referred to in
this Section 2.11(a) then due and payable
hereunder or under the other Loan Documents; and
NINTH, to the costs and expenses (including
attorneys' fees and expenses), if any, incurred by
the Agent in the collection of such amounts under
this Agreement or any of the other Loan Documents.
(b) Payments Subsequent to
Acceleration. Subsequent to the acceleration of
the Obligations under Section 8.2 hereof, payments
and prepayments with respect to the Obligations
made to the Agent, the Lenders, the Issuing Banks
or otherwise received by the Agent, any Lender,
any Issuing Bank (from realization on Collateral
or otherwise) shall be distributed in the
following order of priority (subject, as
applicable, to Section 2.10 hereof): FIRST, to
the costs and expenses (including attorneys' fees
and expenses), if any, incurred by the Agent, any
Lender, any Issuing Bank in the collection of such
amounts under this Agreement or of the Loan
Documents, including, without limitation, any
costs incurred in connection with the sale or
disposition of any Collateral; SECOND, to the
payment of interest then due and payable on the
Swing Loans; THIRD, to the payment of the
principal of any Swing Loans then outstanding;
FOURTH, to any fees then due and payable to the
Agent under this Agreement or any other Loan
Document; FIFTH, to any fees then due and payable
to the Lenders and the Issuing Banks under this
Agreement or any other Loan Document; SIXTH, to
the payment of interest then due and payable on
the Revolving Loans and the Term Loan; SEVENTH, to
the payment of principal of the Revolving Loans
then outstanding; EIGHTH to the payment of
principal on the Term Loan; NINTH, to the extent
of any Letter of Credit Obligations then
outstanding, to the Letter of Credit Reserve
Account; TENTH, to the payment of any obligation
under any Interest Hedge Agreement and any Foreign
Exchange Agreement between the Borrower, on the
one hand, and the Agent (or an affiliate of the
Agent) or one or more Lenders (or an affiliate of
a Lender), on the other hand; ELEVENTH, to any
other Obligations not otherwise referred to in
this Section 2.11(b); TWELFTH, to damages incurred
by the Agent or any Lender by reason of any breach
hereof or of any other Loan Document; and
THIRTEENTH, upon satisfaction in full of all
Obligations to the Borrower or as otherwise
required by law.
ARTICLE 1Section .9 Use of Proceeds. The
proceeds of the Loan shall be used by the Borrower
as follows:
(a) The proceeds of the Term Loan and
the initial Advance of Revolving Loans hereunder
shall be used on the Agreement Date to refinance
existing Indebtedness of the Borrower and to fund
transaction costs.
(b) The balance of the proceeds of the
Loans shall be used to fund capital expenditures
and for the Borrower's general operating capital
needs and other general corporate purposes to the
extent not inconsistent with the provisions of
this Agreement.
ARTICLE 1Section .10 All Obligations to
Constitute One Obligation. All Obligations shall
constitute one general obligation of the Borrower
and shall be secured by the Agent's security
interest (on behalf of the Lenders and the Issuing
Banks) and Lien upon all of the Collateral, and by
all other security interests and Liens heretofore,
now or at any time hereafter granted by the
Borrower to the Agent and the Lenders, to the
extent provided in the Security Documents under
which such Lien arises.
ARTICLE 1Section .11 Maximum Rate of
Interest. In no contingency or event whatsoever
shall the aggregate of all amounts deemed interest
on the Loans and charged or collected pursuant to
the terms of this Agreement or pursuant to the
Notes exceed the highest rate permissible under
any law which a court of competent jurisdiction
shall, in a final determination, deem applicable
thereto. In the event that such a court
determines that the Lenders have charged or
received interest hereunder in excess of the
highest applicable rate, the rate in effect
hereunder shall automatically be reduced to the
maximum rate permitted by Applicable Law and the
Lenders shall promptly refund to the Borrower any
interest received by them in excess of the maximum
lawful rate or, if so requested by the Borrower,
shall apply such excess to the principal balance
of the Obligations. It is the intent hereof that
the Borrower not pay or contract to pay, and that
the Lenders not receive or contract to receive,
directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by
the Borrower under Applicable Law.
ARTICLE 1Section .12 Letters of Credit.
(a) Subject to the terms and conditions
hereof, each Issuing Bank, on behalf of the
Lenders, and in reliance on the agreements of the
Lenders set forth in subsection (c) below, hereby
agrees to issue one or more Letters of Credit up
to an aggregate face amount equal to such Issuing
Bank's pro rata share of the Letter of Credit
Commitment; provided, however, that the Issuing
Banks shall not issue any Letter of Credit unless
the conditions precedent to the issuance thereof
set forth in Section 3.3 hereof have been
satisfied, and shall not issue any Letter of
Credit if any Default then exists or would be
caused thereby or if, after giving effect to such
issuance, the Available Revolving Loan Commitment
would be less than zero or there would exist a
Borrowing Base Deficiency; and provided further,
however, that at no time shall the total Letter of
Credit Obligations outstanding hereunder exceed
the Letter of Credit Commitment. Each Letter of
Credit shall (1) be denominated in U.S. dollars,
and (2) expire no later than the earlier to occur
of (A) the Maturity Date, and (B) 360 days after
its date of issuance (but may contain provisions
for automatic renewal provided that no Default or
Event of Default exists on the renewal date or
would be caused by such renewal). Each Letter of
Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the
laws of the State of New York. The Issuing Banks
shall not at any time be obligated to issue, or
cause to be issued, any Letter of Credit if such
issuance would conflict with, or cause such
Issuing Bank to exceed any limits imposed by, any
Applicable Law.
(b) The Borrower may from time to time
request that an Issuing Bank issue a Letter of
Credit. The Borrower shall execute and deliver to
the Agent and applicable Issuing Bank a Request
for Issuance of Letter of Credit for each Letter
of Credit to be issued by such Issuing Bank, not
later than 12:00 noon (New York time) on the fifth
(5th) Business Day preceding the date on which the
requested Letter of Credit is to be issued, or
such shorter notice as may be acceptable to the
Issuing Bank and the Agent. Upon receipt of any
such Request for Issuance of Letter of Credit,
subject to satisfaction of all conditions
precedent thereto as set forth in Section 3.3
hereof, the Issuing Bank shall process such
Request for Issuance of Letter of Credit and the
certificates, documents and other papers and
information delivered to it in connection
therewith in accordance with its customary
procedures and shall promptly issue the Letter of
Credit requested thereby. The Issuing Bank shall
furnish a copy of such Letter of Credit to the
Borrower and the Agent following the issuance
thereof. The Borrower shall pay or reimburse the
Issuing Bank for normal and customary costs and
expenses incurred by such Issuing Bank in issuing,
effecting payment under, amending or otherwise
administering the Letters of Credit.
(c) Immediately upon the issuance by an
Issuing Bank of a Letter of Credit and in
accordance with the terms and conditions of this
Agreement, such Issuing Bank shall be deemed to
have sold and transferred to each Lender, and each
Lender shall be deemed irrevocably and
unconditionally to have purchased and received
from such Issuing Bank, without recourse or
warranty, an undivided interest and participation,
to the extent of such Lender's Commitment Ratio,
in such Letter of Credit and the obligations of
the Borrower with respect thereto (including,
without limitation, all Letter of Credit
Obligations with respect thereto). At such time
as the Agent shall be notified by the Issuing Bank
that the beneficiary under any Letter of Credit
has drawn on the same, the Agent shall promptly
notify the Borrower and each Lender, by telephone
or telecopy, of the amount of the draw and, in the
case of each Lender, such Lender's portion of such
draw amount as calculated in accordance with its
Commitment Ratio.
(d) The Borrower hereby agrees to
immediately reimburse an Issuing Bank for amounts
paid by such Issuing Bank in respect of draws
under a Letter of Credit. In order to facilitate
such repayment, the Borrower hereby irrevocably
requests the Lenders, and the Lenders hereby
severally agree, on the terms and conditions of
this Agreement (other than as provided in Article
2 hereof with respect to the amounts of, the
timing of requests for, and the repayment of
Advances hereunder and in Article 3 hereof with
respect to conditions precedent to Advances
hereunder), with respect to any drawing under a
Letter of Credit, to make a Base Rate Advance on
each day on which a draw is made under any Letter
of Credit and in the amount of such draw, and to
pay the proceeds of such Advance directly to the
Issuing Bank to reimburse the Issuing Bank for the
amount paid by it upon such draw. Each Lender
shall pay its share of such Base Rate Advance by
paying its portion of such Advance to the Agent in
accordance with Section 2.2(e) hereof and its
Commitment Ratio, without reduction for any set-
off or counterclaim of any nature whatsoever and
regardless of whether any Default or Event of
Default then exists or would be caused thereby.
The disbursement of funds in connection with a
draw under a Letter of Credit pursuant to this
Section hereunder shall be subject to the terms
and conditions of Section 2.2(e) hereof. The
obligation of each Lender to make payments to the
Agent, for the account of the Issuing Bank, in
accordance with this Section 2.15 shall be
absolute and unconditional and no Lender shall be
relieved of its obligations to make such payments
by reason of noncompliance by any other Person
with the terms of the Letter of Credit or for any
other reason (other than the gross negligence of
the Issuing Bank in paying such Letter of Credit,
as determined by a final non-appealable judgment
of a court of competent jurisdiction). The Agent
shall promptly remit to the Issuing Bank the
amounts so received from the other Lenders. Any
overdue amounts payable by the Lenders to the
Issuing Bank in respect of a draw under any Letter
of Credit shall bear interest, payable on demand,
(x) for the first two Business Days, at the rate
on overnight Federal funds transactions with
members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day
by the Federal Reserve Bank of New York, and (y)
thereafter, at the Base Rate.
(e) The Borrower agrees that each
Advance by the Lenders to reimburse the Issuing
Bank for draws under any Letter of Credit, shall,
for all purposes hereunder, be deemed to be a Base
Rate Advance under the Revolving Loan Commitment
and shall be payable and bear interest in
accordance with all other Base Rate Advances of
Revolving Loans.
(f) Borrower agrees that any action
taken or omitted to be taken by an Issuing Bank in
connection with any Letter of Credit, except for
such actions or omissions as shall constitute
gross negligence or willful misconduct on the part
of such Issuing Bank as determined by a final non-
appealable judgment of a court of competent
jurisdiction, shall be binding on the Borrower as
between the Borrower and the Issuing Bank, and
shall not result in any liability of the Issuing
Bank to the Borrower. The obligation of the
Borrower to reimburse an Issuing Bank for a
drawing under any Letter of Credit or the Lenders
for Advances made by them to Issuing Banks on
account of draws made under the Letters of Credit
shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances
whatsoever, including, without limitation, the
following circumstances:
(i) Any lack of validity or
enforceability of any Loan Document;
(ii) Any amendment or waiver of or
consent to any departure from any or all of
the Loan Documents;
(iii) Any improper use which may be
made of any Letter of Credit or any improper
acts or omissions of any beneficiary or
transferee of any Letter of Credit in
connection therewith;
(iv) The existence of any claim,
set-off, defense or any right which the
Borrower may have at any time against any
beneficiary or any transferee of any Letter
of Credit (or Persons for whom any such
beneficiary or any such transferee may be
acting), any Lender or any other Person,
whether in connection with any Letter of
Credit, any transaction contemplated by any
Letter of Credit, this Agreement, or any
other Loan Document, or any unrelated
transaction;
(v) Any statement or any
other documents presented under any Letter of
Credit proving to be insufficient, forged,
fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate
in any respect whatsoever;
(vi) The insolvency of any
Person issuing any documents in connection
with any Letter of Credit;
(vii) Any breach of any
agreement between the Borrower and any
beneficiary or transferee of any Letter of
Credit;
(viii) Any irregularity in the
transaction with respect to which any Letter
of Credit is issued, including any fraud by
the beneficiary or any transferee of such
Letter of Credit;
(ix) Any 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;
(x) Any act, error, neglect
or default, omission, insolvency or failure
of business of any of the correspondents of
the Issuing Bank;
(xi) Any other circumstances
arising from causes beyond the control of the
Issuing Bank;
(xii) Payment by the Issuing
Bank under any Letter of Credit against
presentation of a sight draft or a
certificate which does not comply with the
terms of such Letter of Credit, provided that
such payment shall not have constituted gross
negligence or willful misconduct of the
Issuing Bank as determined by a final non-
appealable judgment of a court of competent
jurisdiction; and
(xiii) Any other circumstance or
happening whatsoever, whether or not similar
to any of the foregoing.
(g) If any change in Applicable Law,
any change in the interpretation or administration
thereof, or any change in compliance with
Applicable Law by the Issuing Bank as a result of
any request or directive of any Governmental
Authority, central bank or comparable agency
(whether or not having the force of law) after the
Agreement Date shall (i) impose, modify or deem
applicable any reserve (including, without
limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit,
capital adequacy, assessment or other requirements
or conditions against letters of credit issued by
the Issuing Bank or (ii) impose on the Issuing
Bank any other condition regarding this Agreement
or any Letter of Credit or any participation
therein, and the result of any of the foregoing in
the determination of the Issuing Bank is to
increase the cost to the Issuing Bank of issuing
or maintaining any Letter of Credit or purchasing
or maintaining any participation therein, then, on
the earlier of the Maturity Date or a date not
more than five (5) days after demand by the
Issuing Bank, the Borrower agrees to pay to the
Issuing Bank, from time to time as specified by
the Issuing Bank, such additional amount or
amounts as the Issuing Bank determines will
compensate it for such increased costs, from the
date such change or action is effective, together
with interest on each such amount from the
Maturity Date or the date demanded, as applicable,
until payment in full thereof at the Base Rate. A
certificate as to such increased cost incurred by
the Issuing Bank as a result of any event referred
to in this paragraph submitted by the Issuing Bank
to the Borrower shall be conclusive, absent
manifest error, as to the amount thereof.
(h) The Borrower will indemnify and
hold harmless the Agent, each Issuing Bank and
each other Lender and each of their respective
employees, representatives, officers and directors
from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including
reasonable attorneys' fees) which may be imposed
on, incurred by or asserted against the Agent,
such Issuing Bank or any such other Lender in any
way relating to or arising out of the issuance of
a Letter of Credit, except that the Borrower shall
not be liable to the Agent, any Issuing Bank or
any such Lender for any portion of such claims,
liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from the
gross negligence or willful misconduct of the
Agent, such Issuing Bank or such Lender, as the
case may be, as determined by a final non-
appealable judgment of a court of competent
jurisdiction. This Section 2.15(h) shall survive
termination of this Agreement.
(i) Each Lender shall be responsible
(to the extent the Issuing Bank is not reimbursed
by the Borrower) for its pro rata share (based on
such Lender's Commitment Ratio) of any and all
reasonable out-of-pocket costs, expenses
(including reasonable legal fees) and
disbursements which may be incurred or made by the
Issuing Bank in connection with the collection of
any amounts due under, the administration of, or
the presentation or enforcement of any rights
conferred by any Letter of Credit, the Borrower's
or any guarantor's obligations to reimburse draws
thereunder or otherwise. In the event the
Borrower shall fail to pay such expenses of the
Issuing Bank within fifteen (15) days of demand
for payment by the Issuing Bank, each Lender shall
thereupon pay to the Issuing Bank its pro rata
share (based on such Lender's Commitment Ratio) of
such expenses within ten (10) days from the date
of the Issuing Bank's notice to the Lenders of the
Borrower's failure to pay; provided, however, that
if the Borrower shall thereafter pay such
expenses, the Issuing Bank will repay to each
Lender the amounts received from such Lender
hereunder.
ARTICLE 2
CONDITIONS PRECEDENT
ARTICLE 2Section .1 Conditions Precedent to
Initial Advance. The obligations of the Lenders
to undertake the Commitment and to make the
initial Advance hereunder, and the obligation of
the Issuing Banks to issue the initial Letter of
Credit hereunder, are subject to the prior
fulfillment of each of the following conditions:
(a) The Agent or the Lenders, as
appropriate, shall have received each of the
following, in form and substance satisfactory to
the Agent and the Lenders:
(i) This duly executed Agreement;
(ii) A duly executed Term Loan Note
to the order of each Lender in the amount of
such Lender's pro rata share of the Term Loan
Commitment;
(iii) A duly executed Revolving Loan
Note to the order of each Lender in the
amount of such Lender's pro rata share of the
Revolving Loan Commitment;
(iv) The Security Agreement and the
Intellectual Property Security Agreements,
each duly executed by the Borrower,
(v) The Subsidiary Security
Agreement duly executed by the Material
Subsidiaries;
(vi) Original Uniform Commercial
Code financing statements signed by Borrower
and each Material Subsidiary as debtor and
naming the Agent as secured party to be filed
in all appropriate jurisdictions, in such
form as shall be satisfactory to the Agent;
(vii) The Subsidiary Guaranty duly
executed by the Material Subsidiaries;
(viii) The Assignment of Notes, duly
executed by the Borrower and microcircuits,
with the original Finance Corp. Subordinated
Notes and all other applicable promissory
notes attached thereto;
(ix) The Pledge Agreement, duly
executed by the Borrower, together with the
certificates representing all of the Capital
Stock of the Borrower's domestic
Subsidiaries, and stocks powers duly endorsed
in blank;
(x) The Set-Off Waiver Letter,
duly executed by LGE;
(xi) The opinions of Sidley &
Austin, as counsel to the Borrower and the
Material Subsidiaries regarding the Loan
Documents and the Receivables Securitization,
addressed to each Lender, the Issuing Bank
and the Agent and satisfactory to them, dated
the Agreement Date;
(xii) The opinion of Xxxxxxx X.
Xxxxxx, as general counsel to the Borrower
and the Material Subsidiaries regarding the
Loan Documents and the Receivables
Securitization, addressed to each Lender, the
Issuing Bank and the Agent and satisfactory
to them, dated the Agreement Date;
(xiii) The opinion of Xxxx Xxxxxxxx
Xxxxxxxx & Xxxxxx LLP, as counsel to the
Agent, addressed to each Lender, the Issuing
Bank and the Agent and satisfactory to them,
dated the Agreement Date;
(xiv) The duly executed Request for
Advance for the initial Advance of the Loans;
(xv) A duly executed Borrowing Base
Certificate dated as of the Agreement Date;
(xvi) A loan certificate signed by
an Authorized Signatory of the Borrower in
substantially the form of Exhibit I attached
hereto, including a certificate of incumbency
with respect to each Authorized Signatory of
the Borrower, together with appropriate
attachments which shall include, without
limitation, the following: (A) a copy of the
Certificate of Incorporation of the Borrower
certified to be true, complete and correct by
the Secretary of State for the State of
Delaware, (B) a true, complete and correct
copy of the By-Laws of the Borrower, (C) a
true, complete and correct copy of the
resolutions of the Borrower authorizing the
borrowing hereunder and the execution,
delivery and performance by the Borrower of
the Loan Documents, (D) certificates of good
standing from each jurisdiction in which the
Borrower does business, and (E) copies of
employment contracts for key management level
employees of the Borrower;
(xvii) A loan certificate from each
Material Subsidiary by an Authorized
Signatory of such Material Subsidiary in
substantially the form of Exhibit I attached
hereto, including a certificate of incumbency
with respect to each Authorized Signatory of
such Material Subsidiary, together with
appropriate attachments which shall include,
without limitation, the following: (A) a
copy of the Certificate of Incorporation of
such Material Subsidiary certified to be
true, complete and correct by the Secretary
of State for the jurisdiction of its
incorporation, (B) a true, complete and
correct copy of the By-Laws of such Material
Subsidiary, (C) a true, complete and correct
copy of the resolutions of such Material
Subsidiary authorizing the execution,
delivery and performance of each Loan
Document to which it is a party, and (D)
certificates of good standing from each
jurisdiction in which such Material
Subsidiary is qualified to do business;
(xviii) Audited financial statements
for the Borrower for its 1996 fiscal year,
unaudited financial statements for the
Borrower for the month ending January 31,
1997, and pro-forma financial statements for
the Borrower's 1997 fiscal year on a month by
month basis;
(xix) Copies of certificates of
insurance and the related insurance policies
covering the assets of the Borrower and
otherwise meeting the requirements of
Section 5.5 hereof;
(xx) Copies of any pay-off letters,
termination statements, canceled mortgages
and the like required by the Agent in
connection with the removal of any Liens
(other than Permitted Liens) against the
assets of the Borrower or any Material
Subsidiary;
(xxi) Lien search results with
respect to the Borrower and all Material
Subsidiaries from all appropriate
jurisdictions and filing offices (including
search results from the United States Patent
and Trademark Office regarding the Tuning
Patents and the Borrower's Trademark
Property);
(xxii) Evidence satisfactory to the
Agent that the Liens granted pursuant to the
Security Documents will be first priority
perfected Liens on the Collateral (subject
only to Permitted Liens);
(xxiii) Evidence satisfactory to the
Agent and the Lenders that the Salomon Lease
Transaction has closed and that the Borrower
has received Net Cash Proceeds of at least
$80,000,000 as a result thereof (which may
include an amount of up to $2,000,000
(the"Escrow Amount") held in escrow for the
Borrower);
(xxiv) The Distribution Instructions
Letter (the "Distribution Instruction
Letter") duly executed by the Borrower and
Microcircuits, providing for irrevocable
payment instructions from the Borrower to the
Receivables Trustee instructing that all
payments of Servicing Fees (as defined in the
Pooling and Servicing Agreement) to the
Borrower under the Pooling and Servicing
Agreement be paid directly to the Clearing
Account, and further providing for
irrevocable payment instructions from the
Borrower and Microcircuits to Finance Corp.
instructing that all payments to the Borrower
or Microcircuits under the Receivables
Purchase Agreements be paid directly to the
Clearing Account, in substantially the form
of Exhibit J attached hereto;
(xxv) The Agent shall have received
satisfactory evidence that the Receivables
Securitization has closed with liquidity
backstop commitments of at least $130,000,000
and shall have received a copy of the
Securitization Documents, duly executed by
each of the parties thereto, in form and
substance satisfactory to the Agent;
(xxvi) No change in the business,
assets, management, operations, financial
condition or prospects of the Borrower shall
have occurred since December 31, 1996, which
change, in the judgment of the Agent and the
Lenders, will have a Materially Adverse
Effect;
(xxvii) Payment of all fees and
expenses payable to the Agent, the affiliates
of the Agent and the Lenders in connection
with the execution and delivery of this
Agreement, including, without limitation,
fees and expenses of counsel to the Agent;
(xxviii) Evidence satisfactory to the
Agent and the Lenders that no Default or
Event of Default exists under the
Subordinated Debentures or will be caused by
the Borrower's execution of this Agreement or
the Loan Documents; and
(xxix) All such other documents as
the Agent may reasonably request, certified
by an appropriate governmental official or an
Authorized Signatory if so requested.
(b) The Agent and the Lenders shall
have received evidence reasonably satisfactory to
the Majority Lenders that as of the Agreement Date
the Borrower owns all of the issued and
outstanding Capital Stock of Finance Corp.
(c) The Agent shall be satisfied with
the Borrower's cash management system and shall
have received duly executed Blocked Account
Letters as required by Section 5.15.
(d) The Agent and the Lenders shall
have received evidence reasonably satisfactory to
the Majority Lenders that all Necessary
Authorizations are in full force and effect and
are not subject to any pending or threatened
reversal or cancellation, and the Agent and the
Lenders shall have received a certificate of an
Authorized Signatory so stating.
(e) All of the representations and
warranties of the Borrower under this Agreement
shall be true and correct, both before and after
giving effect to the application of the proceeds
of the initial Advance.
ARTICLE 2Section .2 Conditions Precedent to
Each Advance. The obligation of the Lenders to
make each Advance, including the initial Advance,
hereunder (but excluding Advances, the proceeds of
which are to reimburse (i) the Swing Bank for
Swing Loans or (ii) an Issuing Bank for amounts
drawn under a Letter of Credit), is subject to the
fulfillment of each of the following conditions
immediately prior to or contemporaneously with
such Advance:
(a) All of the representations and
warranties of the Borrower under this Agreement,
which, pursuant to Section 4.3 hereof, are made at
and as of the time of such Advance, shall be true
and correct at such time, both before and after
giving effect to the application of the proceeds
of the Advance, and the Agent shall have received
a certificate (which may be a Request for Advance)
to that effect signed by an Authorized Signatory
of the Borrower and dated the date of such
Advance;
(b) The incumbency of the Authorized
Signatories shall be as stated in the certificate
of incumbency contained in the certificate of the
Borrower delivered pursuant to Section 3.1(a) or
as subsequently modified and reflected in a
certificate of incumbency delivered to the Agent
and the Lenders;
(c) The most recent Borrowing Base
Certificate which shall have been delivered to the
Agent pursuant to Section 6.5(a) hereof shall
demonstrate that, after giving effect to the
making of such Advance, no Borrowing Base
Deficiency shall exist;
(d) There shall not exist on the date
of such Advance and after giving effect thereto, a
Default or an Event of Default hereunder; and
(e) The Agent and the Lenders shall
have received all such other certificates,
reports, statements, opinions of counsel, or other
documents as the Agent or Lenders may reasonably
request and all other conditions to the making of
such Advance which are set forth in this Agreement
shall have been fulfilled.
The Borrower hereby agrees that the delivery of
any Request for Advance hereunder shall be deemed
to be the certification of the Authorized
Signatory thereof that there does not exist, on
the date of the making of the Advance and after
giving effect thereto, a Default or an Event of
Default hereunder.
ARTICLE 2Section .3 Conditions Precedent to
Each Letter of Credit. The obligation of the
Issuing Banks to issue each Letter of Credit
(including the initial Letter of Credit) hereunder
is subject to the fulfillment of each of the
following conditions immediately prior to or
contemporaneously with the issuance of such Letter
of Credit:
(a) All of the representations and
warranties of the Borrower under this Agreement,
which, pursuant to Section 4.3 hereof, are made at
and as of the time of the issuance of such Letter
of Credit, shall be true and correct at such time,
both before and after giving effect to the
issuance of the Letter of Credit, and the Agent
shall have received a certificate (which may be a
Request for Issuance of Letter of Credit) to that
effect signed by an Authorized signatory of the
Borrower and dated the date of the issuance of
such Letter of Credit;
(b) The incumbency of the Authorized
Signatories shall be as stated in the certificate
of incumbency contained in the certificate of the
Borrower delivered pursuant to Section 3.1(a) or
as subsequently modified and reflected in a
certificate of incumbency delivered to the Agent
and the Lenders;
(c) The most recent Borrowing Base
Certificate which shall have been delivered to the
Agent pursuant to Section 6.5(a) hereof shall
demonstrate that, after giving effect to the
making of such Letter of Credit, no Borrowing Base
Deficiency shall exist;
(d) There shall not exist on the date
of issuance of such Letter of Credit, and after
giving effect thereto, a Default or an Event of
Default; and
(e) The Agent and the Issuing Bank
shall have received all such other certificates,
reports, statements, opinions of counsel, or other
documents as the Agent or Issuing Bank may
reasonably request and all other conditions to the
issuance of such Letter of Credit which are set
forth in this Agreement shall have been fulfilled.
The Borrower hereby agrees that the delivery of
any Request for Issuance of a Letter of Credit
hereunder shall be deemed to be the certification
of the Authorized Signatory thereof that there
does not exist, on the date of issuance of the
Letter of Credit and after giving effect thereto,
a Default or an Event of Default hereunder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
ARTICLE 3Section .1 General Representations
and Warranties. In order to induce the Agent, the
Lenders and the Issuing Banks to enter into this
Agreement and to extend the Loans and issue the
Letters of Credit to the Borrower, the Borrower
hereby agrees, represents, and warrants that:
(a) Organization; Power; Qualification.
Each of the Borrower and the Borrower's
Subsidiaries is a corporation duly organized,
validly existing, and in good standing under the
laws of their respective states of incorporation,
has the corporate power and authority to own or
lease and operate its properties and to carry on
its business as now being and hereafter proposed
to be conducted, and is duly qualified and is in
good standing as a foreign corporation, and
authorized to do business, in each jurisdiction in
which the character of its properties or the
nature of its business requires such qualification
or authorization.
(b) Authorization; Enforceability. The
Borrower and each of the Borrower's Material
Subsidiaries has the power and has taken all
necessary corporate action to authorize it to
execute, deliver, and perform this Agreement and
each of the other Loan Documents to which it is a
party in accordance with the terms thereof and to
consummate the transactions contemplated hereby
and thereby. This Agreement and each of the other
Loan Documents to which the Borrower is a party
has been duly executed and delivered by the
Borrower, and is, and each of the other Loan
Documents to which the Borrower is a party is, a
legal, valid and binding obligation of the
Borrower, enforceable in accordance with its
terms.
(c) Partnerships; Joint Ventures;
Subsidiaries. Neither Borrower nor any of its
Subsidiaries is a partner or joint venturer in any
partnership or joint venture other than (i) the
Borrower's Subsidiaries listed on Schedule 4.1(c)-
1 and (ii) the partnerships and joint ventures
listed on Schedule 4.1(c)-2. Schedule 4.1(c)-2
sets forth, for each partnership or joint venture
that is not a Subsidiary of Borrower, a complete
and accurate statement of (a) the percentage
ownership of each such partnership or joint
venture by Borrower or any of its Subsidiaries,
(b) the state or other jurisdiction of formation
or incorporation, as appropriate, of each such
partnership or joint venture, (c) each state in
which each such partnership or joint venture is
qualified to do business on the date of this
Agreement and (d) all of each such partnership's
or joint venture's trade names, trade styles or
doing business forms on the date of this
Agreement. Except as set forth on Schedule
4.1(c)-1 attached hereto, the Borrower has no
Subsidiaries.
(d) Capital Stock and Related Matters.
The authorized Capital Stock of Borrower consists
of one hundred million (100,000,000) shares of
common stock, $1.00 par value per share, of which
sixty-six million four hundred forty-two thousand
seven hundred eighteen (66,442,718) shares were
issued and outstanding as of March 14, 1997 and
are fully paid and non-assessable. As of the
Agreement Date, all holders of five percent (5%)
or more of such Capital Stock, together with a
description of such Capital Stock held by such
Person, are listed on Schedule 4.1(d). Except as
described on Schedule 4.1(d) attached hereto, the
Borrower has outstanding no stock or securities
convertible into or exchangeable for any shares of
its Capital Stock, nor are there any preemptive or
similar rights to subscribe for or to purchase, or
any other rights to subscribe for or to purchase,
or any options for the purchase of, or any
agreements providing for the issuance (contingent
or otherwise) of, or any calls, commitments, or
claims of any character relating to, any Capital
Stock or any stock or securities convertible into
or exchangeable for any Capital Stock. The
Borrower is not subject to any obligation
(contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its
Capital Stock or to register any shares of its
Capital Stock, and there are no agreements
restricting the transfer of any shares of the
Borrower's Capital Stock.
(e) Compliance with laws, etc., of
Agreement, Other Loan Documents, and Contemplated
Transactions. The execution, delivery, and
performance of this Agreement and each of the
other Loan Documents in accordance with the terms
thereof and the consummation of the transactions
contemplated hereby and thereby do not and will
not (i) violate any Applicable Law, (ii) conflict
with, result in a breach of, or constitute a
default under the certificate of incorporation or
by-laws of the Borrower or any Material Subsidiary
or under any indenture, agreement, or other
instrument to which the Borrower or any Material
Subsidiary is a party or by which the Borrower or
any Material Subsidiary or any of their respective
properties may be bound, or (iii) result in or
require the creation or imposition of any Lien
upon or with respect to any property now owned or
hereafter acquired by the Borrower or any Material
Subsidiary except Permitted Liens.
(f) Necessary Authorizations. The
Borrower and each Material Subsidiary have
obtained all Necessary Authorizations, and all
such Necessary Authorizations are in full force
and effect. None of said Necessary Authorizations
is the subject of any pending or, to the best of
the Borrower's knowledge, threatened attack or
revocation, by the grantor of the Necessary
Authorization. Neither the Borrower nor any
Material Subsidiary is required to obtain any
additional Necessary Authorizations in connection
with the execution, delivery, and performance, in
accordance with the terms of this Agreement or any
other Loan Document, and the borrowing hereunder.
(g) Title to Properties. The Borrower
and each of the Borrower's Subsidiaries has good,
marketable, and legal title to, or a valid
leasehold interest in, all of its properties and
assets, and none of such properties or assets is
subject to any Liens (other than Permitted Liens)
which detract from the value of such properties or
assets or interferes with the business or
operations of the Borrower and the Borrower's
Subsidiaries as presently conducted or proposed to
be conducted.
(h) Material Contracts; Labor Matters.
Schedule 4.1(h) contains a complete list, as of
the date of this Agreement, of each contract or
agreement to which Borrower or any Material
Subsidiary is a party which is material to its
respective business, financial condition,
operations, prospects or property and, upon the
request of the Agent or any Lender, the Borrower
will provide the Agent or such Lender, as
applicable, with a copy of any such contract or
agreement. Except as disclosed on
Schedule 4.1(h): (a) no labor contract to which
Borrower or any Material Subsidiary is a party or
is otherwise subject is scheduled to expire prior
to the Maturity Date; (b) neither Borrower nor any
Material Subsidiary has, within the two-year
period preceding the date of this Agreement, taken
any action which would have constituted or
resulted in a "plant closing" or "mass layoff"
within the meaning of the Federal Worker
Adjustment and Retraining Notification Act of 1988
or any similar applicable federal, state or local
law, and Borrower has no reasonable expectation
that any such action is or will be required at any
time prior to the Maturity Date; and (c) on the
Agreement Date (i) neither Borrower nor any
Material Subsidiary is a party to any labor
dispute (other than any immaterial disputes with
Borrower's or such Material Subsidiary's employees
as individuals and not affecting Borrower's or
such Material Subsidiary's relations with any
labor group or its workforce as a whole) and (ii)
there are no pending or, to the Borrower's
knowledge, threatened strikes or walkouts relating
to any labor contracts to which Borrower or any
Material Subsidiary is a party or is otherwise
subject. Except as set forth on Schedule 4.1(h)
attached hereto, none of the employees of the
Borrower or any of the Borrower's Subsidiaries is
a party to any collective bargaining agreement
with the Borrower or any of the Borrower's
Subsidiaries.
(i) Taxes. All federal, state, and
other tax returns of the Borrower and each of the
Borrower's Subsidiaries required by law to be
filed have been duly filed, and all federal,
state, and other taxes, assessments, and other
governmental charges or levies upon the Borrower
and each of the Borrower's Subsidiaries and any of
their respective properties, income, profits, and
assets, which are due and payable, have been paid,
except any payment of any of the foregoing which
the Borrower or any of the Borrower's
Subsidiaries, as applicable, are currently
contesting in good faith by appropriate
proceedings and with respect to which reserves in
conformity with GAAP have been provided on the
books of the Borrower or the Borrower's
Subsidiaries, as the case may be. The charges,
accruals, and reserves on the books of the
Borrower and each of the Borrower's Subsidiaries
in respect of taxes are, in the reasonable
judgement of the Borrower, adequate. Neither the
Borrower nor any of the Borrower's Subsidiaries
are being audited, or have knowledge of any
pending audit, by the Internal Revenue Service or
any other taxing authority.
(j) Financial Statements. The Borrower
has furnished, or caused to be furnished, to the
Lender financial statements for the Borrower and
the Borrower's Subsidiaries on a consolidated
basis which are complete and correct in all
material respects and present fairly in accordance
with GAAP the financial position of the Borrower
and the Borrower's Subsidiaries on a consolidated
basis as at December 31, 1996, and the results of
operations for the periods then ended. Except as
disclosed in such financial statements, neither
the Borrower nor any of the Borrower's
Subsidiaries has any material liabilities,
contingent or otherwise, and there are no material
unrealized or anticipated losses of the Borrower
or any of the Borrower's Subsidiaries which have
not heretofore been disclosed in writing to the
Lenders.
(k) No Adverse Change. Since December
31, 1996, there has occurred no event which could
reasonably be expected to have a Materially
Adverse Effect.
(l) Investments and Guaranties. As of
the Agreement Date, the Borrower does not own the
Capital Stock, partnership interests or other
securities of or equity interests in, or have
outstanding loans or advances to, or guaranties of
the obligations of, any Person, except as
reflected in the financial statements referred to
in Section 4.1(j) above or disclosed on Schedule
4.1(l).
(m) Liabilities, Litigation, etc.
Except for liabilities incurred in the normal
course of business, neither the Borrower nor any
of the Borrower's Subsidiaries has any material
(individually or in the aggregate) liabilities,
direct or contingent, except as disclosed or
referred to in the financial statements referred
to in Section 4.1(j) above or with respect to the
Obligations, the Subordinated Debentures or the
Securitization Documents. As of the Agreement
Date, except as described on Schedules 4.1(m) and
4.1(x) attached hereto, there is no litigation,
legal or administrative proceeding, investigation,
or other action of any nature pending or, to the
knowledge of the Borrower, threatened against or
affecting the Borrower or any of the Borrower's
Subsidiaries or any of their respective properties
which could reasonably be expected to result in
any judgment against or liability of the Borrower
or such Subsidiary in excess of $100,000. None of
such litigation disclosed on Schedules 4.1(m) and
4.1(x), individually or collectively, could
reasonably be expected to have a Materially
Adverse Effect. The Borrower knows of no unusual
or unduly burdensome restriction, restraint, or
hazard relative to the business or properties of
the Borrower or any of the Borrower's Subsidiaries
that is not customary for or generally applicable
to similarly situated businesses in the same
industry as the Borrower and the Borrower's
Subsidiaries.
(n) ERISA. The Borrower and each ERISA
Affiliate and each of their respective Plans are
in substantial compliance with ERISA and the Code
and neither the Borrower nor any of its ERISA
Affiliates incurred any accumulated funding
deficiency with respect to any such Plan within
the meaning of ERISA or the Code. The Borrower
and each of its ERISA Affiliates have complied
with all material requirements of ERISA Sections
601 through 608 and Code Section 4980B. Neither
the Borrower nor, to the best of the Borrower's
knowledge, any of its ERISA Affiliates has made
any promises of retirement or other benefits to
employees, except as set forth in the Plans.
Neither the Borrower nor any of the Borrower's
Subsidiaries has incurred any material liability
to the Pension Benefit Guaranty Corporation in
connection with any such Plan. The assets of each
such Plan which is subject to Title IV of ERISA
are sufficient to provide the benefits under such
Plan, the payment of which the Pension Benefit
Guaranty Corporation would guarantee if such Plan
were terminated, and such assets are also
sufficient to provide all other "benefit
liabilities" (as defined in ERISA Section
4001(a)(16)) due under the plan upon termination.
No Reportable Event has occurred and is
continuing with respect to any such Plan. No such
Plan or trust created thereunder, or party in
interest (as defined in Section 3(14) of ERISA, or
any fiduciary (as defined in Section 3(21) of
ERISA), has engaged in a "prohibited transaction"
(as such term is defined in Section 406 of ERISA
or Section 4975 of the Code) which would subject
such Plan or any other Plan of the Borrower or any
of its ERISA Affiliates, any trust created
thereunder, or any such party in interest or
fiduciary, or any party dealing with any such Plan
or any such trust to any material penalty or tax
on "prohibited transactions" imposed by Section
502 of ERISA or Section 4975 of the Code. Neither
the Borrower nor any of its ERISA Affiliates is a
participant in or is obligated to make any payment
to a Multiemployer Plan.
(o) Intellectual Property; Licenses.
Borrower possesses adequate Intellectual Property
to continue to conduct its business as heretofore
conducted by it, and all Intellectual Property
existing on the date hereof, (together with in the
case of patents and Trademarks, the date of
issuance thereof), is listed on Schedule 4.1(o).
With respect to Intellectual Property of the
Borrower unless such Intellectual Property has
become obsolete or is no longer used or useful in
the conduct of the business of the Borrower:
(i) it is valid and enforceable, is
subsisting, and has not been adjudged invalid
or unenforceable, in whole or in part;
(ii) Borrower has made all
necessary filings and recordations to protect
its interest therein, including, without
limitation, recordations of all of its
interest in its Patent Property and Trademark
Property in the United States Patent and
Trademark Office and, to the extent necessary
for the conduct of Borrower's business, in
corresponding offices throughout the world;
(iii) Except as set forth on
Schedule 4.1(o), Borrower is the exclusive
owner of the entire and unencumbered right,
title and interest in and to such
Intellectual Property owned by it and no
claim has been made that the use of any of
its owned Intellectual Property does or may
violate the asserted rights of any third
party; and
(iv) Borrower has performed, and
Borrower will continue to perform, all acts,
and Borrower has paid and will continue to
pay, all required fees and taxes, to maintain
each and every item of such Intellectual
Property in full force and effect throughout
the world, as applicable.
Borrower owns directly or is entitled to use, by
license or otherwise, all patents, Trademarks,
copyrights, mask works, licenses, technology,
know-how, processes and rights with respect to any
of the foregoing used in, necessary for or of
importance to the conduct of Borrower's business.
(p) Compliance with Law; Absence of
Default. Each of the Borrower and the Borrower's
Subsidiaries is in material compliance with all
Applicable Laws and with all of the provisions of
its certificate of incorporation and by-laws, and
no event has occurred or has failed to occur which
has not been remedied or waived, the occurrence or
non-occurrence of which constitutes (i) a Default
or (ii) a default by the Borrower or any of the
Borrower's Subsidiaries under the Subordinated
Debentures, the Securitization Documents or any
other indenture, agreement, or other instrument,
or any judgment, decree, or order to which the
Borrower or any of the Borrower's Subsidiaries is
a party or by which the Borrower or any of the
Borrower's Subsidiaries or any of their respective
properties may be bound.
(q) Casualties; Taking of Properties,
etc. Since December 31, 1996, neither the
business nor the properties of the Borrower or any
of the Borrower's Subsidiaries has been materially
and adversely affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm,
accident, strike or other labor disturbance,
embargo, requisition or taking of property or
cancellation of contracts, permits or concessions
by any domestic or foreign government or any
agency thereof, riot, activities of armed forces,
or acts of God or of any public enemy.
(r) Accuracy and Completeness of
Information. All information, reports, and other
papers and data relating to the Borrower or any of
the Borrower's Subsidiaries furnished to the Agent
and the Lenders were, at the time the same were so
furnished, (i) to the extent prepared by third
parties, to the best of Borrower's knowledge, and
(ii) to the extent prepared by the Borrower,
complete and correct in all material respects in
light of all such information, reports and other
papers and data taken as a whole at such time. No
fact is currently known to the Borrower which has,
or could reasonably be expected to have, a
Materially Adverse Effect. With respect to
projections, estimates and forecasts given to the
Lenders, such projections, estimates and forecasts
are based on the Borrower's good faith assessment
of the future of the business at the time made.
The Borrower had a reasonable basis for such
assessments at the time made.
(s) Compliance with Regulations G, T,
U, and X. Neither the Borrower nor any of the
Borrower's Subsidiaries is engaged principally or
as one of its important activities in the business
of extending credit for the purpose of purchasing
or carrying, and neither the Borrower nor any of
the Borrower's Subsidiaries owns or presently
intends to acquire, any "margin security" or
"margin stock" as defined in Regulations G, T, U,
and X (12 C.F.R. Parts 221 and 224) of the Board
of Governors of the Federal Reserve System (herein
called "margin stock"). None of the proceeds of
the Loans will be used, directly or indirectly,
for the purpose of purchasing or carrying any
margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally
incurred to purchase or carry margin stock or for
any other purpose which might constitute this
transaction a "purpose credit" within the meaning
of said Regulations G, T, U, and X. Neither the
Borrower nor any bank acting on its behalf has
taken or will take any action which might cause
this Agreement or the Notes to violate Regulation
G, T, U, or X or any other regulation of the Board
of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934, in
each case as now in effect or as the same may
hereafter be in effect. If so requested by the
Agent, the Borrower will furnish the Agent with
(i) a statement or statements in conformity with
the requirements of Federal Reserve Forms G-3
and/or U-1 referred to in Regulations G and U of
said Board of Governors and (ii) other documents
evidencing its compliance with the margin
regulations, including without limitation an
opinion of counsel in form and substance
satisfactory to the Agent. Neither the making of
the Loans nor the use of proceeds thereof will
violate, or be inconsistent with, the provisions
of Regulation G, T, U, or X of said Board of
Governors.
(t) Solvency. As of the Agreement Date
and after giving effect to the transactions
contemplated by the Loan Documents (i) the
property of Borrower, at a fair valuation, will
exceed its debt; (ii) the capital of the Borrower
will not be unreasonably small to conduct its
business; (iii) the Borrower will not have
incurred debts, or have intended to incur debts,
beyond its ability to pay such debts as they
mature; and (iv) the present fair salable value of
the assets of the Borrower will be materially
greater than the amount that will be required to
pay its probable liabilities (including debts) as
they become absolute and matured. For purposes of
this Section, "debt" means any liability on a
claim, and "claim" means (i) the right to payment,
whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent,
matured, unmatured, undisputed, legal, equitable,
secured or unsecured, or (ii) the right to an
equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether
or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured,
unmatured, undisputed, secured or unsecured.
(u) Insurance. The Borrower and each
of its Subsidiaries have insurance meeting the
requirements of Section 5.5 hereof, and such
insurance policies are in full force and effect.
As of the Agreement Date, all insurance maintained
by the Borrower is fully described on Schedule
4.1(u) hereto.
(v) Broker's or Finder's Commissions.
No broker's or finder's fee or commission will be
payable with respect to the issuance of the Notes,
and no other similar fees or commissions will be
payable by the Borrower for any other services
rendered to the Borrower ancillary to the
transactions contemplated herein.
(w) Real Property. All real property
leased by the Borrower or any Material Subsidiary
as of the Agreement Date, and the name of the
lessor of such real property, is set forth in
Schedule 4.1(w)-1. The leases of Borrower or such
Material Subsidiary are valid, enforceable and in
full force and effect, and have not been modified
or amended, except as otherwise set forth in
Schedule 4.1(w)-1. The Borrower or such Material
Subsidiary is the sole holder of the lessee's
interests under such leases, and has the right to
pledge and assign the same except as qualified in
Schedule 4.1(w)-1. Neither Borrower nor such
Material Subsidiary has made any pledge or
assignment of any of it rights under such leases
except as set forth in Schedule 4.1(w)-1 and,
there is no default or condition which, with the
passage of time or the giving of notice, or both,
would constitute a material default on the part of
any party under such leases. All real property
owned by the Borrower or any Material Subsidiary
as of the Agreement Date is set forth in
Schedule 4.1(w)-2. As of the Agreement Date, the
Borrower or such Material Subsidiary does not own,
lease or use any real property other than as set
forth on Schedule 4.1(w). The Borrower and each
Material Subsidiary owns good and marketable fee
simple title to all of its owned real property,
and none of its respective owned real property is
subject to any Liens, except Permitted Liens.
Neither the Borrower nor such Material Subsidiary
owns or holds, or is obligated under or a party
to, any option, right of first refusal or any
other contractual right to purchase, acquire,
sell, assign or dispose of any real property owned
or leased by it.
(x) Environmental Matters. Except as
is described on Schedule 4.1(x) attached hereto:
(i) To the best of the
Borrower's and its Subsidiaries' knowledge,
after reasonably diligent inquiry, the
Property does not contain, in, on or under,
including, without limitation, the soil and
groundwater thereunder, any Hazardous
Materials in violation of Environmental Laws
or in amounts that could give rise to
liability under Environmental Laws.
(ii) The Borrower and each of
the Borrower's Subsidiaries is in material
compliance with all applicable Environmental
Laws, and there is no contamination or
violation of any Environmental Law which
could materially interfere with the continued
operation of any of the Properties or impair
the financial condition of the Borrower and
the Borrower's Subsidiaries on a consolidated
basis.
(iii) Neither the Borrower
nor any of the Borrower's Subsidiaries has
received from any Governmental Authority any
complaint, or notice of violation, alleged
violation, investigation or advisory action
or notice of potential liability regarding
matters of environmental protection or permit
compliance under applicable Environmental
Laws with regard to the Properties, nor is
the Borrower aware that any such notice is
pending.
(iv) Hazardous Materials have
not been generated, treated, stored, disposed
of, at, on or under any of the Property in
violation of any Environmental Laws or in a
manner that could give rise to material
liability under Environmental Laws nor have
any Hazardous Materials been transported or
disposed of from any of the Properties to any
other location in violation of any
Environmental Laws or in a manner that could
give rise to material liability under
Environmental Laws.
(v) Neither the Borrower nor
any of its Subsidiaries is a party to any
governmental administrative actions or
judicial proceedings pending under any
Environmental Law with respect to any of the
Properties, nor are there any consent decrees
or other decrees, consent orders,
administrative orders or other orders, or
other administrative or judicial requirements
outstanding under any Environmental Law with
respect to any of the Properties.
(vi) To the best of the
Borrower's and its Subsidiaries' knowledge,
after reasonably diligent inquiry, there has
been no release or threat of release of
Hazardous Materials into the environment at
or from any of the Properties, or arising
from or relating to the operations of the
Borrower, in violation of Environmental Laws
or in amounts that could give rise to
material liability under Environmental Laws.
(y) OSHA. All of the Borrower's and
the Borrower Subsidiaries' operations are
conducted in all material respects in compliance
with all applicable rules and regulations
promulgated by the Occupational Safety and Health
Administration of the United States Department of
Labor.
(z) Name of Borrower. The Borrower and
the Material Subsidiaries have not changed their
respective names within the preceding five (5)
years from the Agreement Date, nor has the
Borrower or any Material Subsidiary transacted
business under any other name or trade name.
(a)(a) Investment Company Act. Neither
the Borrower nor any of the Borrower's
Subsidiaries is required to register under the
provisions of the Investment Company Act of 1940,
as amended, and neither the entering into or
performance by the Borrower of this Agreement nor
the issuance of the Notes violates any provision
of such Act or requires any consent, approval, or
authorization of, or registration with, any
governmental or public body or authority pursuant
to any of the provisions of such Act.
ARTICLE 3Section .2 Representations and
Warranties Relating to Inventory. Except as
specifically disclosed to and acknowledged by the
Agent in writing, with respect to all Eligible
Inventory, the Agent may rely upon all statements,
warranties, or representations made in any
Borrowing Base Certificate in determining the
classification of such Inventory and in
determining which items of Inventory listed in
such Borrower Base Certificate meet the Inventory
Eligibility Requirements.
ARTICLE 3Section .3 Survival of
Representations and Warranties, etc. All
representations and warranties made under this
Agreement shall be deemed to be made, and shall be
true and correct, at and as of the Agreement Date
and the date of each Advance or issuance of a
Letter of Credit hereunder, except to the extent
previously fulfilled in accordance with the terms
hereof and to the extent subsequently
inapplicable. All representations and warranties
made under this Agreement shall survive, and not
be waived by, the execution hereof by the Lenders,
the Issuing Banks, and the Agent, any
investigation or inquiry by any Lender, or the
Agent or the making of any Advance or the issuance
of any Letter of Credit under this Agreement.
ARTICLE 4
GENERAL COVENANTS
So long as any of the Obligations are
outstanding and unpaid or the Borrower shall have
the right to borrow, or have Letters of Credit
issued, hereunder (whether or not the conditions
to borrowing have been or can be fulfilled), and
unless the Majority Lenders shall otherwise
consent in writing:
ARTICLE 4Section .1 Preservation of Existence
and Similar Matters. The Borrower will, and will
cause each of the Borrower's Subsidiaries (other
than the Immaterial Subsidiaries) to (i) preserve
and maintain their respective existence, rights,
franchises, licenses, and privileges in their
respective jurisdiction of incorporation
including, without limitation, all Necessary
Authorizations material to its business, and (ii)
qualify and remain qualified and authorized to do
business in each jurisdiction in which the
character of their respective properties or the
nature of their respective business requires such
qualification or authorization.
ARTICLE 4Section .2 Compliance with
Applicable Law. The Borrower will comply, and
will cause each of the Borrower's Subsidiaries to
comply, in all material respects with the
requirements of all Applicable Law.
ARTICLE 4Section .3 Maintenance of
Properties. The Borrower will maintain and will
cause each of the Borrower's Subsidiaries to
maintain or cause to be maintained in the ordinary
course of business in good repair, working order,
and condition, normal wear and tear, removal from
service for routine maintenance and repair and
disposal of obsolete Equipment excepted, all
properties used or useful in their respective
businesses (whether owned or held under lease),
and from time to time make or cause to be made all
needed and appropriate repairs, renewals,
replacements, additions, betterments, and
improvements thereto.
ARTICLE 4Section .4 Accounting Methods and
Financial Records. The Borrower will maintain and
will cause each of the Borrower's Subsidiaries to
maintain a system of accounting established and
administered in accordance with GAAP, and will
keep and will cause each of the Borrower's
Subsidiaries to keep adequate records and books of
account in which complete entries will be made in
accordance with such accounting principles
consistently applied and reflecting all
transactions required to be reflected by such
accounting principles.
ARTICLE 4Section .5 Insurance. The Borrower
will maintain and will cause each of the
Borrower's Subsidiaries to maintain insurance
including, but not limited to, public liability,
product and manufacturer's liability, business
interruption and fidelity coverage insurance, in
such amounts and against such risks as would be
customary for companies in the same industry and
of comparable size as the Borrower from
responsible companies having and maintaining an
A.M. Best rating of "A minus" or better and being
in a size category of VI or larger or otherwise
acceptable to the Agent. In addition to the
foregoing, the Borrower further agrees to maintain
and pay for insurance upon all goods constituting
Collateral wherever located, in storage or in
transit in vehicles, including goods evidenced by
documents, covering casualty, hazard, public
liability and such other risks and in such amounts
as would be customary for companies in the same
industry and of comparable size as the Borrower,
from responsible companies having and maintaining
an A.M. Best rating of "A minus" or better and
being in a size category of VI or larger or
otherwise acceptable to the Agent to insure the
Lenders' interest in such Collateral. All such
property insurance policies shall name the Agent
as loss payee and all liability insurance policies
shall name the Agent as additional insured.
Borrower shall deliver the original certificates
of insurance evidencing that the required
insurance is in force together with satisfactory
lender's loss payable and additional insured, as
applicable, endorsements. Each policy of
insurance or endorsement shall contain a clause
requiring the insurer to give not less than thirty
(30) days' prior written notice to the Agent in
the event of cancellation or modification of the
policy for any reason whatsoever and a clause that
the interest of the Agent shall not be impaired or
invalidated by any act or neglect of the Borrower
or owner of the Collateral nor by the occupation
of the premises for purposes more hazardous than
are permitted by said policy. If the Borrower
fails to provide and pay for such insurance, the
Agent may, at the Borrower's expense, procure the
same, but shall not be required to do so. The
Borrower agrees to deliver to the Agent, promptly
as rendered, true copies of all reports made in
any reporting forms to insurance companies.
ARTICLE 4Section .6 Payment of Taxes and
Claims. The Borrower will pay and discharge, and
will cause each of the Borrower's Subsidiaries to
pay and discharge, all taxes, assessments, and
governmental charges or levies imposed upon them
or upon their respective incomes or profits or
upon any properties belonging to them prior to the
date on which penalties attach thereto, and all
lawful claims for labor, materials and supplies
which have become due and payable and which by law
have or may become a Lien upon any of their
respective Property; except that, no such tax,
assessment, charge, levy, or claim need be paid
which is being contested in good faith by
appropriate proceedings and for which adequate
reserves shall have been set aside on the
appropriate books, but only so long as such tax,
assessment, charge, levy, or claim does not become
a Lien or charge other than a Permitted Lien and
no foreclosure, distraint, sale, or similar
proceedings shall have been commenced and remain
unstayed for a period thirty (30) days after such
commencement. The Borrower shall timely file and
will cause each of the Borrower's Subsidiaries
timely to file all information returns required by
federal, state, or local tax authorities.
ARTICLE 4Section .7 Visits and Inspections.
The Borrower will permit and will cause each of
the Borrower's Subsidiaries to permit
representatives of the Agent, the Issuing Banks
and each Lender to (a) visit and inspect the
properties of the Borrower and each of the
Borrower's Subsidiaries during normal business
hours, (b) inspect and make extracts from and
copies of its books and records, and (c) discuss
with its respective principal officers its
businesses, assets, liabilities, financial
positions, results of operations, and business
prospects relating to the Borrower; provided,
however, if no Default then exists hereunder, the
Agent, any Issuing Bank or any Lender shall give
the Borrower reasonable prior notice of such visit
or inspection.
ARTICLE 4Section .8 Conduct of Business. The
Borrower shall continue, and shall cause each
Material Subsidiary to continue, to engage in
business of the same general type as now
respectively conducted by it.
ARTICLE 4Section .9 ERISA. The Borrower
shall at all times make, or cause to be made,
prompt payment of contributions required to meet
the minimum funding standards set forth in ERISA
with respect to its and its ERISA Affiliates'
Plans; furnish to the Agent, promptly upon the
Agent's request therefor, copies of any annual
report required to be filed pursuant to ERISA in
connection with each such Plan of it and its ERISA
Affiliates; notify the Agent as soon as
practicable of any Reportable Event and of any
additional act or condition arising in connection
with any such Plan which the Borrower believes
might constitute grounds for the termination
thereof by the Pension Benefit Guaranty
Corporation or for the appointment by the
appropriate United States District Court of a
trustee to administer such Plan; and furnish to
the Agent, promptly upon the Agent's request
therefor, such additional information concerning
any such Plan as may be reasonably requested by
the Agent.
ARTICLE 4Section .10 Lien Perfection.
The Borrower agrees to, and will cause each
Material Subsidiary to, execute all Uniform
Commercial Code financing statements, and
amendments and continuation statements thereto,
provided for by Applicable Law together with any
and all other instruments, assignments or
documents and shall take such other action as may
be required to perfect or continue the perfection
of the Agent's (on behalf of the Lenders and the
Issuing Banks) security interest in the
Collateral. The Borrower hereby authorizes the
Agent to execute and file any such financing
statement on the Borrower's behalf to the extent
permitted by Applicable Law.
ARTICLE 4Section .11 Location of
Collateral; Consignment of Inventory.
(a) All Collateral, other than
Inventory in transit, will at all times be kept by
the Borrower at one or more of the business
locations set forth in Schedule 5.11 and shall
not, without the prior written approval of the
Agent, be moved therefrom except, prior to an
Event of Default (i) sales of Inventory in the
ordinary course of business; (ii) sales or other
dispositions of assets permitted pursuant to
Section 7.7 hereof; and (iii) the storage of
Inventory at locations within the continental
United States other than those specified on
Schedule 5.11 hereto if (A) the Borrower gives the
Agent written notice of the new storage location
outside of (x) the state, or (y) if the Uniform
Commercial Code as in effect in such state has a
county filing requirement, the county, in which it
is currently stored at least thirty (30) days
prior to storing Inventory at such location, (B)
the Lenders' security interest in such Inventory
is and continues to be a duly perfected, first
priority Lien thereon, (C) neither the Borrower's
nor the Agent's right of entry upon the premises
where such Inventory is stored or its right to
remove the Inventory therefrom, is in any way
restricted, (D) the owner of such premises agrees
with the Agent not to assert any landlord's,
bailee's or other Lien in respect of the Inventory
for unpaid rent or storage charges, and (E) all
negotiable documents and receipts in respect of
any Collateral maintained at such premises are
promptly delivered to the Agent;
(b) No Inventory will be consigned to
any Person without the Agent's prior written
consent, and, if such consent is given, the
Borrower shall, prior to the delivery of any
Inventory on consignment, (i) provide the Agent
with all consignment agreements to be used in
connection with such consignment, all of which
shall be acceptable to the Agent, (ii) prepare,
execute and file appropriate financing statements
with respect to any consigned Inventory, showing
the Agent as assignee, (iii) conduct a search of
all filings made against the consignee in all
jurisdictions in which any consigned Inventory is
to be located and deliver to the Agent copies of
the results of all such searches and (iv) notify,
in writing, all the creditors of the consignee
which are or may be holders of Liens in the
Inventory to be consigned that the Borrower
expects to deliver certain Inventory to the
consignee, all of which Inventory shall be
described in such notice by item or type.
ARTICLE 4Section .12 Protection of
Collateral. All insurance expenses and expenses
of protecting, storing, warehousing, insuring,
handling, maintaining and shipping the Collateral
(including, without limitation, all rent payable
by the Borrower to any landlord of any premises
where any of the Collateral may be located), and
any and all excise, property, sales, and use taxes
imposed by any state, federal, or local authority
on any of the Collateral or in respect of the sale
thereof, shall be borne and paid by the Borrower.
If the Borrower fails to promptly pay any portion
thereof when due, the Lenders may, at their
option, but shall not be required to, make a Base
Rate Advance for such purpose and pay the same
directly to the appropriate Person. The Borrower
agrees to reimburse the Lenders promptly therefor
with interest accruing thereon daily at the
Default Rate provided in this Agreement. All sums
so paid or incurred by the Lenders for any of the
foregoing and all reasonable costs and expenses
(including attorneys' fees, legal expenses, and
court costs) which the Lenders may incur in
enforcing or protecting the Lien on or rights and
interest in the Collateral or any of its rights or
remedies under this or any other agreement between
the parties hereto or in respect of any of the
transactions to be had hereunder until paid by the
Borrower to the Lenders with interest at the
Default Rate, shall be considered Obligations
owing by the Borrower to the Lenders hereunder.
Such Obligations shall be secured by all
Collateral and by any and all other collateral,
security, assets, reserves, or funds of the
Borrower in or coming into the hands or inuring to
the benefit of the Lenders. Neither the Agent nor
the Lenders shall be liable or responsible in any
way for the safekeeping of any of the Collateral
or for any loss or damage thereto (except for
reasonable care in the custody thereof while any
Collateral is in the Lenders' actual possession)
or for any diminution in the value thereof, or for
any act or default of any warehouseman, carrier,
forwarding agency, or other person whomsoever, but
the same shall be at the Borrower's sole risk.
ARTICLE 4Section .13 Assignments, Records
and Schedules of Accounts. Upon the occurrence of
an Event of Default and if so requested by the
Agent, the Borrower shall execute and deliver to
the Agent formal written assignments of all of the
Accounts weekly, which shall include all Accounts
that have been created since the date of the last
assignment, together with copies of invoices or
invoice registers related thereto. The Borrower
shall keep accurate and complete records of the
Accounts and all payments and collections thereon.
ARTICLE 4Section .14 Administration of
Accounts.
(a) The Agent retains the right after
the occurrence of an Event of Default to notify
the Account Debtors that the Accounts have been
assigned to the Agent and to collect the Accounts
directly in its own name and to charge the
collection costs and expenses, including
attorneys' fees, to the Borrower. The Agent has
no duty to protect, insure, collect or realize
upon the Accounts or preserve rights in them. The
Borrower irrevocably makes, constitutes and
appoints the Agent as the Borrower's true and
lawful attorney and agent-in-fact to endorse the
Borrower's name on any checks, notes, drafts or
other payments relating to, the Accounts which
come into the Agent's possession or under the
Agent's control as a result of its taking any of
the foregoing actions. Additionally, the Agent
shall have the right to collect and settle or
adjust all disputes and claims directly with the
Account Debtor and to compromise the amount or
extend the time for payment of the Accounts upon
such terms and conditions as the Agent may deem
advisable, and to charge the deficiencies,
reasonable costs and expenses thereof, including
attorney's fees, to the Borrower.
(b) If an Account includes a charge for
any tax payable to any governmental taxing
authority, the Lenders are authorized, in their
sole discretion, to pay the amount thereof to the
proper taxing authority for the account of the
Borrower and to make a Base Rate Advance to the
Borrower to pay therefor. The Borrower shall
notify the Agent if any Account includes any tax
due to any governmental taxing authority and, in
the absence of such notice, the Agent shall have
the right to retain the full proceeds of the
Account and shall not be liable for any taxes to
any governmental taxing authority that may be due
by the Borrower by reason of the sale and delivery
creating the Account.
(c) Whether or not a Default or an
Event of Default has occurred, any of the Agent's
officers, employees or agents shall have the
right, at any time or times hereafter, in the name
of the Lenders, or any designee of the Lenders or
the Borrower, to verify the validity, amount or
other matter relating to any Accounts by mail,
telephone, telegraph or otherwise. The Borrower
shall cooperate fully with the Agent and the
Lenders in an effort to facilitate and promptly
conclude any such verification process.
(d) The provisions of this Section 5.14
are subject to any limitations or obligations of
the Agent set forth in the Receivables
Intercreditor Agreement.
ARTICLE 4Section .15 The Blocked Account.
(a) The Borrower shall establish and
maintain one or more special lockboxes or blocked
accounts (each, a "Blocked Account") owned by the
Borrower with such bank(s) as may be selected by
the Borrower and approved by the Agent and which
shall provide that all proceeds of the Collateral
which shall be received in such Blocked Account
shall be remitted in immediately available funds
to the Clearing Account. Each such Blocked
Account bank shall agree to the Agent's standard
Blocked Account Letter or such variation thereof
as shall be mutually satisfactory to the Agent and
such bank. All amounts which shall be deposited
into any Blocked Account shall immediately be
under the sole dominion and exclusive control of
the Agent, on behalf of the Issuing Banks and
Lenders, and the Borrower shall have no right to
withdraw such amounts, and all of the Blocked
Account Letters shall so provide.
(b) The Borrower shall cause, pursuant
to the Disbursement Instructions Letter, all cash,
cash equivalents, checks, notes, drafts or similar
items of payment to be received by it from Finance
Corp., including but not limited to, (1) payments
from Account Debtors (it being expressly
understood that this relates only to accounts not
sold to, or accounts reacquired from, Finance
Corp. pursuant to the Receivables Securitization),
and (2) all payments to be made to the Borrower or
Microcircuits pursuant to the Receivables
Purchase Agreements or the Finance Corp.
Subordinated Notes, to be promptly deposited
directly into the Clearing Account. The Borrower
shall also direct the Receivable Trustee to make
all payments from the Receivables Trustee to the
Borrower for Servicing Fees (as defined in the
Pooling and Servicing Agreement) promptly into the
Clearing Account. Additionally, the Borrower
shall cause all Tuning Patent Royalties and other
payments to be made to the Borrower under any
License Agreement to be promptly deposited by the
obligor thereof directly into the Blocked Account
(and the Borrower has issued such payment
instructions to all licensees under such License
Agreements in effect as of the Agreement Date and
will issue such payment instructions to all
licensees under any License Agreement entered into
after the Agreement Date). In the event that the
Borrower shall at any time receive any remittances
of any of the foregoing directly, the Borrower
shall hold the same as trustee for the Agent,
shall segregate such remittances from its other
assets, and shall promptly deposit the same into
the Clearing Account. All cash, cash equivalents,
checks, notes, drafts or similar items of payment
received by the Borrower otherwise than as
provided elsewhere in this Section 5.15(b) shall
be deposited into the Clearing Account, the
Blocked Account or an account which pursuant to
Section 5.15(d) hereof is subject to a Blocked
Account Letter.
(c) On the Business Day on which any
amount is deposited into the Clearing Account in
immediately available funds the Agent shall
withdraw such amount from the Clearing Account,
deposit the same in the Loan Account, and apply
the same against the Obligations in the manner
provided for in Section 2.11 hereof; provided,
however, and notwithstanding the foregoing, that
unless an Event of Default then exists, no money
on deposit in the Clearing Account shall be
applied against (A) the principal of the Term Loan
unless such payment is then due under Section 2.6,
or (B) any Eurodollar Advance if such application
would constitute a prepayment of such Eurodollar
Advance prior to its Payment Date, and such funds
shall be retained in the Clearing Account (and
will be invested by the Agent in overnight
deposits for the Borrower's account) until the
earlier of (i) such payment of principal on the
Term Loan being due under Section 2.6, (ii) such
Payment Date, (iii) the next Business Day on which
additional Obligations arise, or (iv) the
occurrence of an Event of Default, at which time
such amount shall be applied to the Term Loan
principal, such Eurodollar Advance or such
Obligations (in accordance with the provisions of
Section 2.11 hereof), as the case may be; provided
further, however, that unless an Event of Default
then exists, if at any time there are no Revolving
Loans outstanding and no payment of the Term Loan
then due under Section 2.6, any funds on deposit
in the Clearing Account at such time shall be
delivered to the Borrower upon the Borrower's
request.
(d) The Borrower shall not open any
other deposit account (except as required by the
Securitization Documents) unless the depository
bank for such account shall have entered into an
agreement with the Agent substantially in the form
of the Blocked Account Letters. As of the
Agreement Date, all bank accounts of the Borrower
are listed on Schedule 5.15.
ARTICLE 4Section .16 Further Assurances.
The Borrower will promptly cure, or cause to be
cured, defects in the creation and issuance of any
of the Notes and the execution and delivery of the
Loan Documents (including this Agreement),
resulting from any act or failure to act by the
Borrower or any of the Borrower's Subsidiaries or
any employee or officer thereof. The Borrower at
its expense will promptly execute and deliver to
the Agent and the Lenders, or cause to be executed
and delivered to the Agent and the Lenders, all
such other and further documents, agreements, and
instruments in compliance with or accomplishment
of the covenants and agreements of the Borrower in
the Loan Documents, including this Agreement, or
to correct any omissions in the Loan Documents, or
more fully to state the obligations set out herein
or in any of the Loan Documents, or to obtain any
consents, all as may be necessary or appropriate
in connection therewith as may be reasonably
requested.
ARTICLE 4Section .17 Broker's Claims.
The Borrower hereby indemnifies and agrees to hold
the Agent and each of the Lenders harmless from
and against any and all losses, liabilities,
damages, costs and expenses which may be suffered
or incurred by the Agent and each of the Lenders
in respect of any claim, suit, action or cause of
action now or hereafter asserted by a broker or
any Person acting in a similar capacity arising
from or in connection with the execution and
delivery of this Agreement or any other Loan
Document or the consummation of the transactions
contemplated herein or therein.
ARTICLE 4Section .18 Indemnity. The
Borrower will indemnify and hold harmless the
Agent, the Issuing Banks and each of the Lenders
and each of their respective employees,
representatives, officers and directors from and
against any and all claims, liabilities,
investigations, losses, damages, actions, and
demands by any party against the Agent, the
Lenders, or any of them resulting from any breach
or alleged breach by the Borrower of any
representation or warranty made hereunder, or
otherwise arising out of the Commitment or the
making, administration or enforcement of the Loan
Documents and the Loans; unless, with respect to
any of the above, the Agent, the Lenders, or any
of them are finally judicially determined to have
acted or failed to act with gross negligence or
wilful misconduct. This Section 5.18 shall
survive termination of this Agreement.
ARTICLE 4Section .19 Environmental
Matters. The conduct of each of the Borrower's
and its Subsidiary's business operations will not
materially violate any Environmental Laws, and the
Borrower will not use or permit any other party to
use any Hazardous Materials at any of its places
of business except such materials as are
incidental to the Borrower's or such Subsidiary's
normal course of business, maintenance and
repairs, and then only in material compliance with
all applicable Environmental Laws. The Borrower
shall apply for and/or timely renew all permits
required for the business operations at its places
of business. The Borrower shall promptly notify
the Agent in writing of (i) any and all
enforcement, cleanup, remedial, removal, or other
governmental or regulatory actions instituted,
completed or threatened in writing pursuant to any
applicable Environmental Law; and (ii) all claims
made or threatened by any third party against the
Borrower or any Subsidiary of the Borrower
relating to damages, contribution, cost recover
compensation, loss or injury resulting from any
Hazardous Materials which, in either case, could
reasonably be expected to result in liability
under Environmental Laws in excess of $400,000.
The Borrower shall promptly notify the Agent of
any remedial action taken by the Borrower or any
Subsidiary of the Borrower pursuant to
Environmental Laws with respect to the Borrower's
or such Subsidiary's business operations.
ARTICLE 4Section .20 Lease Transactions.
By May 15, 1997, the Borrower shall have received
the Escrow Amount. By October 15, 1997, the
Borrower shall have entered into and closed the
Lease Transactions and received Gross Proceeds in
the aggregate of not less than $120,000,000 as a
result thereof.
ARTICLE 4Section .21 Warehouse
Arrangement. The Borrower shall at all times make
any payments due and owing to GATX Logistics, Inc.
pursuant to any warehousing agreement at the time
such payments are due (subject to applicable grace
periods contained therein), and shall otherwise
comply with all material provisions of any such
warehousing agreement. The Borrower acknowledges
that the Agent shall establish a reserve against
the Borrowing Base in an amount equal to the
greater of (a) $1,500,000, and (b)(i) the monthly
average during the previous three (3) month period
of all fees or other compensation payable to GATX
Logistics, Inc. by the Borrower, multiplied by
(ii) three. At the time the financial statements
are furnished pursuant to Section 6.1, for so long
as the provisions of this Section 5.21 remain in
effect, the Borrower will include in the
certificate to be delivered pursuant to Section
6.3 information with respect to the amount of all
such fees and other compensation paid by the
Borrower to GATX Logistics Inc. for each of the
three (3) previous fiscal months. Within five (5)
days after the Agreement Date, the Borrower shall
provide the Agent with copies of all warehousing
agreements with GATX Logistics, Inc., and shall
thereafter promptly provide the Agent with copies
of all amendments thereto and any new warehousing
agreements entered into after the Agreement Date
with GATX Logistics, Inc. The provisions of this
Section 5.21 shall be of no further effectiveness
upon the earlier to occur of (a) receipt by the
Agent of a Lien waiver agreement executed by GATX
Logistics, Inc. in form and substance reasonably
acceptable to the Agent, and (b) receipt of an
opinion in form and substance reasonably
acceptable to the Agent opining that under
Applicable Law or the applicable agreements GATX
Logistics, Inc. has no Lien.
ARTICLE 5
INFORMATION COVENANTS
So long as any of the Obligations are
outstanding and unpaid or the Borrower has a right
to borrow, or have Letters of Credit issued,
hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and
unless the Majority Lenders shall otherwise
consent in writing, the Borrower will furnish or
cause to be furnished to each Lender and to the
Agent at their respective offices:
ARTICLE 5Section .1 Monthly Financial
Statements and Information. Within thirty (30)
days after each fiscal month end in each year of
the Borrower, the balance sheet of the Borrower as
at the end of such fiscal month, and the related
statement of income and related statement of cash
flows of the Borrower for such fiscal month and
for the elapsed portion of the year ended with the
last day of such fiscal month, all of which shall
be on a consolidated basis with the Borrower's
Subsidiaries and certified by the Authorized
Signatory of the Borrower, in his or her opinion,
to present fairly, in accordance with GAAP, the
financial position of the Borrower, as at the end
of such period and the results of operations for
such period, and for the elapsed portion of the
year ended with the last day of such period,
subject only to normal year-end adjustments.
ARTICLE 5Section .2 Annual Financial
Statements and Information; Certificate of No
Default. Within ninety (90) days after the end of
each year of the Borrower, the audited balance
sheets of the Borrower as at the end of such year,
all of which shall be on a consolidated or
consolidating basis with the Borrower's
Subsidiaries, and the related audited statements
of income and retained earnings and related
audited statements of cash flows for such year,
which financial statements shall set forth in
comparative form such figures as at the end of and
for the previous year, and shall be accompanied by
an opinion of Xxxxxx Xxxxxxxx L.L.P. or other
independent certified public accountants of
recognized standing satisfactory to the Majority
Lenders, together with a statement of the chief
financial officer of the Borrower certifying that
no Default or Event of Default, including, without
limitation, any Default under Sections 7.8, 7.9,
7.10, 7.11, 7.12, 7.13 and 7.14 hereof, was
detected during the examination of the Borrower,
and that such accountants have authorized the
Borrower to deliver such financial statements and
opinion thereon to the Agent and the Lenders
pursuant to this Agreement.
ARTICLE 5Section .3 Performance Certificates.
At the time the financial statements are
furnished pursuant to Sections 6.1 for the months
of March, June, September and December and 6.2
hereof, a certificate of an Authorized Signatory
of the Borrower in the form of Exhibit K attached
hereto:
(a) Setting forth as at the end of such
quarter or year, as the case may be, (i) the
arithmetical calculations required to establish
whether or not the Borrower was in compliance with
the requirements of Sections 7.8, 7.9, 7.10, 7.11,
7.12, 7.13 and 7.14 hereof, and (ii) all domestic
Subsidiaries of the Borrower (other than the
Material Subsidiaries) and the total book value of
assets owned by each such Subsidiary; and
(b) Stating that, to the best of his or
her knowledge, no Default or Event of Default has
occurred as at the end of such quarter or year, as
the case may be, or, if a Default or an Event of
Default has occurred, disclosing each such Default
or Event of Default and its nature, when it
occurred, whether it is continuing, and the steps
being taken by the Borrower with respect to such
Default or Event of Default.
ARTICLE 5Section .4 Access to Accountants.
The Borrower hereby authorizes the Agent to
communicate directly with the Borrower's
independent public accountants and authorizes
these accountants to disclose to the Agent any and
all financial statements and other supporting
financial data, including matters relating to the
annual audit and copies of any arrangement letter
with respect to its business, financial condition
and other affairs. On or before the Agreement
Date, the Borrower shall deliver to its
independent public accountants a letter
authorizing and instructing them to comply with
the provisions of this Section 6.4.
ARTICLE 5Section .5 Additional Reports.
(a) By Tuesday of each week, the
Borrower shall deliver to the Agent and to any
Lender requesting the same, a Borrowing Base
Certificate as of the immediately preceding
Saturday, which shall be in such form as shall be
satisfactory to the Agent, setting forth the
amount of Inventory owned by the Borrower, and
specifically setting forth the amount of Eligible
Finished Goods VCR Inventory, Eligible Finished
Goods TV and Other Inventory and Eligible Picture
Tube Inventory;
(b) Promptly upon receipt thereof, the
Borrower shall deliver to the Agent and the
Lenders copies of all final reports, if any,
submitted to the Borrower by its independent
public accountants in connection with any annual
or interim audit of the Borrower or any of the
Borrower's Subsidiaries, including, without
limitation, any final management report prepared
in connection with the annual audit referred to in
Section 6.2 hereof;
(c) Prior to December 31 of each year,
the Borrower shall deliver to the Agent and the
Lenders the annual budget for the Borrower and any
of the Borrower's Subsidiaries, including
forecasts of the income statement, the balance
sheet and a cash flow statement for the
immediately succeeding year on a month by month
basis;
(d) Promptly after the sending thereof,
the Borrower shall deliver to the Agent and the
Lenders copies of all financial statements,
reports and other information which the Borrower
or any of the Borrower's Subsidiaries sends to any
holder of its Indebtedness or its securities or
which the Borrower or any of the Borrower's
Subsidiaries files with the Securities and
Exchange Commission or any national securities
exchange;
(e) The Borrower shall deliver to the
Agent on behalf of the Lenders promptly after the
same become available copies of the semi-annual
unaudited and annual audited balance sheet of LGE
as at the end of each such period, respectively,
and the related statements of income and cash
flows of LGE for such period, all on a
consolidated and consolidating basis with LGE's
Subsidiaries;
(f) Promptly after the preparation of
the same, the Borrower shall deliver to the Agent
and, if requested of the Borrower by another
Lender, to such other Lender, copies of all
notices, documents, certificates or reports
required to be provided to the Receivables Trustee
by or on behalf of the Borrower, as Servicer (as
such term is defined in the Pooling and Servicing
Agreement) pursuant to Sections 3.04(h), 3.06 and
3.07 of the Pooling and Servicing Agreement; and
(g) From time to time and promptly upon
each request the Borrower shall deliver to the
Agent on behalf of the Lenders such data,
certificates, reports, statements, opinions of
counsel, documents, or further information
regarding the business, assets, liabilities,
financial position, projections, results of
operations, or business prospects of the Borrower
or any of the Borrower's Subsidiaries as the Agent
may reasonably request.
ARTICLE 5Section .6 Notice of Litigation and
Other Matters.
(a) Within five (5) Business Days of
the Borrower's obtaining knowledge of the
institution of, or written threat of, any action,
suit, governmental investigation or arbitration
proceeding against the Borrower or any of the
Borrower's Subsidiaries or any Property, which
action, suit, governmental investigation or
arbitration proceeding exposes, in the Borrower's
reasonable judgment, the Borrower or any of the
Borrower's Subsidiaries to liability in an
aggregate amount in excess of $400,000, the
Borrower shall notify the Agent, and the Lenders
of the occurrence thereof, and the Borrower shall
provide such additional information with respect
to such matters as the Agent or the Lenders may
reasonably request; provided, however, that if the
claim is covered by insurance and the insurer has
acknowledged coverage and assumed the defense of
such suit, the payment or value must be $400,000
in excess of the insurance coverage.
(b) The Borrower shall notify the Agent
and the Lenders within five (5) Business Days of
the Borrower becoming aware of (i) any labor
dispute which may result in claims or losses from
operations greater than $400,000 in the aggregate
not covered by insurance to which the Borrower or
any of the Borrower's Subsidiaries may become a
party, including, without limitation, any strikes,
lockouts or other disputes relating to their
respective plants and other facilities and (ii)
any liability greater than $400,000 in the
aggregate not covered by insurance and incurred
with respect to any closing of any plant or other
facility of the Borrower or any of the Borrower's
Subsidiaries;
(c) Within three (3) Business Days' of
the occurrence of any default (whether or not the
Borrower has received notice thereof from any
other Person) on Indebtedness of the Borrower or
any Subsidiary of the Borrower which singly, or in
the aggregate exceed $1,000,000, the Borrower
shall notify the Agent and the Lenders of the
occurrence thereof;
(d) Within fifteen (15) days of the
occurrence of any default on any Indebtedness of
any Person owed to the Borrower, which singly or
in the aggregate exceeds $2,000,000, the Borrower
shall notify the Agent and the Lenders of the
occurrence thereof;
(e) Promptly upon the Borrower's
receipt of notice or the pendency of any
proceeding for the condemnation or other taking of
any real property of the Borrower or any of the
Borrower's Subsidiaries, the Borrower shall notify
the Agent and the Lenders of the occurrence
thereof;
(f) Promptly upon the Borrower's
receipt of notice of any material adverse change
with respect to the business, assets, liabilities,
financial position, or results of operations of
the Borrower or any of the Borrower's
Subsidiaries, other than changes in the ordinary
course of business which have not had and are not
likely to have a Materially Adverse Effect, the
Borrower shall notify the Agent and the Lenders of
the occurrence thereof;
(g) Promptly following any material
amendment or change to the budget submitted to the
Agent and the Lenders pursuant to Section 6.5(c)
hereof, the Borrower shall notify the Agent and
the Lenders of the occurrence thereof;
(h) Promptly following any (i) Default
under any Loan Document, or the occurrence of any
Servicer Default or Early Amortization Event (as
such terms are defined in the Pooling and
Servicing Agreement) under the Securitization
Documents, or default by the Borrower under any
Subordinated Debenture, or (ii) default under any
other agreement (other than those referenced in
clause (i) of this Section 6.6(h) above) to which
the Borrower or any of the Borrower's Subsidiaries
is a party or by which any of their respective
properties is bound which could reasonably be
expected to have a Materially Adverse Effect, then
the Borrower shall notify the Agent and the
Lenders of the occurrence thereof giving in each
case the details thereof and specifying the action
proposed to be taken with respect thereto;
(i) Promptly following the occurrence
of any event subsequent to the Agreement Date
which, if such event had occurred prior to the
Agreement Date, would have constituted an
exception to the representation and warranty in
Section 4.1(x) of this Agreement, the Borrower
shall notify the Agent and the Lenders of the
occurrence thereof; and
(j) Promptly following the occurrence
of any Reportable Event or a "prohibited
transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) with
respect to any Plan of the Borrower or any of its
ERISA Affiliates or the institution or threatened
institution by the Pension Benefit Guaranty
Corporation of proceedings under ERISA to
terminate or to partially terminate any such Plan
or the commencement or threatened commencement of
any litigation regarding any such Plan or naming
it or the trustee of any such Plan with respect to
such Plan (other than claims for benefits in the
ordinary course of business), the Borrower shall
notify the Agent and the Lenders of the occurrence
thereof.
ARTICLE 6
NEGATIVE COVENANTS
So long as any of the Obligations are
outstanding and unpaid or the Borrower has a right
to borrow, or have Letters of Credit issued,
hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and
unless the Majority Lenders shall otherwise give
their prior consent in writing:
ARTICLE 6Section .1 Indebtedness. The
Borrower will not create, assume, incur, or
otherwise become or remain obligated in respect
of, or permit to be outstanding, and will not
permit any of the Borrower's Subsidiaries to
create, assume, incur, or otherwise become
obligated in respect of, or permit to be
outstanding, any Indebtedness except:
(a) Indebtedness under this Agreement
and the other Loan Documents;
(b) Indebtedness under the Subordinated
Debentures and under the Securitization Documents;
(c) Trade or accounts payable and/or
similar obligations, and accrued expenses,
incurred in the ordinary course of business, other
than for borrowed money;
(d) Indebtedness secured by Permitted
Liens described in clause (f) of the definition of
Permitted Liens set forth in Article 1 hereof and
Capitalized Lease Obligations, collectively, not
to exceed the aggregate principal amount of
$6,000,000 at any time (not including any
Capitalized Lease Obligations that may be incurred
pursuant to the Subsequent Lease Transaction);
(e) Indebtedness of the Borrower to
General Electric Capital Corporation existing
prior to the Agreement Date in connection with the
guaranty by General Electric Capital Corporation
of those letters of Credit listed on Schedule 7.1;
(f) Guaranties permitted by
Section 7.2; and
(g) Other unsecured Indebtedness
incurred by the Borrower not to exceed $2,000,000
in the aggregate outstanding from time to time.
ARTICLE 6Section .2 Guaranties. The Borrower
will not at any time guarantee or enter into or
assume any Guaranty, or be obligated with respect
to, or permit to be outstanding, any Guaranty and
will not permit any of the Borrower's Subsidiaries
at any time to guarantee or enter into or assume
any Guaranty, or be obligated with respect to, or
permit to be outstanding, any Guaranty, in each
case other than (a) obligations under repurchase
agreements of the Borrower entered into in
connection with the sale of products in the
ordinary course of business of the Borrower, (b)
obligations under agreements to indemnify persons
or entities which have issued bid or performance
bonds or letters of credit in the ordinary course
of business of the Borrower securing performance
by the Borrower of activities permissible
hereunder, (c) obligations under agreements of the
Borrower entered into in connection with the
acquisition of services, supplies, and equipment
in the ordinary course of business of the
Borrower, (d) the Borrower may guaranty
indemnification obligations of Microcircuits under
the Securitization Documents, (e) the Borrower may
guaranty Indebtedness of any Material Subsidiary
permitted to be incurred by such Material
Subsidiary under clause (c) or (d) of Section 7.1
hereof, (f) endorsements of instruments in the
ordinary course of business, and (g) other
obligations of any Affiliate, which do not exceed
$1,000,000 in the aggregate outstanding at any
time.
ARTICLE 6Section .3 Liens. The Borrower will
not create, assume, incur, or permit to exist or
to be created, assumed, or permitted to exist,
directly or indirectly, and will not permit any of
the Borrower's Subsidiaries to create, assume,
incur, or permit to exist or to be created,
assumed, or permitted to exist, directly or
indirectly, any Lien on any of its property, real
or personal, now owned or hereafter acquired,
except for Permitted Liens.
ARTICLE 6Section .4 Restricted Payments and
Purchases. The Borrower shall not directly or
indirectly declare or make, and shall not permit
any of the Borrower's Subsidiaries to directly or
indirectly declare or make, any Restricted Payment
or Restricted Purchase, or set aside any funds for
any such purpose; provided, however, the
Borrower's Subsidiaries may make Restricted
Payments to the Borrower.
ARTICLE 6Section .5 Investments. The
Borrower will not make and will not permit any of
its Subsidiaries to make any loan or advance to,
or otherwise acquire for consideration evidences
of Indebtedness, Capital Stock, partnership
interests or other securities of or equity
interests in any third party, except that (a) the
Borrower may purchase or otherwise acquire and own
and may permit any of its Subsidiaries to purchase
or otherwise acquire and own, (i) marketable,
direct obligations of the United States of America
and its agencies maturing within three hundred
sixty-five (365) days of the date of purchase,
(ii) commercial paper issued by corporations, each
of which shall (A) have a consolidated net worth
of at least $250,000,000, and (B) conduct
substantially all of its business in the United
States of America, which commercial paper will
mature within one hundred eighty (180) days from
the date of the original issue thereof and is
rated "P-1" or better by Xxxxx'x Investors
Service, Inc., or "A-1+" or better by Standard &
Poor's Corporation, (iii) certificates of deposit
maturing within three hundred sixty-five (365)
days of the date of purchase and issued by a
United States national or state bank having
deposits totaling more than $250,000,000, and
whose short-term debt is rated "P-1" or better by
Xxxxx'x Investors Service, Inc. or "A-1+" or
better by Standard & Poor's Corporation, and (iv)
up to $100,000 per institution and up to
$1,000,000 in the aggregate in (A) short-term
obligations issued by any local commercial bank or
trust company located in those areas where the
Borrower conducts its business, whose deposits are
insured by the Federal Deposit Insurance
Corporation, or (B) commercial bank-insured money
market funds, or any combination of investments
described in clauses (A) and (B); (b) the Borrower
may hold the Investments in existence on the
Agreement Date and described on Schedule 4.1(l);
(c) so long as no Default or Event of Default
shall have occurred and be continuing, the
Borrower may convert any of its Accounts that are
in excess of ninety (90) days past due into notes
or equity interests from the applicable Account
Debtor so long as the Agent is granted a first
priority security interest in such equity or note
which Lien is perfected contemporaneously with the
conversion of such Account to equity or notes, (d)
Finance Corp. may execute the Transferor
Certificate (as defined in the Pooling and
Servicing Agreement) and take such other actions
required pursuant to the Securitization Documents,
(e) the Borrower and microcircuits may participate
in the Receivables Securitization as provided in
the Securitization Documents and receive the
Finance Corp. Subordinated Notes, (f) the Borrower
may hold the Capital Stock of its Subsidiaries in
existence on the Agreement Date or formed in
accordance with Section 7.7(g), and (g) the
Borrower may make loans or advances to any
Material Subsidiary and any Material Subsidiary
may make loans or advances to any other Material
Subsidiary.
ARTICLE 6Section .6 Affiliate Transactions.
The Borrower shall not, and shall not permit its
Subsidiaries to, enter into or be a party to any
agreement or transaction with any Affiliate except
(a) the Borrower and its Material Subsidiaries may
purchase Inventory from any Mexican Subsidiary in
the ordinary course of business and in a manner
consistent with past business practices; provided,
that the amount advanced to any Mexican Subsidiary
for such Inventory production, together with the
cash on hand or on deposit held by such Mexican
Subsidiary, shall not exceed the cash needs of
such Mexican Subsidiary for working capital during
the period of seven consecutive days following any
date of determination, (b) as listed on Schedule
7.6 hereto, or (c) in the ordinary course of and
pursuant to the reasonable requirements of the
Borrower's or such Subsidiaries business and upon
fair and reasonable terms that are no less
favorable to the Borrower or to such Subsidiary
than it would obtain in a comparable arms length
transaction with a Person not an Affiliate of
Borrower, and on terms consistent with the
business relationship of Borrower or such
Subsidiary and such Affiliate prior to the
Agreement Date, if any; provided that any
contracts, purchase orders, or other transactions
between the Borrower or any Material Subsidiary,
on one hand, and any Affiliate, on the other hand,
that provide for payments in excess of $3,000,000
in a single contract, purchase order or
transaction or a series of related contracts,
purchase orders or transactions shall be
summarized in a quarterly report prepared by the
Borrower certified by an Authorized Signatory of
the Borrower and delivered to the Agent within
forty-five (45) days following the last day of
each fiscal quarter. Nothing contained in this
Agreement shall prohibit increases in compensation
and benefits for officers and employees of the
Borrower or any of the Borrower's Subsidiaries
which are customary in the industry or consistent
with the past business practice of the Borrower or
any of the Borrower's Subsidiaries, or payment of
customary directors' fees and indemnities.
ARTICLE 6Section .7 Liquidation; Change in
Ownership, Name, or Year; Disposition or
Acquisition of Assets; Etc. The Borrower shall
not, and shall not permit any of the Borrower's
Subsidiaries to, at any time:
(a) Liquidate or dissolve itself (or
suffer any liquidation or dissolution) or
otherwise wind up its business; provided, however,
that Productos Magneticos de Chihauhau, S.A. de
C.V., Xxxxxx, X.X. de C.V. and any Immaterial
Subsidiary may dissolve or liquidate;
(b) Sell, lease, abandon, transfer or
otherwise dispose of, in a single transaction or a
series of related transactions, any assets,
property or business except for the sale of
Inventory in the ordinary course of business at
the fair market value thereof and for cash or cash
equivalents and except for physical assets used,
consumed or otherwise disposed of in the ordinary
course of business; provided, however, that
(a) the Borrower may sell assets (other than
Collateral) pursuant to the Subsequent Lease
Transaction and may sell or otherwise dispose of
other assets (other than Collateral) with a sale
value not greater than $1,000,000 in the aggregate
for all such assets that may be sold during any
year if the Net Cash Proceeds from such sale are
applied to the Loans as required by Section
2.6(c); and (b) the Borrower, Microcircuits and
Finance Corp. may sell and transfer the
receivables as set forth in the Receivables
Purchase Agreements and the other Securitization
Documents;
(c) Become a partner or joint venturer
with any third party; provided, however, the
Borrower may become a partner or joint venturer
with LGE if (i) no Default exists hereunder at
such time, (ii) such arrangement is in compliance
with Section 7.6 hereof, and (iii) at the time the
Borrower enters into such partnership or joint
venture, the Borrower executes and delivers to the
Agent all documents reasonably necessary
(including UCC-1 financing statements) to perfect
the security interest of the Agent in the
partnership or other equity interest of the
Borrower in such partnership or joint venture;
(d) Acquire (i) all or any substantial
part of the assets, property or business of, or
(ii) any assets that constitute a division or
operating unit of the business of, any other
Person;
(e) Merge or consolidate with any other
Person, except that any Subsidiary of the Borrower
may be merged into or consolidated with the
Borrower or another Wholly-Owned Subsidiary of the
Borrower; provided that the Borrower is the
surviving entity in any such merger or
consolidation, or if the Borrower is not a party
to such merger or consolidation but any Material
Subsidiary is a party to such merger or
consolidation, the surviving entity is a Material
Subsidiary.;
(f) Change its corporate name without
giving the Agent thirty (30) days prior written
notice of its intention to do so and complying
with all reasonable requirements of the Lenders in
regard thereto;
(g) Create any Subsidiary, except for
the creation of a Wholly-Owned Subsidiary of the
Borrower provided; that (i) such Subsidiary is
organized under the laws of a jurisdiction within
the United States of America, (ii) (A) if such
Subsidiary is or becomes a Material Subsidiary,
such Subsidiary executes at the time of its
creation (or within thirty (30) days after it
becomes a Material Subsidiary) a Supplement to the
Subsidiary Guaranty in favor of the Agent, the
Issuing Banks and the Lenders in the form of
Exhibit L attached hereto and a Supplement to the
Subsidiary Security Agreement in favor of the
Agent, the Issuing Banks and the Lenders in the
form of Exhibit M attached hereto, (B) if such
Subsidiary is a domestic Subsidiary, the Borrower
executes an amendment to the Pledge Agreement for
purposes of pledging the stock of such Subsidiary
to the Agent pursuant to the terms of the Pledge
Agreement, and (C) if such Subsidiary is a
domestic Subsidiary, or is or becomes a Material
Subsidiary, the Borrower and such Subsidiary take
all steps required and execute all necessary
documents (including UCC-1 financing statements)
to perfect the security interest of the Agent in
the Capital Stock of such domestic Subsidiary and
the assets of such Material Subsidiary, and (iii)
no Default exists immediately prior to or after
the creation of such Subsidiary; or
(h) Change its year-end for accounting
purposes from the calendar year ending December
31.
ARTICLE 6Section .8 Minimum EBITDA. The
Borrower shall not permit for the fiscal quarter
ended (a) June 30, 1997, EBITDA for the
immediately preceding six (6) month period to be
less than ($25,000,000), (b) September 30, 1997,
EBITDA for the immediately preceding nine (9)
month period to be less than $10,000,000, and (c)
December 31, 1997, and each fiscal quarter end
thereafter, EBITDA for the immediately preceding
twelve (12) month period to be less than the
amount hereinbelow specified for such period:
Quarter End Amount
December 31, 1997 $ 45,000,000
March 31, 1998 $ 60,000,000
June 30, 1998 $ 80,000,000
September 30, 1998 $ 95,000,000
December 31, 1998 $105,000,000
March 31, 1999 $125,000,000
June 30, 1999, and thereafter $135,000,000
ARTICLE 6Section .9 Current Ratio. The
Borrower shall not as of the fiscal quarter ending
June 30, 1997, and for each fiscal quarter end
thereafter, permit the ratio of (a) Current Assets
to (b) Current Liabilities to be less than the
ratio hereinbelow specified for such period:
Quarter End Ratio
June 30, 1997 0.80 to 1.00
September 30, 1997 0.80 to 1.00
December 31, 1997, and thereafter 0.85 to 1.00
ARTICLE 6Section .10 Fixed Charge
Coverage Ratio. The Borrower shall not permit for
the quarter ended September 30, 1998, and each
calendar quarter end thereafter, the Fixed Charge
Coverage Ratio for the immediately preceding
twelve (12) month period to be less than the ratio
hereinbelow specified for such period:
Quarter End Ratio
September 30, 1998 0.80 to 1.00
December 31, 1998 1.25 to 1.00
March 31, 1999, and thereafter 1.50 to 1.00
ARTICLE 6Section .11 Capital
Expenditures. The Borrower shall not make or
incur in the aggregate any Capital Expenditures,
during any fiscal year, in excess of the amount
hereinbelow specified (the "Permitted Amount") for
such year:
Year Permitted Amount
1997 $115,000,000
1998 $ 51,000,000
1999 $ 60,000,000
2000 $ 30,000,000
; provided, however, the Borrower may make
additional Capital Expenditures during (a) fiscal
year 1998 in an aggregate amount equal to (i) the
Permitted Amount for fiscal year 1997, minus
(ii) the aggregate amount of Capital Expenditures
made in fiscal year 1997, and (b) fiscal year 1999
and fiscal year 2000 in an aggregate amount equal
to (i) (A) the Permitted Amount for the
immediately preceding fiscal year, minus (B) the
aggregate amount of Capital Expenditures made in
the immediately preceding fiscal year, multiplied
by (ii) fifty percent (50%).
ARTICLE 6Section .12 Interest Coverage
Ratio. The Borrower shall not permit for the
quarter ended (a) September 30, 1997, the Interest
Coverage Ratio for the immediately preceding nine
(9) month period to be less than 0.80 to 1.0, and
(b) December 31, 1997, and each calendar quarter
end thereafter, the Interest Coverage Ratio for
the immediately preceding twelve (12) month period
to be less than the ratio hereinbelow specified
for such period:
Quarter End Ratio
December 31, 1997 1.70 to 1.0
March 31, 1998 2.00 to 1.00
June 30, 1998 2.25 to 1.00
September 30, 1998 2.50 to 1.00
December 31, 1998 2.50 to 1.00
March 31, 1999, and thereafter 3.00 to 1.00
ARTICLE 6Section .13 Funded Debt/Total
Capitalization Ratio. The Borrower shall not
permit for the fiscal quarter ended June 30, 1997,
and each fiscal quarter end thereafter, the ratio
of (a) the sum of (i) Funded Debt plus (ii) the
LGE Payable, to (b) Total Capitalization for the
immediately preceding twelve (12) month period to
exceed the ratio which is hereinbelow specified
for such period:
Quarter End Ratio
June 30, 1997 0.90 to 1.00
September 30, 1997 0.90 to 1.00
December 31, 1997 0.85 to 1.00
March 31, 1998 0.85 to 1.00
September 30, 1998 0.85 to 1.00
September 30, 1998 0.85 to 1.00
December 31, 1998, and thereafter 0.80 to 1.00
ARTICLE 6Section .14 Tuning Patent
Royalties; LGE Payable.
(a) As of the fiscal quarter ended June 30,
1997, and each fiscal quarter end thereafter, the
aggregate amount of Tuning Patent Royalties
received by the Borrower during the immediately
preceding twelve (12) month period shall not be
less than $18,000,000.
(b) The aggregate outstanding balance of the
LGE Payable for each day from the Agreement Date
through June 30, 1997 shall not be less than
$60,000,000. As of the fiscal month ended
July 31, 1997, and each fiscal month end
thereafter, the aggregate average outstanding
amount of the LGE Payable during the immediately
preceding six (6) month period shall not be less
than the amount which is hereinbelow specified for
such period:
Month End Average Amount
July 31, 1997,
through June 30, 1998 $75,000,000
July 31, 1998,
through December 31, 1998 $85,000,000
January 31, 1999,
through June 30, 1999 $75,000,000
July 31, 1999,
through December 31, 1999 $85,000,000
January 31, 2000, and
thereafter $75,000,000
ARTICLE 6Section .15 Sales and
Leasebacks. The Borrower will not enter into and
will not permit any of the Borrower's Subsidiaries
to enter into any arrangement, directly or
indirectly, with any third party whereby the
Borrower or such Subsidiary shall sell or transfer
any property, real or personal, whether now owned
or hereafter acquired, and whereby the Borrower or
such Subsidiary shall then or thereafter rent or
lease as lessee such property or any part thereof
or other property which the Borrower or such
Subsidiary intends to use for substantially the
same purpose or purposes as the property sold or
transferred; provided, however, the Borrower may
enter into the Subsequent Lease Transaction on
substantially the same terms as the terms of the
Salomon Lease Transaction or the proposed terms of
the Subsequent Lease Transaction as in existence
on the Agreement Date.
ARTICLE 6Section .16 Amendment and
Waiver. The Borrower shall not, without the prior
written consent of the Majority Lenders, enter
into any amendment of, or agree to or accept any
waiver which would adversely affect the rights of
the Agent, the Lenders and the Issuing Banks under
this Agreement or any other Loan Document, of (a)
its certificate of incorporation and by-laws,
(b) the Subordinated Debentures, or (c) the
Securitization Documents.
ARTICLE 6Section .17 ERISA Liability.
The Borrower and each of the Borrower's
Subsidiaries shall not fail to meet all of the
applicable minimum funding requirements of ERISA
and the Code, without regard to any waivers
thereof, and, to the extent that the assets of any
of its Plans would be less than an amount
sufficient to provide all accrued benefits payable
under such Plans, shall make the maximum
deductible contributions allowable under the Code.
Neither the Borrower nor any of the Borrower's
Subsidiaries shall (a) become a participant in any
Multiemployer Plan after the Agreement Date, or
(b) withdraw from any Multiemployer Plan if such
withdrawal would result in material liability to
the Borrower or any Subsidiary.
ARTICLE 6Section .18 Payment
Instructions. The Borrower will not issue payment
instructions to the Receivables Trustee or Finance
Corp. contrary to the payment instructions set
forth in the Distribution Instructions Letter and
the Borrower will not issue payment instructions
to any licensee under a License Agreement contrary
to the provisions of Section 5.15(b) hereof.
ARTICLE 6Section .19 Prepayments. The
Borrower shall not prepay, redeem, defease or
purchase in any manner, or deposit or set aside
funds for the purpose of any of the foregoing,
make any payment in respect of principal of, or
make any payment in respect of interest on, (a)
the LGE Payable; provided, however, that so long
as no Default or Event of Default is then existing
or would be caused thereby, the Borrower may make
current payments of accounts due on the LGE
Payable, and the accrued interest thereon, if the
outstanding aggregate balance of the LGE Payable
remains equal to or greater than the amount
required by Section 7.14(b); and (b) any Funded
Debt (including the Subordinated Debentures),
except the Borrower may (i) make regularly
scheduled payments of principal or interest
required in accordance with the terms of the
instruments governing any Funded Debt permitted
hereunder, (ii), provided no Event of Default then
exists or would be caused thereby, purchase
Subordinated Debentures at prices below 100% of
the principal amount thereof, plus accrued
interest, for delivery 60 days in advance to the
trustee with respect to such Subordinated
Debentures to reduce or satisfy the Borrower's
obligation with respect to any mandatory sinking
fund payment relating thereto, and (iii) make
payments with respect to the Obligations;
provided, however, the Borrower shall not make any
payments (whether with respect to principal,
interest, sinking fund obligations, or otherwise)
on the Subordinated Debentures if such payments
would violate the subordination provisions of the
Subordinated Debentures.
ARTICLE 6Section .20 Negative Pledge.
The Borrower shall not, directly or indirectly,
enter into any agreement (other than the Loan
Documents) with any Person that prohibits or
restricts or limits the ability of the Borrower to
create, incur, pledge, or suffer to exist any Lien
upon any assets of the Borrower.
ARTICLE 7
DEFAULT
ARTICLE 7Section .1 Events of Default. Each
of the following shall constitute an Event of
Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any
judgment or order of any court or any order, rule,
or regulation of any governmental or non-
governmental body:
(a) Any representation or warranty made
under this Agreement shall prove incorrect or
misleading in any material respect when made or
deemed to have been made pursuant to Section 4.3
hereof;
(b) The Borrower shall default in the
payment of any principal or interest under the
Notes, or any of them, or any reimbursement
obligations with respect to any Letter of Credit,
or any fees payable hereunder or under the other
Loan Documents;
(c) The Borrower shall default in the
performance or observance of any agreement or
covenant contained in Sections 5.5, 5.7, 5.9,
5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.18, 5.20 or
5.21, or in Article 6 or Article 7 hereof or in
any Security Document;
(d) The Borrower shall default in the
performance or observance of any other agreement
or covenant contained in this Agreement not
specifically referred to elsewhere in this Section
8.1, and such default shall not be cured to the
Majority Lenders' satisfaction within a period of
thirty (30) days from the date that the Borrower
knew or should have known of the occurrence of
such default;
(e) There shall occur any default in
the performance or observance of any agreement or
covenant or breach of any representation or
warranty contained in any of the other Loan
Documents (other than this Agreement or the
Security Documents or as otherwise provided in
this Section 8.1) which shall not be cured to the
Majority Lenders' satisfaction within the
applicable cure period, if any, provided for in
such Loan Document, or, if there is no applicable
cure period set forth in such Loan Document,
within a period of thirty (30) days from the date
that the Borrower knew or should have known of the
occurrence of such default;
(f) There shall occur any Change of
Control of the Borrower;
(g) There shall be entered a decree or
order for relief in respect of the Borrower or any
of the Borrower's Subsidiaries under the
Bankruptcy Code, or any other applicable federal
or state bankruptcy law or other similar law, or
appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or similar
official of the Borrower or any of the Borrower's
Subsidiaries, or of any substantial part of their
respective properties, or ordering the winding-up
or liquidation of the affairs of the Borrower or
any of the Borrower's Subsidiaries, or an
involuntary petition shall be filed against the
Borrower or any of the Borrower's Subsidiaries,
and a temporary stay entered, and (i) such
petition and stay shall not be diligently
contested, or (ii) any such petition and stay
shall continue undismissed for a period of sixty
(60) consecutive days;
(h) Any of the Borrower or any of the
Borrower's Subsidiaries shall file a petition,
answer, or consent seeking relief under the
Bankruptcy Code, or any other applicable federal
or state bankruptcy law or other similar law, or
the Borrower or any of the Borrower's Subsidiaries
shall consent to the institution of proceedings
thereunder or to the filing of any such petition
or to the appointment or taking of possession of a
receiver, liquidator, assignee, trustee,
custodian, sequestrator, or other similar official
of the Borrower or any of the Borrower's
Subsidiaries, or of any substantial part of their
respective properties, or the Borrower or any of
the Borrower's Subsidiaries shall fail generally
to pay their respective debts as they become due,
or the Borrower or any of the Borrower's
Subsidiaries shall take any action in furtherance
of any such action;
(i) There shall be entered a decree or
order for relief in respect of LGE (or any other
direct or indirect holding company between the
Borrower and LGE holding five percent (5%) or more
of the Capital Stock of the Borrower or of any
class thereof) under the Bankruptcy Code, or any
other applicable federal or state bankruptcy law
or other similar law (including without limitation
the laws of Korea), or appointing a receiver,
liquidator, assignee, trustee, custodian,
sequestrator, or similar official of LGE (or any
other direct or indirect holding company between
the Borrower and LGE holding five percent (5%) or
more of the Capital Stock of the Borrower or of
any class thereof), or of any substantial part of
their respective properties, or ordering the
winding-up or liquidation of the affairs of LGE
(or any other direct or indirect holding company
between the Borrower and LGE holding five
percent (5%) or more of the Capital Stock of the
Borrower or of any class thereof), or an
involuntary petition shall be filed against LGE
(or any other direct or indirect holding company
between the Borrower and LGE holding five
percent (5%) or more of the Capital Stock of the
Borrower or of any class thereof), and a temporary
stay entered, and (i) such petition and stay shall
not be diligently contested, or (ii) any such
petition and stay shall continue undismissed for a
period of sixty (60) consecutive days;
(j) LGE (or any other direct or
indirect holding company between the Borrower and
LGE holding five percent (5%) or more of the
Capital Stock of the Borrower or of any class
thereof) shall file a petition, answer, or consent
seeking relief under the Bankruptcy Code, or any
other applicable federal or state bankruptcy law
or other similar law (including, without
limitation, the laws of Korea), or LGE (or any
other direct or indirect holding company between
the Borrower and LGE holding five percent (5%) or
more of the Capital Stock of the Borrower or of
any class thereof) shall consent to the
institution of proceedings thereunder or to the
filing of any such petition or to the appointment
or taking of possession of a receiver, liquidator,
assignee, trustee, custodian, sequestrator, or
other similar official of LGE (or any other direct
or indirect holding company between the Borrower
and LGE holding five percent (5%) or more of the
Capital Stock of the Borrower or of any class
thereof), or of any substantial part of their
respective properties, or LGE (or any other direct
or indirect holding company between the Borrower
and LGE holding five percent (5%) or more of the
Capital Stock of the Borrower or of any class
thereof) shall fail generally to pay their
respective debts as they become due, or LGE (or
any other direct or indirect holding company
between the Borrower and LGE holding five
percent (5%) or more of the Capital Stock of the
Borrower or of any class thereof) shall take any
action in furtherance of any such action;
(k) A final judgment (other than a
money judgment fully covered by insurance as to
which the insurance company has acknowledged
coverage) shall be entered by any court against
any of the Borrower or any of the Borrower's
Subsidiaries for the payment of money which
exceeds $1,000,000, or a warrant of attachment or
execution or similar process shall be issued or
levied against property of any of the Borrower or
any of the Borrower's Subsidiaries pursuant to a
final judgment which, together with all other such
property of the Borrower and the Borrower's
Subsidiaries subject to other such process,
exceeds in value $1,000,000 in the aggregate, and
if, within sixty (60) days after the entry, issue,
or levy thereof, such judgment, warrant, or
process shall not have been paid or discharged or
stayed pending appeal, or if, after the expiration
of any such stay, such judgment, warrant, or
process shall not have been paid or discharged;
(l) There shall be at any time any
"accumulated funding deficiency," as defined in
ERISA or in Section 412 of the Code, with respect
to any Plan maintained by any of the Borrower and
its ERISA Affiliates, or to which the Borrower or
any of its ERISA Affiliates has any liabilities,
or any trust created thereunder; or a trustee
shall be appointed by a United States District
Court to administer any such Plan; or the Pension
Benefit Guaranty Corporation shall institute
proceedings to terminate any such Plan; or any of
the Borrower and its ERISA Affiliates shall incur
any liability to the Pension Benefit Guaranty
Corporation in connection with the termination of
any such Plan; or any Plan or trust created under
any Plan of any of the Borrower and its ERISA
Affiliates shall engage in a non-exempt
"prohibited transaction" (as such term is defined
in Section 406 of ERISA or Section 4975 of the
Code) which would subject any such Plan, any trust
created thereunder, any trustee or administrator
thereof, or any party dealing with any such Plan
or trust to any material tax or penalty on
"prohibited transactions" imposed by Section 502
of ERISA or Section 4975 of the Code or the
Borrower or any of its ERISA Affiliates shall
enter into or become obligated after the Agreement
Date to contribute to a Multiemployer Plan;
(m) There shall occur any default
(after the expiration of any applicable cure
period) under any indenture, agreement, or
instrument evidencing Indebtedness of the Borrower
or any of the Borrower's Subsidiaries in an
aggregate principal amount exceeding $2,000,000,
including, without limitation, the Subordinated
Debentures or the Securitization Documents;
(n) All or any portion of any Security
Document shall at any time and for any reason be
declared to be null and void, or a proceeding
shall be commenced by the Borrower or any of its
Affiliates, or by any governmental authority
having jurisdiction over the Borrower or any of
its Affiliates, seeking to establish the
invalidity or unenforceability thereof (exclusive
of questions of interpretation of any provision
thereof), or the Borrower or any of its Affiliates
shall deny that it has any liability or obligation
for the payment of principal or interest purported
to be created under any Loan Document;
(o) There shall occur any event or
occurrence which, singly or when aggregated with
other events or occurrences, has a Materially
Adverse Effect;
(p) A Termination Event, or an Early
Amortization Event, or, if the Borrower is the
Servicer at such time, a Servicer Default (as such
terms are defined in the Pooling and Servicing
Agreement) under any of the Securitization
Documents shall occur and be continuing and shall
not have been rescinded in accordance with the
terms of such Securitization Documents; or
(q) Any Tuning Patent, any License
Agreement relating thereto or any of the
Borrower's right, title or interest in and to such
Tuning Patent or License Agreement, shall become
invalid or shall be terminated or shall otherwise
no longer be enforceable by or for the benefit of
the Borrower.
ARTICLE 7Section .2 Remedies. If an Event of
Default shall have occurred and shall be
continuing, in addition to the rights and remedies
set forth elsewhere in this Agreement and the Loan
Documents:
(a) With the exception of an Event of
Default specified in Section 8.1(g) or (h), the
Agent, at the direction of the Majority Lenders,
shall (i) terminate the Commitments and the Letter
of Credit Commitment, or (ii) declare the
principal of and interest on the Loans and the
Notes and all other Obligations to be forthwith
due and payable without presentment, demand,
protest, or notice of any kind, all of which are
hereby expressly waived, anything in this
Agreement or in the Notes to the contrary
notwithstanding, or both.
(b) Upon the occurrence and continuance
of an Event of Default specified in Sections
8.1(g) or (h), such principal, interest, and other
Obligations shall thereupon and concurrently
therewith become due and payable, and the
Commitments and the Letter of Credit Commitment,
shall forthwith terminate, all without any action
by the Agent or the Lenders or the Majority
Lenders or the holders of the Notes and without
presentment, demand, protest, or other notice of
any kind, all of which are expressly waived,
anything in this Agreement or in the Notes to the
contrary notwithstanding.
(c) The Agent, with the concurrence of
the Majority Lenders, shall exercise all of the
post-default rights granted to it and to them
under the Loan Documents or under Applicable Law.
The Agent, for the benefit of itself, the Issuing
Banks and the Lenders, shall have the right to the
appointment of a receiver for the Property of the
Borrower, and the Borrower hereby consents to such
rights and such appointment and hereby waives any
objection the Borrower may have thereto or the
right to have a bond or other security posted by
the Agent, the Issuing Banks or the Lenders in
connection therewith.
(d) In regard to all Letters of Credit
with respect to which presentment for honor shall
not have occurred at the time of any acceleration
of the Obligations pursuant to the provisions of
this Section 8.2, the Borrower shall promptly upon
demand by the Agent deposit in a Letter of Credit
Reserve Account opened by Agent for the benefit of
the Issuing Bank an amount equal to the aggregate
then undrawn and unexpired amount of such Letter
of Credit Obligations. Amounts held in such
Letter of Credit Reserve Account shall be applied
by the Agent to the payment of drafts drawn under
such Letters of Credit, and the unused portion
thereof after such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower
hereunder and under the Notes in the manner set
forth in Section 2.11 hereof. Pending the
application of such deposit to the payment of the
Reimbursement Obligations, the Agent shall, to the
extent reasonably practicable, invest such deposit
in an interest bearing open account or similar
available savings deposit account and all interest
accrued thereon shall be held with such deposit as
additional security for the Reimbursement
Obligations. After all such Letters of Credit
shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been
satisfied, and all other Obligations shall have
been paid in full, the balance, if any, in such
Letter of Credit Reserve Account shall be returned
to the Borrower. Except as expressly provided
hereinabove, presentment, demand, protest and all
other notices of any kind are hereby expressly
waived by the Borrower.
(e) The Agent may, and upon the request
of the Lenders (whose voting rights hereunder have
not been restructed pursuant to Section 2.2(e)
hereof) the total of whose commitment ratios
equals or exceeds eighty percent (80%) of the
Commitment Ratios of all Lenders entitled to vote
hereunder, the Agent shall, upon one (1) Business
Day's prior notice, terminate transfers under the
Securitization Documents while an Event of Default
is continuing, if on the date of such notice,
either (a) the sum of the outstanding principal
amount of the Loans and the Letter of Credit
Obligations equals or exceeds $75,000,000, or
(b) the sum of the outstanding principal amount of
the Loans and the Letter of Credit Obligations is
less than $75,000,000 and the Available Revolving
Loan Commitment is less than $15,000,000.
Additionally, upon the occurrence of an Event of
Default, the Agent may send an Enforcement Notice
(as defined in the Receivables Intercreditor
Agreement to the Receivables Trustee.
(f) The rights and remedies of the
Agent, the Issuing Banks and the Lenders hereunder
shall be cumulative, and not exclusive.
ARTICLE 8
THE AGENT
ARTICLE 8Section .1 Appointment and
Authorization. Each Lender hereby irrevocably
appoints and authorizes, and hereby agrees that it
will require any transferee of any of its interest
in its Loans and in its Notes irrevocably to
appoint and authorize, the Agent to take such
actions as its agent on its behalf and to exercise
such powers hereunder as are delegated by the
terms hereof, together with such powers as are
reasonably incidental thereto. Neither the Agent
nor any of its directors, officers, employees, or
agents shall be liable for any action taken or
omitted to be taken by it hereunder or in
connection herewith, except for its own gross
negligence or willful misconduct as determined by
a final non-appealable order of a court of
competent jurisdiction.
ARTICLE 8Section .2 Interest Holders. The
Agent may treat each Lender, or the Person
designated in the last notice filed with the Agent
under this Section 9.2, as the holder of all of
the interests of such Lender in its Loans and in
its Notes until written notice of transfer, signed
by such Lender (or the Person designated in the
last notice filed with the Agent) and by the
Person designated in such written notice of
transfer, in form and substance satisfactory to
the Agent, shall have been filed with the Agent.
ARTICLE 8Section .3 Consultation with
Counsel. The Agent may consult with legal counsel
selected by it and shall not be liable to any
Lender or any Issuing Bank for any action taken or
suffered by it in good faith in reliance on the
advice of such counsel.
ARTICLE 8Section .4 Documents. The Agent
shall not be under any duty to examine, inquire
into, or pass upon the validity, effectiveness, or
genuineness of this Agreement, any Note, or any
instrument, document, or communication furnished
pursuant hereto or in connection herewith, and the
Agent shall be entitled to assume that they are
valid, effective, and genuine, have been signed or
sent by the proper parties, and are what they
purport to be.
ARTICLE 8Section .5 Agent and Affiliates.
With respect to the Commitment and Loans, the
Lender which is affiliated with the Agent shall
have the same rights and powers hereunder as any
other Lender, and the Agent and its other
affiliates may accept deposits from, lend money
to, and generally engage in any kind of business
with the Borrower or any Affiliates of, or Persons
doing business with, the Borrower, as if it were
not affiliated with the Agent and without any
obligation to account therefor. The Lender and
the Issuing Banks acknowledge that the Agent and
its affiliates have other lending and investment
relationships with the Borrower and its
Affiliates, and in the future may enter into
additional such relationships.
ARTICLE 8Section .6 Responsibility of the
Agent. The duties and obligations of the Agent
under this Agreement are only those expressly set
forth in this Agreement. The Agent shall be
entitled to assume that no Default or Event of
Default has occurred and is continuing unless it
has actual knowledge, or has been notified by the
Borrower, of such fact, or has been notified by a
Lender that such Lender considers that a Default
or an Event of Default has occurred and is
continuing, and such Lender shall specify in
detail the nature thereof in writing. The Agent
shall provide each Lender with copies of such
documents received from the Borrower as such
Lender may reasonably request.
ARTICLE 8Section .7 Action by Agent.
(a) The Agent shall be entitled to use
its discretion with respect to exercising or
refraining from exercising any rights which may be
vested in it by, and with respect to taking or
refraining from taking any action or actions which
it may be able to take under or in respect of,
this Agreement, unless the Agent shall have been
instructed by the Majority Lenders to exercise or
refrain from exercising such rights or to take or
refrain from taking such action, provided that the
Agent shall not exercise any rights under Section
8.2(a) of this Agreement without the approval of
the Majority Lenders. The Agent shall incur no
liability under or in respect of this Agreement
with respect to anything which it may do or
refrain from doing in the reasonable exercise of
its judgment or which may seem to it to be
necessary or desirable in the circumstances.
(b) The Agent shall not be liable to
the Lenders or to any Lender in acting or
refraining from acting under this Agreement in
accordance with the instructions of the Majority
Lenders, and any action taken or failure to act
pursuant to such instructions shall be binding on
all Lenders.
ARTICLE 8Section .8 Notice of Default or
Event of Default. In the event that the Agent or
any Lender shall acquire actual knowledge, or
shall have been notified in writing, of any
Default or Event of Default, the Agent or such
Lender shall promptly notify the Lenders and the
Agent, and the Agent shall take such action and
assert such rights under this Agreement as the
Majority Lenders shall request in writing, and the
Agent shall not be subject to any liability by
reason of its acting pursuant to any such request.
If the Majority Lenders shall fail to request the
Agent to take action or to assert rights under
this Agreement in respect of any Default or Event
of Default within ten (10) days after their
receipt of the notice of any Default or Event of
Default from the Agent, or shall request
inconsistent action with respect to such Default
or Event of Default, the Agent may, but shall not
be required to, take such action and assert such
rights (other than rights under Article 8 hereof)
as it deems in its discretion to be advisable for
the protection of the Lenders, except that, if the
Majority Lenders have instructed the Agent not to
take such action or assert such right, in no event
shall the Agent act contrary to such instructions.
ARTICLE 8Section .9 Responsibility
Disclaimed. The Agent shall not be under any
liability or responsibility whatsoever as Agent:
(a) To the Borrower or any other Person
or entity as a consequence of any failure or delay
in performance by or any breach by, any Lender or
Lenders of any of its or their obligations under
this Agreement;
(b) To any Lender or Lenders, as a
consequence of any failure or delay in performance
by, or any breach by, the Borrower or any other
obligor of any of its obligations under this
Agreement or the Notes or any other Loan Document;
or
(c) To any Lender or Lenders for any
statements, representations, or warranties in this
Agreement, or any other document contemplated by
this Agreement or any information provided
pursuant to this Agreement, any other Loan
Document, or any other document contemplated by
this Agreement, or for the validity,
effectiveness, enforceability, or sufficiency of
this Agreement, the Notes, any other Loan
Document, or any other document contemplated by
this Agreement.
ARTICLE 8Section .10 Indemnification.
The Lenders agree to indemnify the Agent (to the
extent not reimbursed by the Borrower) pro rata in
accordance with their Commitment Ratios from and
against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments,
suits, investigations, costs, expenses (including
fees and expenses of experts, agents, consultants,
and counsel), or disbursements of any kind or
nature (whether or not the Agent is a party to any
such action, suit or investigation) whatsoever
which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or
arising out of this Agreement, any other Loan
Document, or any other document contemplated by
this Agreement or any action taken or omitted by
the Agent under this Agreement, any other Loan
Document, or any other document contemplated by
this Agreement, except that no Lender shall be
liable to the Agent for any portion of such
liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from the
gross negligence or willful misconduct of the
Agent as determined by a final non-appealable
order of a court of competent jurisdiction. The
provisions of this Section 9.10 shall survive the
termination of this Agreement.
ARTICLE 8Section .11 Credit Decision.
Each Lender represents and warrants to each other
and to the Agent that:
(a) In making its decision to enter
into this Agreement and to make its Advances it
has independently taken whatever steps it
considers necessary to evaluate the financial
condition and affairs of the Borrower and that it
has made an independent credit judgment, and that
it has not relied upon information provided by the
Agent; and
(b) So long as any portion of the Loans
remains outstanding, it will continue to make its
own independent evaluation of the financial
condition and affairs of the Borrower.
ARTICLE 8Section .12 Successor Agent.
Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may
resign at any time by giving written notice
thereof to the Lenders and the Borrower. Upon any
such resignation, the Majority Lenders shall have
the right to appoint a successor Agent (with the
consent of the Borrower if no Event of Default
then exists). If no successor Agent shall have
been so appointed by the Majority Lenders, and
shall have accepted such appointment within thirty
(30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor
Agent which shall be any Lender or a commercial
bank organized under the laws of the United States
of America or any political subdivision thereof
which has combined capital and reserves in excess
of $250,000,000. 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, duties, and obligations of the
retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations
hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article
9.12 shall continue in effect for its benefit in
respect of any actions taken or omitted to be
taken by it while it was acting as the Agent.
ARTICLE 8Section .13 Agent May File
Proofs of Claim. The Agent may file such proofs
of claim and other papers or documents as may be
necessary or advisable in order to have the claims
of the Agent (including any claim for the
reasonable compensation, expenses, disbursements
and advances of the Agent, its agents, financial
advisors and counsel), the Lenders and the Issuing
Banks allowed in any judicial proceedings relative
to the Borrower or any Material Subsidiary, or any
of their respective creditors or property, and
shall be entitled and empowered to collect,
receive and distribute any monies, securities or
other property payable or deliverable on any such
claims and any custodian in any such judicial
proceedings is hereby authorized by each Lender
and Issuing Bank to make such payments to the
Agent and, in the event that the Agent shall
consent to the making of such payments directly to
the Lenders and the Issuing Banks, to pay to the
Agent any amount due to the Agent for the
reasonable compensation, expenses, disbursements
and advances of the Agent, its agents, financial
advisors and counsel, and any other amounts due
the Agent under Section 10.2 hereof. Nothing
contained in the Loan Agreement or the Loan
Documents shall be deemed to authorize the Agent
to authorize or consent to or accept or adopt on
behalf of any Lender or any Issuing Bank any plan
of reorganization, arrangement, adjustment or
composition affecting the Notes, the Letters of
Credit or the rights of any holder thereof, or to
authorize the Agent to vote in respect of the
claim of any Lender of any Issuing Bank in any
such proceeding.
ARTICLE 8Section .14 Collateral. The
Agent is hereby authorized to hold all Collateral
pledged pursuant to any Loan Document and to act
on behalf of the Lenders and the Issuing Banks, in
its own capacity and through other agents
appointed by it, under the Security Documents;
provided, that the Agent shall not agree to the
release of any Collateral except in accordance
with the terms hereof.
ARTICLE 8Section .15 Release of
Collateral.
(a) Each Lender and each Issuing Bank
hereby directs, in accordance with the terms of
this Agreement, the Agent to release or to
subordinate any Lien held by the Agent for the
benefit of the Lenders and the Issuing Banks:
(i) against all of the Collateral,
upon final and indefeasible payment in full
of the Obligations and termination of this
Agreement; or
(ii) against any part of the
Collateral sold or disposed of by the
Borrower if such sale or disposition is
permitted by Section 7.7 hereof or is
otherwise consented to by the requisite
Lenders for such release as set forth in
Section 10.12 hereof, as certified to the
Agent by the Borrower in a certificate of an
Authorized Signatory.
(b) Each Lender and each Issuing Bank
hereby directs the Agent to execute and deliver or
file such termination and partial release
statements and do such other things as are
necessary to release Liens to be released pursuant
to this Section 9.15 promptly upon the
effectiveness of any such release. Upon request
by the Agent at any time, the Lenders and the
Issuing Banks will confirm in writing the Agent's
authority to release particular types or items of
Collateral pursuant to this Section 9.15.
ARTICLE 8Section .16 Securitization
Documents. The Agent is hereby authorized to
enter into the Receivables Intercreditor Agreement
on behalf of the Lenders and each Issuing Bank.
ARTICLE 9
MISCELLANEOUS
ARTICLE 9Section .1 Notices.
(a) All notices and other
communications under this Agreement shall be in
writing and shall be deemed to have been given
five (5) days after deposit in the mail,
designated as certified mail, return receipt
requested, post-prepaid, or one (1) day after
being entrusted to a reputable commercial
overnight delivery service, or when delivered to
the telegraph office or sent out by telex or
telecopy addressed to the party to which such
notice is directed at its address determined as
provided in this Section 10.1. All notices and
other communications under this Agreement shall be
given to the parties hereto at the following
addresses:
(b)
(i) If to the Borrower, to it at:
Zenith Electronics Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Manager Banking and Finance
Telecopy No.: (000) 000-0000
with
copies to (which copies shall
only be required to be sent in
connection with a notice under
Article 8 hereof):
Zenith Electronics Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Telecopy No.: (000) 000-0000
and
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(ii) If to the Agent, to it at:
Xx. Xxx Xxxxxx
Citicorp North America, Inc.
000 Xxxx Xxxxxx
0xx Xxxxx Xxxx 0
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
(iii) If to the Lenders, to them at
the addresses set forth on the
signature pages hereof.
(iv) If to the Issuing Banks, at
the addresses set forth on the
signature pages hereof.
Copies shall be provided to persons other than
parties hereto only in the case of notices under
Article 8 hereof.
(b) Any party hereto may change the
address to which notices shall be directed under
this Section 10.1 by giving ten (10) days' written
notice of such change to the other parties.
ARTICLE 9Section .2 Expenses. The Borrower
agrees to promptly pay:
(a) All reasonable out-of-pocket
expenses of the Agent in connection with the
preparation, negotiation, execution, and delivery
of this Agreement and the other Loan Documents,
the transactions contemplated hereunder and
thereunder, and the making of the initial Advance
hereunder, including, but not limited to, the fees
and disbursements of counsel for the Agent, and
reasonably allocated costs for services of
internal counsel for the Agent;
(b) All reasonable out-of-pocket
expenses of the Agent in connection with the
administration of the transactions contemplated in
this Agreement or the other Loan Documents, and
the preparation, negotiation, execution, and
delivery of any waiver, amendment, or consent by
the Lenders relating to this Agreement or the
other Loan Documents, including, but not limited
to, all reasonable out-of-pocket expenses of the
Agent in connection with its quarterly field
audits, and the fees and disbursements of counsel
for the Agent and reasonably allocated costs for
services of internal counsel for the Agent;
(c) All reasonable out-of-pocket costs
and expenses of the Agent, the Issuing Banks and
any Lender in connection with any restructuring,
refinancing, or "work out" of the transactions
contemplated by this Agreement, and of obtaining
performance under this Agreement or the other Loan
Documents, and all out-of-pocket costs and
expenses of collection if default is made in the
payment of the Notes, which in each case shall
include fees and out-of-pocket expenses of counsel
for the Agent, the Issuing Banks and any Lender,
and the fees and out-of-pocket expenses of any
experts, agents, or consultants of the Agent,
including in each case, but without in any way
limiting the generality of the foregoing,
reasonably allocated costs for service of their
internal counsel; and
(d) All taxes, assessments, general or
special, and other charges levied on, or assessed,
placed or made against any of the Collateral, the
Notes or the Obligations.
ARTICLE 9Section .3 Waivers. The rights and
remedies of the Agent and the Lenders under this
Agreement and the other Loan Documents shall be
cumulative and not exclusive of any rights or
remedies which they would otherwise have. No
failure or delay by the Agent, the Issuing Banks,
the Majority Lenders or the Lenders in exercising
any right shall operate as a waiver of such right.
The Agent and the Lenders expressly reserve the
right to require strict compliance with the terms
of this Agreement in connection with any funding
of a request for an Advance. In the event the
Lenders decide to fund a request for an Advance at
a time when the Borrower is not in strict
compliance with the terms of this Agreement, such
decision by the Lenders shall not be deemed to
constitute an undertaking by the Lenders to fund
any further requests for Advances or preclude the
Lenders from exercising any rights available to
the Lenders under the Loan Documents or at law or
equity. Any waiver or indulgence granted by the
Lenders or by the Majority Lenders shall not
constitute a modification of this Agreement,
except to the extent expressly provided in such
waiver or indulgence, or constitute a course of
dealing by the Lenders at variance with the terms
of the Agreement such as to require further notice
by the Lenders of the Lenders' intent to require
strict adherence to the terms of the Agreement in
the future. Any such actions shall not in any way
affect the ability of the Lenders, in their
discretion, to exercise any rights available to
them under this Agreement or under any other
agreement, whether or not the Lenders are party,
relating to the Borrower.
ARTICLE 9Section .4 Set-Off. In addition to
any rights now or hereafter granted under
Applicable Law and not by way of limitation of any
such rights, except to the extent limited by
Applicable Law, upon the occurrence of a Default
or an Event of Default and during the continuation
thereof, the Lenders and any subsequent holder or
holders of the Notes are hereby authorized by the
Borrower at any time or from time to time, without
notice to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set-
off and to appropriate and apply any and all
deposits (general or special, time or demand,
including, but not limited to, Indebtedness
evidenced by certificates of deposit, in each case
whether matured or unmatured) and any other
Indebtedness at any time held or owing by the
Lenders or such holder to or for the credit or the
account of the Borrower, against and on account of
the obligations and liabilities of the Borrower,
to the Lenders or such holder under this
Agreement, the Notes, and any other Loan Document,
including, but not limited to, all claims of any
nature or description arising out of or connected
with this Agreement, the Notes, or any other Loan
Document, irrespective of whether or not (a) the
Lenders or the holder of the Notes shall have made
any demand hereunder or (b) the Lenders shall have
declared the principal of and interest on the
Loans and Notes and other amounts due hereunder to
be due and payable as permitted by Section 8.2 and
although said obligations and liabilities, or any
of them, shall be contingent or unmatured. Any
sums obtained by any Lender or by any subsequent
holder of the Notes shall be subject to the
application of payments provisions of Article 2
hereof. Upon direction by the Agent, with the
consent of the Majority Lenders, each Lender
holding deposits of the Borrower shall exercise
its set-off rights as so directed.
ARTICLE 9Section .5 Assignment.
(a) The Borrower may not assign or
transfer any of its rights or obligations
hereunder, under the Notes or under any other Loan
Document without the prior written consent of each
Lender.
(b) Each of the Lenders may at any time
enter into assignment agreements or participations
with one or more other banks or other Persons
pursuant to which each Lender may assign or
participate its interest under this Agreement and
the other Loan Documents, including, its interest
in any particular Advance or portion thereof,
provided, that (1) all assignments (other than
assignments described in clause (2) herein and in
Section 10.12(b) hereof) shall be in minimum
principal amounts of the lesser of (X) $5,000,000,
and (Y) the amount of such Lender's Commitment (in
a single assignment only), (2) each Lender may
sell assignments or participations of up to one
hundred percent (100%) of its interest hereunder
to (A) one or more Affiliates of such Lender, or
(B) any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any
Operating Circular issued by such Federal Reserve
Bank (no assignment under this clause (B) shall
relieve such Lender from its obligations
hereunder), and (3) all assignments (other than
assignments described in clause (2) herein and in
Section 10.12(b) hereof) and participations
hereunder shall be subject to the following
additional terms and conditions:
(i) No assignment (except
assignments permitted in Section 10.5(b)(2)
hereof) shall be sold without the prior consent of
the Agent and, if no Event of Default then exists,
the Borrower, which consents shall not be
unreasonably withheld;
(ii) Any Person purchasing a
participation or an assignment of the Loans from
any Lender shall be required to represent and
warrant that its purchase shall not constitute a
"prohibited transaction" (as defined in Section
4.1(n) hereof);
(iii) The Borrower, the Lender,
and the Agent agree that assignments permitted
hereunder (including the assignment of any Advance
or portion thereof) may be made with all voting
rights, and shall be made pursuant to an
Assignment and Assumption Agreement. An
administrative fee of $2,500 shall be payable to
the Agent by the assigning Lender at the time of
any assignment hereunder;
(iv) No participation agreement
shall confer any rights under this Agreement or
any other Loan Document to any purchaser thereof,
or relieve any issuing Lender from any of its
obligations under this Agreement, and all actions
hereunder shall be conducted as if no such
participation had been granted; provided, however,
that any participation agreement may confer on the
participant the right to approve or disapprove
decreases in the rate of interest or fees to the
Lenders, increases in the advance rates set forth
in the definition of "Borrowing Base" herein,
increases in the principal amount of such
participant's pro rata share of the Revolving Loan
Commitment and extensions of the Maturity Date
for, or the date for any scheduled payment of
principal, interest or fees on, the Loans;
(v) Each Lender agrees to provide
the Agent and the Borrower with prompt written
notice of any issuance of participation or
assignments of its interests hereunder;
(vi) No assignment, participation
or other transfer of any rights hereunder or under
the Notes shall be effected that would result in
any interest requiring registration under the
Securities Act of 1933, as amended, or
qualification under any state securities law;
(vii) No such assignment may be
made to any bank or other financial institution
(x) with respect to which a receiver or
conservator (including, without limitation, the
Federal Deposit Insurance Corporation, the
Resolution Trust Company or the Office of Thrift
Supervision) has been appointed or (y) that is not
"adequately capitalized" (as such term is defined
in Section 131(b)(1)(B) of the Federal Deposit
Insurance Corporation Improvement Act as in effect
on the Agreement Date);
(viii) Each assignment or
participation hereunder shall be made by the
assigning Lender pro rata with respect to such
assigning Lender's Revolving Loan Commitment and
Term Loan; and
(ix) If applicable, each Lender
shall, and shall cause each of its assignees to
provide to the Agent on or prior to the Agreement
Date or effective date of any assignment, as the
case may be, an appropriate Internal Revenue
Service form as required by Applicable Law
supporting such Lender's position that no
withholding by the Borrower or the Agent for U.S.
income tax payable by such Lender in respect of
amounts received by it hereunder is required. For
purposes of this Agreement, an appropriate
Internal Revenue Service form shall mean Form 1001
(Ownership Exemption or Reduced Rate Certificate
of the U.S. Department of Treasury), or Form 4224
(Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade
or Business in the United States), or any
successor or related forms adopted by the relevant
U.S. taxing authorities.
(c) Except as specifically set forth in
Section 10.5(b) hereof, nothing in this Agreement
or the Notes, expressed or implied, is intended to
or shall confer on any Person other than the
respective parties hereto and thereto and their
successors and assignees permitted hereunder and
thereunder any benefit or any legal or equitable
right, remedy or other claim under this Agreement
or the Notes.
(d) Anything in this Agreement to the
contrary notwithstanding, in the case of any
participation, all amounts payable by the Borrower
under the Loan Documents shall be calculated and
made in the manner and to the parties hereto as if
no such participation had been sold.
ARTICLE 9Section .6 Counterparts. This
Agreement may be executed in any number of
counterparts, each of which shall be deemed to be
an original, but all such separate counterparts
shall together constitute but one and the same
instrument.
ARTICLE 9Section .7 Governing Law. This
Agreement and the Loan Documents shall be
construed in accordance with and governed by the
laws of the State of New York, except to the
extent otherwise provided in the Loan Documents.
ARTICLE 9Section .8 Severability. Any
provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent
of such prohibition or unenforceability without
invalidating the remaining provisions hereof in
that jurisdiction or affecting the validity or
enforceability of such provision in any other
jurisdiction.
ARTICLE 9Section .9 Headings. Headings used
in this Agreement are for convenience only and
shall not be used in connection with the
interpretation of any provision hereof.
ARTICLE 9Section .10 Source of Funds.
Notwithstanding the use by the Lenders of the Base
Rate and the Eurodollar Rate as reference rates
for the determination of interest on the Loans,
the Lenders shall be under no obligation to obtain
funds from any particular source in order to
charge interest to the Borrower at interest rates
tied to such reference rates.
ARTICLE 9Section .11 Entire Agreement.
Except as otherwise expressly provided herein,
this Agreement and the other documents described
or contemplated herein embody the entire Agreement
and understanding among the parties hereto and
thereto and supersede all prior agreements,
understandings, and conversations relating to the
subject matter hereof and thereof. The Borrower
represents and warrants to the Agent and each of
the Lenders that it has read the provisions of
this Section 10.11 and discussed the provisions of
this Section 10.11 and the rest of the Loan
Agreement with counsel for the Borrower, and the
Borrower acknowledges and agrees that the Agent
and each of the Lenders are expressly relying upon
such representations and warranties of the
Borrower (as well as the other representations and
warranties of the Borrower set forth in Section
4.1 hereof) in entering into this Agreement.
ARTICLE 9Section .12 Amendments and
Waivers.
(a) Neither this Agreement nor any term
hereof may be amended orally, nor may any
provision hereof be waived orally but only by an
instrument in writing signed by the Majority
Lenders and, in the case of an amendment, also by
the Borrower, except that the consent of the
Super-Majority Lenders shall be required for any
increase of the advance rates set forth in the
definition of "Borrowing Base" herein, and the
consent of each of the Lenders shall be required
for (i) any increase in the amount of the
Revolving Loan Commitment, (ii) any sale or
release of any material Collateral except as
permitted hereunder or any release of any
guarantor of the Obligations, (iii) any extensions
of the Maturity Date, the date of payment of
interest or principal or fees, or reduction of
principal (without a corresponding payment with
respect thereto), or reduction in the rate of
interest or fees due to the Lenders hereunder, and
(iv) any amendment of this Section 10.12 or of the
definition of "Majority Lenders" or "Super-
Majority Lenders", and, in the case of an
amendment with respect to any of the foregoing,
the consent of the Borrower.
(b) Each Lender grants to the Agent the
right to purchase all (but not less than all) of
such Lender's Commitment, Letter of Credit
Commitment, the Loans and Letter of Credit
Obligations owing to it and the Notes held by it
and all of its rights and obligations hereunder
and under the other Loan Documents at a price
equal to the aggregate amount of outstanding Loans
and Letter of Credit Obligations owed to such
Lender (together with all accrued and unpaid
interest and fees owed to such Lender), which
right may be exercised by the Agent if such Lender
refuses to execute any amendment, waiver or
consent which requires the written consent of all
of the Lenders and to which the Majority Lenders,
the Agent and the Borrower have agreed. Each
Lender agrees that if the Agent exercises its
option hereunder, it shall promptly execute and
deliver an Assignment and Assumption Agreement and
other agreements and documentation necessary to
effectuate such assignment. The Agent may assign
its purchase rights hereunder to any assignee if
such assignment complies with the requirements of
Section 10.5(b)(i), (ii), (vi), (vii) and (ix).
ARTICLE 9Section .13 Other Relationships.
No relationship created hereunder or under any
other Loan Document shall in any way affect the
ability of the Agent, each Issuing Bank and each
Lender to enter into or maintain business
relationships with the Borrower, or any of its
Affiliates, beyond the relationships specifically
contemplated by this Agreement and the other Loan
Documents.
ARTICLE 9Section .14 Pronouns. The
pronouns used herein shall include, when
appropriate, either gender and both singular and
plural, and the grammatical construction of
sentences shall conform thereto.
ARTICLE 9Section .15 Disclosure. Subject
to Section 10.16 hereof, the Borrower agrees that
the Agent shall have the right to issue press
releases regarding the making of the Loans to the
Borrower pursuant to the terms of this Agreement.
ARTICLE 9Section .16 Replacement of
Lender. In the event that a Replacement Event
occurs and is continuing with respect to any
Lender, the Borrower may designate another
financial institution (such financial institution
being herein called a "Replacement Lender")
acceptable to the Agent, and which is not the
Borrower or an Affiliate of the Borrower, to
assume such Lender's Commitment hereunder, to
purchase the Loans and participations of such
Lender and such Lender's rights hereunder and (if
such Lender is an Issuing Bank) to issue Letters
of Credit in substitution for all outstanding
Letters of Credit issued by such Lender, without
recourse to or representation or warranty by, or
expense to, such Lender for a purchase price equal
to the outstanding principal amount of the Loans
payable to such Lender plus any accrued but unpaid
interest on such Loans and accrued but unpaid
commitment fees and letter of credit fees owing to
such Lender, and upon such assumption, purchase
and substitution, and subject to the execution and
delivery to the Agent by the Replacement Lender of
documentation satisfactory to the Agent (pursuant
to which such Replacement Lender shall assume the
obligations of such original Lender under this
Agreement), the Replacement Lender shall succeed
to the rights and obligations of such Lender
hereunder and such Lender shall no longer be a
party hereto or have any rights hereunder provided
that the obligations of the Borrower to indemnify
such Lender with respect to event occurring or
obligations arising before such replacement shall
survive such replacement. "Replacement Event"
means, with respect to any Lender, the
commencement of or the talking of possession by, a
receiver, custodian, conservator, trustee or
liquidator of such Lender, or the declaration by
the appropriate regulatory authority that such
Lender is insolvent.
ARTICLE 10
YIELD PROTECTION
ARTICLE 10Section .1 Eurodollar Rate
Basis Determination. Notwithstanding anything
contained herein which may be construed to the
contrary, if with respect to any proposed
Eurodollar Rate Advance for any Eurodollar Advance
Period, the Agent determines that deposits in
dollars (in the applicable amount) are not being
offered to the Agent in the relevant market for
such Eurodollar Advance Period, the Agent shall
forthwith give notice thereof to the Borrower and
the Lenders, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to
such situation no longer exist, the obligations of
the Lenders to make such types of Eurodollar Rate
Advances shall be suspended.
ARTICLE 10Section .2 Illegality. If any
applicable law, rule, or regulation, or any change
therein, or any interpretation or change in
interpretation or administration thereof by any
governmental authority, central bank, or
comparable agency charged with the interpretation
or administration thereof, or compliance by any
Lender with any request or directive (whether or
not having the force of law) of any such
authority, central bank, or comparable agency,
shall make it unlawful or impossible for any
Lender to make, maintain, or fund its Eurodollar
Rate Advances, such Lender shall so notify the
Agent, and the Agent shall forthwith give notice
thereof to the other Lenders and the Borrower.
Before giving any notice to the Agent pursuant to
this Section 11.2, such Lender shall designate a
different lending office if such designation will
avoid the need for giving such notice and will
not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. Upon receipt of
such notice, notwithstanding anything contained in
Article 2 hereof, the Borrower shall repay in full
the then outstanding principal amount of each
affected Eurodollar Rate Advance of such Lender,
together with accrued interest thereon, either (a)
on the last day of the then current Eurodollar
Advance Period applicable to such Eurodollar Rate
Advance if such Lender may lawfully continue to
maintain and fund such Eurodollar Rate Advance to
such day or (b) immediately if such Lender may not
lawfully continue to fund and maintain such
Eurodollar Rate Advance to such day. Concurrently
with repaying each affected Eurodollar Rate
Advance of such Lender, notwithstanding anything
contained in Article 2 hereof, the Borrower shall
borrow a Base Rate Advance (or the other type of
Eurodollar Rate Advance, if available) from such
Lender, and such Lender shall make such Advance in
an amount such that the outstanding principal
amount of the Note held by such Lender shall equal
the outstanding principal amount of such Note
immediately prior to such repayment.
ARTICLE 10Section .3 Increased Costs.
(a) If after the Agreement Date any
applicable law, rule, or regulation, or any change
therein, or any interpretation or change in
interpretation or administration thereof by any
governmental authority, central bank, or
comparable agency charged with the interpretation
or administration thereof or compliance by any
Lender with any request or directive (whether or
not having the any such authority, central bank,
or comparable agency:
(i) Shall subject any Lender to
any tax, duty, or other charge with respect
to its obligation to make Eurodollar Rate
Advances, or its Eurodollar Rate Advances, or
shall change the basis of taxation of
payments to any Lender of the principal of or
interest on its Eurodollar Rate Advances or
in respect of any other amounts due under
this Agreement in respect of its Eurodollar
Rate Advances or its obligation to make
Eurodollar Rate Advances (except for changes
in the rate of tax on the overall net income
of such Lender imposed by the jurisdiction in
which such Lender's principal executive
office is located); or
(ii) Shall impose, modify, or deem
applicable any reserve (including, without
limitation, any imposed by the Board of
Governors of the Federal Reserve System, but
excluding any included in an applicable
Eurodollar Reserve Percentage), special
deposit, capital adequacy, assessment, or
other requirement or condition against assets
of, deposits with or for the account of, or
commitments or credit extended by any Lender,
or shall impose on any Lender or the
eurodollar interbank borrowing market any
other condition affecting its obligation to
make such Eurodollar Rate Advances or its
Eurodollar Rate Advances; and the result of
any of the foregoing is to increase the cost
to such Lender of making or maintaining any
such Eurodollar Rate Advances, or to reduce
the amount of any sum received or receivable
by the Lender under this Agreement or under
its Notes with respect thereto, and such
increase is not given effect in the
determination of the Eurodollar Rate then,
on the earlier of demand by such Lender or the
Maturity Date, the Borrower agrees to pay to such
Lender such additional amount or amounts as will
compensate such Lender for such increased costs.
Each Lender will promptly notify the Borrower and
the Agent of any event of which it has knowledge,
occurring after the date hereof, which will
entitle such Lender to compensation pursuant to
this Section 11.3 and will designate a different
lending office if such designation will avoid the
need for, or reduce the amount of, such
compensation and will not, in the sole judgment of
such Lender, be otherwise disadvantageous to such
Lender.
(b) A certificate of any Lender
claiming compensation under this Section 11.3 and
setting forth the additional amount or amounts to
be paid to it hereunder and calculations therefor
shall be conclusive in the absence of manifest
error. In determining such amount, such Lender
may use any reasonable averaging and attribution
methods. If any Lender demands compensation under
this Section 11.3, the Borrower may at any time,
upon at least five (5) Business Days' prior notice
to such Lender, prepay in full the then
outstanding affected Eurodollar Rate Advances of
such Lender, together with accrued interest
thereon to the date of prepayment, along with any
reimbursement required under Section 2.9 hereof.
Concurrently with prepaying such Eurodollar Rate
Advances the Borrower shall borrow a Base Rate
Advance, or a Eurodollar Rate Advance not so
affected, from such Lender, and such Lender shall
make such Advance in an amount such that the
outstanding principal amount of the Notes held by
such Lender shall equal the outstanding principal
amount of such Notes immediately prior to such
prepayment.
ARTICLE 10Section .4 Effect On Other
Advances. If notice has been given pursuant to
Section 11.1, 11.2 or 11.3 suspending the
obligation of any Lender to make any type of
Eurodollar Rate Advance, or requiring Eurodollar
Rate Advances of any Lender to be repaid or
prepaid, then, unless and until such Lender
notifies the Borrower that the circumstances
giving rise to such repayment no longer apply, all
Advances which would otherwise be made by such
Lender as to the type of Eurodollar Rate Advances
affected shall, at the option of the Borrower, be
made instead as Base Rate Advances.
ARTICLE 10Section .5 Capital Adequacy.
If after the date hereof, any Lender or Issuing
Bank (or any affiliate of the foregoing) shall
have reasonably determined that the adoption of
any applicable law, governmental rule, regulation
or order regarding the capital adequacy of banks
or bank holding companies, or any change therein,
or any change in the interpretation or
administration thereof by any governmental
authority, central bank or comparable agency
charged with the interpretation or administration
thereof, or compliance by such Lender or Issuing
Bank (or any affiliate of the foregoing) with any
request or directive regarding capital adequacy
(whether or not having the force of law) of any
such governmental authority, central bank or
comparable agency, has or would have the effect of
reducing the rate of return on such Lender's or
Issuing Bank's (or any affiliate of the foregoing)
capital as a consequence of such Lender's or
Issuing Bank's Commitment or Obligations hereunder
to a level below that which it could have achieved
but for such adoption, change or compliance
(taking into consideration such Lender's or
Issuing Bank's (or any affiliate of the foregoing)
policies with respect to capital adequacy
immediately before such adoption, change or
compliance and assuming that such Lender's or
Issuing Bank's (or any affiliate of the foregoing)
capital was fully utilized prior to such adoption,
change or compliance), then, upon demand by such
Lender or Issuing Bank, the Borrower shall
immediately pay to such Lender or Issuing Bank
such additional amounts as shall be sufficient to
compensate such Lender or Issuing Bank for any
such reduction actually suffered; provided,
however, that there shall be no duplication of
amounts paid to a Lender pursuant to this sentence
and Section 11.3 hereof. A certificate of such
Lender or Issuing Bank setting forth the amount to
be paid to such Lender or Issuing Bank by the
Borrower as a result of any event referred to in
this paragraph shall, absent manifest error, be
conclusive.
ARTICLE 11
JURISDICTION, VENUE AND
WAIVER OF JURY TRIAL
ARTICLE 11Section .1 Jurisdiction and
Service of Process. For purposes of any legal
action or proceeding brought by the Agent or the
Lenders with respect to this Agreement or any
other Loan Document, the Borrower hereby
irrevocably submits to the personal jurisdiction
of the federal and state courts sitting in the
state of New York and hereby irrevocably
designates and appoints, as its authorized agent
for service of process in the State of New York,
CT Corporation System, whose address is [1633
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,] or such other
person as the Borrower shall designate hereafter
by written notice given to the Agent. The consent
to jurisdiction herein shall not be exclusive.
The Agent, the Lenders and the Issuing Banks shall
for all purposes automatically, and without any
act on their part, be entitled to treat such
designee of the Borrower as the authorized agent
to receive for and on behalf of the Borrower
service of writs, or summons or other legal
process in the State of New York, which service
shall be deemed effective personal service on the
Borrower served when delivered, whether or not
such agent gives notice to the Borrower; and
delivery of such service to its authorized agent
shall be deemed to be made when personally
delivered or four (4) Business Days after mailing
by registered or certified mail addressed to such
authorized agent. The Borrower further
irrevocably consents to service of process in any
such action or proceeding by the mailing of copies
thereof by registered or certified mail to the
Borrower at the address set forth above, such
service to become effective four (4) Business Days
after such mailing. In the event that, for any
reason, such agent or his or her successors shall
no longer serve as agent of the Borrower to
receive service of process in the State of New
York, the Borrower shall serve and advise the
Agent thereof so that at all times the Borrower
will maintain an agent to receive service of
process in the State of New York on behalf of the
Borrower with respect to this Agreement and all
other Loan Documents. In the event that, for any
reason, service of legal process cannot be made in
the manner described above, such service may be
made in such manner as permitted by law.
ARTICLE 11Section .2 Consent to Venue.
The Borrower hereby irrevocably waives any
objection it would make now or hereafter for the
laying of venue of any suit, action, or proceeding
arising out of or relating to this Agreement or
any other Loan Document brought in the federal
courts of the United States of America sitting in
New York, New York, and hereby irrevocably waives
any claim that any such suit, action, or
proceeding has been brought in an inconvenient
forum.
ARTICLE 11Section .3 Waiver of Jury
Trial. THE BORROWER AND EACH OF THE AGENT, THE
LENDERS AND THE ISSUING BANKS TO THE EXTENT
PERMITTED BY APPLICABLE LAW WAIVE, AND OTHERWISE
AGREE NOT TO REQUEST, A TRIAL BY JURY IN ANY COURT
AND IN ANY ACTION, PROCEEDING OR COUNTERCLAIM OF
ANY TYPE IN WHICH THE BORROWER, ANY OF THE
LENDERS, THE ISSUING BANKS, THE AGENT, OR ANY OF
THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY,
AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR
INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES
OR THE OTHER LOAN DOCUMENTS AND THE RELATIONS
AMONG THE PARTIES LISTED IN THIS ARTICLE 12.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed under seal by
their duly authorized officers, all as of the day
and year first above written.
BORROWER: ZENITH ELECTRONICS CORPORATION
By:
Its:
(SEAL)
AGENT: CITICORP NORTH AMERICA, INC.
By:
Its:
ISSUING BANK: CITIBANK, N.A.
By:
Its:
Address: 000 Xxxx Xxxxxx
0xx Xxxxx
Zone 4
New York, New York 10043
LENDERS: CITICORP USA, INC.
By:
Its:
Address: 000 Xxxx Xxxxxx
0xx Xxxxx
Zone 4
New York, New York 10043
CONGRESS FINANCIAL CORPORATION
By:
Its: Vice President
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
THE FIRST NATIONAL BANK OF BOSTON
By:
Its:
Address: 000 Xxxxxxx Xxxxxx
Mail Stop 01-09-06
Xxxxxx, Xxxxxxxxxxxxx 00000
XXXXXX FINANCIAL, INC.
By:
Its:
Address: 000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
THE BANK OF NEW YORK COMMERCIAL CORPORATION
By:
Its:
Address: 1290 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
SANWA BUSINESS CREDIT CORPORATION
By:
Its:
Address: 000 Xxxxxxxxxx Xxxxxx Xxxx
0xx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
Its:
Address: 000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
Its:
Address: 000 X. Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
