LOAN AGREEMENT
Dated as of December 20, 1995
among
XXXXXX ELECTRONICS, INC.
THE BANKS HEREIN NAMED
and
FIRST INTERSTATE BANK OF CALIFORNIA,
as Agent
TABLE OF CONTENTS
PAGE
Article 1 DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . 1
1.2 Use of Defined Terms. . . . . . . . . . . . . . . . 33
1.3 Accounting Terms. . . . . . . . . . . . . . . . . . 33
1.4 Rounding. . . . . . . . . . . . . . . . . . . . . . 34
1.5 Exhibits and Schedules. . . . . . . . . . . . . . . 34
1.6 References to "Borrower and its Subsidiaries" . . . 34
1.7 Miscellaneous Terms . . . . . . . . . . . . . . . . 34
Article 2 LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . 35
2.1 Loans-General . . . . . . . . . . . . . . . . . . . 35
2.2 Alternate Base Rate Loans . . . . . . . . . . . . . 37
2.3 Eurodollar Rate Loans . . . . . . . . . . . . . . . 37
2.4 Letters of Credit . . . . . . . . . . . . . . . . . 38
2.5 Voluntary Reduction of Line A Commitment. . . . . . 42
2.6 Automatic Reduction of Line B Commitment. . . . . . 42
2.7 Optional Termination of Commitments . . . . . . . . 42
2.8 Agent's Right to Assume Funds Available for
Advances. . . . . . . . . . . . . . . . . . . . . . 43
2.9 Collateral and Guaranty.. . . . . . . . . . . . . . 43
Article 3 PAYMENTS AND FEES . . . . . . . . . . . . . . . . . 44
3.1 Principal and Interest. . . . . . . . . . . . . . . 44
3.2 Arrangement Fee . . . . . . . . . . . . . . . . . . 46
3.3 Agency Fees . . . . . . . . . . . . . . . . . . . . 46
3.4 Commitment Fees . . . . . . . . . . . . . . . . . . 46
3.5 Letter of Credit Fees . . . . . . . . . . . . . . . 46
3.6 Increased Commitment Costs. . . . . . . . . . . . . 47
3.7 Eurodollar Costs and Related Matters. . . . . . . . 47
3.8 Late Payments . . . . . . . . . . . . . . . . . . . 51
3.9 Computation of Interest and Fees. . . . . . . . . . 52
3.10 Non-Banking Days. . . . . . . . . . . . . . . . . . 52
3.11 Manner and Treatment of Payments. . . . . . . . . . 52
3.12 Funding Sources . . . . . . . . . . . . . . . . . . 54
3.13 Failure to Charge Not Subsequent Waiver . . . . . . 54
3.14 Agent's Right to Assume Payments Will be Made by
Borrower. . . . . . . . . . . . . . . . . . . . . . 54
3.15 Automatic Debit . . . . . . . . . . . . . . . . . . 54
3.16 Fee Determination Detail. . . . . . . . . . . . . . 54
3.17 Survivability . . . . . . . . . . . . . . . . . . . 55
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Article 4 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 56
4.1 Existence and Qualification; Power; Compliance
With Laws . . . . . . . . . . . . . . . . . . . . . 56
4.2 Authority; Compliance With Other Agreements and
Instruments and Government Regulations. . . . . . . 56
4.3 No Governmental Approvals Required. . . . . . . . . 57
4.4 Subsidiaries. . . . . . . . . . . . . . . . . . . . 57
4.5 Financial Statements. . . . . . . . . . . . . . . . 58
4.6 No Other Liabilities; No Material Adverse
Changes . . . . . . . . . . . . . . . . . . . . . . 59
4.7 Title to and Location of Property . . . . . . . . . 59
4.8 Intangible Assets . . . . . . . . . . . . . . . . . 59
4.9 Public Utility Holding Company Act. . . . . . . . . 59
4.10 Litigation. . . . . . . . . . . . . . . . . . . . . 60
4.11 Binding Obligations . . . . . . . . . . . . . . . . 60
4.12 No Default. . . . . . . . . . . . . . . . . . . . . 60
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . 60
4.14 Regulations G, T, U and X; Investment Company
Act . . . . . . . . . . . . . . . . . . . . . . . . 61
4.15 Disclosure. . . . . . . . . . . . . . . . . . . . . 61
4.16 Tax Liability . . . . . . . . . . . . . . . . . . . 61
4.17 Projections . . . . . . . . . . . . . . . . . . . . 61
4.18 Hazardous Materials . . . . . . . . . . . . . . . . 62
4.19 Security Interests. . . . . . . . . . . . . . . . . 62
4.20 Trade Names . . . . . . . . . . . . . . . . . . . . 62
4.21 The Deanco Acquisition. . . . . . . . . . . . . . . 62
Article 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION
AND REPORTING REQUIREMENTS) . . . . . . . . . . . . 64
5.1 Payment of Taxes and Other Potential Liens. . . . . 64
5.2 Preservation of Existence . . . . . . . . . . . . . 64
5.3 Maintenance of Properties . . . . . . . . . . . . . 64
5.4 Maintenance of Insurance. . . . . . . . . . . . . . 65
5.5 Compliance With Laws. . . . . . . . . . . . . . . . 65
5.6 Inspection Rights . . . . . . . . . . . . . . . . . 65
5.7 Audit Rights. . . . . . . . . . . . . . . . . . . . 65
5.8 Keeping of Records and Books of Account . . . . . . 65
5.9 Compliance With Agreements. . . . . . . . . . . . . 66
5.10 Use of Proceeds . . . . . . . . . . . . . . . . . . 66
5.11 New Subsidiaries. . . . . . . . . . . . . . . . . . 66
5.12 Hazardous Materials Laws. . . . . . . . . . . . . . 66
5.13 Merger of EDAC and Deanco . . . . . . . . . . . . . 66
Article 6 NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . 68
6.1 Prepayment of Indebtedness. . . . . . . . . . . . . 68
6.2 Disposition of Property . . . . . . . . . . . . . . 68
6.3 Mergers . . . . . . . . . . . . . . . . . . . . . . 68
6.4 Hostile Acquisitions. . . . . . . . . . . . . . . . 68
6.5 Distributions . . . . . . . . . . . . . . . . . . . 68
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6.6 ERISA . . . . . . . . . . . . . . . . . . . . . . . 69
6.7 Change in Nature of Business. . . . . . . . . . . . 69
6.8 Liens and Negative Pledges. . . . . . . . . . . . . 69
6.9 Indebtedness and Guaranty Obligations . . . . . . . 69
6.10 Transactions with Affiliates. . . . . . . . . . . . 70
6.11 Stockholders' Equity. . . . . . . . . . . . . . . . 70
6.12 Fixed Charge Coverage Ratio . . . . . . . . . . . . 71
6.13 Cash Flow Leverage. . . . . . . . . . . . . . . . . 71
6.14 Net Income. . . . . . . . . . . . . . . . . . . . . 71
6.15 Accounts Payable Turnover . . . . . . . . . . . . . 72
6.16 Investments . . . . . . . . . . . . . . . . . . . . 72
6.17 Acquisitions. . . . . . . . . . . . . . . . . . . . 72
6.18 Subsidiary Indebtedness . . . . . . . . . . . . . . 72
6.19 Change in Location of Chief Executive Offices
and Assets. . . . . . . . . . . . . . . . . . . . . 73
Article 7 INFORMATION AND REPORTING REQUIREMENTS. . . . . . . 74
7.1 Financial and Business Information. . . . . . . . . 74
7.2 Compliance Certificates . . . . . . . . . . . . . . 77
Article 8 CONDITIONS. . . . . . . . . . . . . . . . . . . . . 78
8.1 Initial Advances, Etc.. . . . . . . . . . . . . . . 78
8.2 Any Advance, Etc. . . . . . . . . . . . . . . . . . 81
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF
DEFAULT . . . . . . . . . . . . . . . . . . . . . . 83
9.1 Events of Default . . . . . . . . . . . . . . . . . 83
9.2 Remedies Upon Event of Default. . . . . . . . . . . 85
Article 10 THE AGENT . . . . . . . . . . . . . . . . . . . . . 88
10.1 Appointment and Authorization . . . . . . . . . . . 88
10.2 Agent and Affiliates. . . . . . . . . . . . . . . . 88
10.3 Proportionate Interest in any Collateral. . . . . . 88
10.4 Banks' Credit Decisions . . . . . . . . . . . . . . 89
10.5 Action by Agent . . . . . . . . . . . . . . . . . . 89
10.6 Liability of Agent. . . . . . . . . . . . . . . . . 90
10.7 Indemnification . . . . . . . . . . . . . . . . . . 91
10.8 Successor Agent . . . . . . . . . . . . . . . . . . 92
10.9 No Obligations of Borrower. . . . . . . . . . . . . 92
Article 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 94
11.1 Cumulative Remedies; No Waiver. . . . . . . . . . . 94
11.2 Amendments; Consents. . . . . . . . . . . . . . . . 94
11.3 Costs, Expenses and Taxes . . . . . . . . . . . . . 95
11.4 Nature of Banks' Obligations. . . . . . . . . . . . 96
11.5 Survival of Representations and Warranties. . . . . 96
11.6 Notices . . . . . . . . . . . . . . . . . . . . . . 96
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11.7 Execution of Loan Documents . . . . . . . . . . . . 97
11.8 Binding Effect; Assignment. . . . . . . . . . . . . 97
11.9 Right of Setoff . . . . . . . . . . . . . . . . . . 100
11.10 Sharing of Setoffs. . . . . . . . . . . . . . . . . 100
11.11 Indemnity by Borrower . . . . . . . . . . . . . . . 101
11.12 Nonliability of the Banks . . . . . . . . . . . . . 102
11.13 No Third Parties Benefited. . . . . . . . . . . . . 103
11.14 Confidentiality . . . . . . . . . . . . . . . . . . 103
11.15 Further Assurances. . . . . . . . . . . . . . . . . 104
11.16 Integration . . . . . . . . . . . . . . . . . . . . 104
11.17 Governing Law . . . . . . . . . . . . . . . . . . . 104
11.18 Severability of Provisions. . . . . . . . . . . . . 104
11.19 Headings. . . . . . . . . . . . . . . . . . . . . . 105
11.20 Time of the Essence . . . . . . . . . . . . . . . . 105
11.21 Foreign Banks and Participants. . . . . . . . . . . 105
11.22 Hazardous Material Indemnity. . . . . . . . . . . . 106
11.23 Arbitration Reference . . . . . . . . . . . . . . . 107
11.24 Purported Oral Amendments . . . . . . . . . . . . . 110
EXHIBITS
A - Borrowing Base Certificate
B - Commitment Assignment and Acceptance
C - Compliance Certificate
D - Landlord Acknowledgement and Consent
E - Line A Note
F - Line B Note
G - Opinion of Counsel
H - Pledge Agreement
I - Pricing Certificate
J - RayChem Lien Subordination
K - Request for Letter of Credit
L - Request for Loan
M - Request for Redesignation
N - Security Agreement
O - Subsidiary Guaranty
SCHEDULES
1.1 Bank Commitments
4.4 Subsidiaries
4.7 Owned and Leased Real Property
4.10 Material Litigation
4.20 Trade Names
5.4 Minimum Insurance Coverage
6.8 Existing Liens, Negative Pledges and Rights of Others
6.9 Existing Indebtedness
6.16 Existing Investments
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LOAN AGREEMENT
Dated as of December 20, 1995
This LOAN AGREEMENT ("Agreement") is entered into by and among
XXXXXX ELECTRONICS, INC., a Delaware corporation ("Borrower"), each bank whose
name is set forth on the signature pages of this Agreement and each lender which
may hereafter become a party to this Agreement pursuant to SECTION 11.8
(collectively, the "Banks" and individually, a "Bank"), and FIRST INTERSTATE
BANK OF CALIFORNIA, as Agent.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"ACCOUNTS PAYABLE TURNOVER" means, as of the last day of any Fiscal
Month, the result obtained (expressed as a number of days) by
(a) DIVIDING (i) the amount of Borrower's accounts payable on that date
determined in accordance with Generally Accepted Accounting Principles BY
(ii) the result obtained by MULTIPLYING (A) four (4) times (B) the cost
of sales of Borrower for the three (3) Fiscal Months ending on such date
determined in accordance with Generally Accepted Accounting Principles
and (b) MULTIPLYING that quotient by 365.
"ACQUISITION" means any transaction, or any series of related
transactions, by which Borrower and/or any of its Subsidiaries directly
or indirectly (a) acquires any ongoing business or all or substantially
all of the assets of any firm, partnership, joint venture, limited
liability company, corporation or division thereof, whether through
purchase of assets, merger or otherwise, (b) acquires (in one transaction
or as the most recent transaction in a series of transactions) control of
at least a majority in ordinary voting power of the securities of a
corporation which have ordinary voting power for the election of
directors or (c) acquires control of a 50% or more ownership interest in
any partnership, limited liability company or joint venture.
"ADJUSTED TOTAL LIABILITIES" means, with respect to any Person and
as of any date of determination, the SUM OF
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(a) the total liabilities of that Person as of that date determined in
accordance with Generally Accepted Accounting Principles consistently
applied, PLUS (b) the aggregate effective amount of all letters of credit
for which such Person is the account party as of that date PLUS (c) the
aggregate obligations of that Person under all Guaranty Obligations as of
that date.
"ADVANCE" means any advance made or to be made by any Bank to
Borrower as provided in ARTICLE 2, and INCLUDES each Alternate Base Rate
Advance and Eurodollar Rate Advance.
"AFFILIATE" means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled
by, such Person. As used in this definition, "control" (and the
correlative terms, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); PROVIDED that, in any event, any Person that owns, directly
or indirectly, 10% or more of the securities having ordinary voting power
for the election of directors or other governing body of a corporation
that has more than 100 record holders of such securities, or 10% or more
of the ownership interests of any limited liability company that has more
than 100 record holders of such interests, or 10% or more of the
partnership or other ownership interests of any other Person that has
more than 100 record holders of such interests, will be deemed to control
such corporation, partnership or other Person.
"AGENT" means First Interstate Bank of California, when acting in
its capacity as the Agent under any of the Loan Documents, or any
successor Agent.
"AGENT'S OFFICE" means the Agent's address as set forth on the
signature pages of this Agreement, or such other address as the Agent
hereafter may designate by written notice to Borrower and the Banks.
"AGGREGATE EFFECTIVE AMOUNT" means, as of any date of determination
and with respect to all Letters of Credit then outstanding, the SUM OF
(a) the aggregate effective face amounts of all such Letters of Credit
not then paid by the Issuing Bank PLUS (b) the aggregate amounts paid by
the Issuing Bank under such Letters of Credit not then reimbursed to the
Issuing Bank by Borrower pursuant to SECTION 2.4(d) and not the subject
of Advances made pursuant to SECTION 2.4(e).
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"AGREEMENT" means this Loan Agreement, either as originally executed
or as it may from time to time be supplemented, modified, amended,
restated or extended.
"ALTERNATE BASE RATE" means, as of any date of determination, the
rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%)
equal to the HIGHER OF (a) the Prime Rate in effect on such date and
(b) the Federal Funds Rate in effect on such date plus 1/2 of 1%.
"ALTERNATE BASE RATE ADVANCE" means an Advance made hereunder that
bears interest determined in relation to the Alternate Base Rate.
"ALTERNATE BASE RATE LOAN" means a Loan made hereunder that bears
interest determined in relation to the Alternate Base Rate.
"AMORTIZATION AMOUNT" means, with respect to each Amortization Date,
the amount set forth below opposite that Amortization Date or opposite
the period during which such Amortization Date occurs (as applicable):
Amortization date Amount
----------------- ------
March 31, 1997 $1,500,000
June 30, 1997
through
December 31, 1997 $2,000,000
March 31, 1998
through
December 31, 1998 $2,500,000
March 31, 1999 and
June 30, 1999 $6,250,000
"AMORTIZATION DATE" means March 31, 1997 and each Quarterly Payment
Date thereafter through and including the Line B Maturity Date.
"APPLICABLE ALTERNATE BASE RATE MARGIN" means, for each Pricing
Period, the interest rate margin set forth below (expressed in basis
points) opposite the Applicable Pricing Level for that Pricing Period:
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Applicable
Pricing Level Margin
------------- ------
I 100.00
II 50.00
III 25.00
IV 00.00
"APPLICABLE COMMITMENT FEE RATE" means, for each Pricing Period, the
rate set forth below (expressed in basis points) opposite the Applicable
Pricing Level for that Pricing Period:
Applicable Commitment
Pricing Level Fee Rate
------------- -----------
I 37.50
II 37.50
III 25.00
IV 12.50
"APPLICABLE EURODOLLAR RATE MARGIN" means, for each Pricing Period,
the interest rate margin set forth below (expressed in basis points)
opposite the Applicable Pricing Level for that Pricing Period:
Applicable
Pricing Level Margin
------------- ------
I 225.00
II 175.00
III 125.00
IV 75.00
"APPLICABLE STANDBY LETTER OF CREDIT FEE" means, for each Pricing
Period, the per annum rate set forth as the interest rate margin in the
definition of "Applicable Eurodollar Rate Margin" opposite the Applicable
Pricing Level for that Pricing Period.
"APPLICABLE PRICING LEVEL" means (a) for the initial Pricing Period,
Pricing Level I and (b) for each subsequent Pricing Period, the Pricing
Level set forth below opposite the Cash Flow Leverage achieved by the
Borrower as of the last day of the Fiscal Quarter most
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recently ended prior to the commencement of that Pricing Period:
Pricing Level Cash Flow Leverage
------------- ------------------
I Equal to or greater than 4.00 to 1.00
II Less than 4.00 to 1.00 and equal to or
greater than 3.00 to 1.00
III Less than 3.00 to 1.00 and equal to or
greater than 2.00 to 1.00
IV Less than 2.00 to 1.00;
PROVIDED that if Borrower fails to deliver a Pricing Certificate with
respect to any Pricing Period prior to the commencement of such Pricing
Period, then until (but only until) such Pricing Certificate is delivered
the Applicable Pricing Level for that Pricing Period shall be Pricing
Level I.
"BANKING DAY" means any Monday, Tuesday, Wednesday, Thursday or
Friday, OTHER THAN a day on which banks are authorized or required to be
closed in California or New York.
"BORROWER" means Xxxxxx Electronics, Inc., its successors and its
permitted assigns.
"BORROWING BASE" means, as of any date of determination, an amount
determined by the Agent based on the most recent Borrowing Base
Certificate equal to the SUM OF:
(a) 85% of Eligible Receivables; PLUS
(b) 50% of Eligible Inventory;
PROVIDED, HOWEVER, that (y) if on such date the aggregate amount of all
returns, rebates, discounts, credits and allowances for the three (3)
Fiscal Months then most recently ended exceeds 5% of Borrower's gross
sales for such period, the percentage set forth in clause (a) above shall
be reduced to such percentage as may be determined by the Agent in the
exercise of its reasonable (from the perspective of a secured lender)
judgment and (z) if on such date the most recent Borrowing Base
Certificate is as of a date more than 60 days from such date, Borrowing
Base
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shall mean such amount as may be determined by the Agent in the exercise
of its reasonable (from the perspective of a secured lender) judgment.
"BORROWING BASE CERTIFICATE" means a borrowing base certificate in
the form of EXHIBIT A, properly completed and executed by a Responsible
Official of Borrower.
"CAPITAL EXPENDITURE" means any expenditure that is considered a
capital expenditure under Generally Accepted Accounting Principles,
INCLUDING any amount which is required to be treated as an asset subject
to a Capital Lease Obligation.
"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of a
Person as lessee under any leasing or similar arrangement which, in
accordance with Generally Accepted Accounting Principles, are required to
be capitalized on the books of such Person.
"CASH" means, when used in connection with any Person, all monetary
and non-monetary items owned by that Person that are treated as cash in
accordance with Generally Accepted Accounting Principles, consistently
applied.
"CASH EQUIVALENTS" means, when used in connection with any Person,
that Person's Investments in:
(a) Government Securities due within one year after the date of the
making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America or any political subdivision of any such State
or any public agency or instrumentality thereof given on the date of such
Investment a credit rating of at least Aa by Xxxxx'x Investors Service,
Inc. or AA by Standard & Poor's Rating Group (a division of XxXxxx-Xxxx,
Inc.), in each case due within one year from the making of the
Investment;
(c) readily marketable direct obligations of any political
subdivision of any State of the United States of America or any public
agency or instrumentality thereof, or any corporation doing business and
incorporated under the Laws of any State of the United States of America,
fully backed by a letter of credit issued by a commercial bank with a
credit rating on the date of the Investment of at least Aa by Xxxxx'x
Investors Service, Inc. or AA by Standard & Poor's Rating Group (a
division of XxXxxx-Xxxx, Inc.), in each case subject to repricing not
less frequently than every seven days and to an obligation of
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the part of the issuing bank to repurchase the same at these repricing
points;
(d) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and repurchase agreements
covering Government Securities executed by, any Bank or any bank
incorporated under the Laws of the United States of America, any State
thereof or the District of Columbia and having on the date of such
Investment combined capital, surplus and undivided profits of at least
$250,000,000, or total assets of at least $5,000,000,000, in each case
due within one year after the date of the making of the Investment;
(e) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and repurchase agreements
covering Government Securities executed by, any branch or office located
in the United States of America of a bank incorporated under the Laws of
any jurisdiction outside the United States of America having on the date
of such Investment combined capital, surplus and undivided profits of at
least $500,000,000, or total assets of at least $15,000,000,000, in each
case due within one year after the date of the making of the Investment;
(f) repurchase agreements covering Government Securities executed
by a broker or dealer registered under Section 15(b) of the Securities
Exchange Act of 1934, as amended, having on the date of the Investment
capital of at least $50,000,000, due within 30 days after the date of the
making of the Investment; PROVIDED that the maker of the Investment
receives written confirmation of the transfer to it of record ownership
of the Government Securities on the books of a "primary dealer" in such
Government Securities on the books of such registered broker or dealer,
as soon as reasonably practicable after the making of the Investment;
(g) readily marketable commercial paper of corporations doing
business in and incorporated under the Laws of the United States of
America, any State thereof or the District of Columbia or of any
corporation that is the holding company for a bank described in
clause (d) or (e) above given on the date of such Investment a credit
rating of at least P-1 by Xxxxx'x Investors Service, Inc. or A-1 by
Standard & Poor's Rating Group (a division of XxXxxx-Xxxx, Inc.), in each
case due within 90 days after the date of the making of the Investment;
(h) "money market preferred stock" issued by a corporation
incorporated under the Laws of the
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United States of America or any State thereof given on the date of such
Investment a credit rating of at least Aa by Xxxxx'x Investors Service,
Inc. or AA by Standard & Poor's Rating Group (a division of XxXxxx-Xxxx,
Inc.), in each case having an investment period not exceeding 50 days;
PROVIDED that (i) the amount of all such Investments issued by the same
issuer does not exceed $5,000,000 and (ii) the aggregate amount of all
such Investments does not exceed $15,000,000;
(i) a readily redeemable "money market mutual fund" sponsored by a
bank described in clause (d) or (e) hereof, or a registered broker or
dealer described in clause (f) hereof, that has and maintains an
investment policy limiting its investments primarily to instruments of
the types described in clauses (a) through (h) hereof and given on the
date of such Investment a credit rating of at least Aa by Xxxxx'x
Investors Service, Inc. and AA by Standard & Poor's Rating Group (a
division of XxXxxx-Xxxx, Inc.); and
(j) corporate notes or bonds having an original term to maturity of
not more than one year issued by a corporation incorporated under the
Laws of the United States of America, any State thereof or the District
of Columbia, or a participation interest therein; PROVIDED that
(i) commercial paper issued by such corporation is given on the date of
such Investment a credit rating of at least Aa by Xxxxx'x Investors
Service, Inc. and AA by Standard & Poor's Rating Group (a division of
XxXxxx-Xxxx, Inc.), (ii) the amount of all such Investments issued by the
same issuer does not exceed $5,000,000 and (iii) the aggregate amount of
all such Investments does not exceed $15,000,000.
"CASH FLOW LEVERAGE" means (a) as of June 30, 1996 and the last day
of each Fiscal Month or Fiscal Quarter (as applicable) thereafter through
November 30, 1996, the RATIO OF (i) Adjusted Total Liabilities of
Borrower and its Subsidiaries on that date TO (ii) EBITDA for the fiscal
period commencing on January 1, 1996 and ending on such date, adjusted by
the appropriate straight line annualization factor and (b) as of
December 31, 1996 and the last day of each Fiscal Month or Fiscal Quarter
(as applicable) thereafter, the RATIO OF (i) Adjusted Total Liabilities
of Borrower and its Subsidiaries on that date to (ii) EBITDA for the
fiscal period consisting of the twelve (12) Fiscal Months or the four (4)
Fiscal Quarters (as applicable) then ended.
"CERTIFICATE" means a certificate signed by a Senior Officer or
Responsible Official (as applicable) of the
-8-
Person providing the certificate, signed on behalf of such Person.
"CHANGE IN CONTROL" means any transaction or series of related
transactions (a) in which any Unrelated Person or two or more Unrelated
Persons acting in concert acquire beneficial ownership (within the
meaning of Rule 13d-3(a)(1) under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of more than 50% of the outstanding
capital stock of Borrower entitled to vote for the election of directors
("Voting Stock"), (b) in which any such Unrelated Person or Unrelated
Persons acting in concert acquire beneficial ownership of 20% or more of
the Voting Stock subsequent to the Closing Date and (i) at the first
election for the board of directors of Borrower subsequent to such
acquisition, individuals who prior to such election were directors of
Borrower and individuals approved by such directors cease for any reason
(OTHER THAN death or incapacity) to constitute more than 50% of the board
of directors of Borrower or (ii) if the terms of all directors of
Borrower do not expire at the date of such first election, then at the
second election for the board of directors of Borrower subsequent to such
acquisition, individuals who prior to such first election were directors
of Borrower and individuals approved by such directors cease for any
reason (OTHER THAN death or incapacity) to constitute more than 50% of
the board of directors of Borrower or (c) constituting a "change in
control" or other similar occurrence under documentation evidencing or
governing any Indebtedness of Borrower of $5,000,000 or more which
results in an obligation of Borrower to prepay, purchase, offer to
purchase, redeem or defease such Indebtedness. For purposes of the
foregoing, the term "UNRELATED PERSON" means any Person OTHER THAN (a) a
Subsidiary of Borrower, (b) an employee stock ownership plan or other
employee benefit plan covering the employees of Borrower and its
Subsidiaries and (c) any officer or director of Borrower on the date of
this Agreement, or any Person with which any of them is an affiliate or
associate within the meaning of such terms under the Securities Exchange
Act of 1934, as amended.
"CLOSING DATE" means the time and Banking Day on which the
conditions set forth in SECTION 8.1 are satisfied or waived. The Agent
shall notify Borrower and the Banks of the date that is the Closing Date.
"CODE" means the Internal Revenue Code of 1986, as amended or
replaced and as in effect from time to time.
-9-
"COLLATERAL" means all of the collateral covered by the Collateral
Documents.
"COLLATERAL DOCUMENTS" means, collectively, the Security Agreement,
the Pledge Agreement and any other security agreement, pledge agreement,
deed of trust, mortgage or other collateral security agreement hereafter
executed and delivered by Borrower or any of its Subsidiaries to secure
the Obligations.
"COMMITMENT ASSIGNMENT AND ACCEPTANCE" means a commitment assignment
and acceptance substantially in the form of EXHIBIT B.
"COMMITMENTS" means, collectively, the Line A Commitment and the
Line B Commitment.
"COMPLIANCE CERTIFICATE" means a compliance certificate in the form
of EXHIBIT C, properly completed and signed by a Senior Officer of
Borrower, on behalf of Borrower.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of
any outstanding security issued by that Person or of any material
agreement, instrument or undertaking to which that Person is a party or
by which it or any of its Property is bound.
"DEANCO" means Deanco, Inc., a New York corporation.
"DEANCO ACQUISITION" means the Acquisition by Borrower of all of the
outstanding capital stock of EDAC on the Closing Date pursuant to the
Deanco Acquisition Agreement.
"DEANCO ACQUISITION AGREEMENT" means that certain Stock Purchase
Agreement dated as of November 15, 1995 between Borrower and the holders
of the capital stock of EDAC.
"DEANCO ACQUISITION NOTES" means those certain Promissory Notes Due
January 2, 1996 issued by Borrower on the Closing Date to the sellers
under the Deanco Acquisition Agreement.
"DEANCO TRANSACTIONAL COSTS" means all expenses, costs and charges
incurred or recorded on or after January 1, 1996 by Borrower or its
Subsidiaries in connection with the Deanco Acquisition (INCLUDING legal
and accounting fees, employee severance payments, lease settlements,
moving costs and other expenses, costs and
-10-
charges); TO THE EXTENT that the aggregate amount thereof does not exceed
$1,500,000.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States
of America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"DEFAULT" means any event that, with the giving of any applicable
notice or passage of time specified in SECTION 9.1, or both, would be an
Event of Default.
"DEFAULT RATE" means the interest rate prescribed in SECTION 3.8.
"DESIGNATED DEPOSIT ACCOUNT" means a deposit account to be
maintained by Borrower with First Interstate Bank of California, as from
time to time designated by Borrower by written notification to the Agent.
"DESIGNATED EURODOLLAR MARKET" means, with respect to any Eurodollar
Rate Loan, (a) the London Eurodollar Market, (b) if prime banks in the
London Eurodollar Market are at the relevant time not accepting deposits
of Dollars or if the Agent determines in good faith that the London
Eurodollar Market does not represent at the relevant time the effective
pricing to the Banks for deposits of Dollars in the London Eurodollar
Market, the Cayman Islands Eurodollar Market or (c) if prime banks in the
Cayman Islands Eurodollar Market are at the relevant time not accepting
deposits of Dollars or if the Agent determines in good faith that the
Cayman Islands Eurodollar Market does not represent at the relevant time
the effective pricing to the Banks for deposits of Dollars in the
Cayman Islands Eurodollar Market, such other Eurodollar Market as may
from time to time be selected by the Agent with the approval of Borrower
and the Requisite Banks.
"DISPOSITION" means the sale, transfer, lease or other disposition
("Transfer") of any asset of Borrower or any of its Subsidiaries OTHER
THAN (a) a Transfer of Cash, Cash Equivalents, inventory or other assets
in the ordinary course of business of Borrower or any of its Subsidiaries
on terms which Borrower or such Subsidiary reasonably believes are fair
market terms, (b) a Transfer of equipment where substantially similar
equipment in replacement thereof has theretofore been acquired, or
thereafter within 90 days is acquired, by Borrower or any of its
Subsidiaries, or where Borrower or the Subsidiary
-11-
determines in good faith that the failure to replace such equipment will
not be detrimental to the business of Borrower or its Subsidiaries, (c) a
Transfer of Property that is no longer required for the conduct of
Borrower's or a Subsidiary's business, provided any such Transfer is on
fair market terms, (d) a Transfer to Borrower or to any of its
Subsidiaries and (e) a Transfer of capital stock of any Subsidiary to any
other Subsidiary or to Borrower if made subject to the Lien in favor of
the Agent on such capital stock.
"DISQUALIFIED STOCK" means any capital stock, warrants, options or
other rights to acquire capital stock (but excluding any debt security
which is convertible, or exchangeable, for capital stock), which, by its
terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Line A Maturity Date.
"DISTRIBUTION" means, with respect to any equity security or any
warrant or option to purchase an equity security issued by a Person,
(i) the retirement, redemption, purchase or other acquisition for Cash or
for Property by such Person of such security, (ii) the declaration or
(without duplication) payment by such Person of any dividend in Cash or
in Property on or with respect to any such security, (iii) any Investment
by such Person in the holder of 5% or more of any such security if a
purpose of such Investment is to avoid characterization of the
transaction as a Distribution and (iv) any other payment in Cash or
Property by such Person constituting a distribution under applicable Laws
with respect to such security.
"DOLLARS" or "$" means United States dollars.
"EBITDA" means, with respect to any fiscal period, the SUM OF
(a) Net Income for that period, PLUS (b) any extraordinary loss reflected
in such Net Income, MINUS (c) any extraordinary gain reflected in such
Net Income, PLUS (d) Interest Expense for that fiscal period, PLUS
(e) the aggregate amount of federal and state taxes on or measured by
income for that fiscal period (whether or not payable during that
period), PLUS (f) depreciation, amortization and all other non-Cash
expenses for that fiscal period, in each case as determined in accordance
with Generally Accepted Accounting Principles and, in the case of
items (d), (e) and (f), only to the extent deducted in the determination
of Net Income for that
-12-
fiscal period; PROVIDED that (A) any Deanco Transactional Costs for the
period January 1, 1996 and December 31, 1996 shall be added back to
EBITDA for any fiscal period occurring during such period and (B) if
Borrower has made an Acquisition during that fiscal period, EBITDA shall
be calculated as if the Acquisition had been made on the first day of
such fiscal period, taking into account the results of operations of the
Person that was the subject of the Acquisition.
"EDAC" means Electrical Distribution Acquisition Company, a Delaware
corporation, which on the Closing Date owns 100% of the outstanding
capital stock of Deanco.
"EDAC SHAREHOLDERS NOTES" means the Floating Rate Subordinated Notes
Due December 31, 1999 made by EDAC in favor of the holders of the capital
stock of EDAC.
"ELIGIBLE ASSIGNEE" means (a) another Bank, (b) with respect to any
Bank, any Affiliate of that Bank, (c) any commercial bank having a
combined capital and surplus of $100,000,000 or more, (d) any (i) savings
bank, savings and loan association or similar financial institution or
(ii) insurance company engaged in the business of writing insurance
which, in either case (A) has a net worth of $200,000,000 or more, (B) is
engaged in the business of lending money and extending credit under
credit facilities substantially similar to those extended under this
Agreement and (C) is operationally and procedurally able to meet the
obligations of a Bank hereunder to the same degree as a commercial bank
and (e) any other financial institution (INCLUDING a mutual fund or other
fund) having total assets of $250,000,000 or more which meets the
requirements set forth in subclauses (B) and (C) of clause (d) above;
PROVIDED that each Eligible Assignee must either (I) be organized under
the Laws of the United States of America, any State thereof or the
District of Columbia or (II) be organized under the Laws of the Cayman
Islands or any country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of such a
country, and (y) act hereunder through a branch, agency or funding office
located in the United States of America and (z) be exempt from
withholding of tax on interest and deliver the documents related thereto
pursuant to SECTION 11.21.
"ELIGIBLE INVENTORY" means, as of any date of determination,
inventory of Borrower and its Subsidiaries as to which the Agent holds a
first priority perfected security interest, EXCLUDING the following:
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(a) inventory that is not free and clear of all Liens and
Rights of Others, OTHER THAN the Lien in favor of the Agent, Permitted
Encumbrances and the RayChem Lien;
(b) inventory that is not located at one of the locations
indicated on SCHEDULE 4.7;
(c) inventory consisting of packaging materials, pallets,
bags, boxes, capitalized depot freight and handling costs or supplies;
(d) inventory consisting of work-in-process;
(e) inventory covered by negotiable documents of title that
have not been delivered to the Agent in pledge;
(f) inventory that is not held for sale or use in the ordinary
course of business;
(g) inventory that has been placed on consignment;
(h) inventory that is not of good and merchantable quality;
(i) inventory that is obsolete or otherwise may not reasonably
be expected to be sold for a price at least equal to its carrying cost;
and
(k) inventory that has otherwise been deemed by the Agent not
to be Eligible Inventory on grounds that are customary and reasonable
from the perspective of a secured lender which are not the express
subject matter of any of clauses (a) through (i) above.
"ELIGIBLE RECEIVABLES" means, as of any date of determination,
accounts receivable of Borrower and its Subsidiaries as to which the
Agent holds a first priority perfected security interest, PROVIDED that
such accounts receivable:
(a) are trade accounts which arose in the ordinary course of
business of Borrower or its Subsidiary;
(b) represent amounts owed for services rendered or goods
delivered to an account debtor or to a common carrier for delivery to an
account debtor;
(c) have been the subject of an invoice submitted to the
account debtor within five days of the
-14-
date of shipment of the related goods or the rendering of the related
services;
(d) do not remain unpaid more than 90 days from the date of
invoice;
(e) do not represent amounts owed for goods shipped on a
consignment or "xxxx and hold" basis;
(f) do not have as the account debtor a Person that since the
sale has become the subject of any pending proceeding under any Debtor
Relief Law;
(g) do not have as the account debtor any Governmental Agency
(OTHER THAN a Governmental Agency expressly approved by the Agent in
writing) or any Affiliate, officer or employee of Borrower or its
Subsidiaries;
(h) do not have as the account debtor a Person (OTHER THAN a
Person expressly approved by the Agent in writing) located outside the
United States of America or Canada, UNLESS the payment of such account
receivable is insured by the Foreign Credit Insurance Association or is
secured by a letter of credit issued or confirmed to Borrower by a bank
located in the United States of America reasonably acceptable to the
Agent, each such insurance policy or letter of credit being in form and
substance reasonably satisfactory to the Agent;
(i) do not include any account receivable due from an account
debtor (or any of its Affiliates) if 25% or more of the aggregate
accounts receivable due from that account debtor (and/or such Affiliates)
remain unpaid more than 90 days from the date of invoice;
(j) do not include accounts receivable of an account debtor to
the extent that the aggregate accounts receivable of that account debtor
(and its Affiliates) exceed 10% of all Eligible Receivables;
(k) do not include any account receivable to the extent that
it is subject to any known or asserted offset, counterclaim or defense
(INCLUDING contra accounts), or to the extent that the account debtor has
disputed its liability;
(l) do not include any account receivable that is
unenforceable against the account debtor for any reason, INCLUDING any
account receivable that is not enforceable unless a future condition is
met;
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(m) do not include any account receivable which is evidenced
by a promissory note, draft, trade acceptance or other instrument;
(n) do not include any account receivable arising from the
sale of goods which remain in the possession or control of Borrower or
its Subsidiaries;
(o) have not otherwise been deemed by the Agent not to be
Eligible Receivables on grounds that are customary and reasonable from
the perspective of a secured lender which are not the express subject
matter of any of clauses (a) through (n) above.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and any regulations issued pursuant thereto, as amended or replaced and
as in effect from time to time.
"EURODOLLAR BANKING DAY" means any Banking Day on which dealings in
Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"EURODOLLAR BASE RATE" means, with respect to any Eurodollar Rate
Loan, the interest rate per annum (rounded upward, if necessary, to the
next 1/16 of 1%) at which deposits in Dollars are offered by the
Eurodollar Reference Bank to prime banks in the Designated Eurodollar
Market at or about 11:00 a.m. local time in the Designated Eurodollar
Market, three (3) Eurodollar Banking Days before the first day of the
applicable Eurodollar Period in an aggregate amount approximately equal
to the amount of the Advance made by the Eurodollar Reference Bank with
respect to such Eurodollar Rate Loan and for a period of time comparable
to the number of days in the applicable Eurodollar Period. The
determination of the Eurodollar Base Rate by the Agent shall be
conclusive in the absence of manifest error.
"EURODOLLAR LENDING OFFICE" means, as to each Bank, its office or
branch so designated by written notice to Borrower and the Agent as its
Eurodollar Lending Office. If no Eurodollar Lending Office is designated
by a Bank, its Eurodollar Lending Office shall be its office at its
address for purposes of notices hereunder.
"EURODOLLAR MARKET" means a regular established market located
outside the United States of America by and among banks for the
solicitation, offer and acceptance of Dollar deposits in such banks.
"EURODOLLAR OBLIGATIONS" means eurocurrency liabilities, as defined
in Regulation D.
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"EURODOLLAR PERIOD" means, as to each Eurodollar Rate Loan, the
period commencing on the date specified by Borrower pursuant to
Sections 2.1(c) or 2.1(i) and ending 1, 2, 3 or 6 months (or, with the
written consent of all of the Banks, any other period) thereafter, as
specified by Borrower in the applicable Request for Loan; PROVIDED that:
(a) The first day of any Eurodollar Period shall be a
Eurodollar Banking Day;
(b) Any Eurodollar Period that would otherwise end on a day
that is not a Eurodollar Banking Day shall be extended to the next
succeeding Eurodollar Banking Day unless such Eurodollar Banking Day
falls in another calendar month, in which case such Eurodollar
Period shall end on the next preceding Eurodollar Banking Day;
(c) Borrower may not specify a Eurodollar Period with respect
to a Line B Loan that extends beyond the next Amortization Date
unless the aggregate principal amount of the Line B Loans having a
Eurodollar Period ending after such Amortization Date does not
exceed the Line B Commitment (after giving effect to any reduction
thereto scheduled to be made on such Amortization Date pursuant to
SECTION 2.6); and
(d) No Eurodollar Period with respect to a Line A Loan shall
extend beyond the Line A Maturity Date and no Eurodollar Period with
respect to a Line B Loan shall extend beyond the Line B Maturity
Date.
"EURODOLLAR RATE" means, with respect to any Eurodollar Rate Loan,
an interest rate per annum (rounded upward, if necessary, to the nearest
1/16 of one percent) determined pursuant to the following formula:
Eurodollar Base Rate
Eurodollar --------------------
Rate = 1.00 - Eurodollar Reserve
Percentage
"EURODOLLAR RATE ADVANCE" means an Advance made hereunder that bears
interest determined in relation to the Eurodollar Rate.
"EURODOLLAR RATE LOAN" means a Loan made hereunder that bears
interest determined in relation to the Eurodollar Rate.
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"EURODOLLAR REFERENCE BANK" means First Interstate Bank of
California.
"EURODOLLAR RESERVE PERCENTAGE" means, with respect to any
Eurodollar Rate Loan, the maximum reserve percentage (expressed as a
decimal, rounded upward, if necessary, to the nearest 1/100th of 1%) in
effect on the date the Eurodollar Base Rate for that Eurodollar Rate Loan
is determined (whether or not applicable to any Bank) under regulations
issued from time to time by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") having a term
comparable to the Eurodollar Period for such Eurodollar Rate Loan. The
determination by the Agent of any applicable Eurodollar Reserve
Percentage shall be conclusive in the absence of manifest error.
"EVENT OF DEFAULT" shall have the meaning provided in SECTION 9.1.
"EXCLUDED TAXES" shall have the meaning provided in SECTION 3.10(d).
"FEDERAL FUNDS RATE" means, as of any date of determination, the
rate set forth in the weekly statistical release designated as H.15(519),
or any successor publication, published by the Federal Reserve Board
(including any such successor, "H.15(519)") for such date opposite the
caption "Federal Funds (Effective)". If for any relevant date such rate
is not yet published in H.15(519), the rate for such date will be the
rate set forth in the daily statistical release designated as the
Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotation") for
such date under the caption "Federal Funds Effective Rate". If on any
relevant date the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such
date will be the arithmetic mean of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time)
on that date by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent. For purposes of
this Agreement, any change in the Alternate Base Rate due to a change in
the Federal Funds Rate shall be effective as of the opening of business
on the effective date of such change.
-18-
"FISCAL MONTH" means the fiscal month of Borrower consisting of a
four week or five week (as applicable) period ending on or about the last
day of each calendar month.
"FISCAL QUARTER" means the fiscal quarter of Borrower consisting of
three Fiscal Months (aggregating thirteen weeks) ending on or about each
March 31, June 30, September 30 and December 31.
"FISCAL YEAR" means the fiscal year of Borrower consisting of four
Fiscal Quarters ending on each December 31.
"FIXED CHARGES" means, with respect to any fiscal period, the SUM OF
(a) Interest Expense for that fiscal period, PLUS (b) Rental Expense for
that fiscal period PLUS (c) the current portion of long-term debt of
Borrower and its Subsidiaries as of the first day of that fiscal period,
all determined in accordance with Generally Accepted Accounting
Principles.
"FIXED CHARGE COVERAGE RATIO" means (a) as of June 30, 1996 and the
last day of each Fiscal Month thereafter through November 30, 1996, the
RATIO OF (i) the SUM OF (A) EBITDA for the fiscal period commencing on
January 1, 1996 and ending on such date PLUS (B) Rental Expense for such
fiscal period, in each case adjusted by the appropriate straight line
annualization factor TO (ii) Fixed Charges for such fiscal period,
adjusted by the same annualization factor and (b) as of December 31, 1996
and the last day of each Fiscal Month thereafter, the RATIO OF (i) the
SUM OF (A) EBITDA for the fiscal period consisting of the twelve (12)
Fiscal Months then ended PLUS (B) Rental Expense for such fiscal period
TO (ii) Fixed Charges for such fiscal period.
"FORMER DEANCO SHAREHOLDERS NOTES" means the Promissory Notes dated
as of October 7, 1994 made by a predecessor of Deanco in favor of certain
Persons who were shareholders of Deanco prior to October 7, 1994.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means, as of any date of
determination, accounting principles (a) set forth as generally accepted
in then currently effective Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (b) set forth
as generally accepted in then currently effective Statements of the
Financial Accounting Standards Board or (c) that are then approved by
such other entity as may be approved by a significant segment of the
accounting profession in the United States of America.
-19-
The term "CONSISTENTLY APPLIED," as used in connection therewith, means
that the accounting principles applied are consistent in all material
respects with those applied at prior dates or for prior periods.
"GOVERNMENT SECURITIES" means readily marketable (a) direct full
faith and credit obligations of the United States of America or
obligations guaranteed by the full faith and credit of the United States
of America and (b) obligations of an agency or instrumentality of, or
corporation owned, controlled or sponsored by, the United States of
America that are generally considered in the securities industry to be
implicit obligations of the United States of America.
"GOVERNMENTAL AGENCY" means (a) any international, foreign, federal,
state, county or municipal government, or political subdivision thereof,
(b) any governmental agency, authority, board, bureau, commission,
department, instrumentality or public body, or (c) any court or
administrative tribunal of competent jurisdiction.
"GUARANTY OBLIGATION" means, as to any Person, any (a) guarantee by
that Person of Indebtedness of, or other obligation performable by, any
other Person or (b) assurance given by that Person to an obligee of any
other Person with respect to the performance of an obligation by, or the
financial condition of, such other Person, whether direct, indirect or
contingent, INCLUDING any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide
funds (by means of loans, capital contributions or otherwise) to such
other Person, any agreement to support the solvency or level of any
balance sheet item of such other Person or any "keep-well" or other
arrangement of whatever nature given for the purpose of assuring or
holding harmless such obligee against loss with respect to any obligation
of such other Person; PROVIDED, HOWEVER, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any
Guaranty Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation (unless the
Guaranty Obligation is limited by its terms to a lesser amount, in which
case to the extent of such amount) or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined
by the Person in good faith.
"HAZARDOUS MATERIALS" means oil or petrochemical products, poly-
chlorinated biphenyl, asbestos, urea formaldehyde, flammable explosives,
radioactive materials,
-20-
hazardous wastes, toxic substances or related materials, INCLUDING any
substances considered "hazardous substances," "hazardous wastes,"
"hazardous materials," "infectious wastes", "pollutant substances",
"solid waste" or "toxic substances" under any Hazardous Materials Laws.
"HAZARDOUS MATERIALS LAWS" means all Laws pertaining to the
treatment, transportation or disposal of Hazardous Materials on or about
any Real Property, or any portion thereof, INCLUDING: the Federal Water
Pollution Control Act (33 U.S.C. Section 1251, ET SEQ.), the Federal
Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901,
ET SEQ.), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Section 9601, ET SEQ.) and
the Superfund Amendments and Reauthorization Act of 1986, the Hazardous
Materials Transportation Act, as amended (44 U.S.C. Section 1801, ET
SEQ.), the Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.,
the California Health and Safety Code (Section 25100, ET SEQ.), the
California Water Code and the California Administrative Code, in each
case as such Laws are amended from time to time.
"INDEBTEDNESS" means, as to any Person (without duplication),
(a) indebtedness of such Person for borrowed money or for the deferred
purchase price of Property (excluding trade and other accounts payable in
the ordinary course of business in accordance with customary trade
terms), INCLUDING any Guaranty Obligation for any such indebtedness,
(b) indebtedness of such Person of the nature described in clause (a)
that is non-recourse to the credit of such Person but is secured by
assets of such Person, to the extent of the value of such assets, (or the
amount of such indebtedness, if less), (c) Capital Lease Obligations of
such Person, (d) indebtedness of such Person arising under bankers'
acceptance facilities or under facilities for the discount of accounts
receivable of such Person, (e) any direct or contingent monetary
obligations of such Person under letters of credit issued for the account
of such Person and (f) any net monetary obligations of such Person under
a Swap Agreement.
"INDEMNITY EXPIRATION DATE" means the date upon which the
obligations of Borrower under the Former Deanco Shareholders Notes may no
longer be offset against the obligations of the holders thereof for
indemnity and/or purchase price adjustments in connection with the stock
purchase agreement giving rise to the Former Deanco Shareholders Notes.
"INTANGIBLE ASSETS" means assets that are considered intangible
assets under Generally Accepted Accounting
-21-
Principles, INCLUDING customer lists, goodwill, computer software,
copyrights, trade names, trademarks and patents.
"INTEREST DIFFERENTIAL" means, with respect to any prepayment of a
Eurodollar Rate Loan on a day other than the last day of the applicable
Eurodollar Period and with respect to any failure to borrow a Eurodollar
Rate Loan on the date or in the amount specified in any Request for Loan,
(a) the per annum interest rate payable (or, with respect to a failure to
borrow, the interest rate which would have been payable) pursuant to
SECTION 3.1(c) with respect to the Eurodollar Rate Loan MINUS (b) the
Eurodollar Rate on, or as near as practicable to the date of the
prepayment or failure to borrow for a Eurodollar Rate Loan with a
Eurodollar Period commencing on such date and ending on the last day of
the Eurodollar Period of the Eurodollar Rate Loan so prepaid or which
would have been borrowed on such date.
"INTEREST EXPENSE" means, with respect to any fiscal period, the SUM
OF (a) all interest, fees, charges and related expenses paid or payable
(without duplication) for that fiscal period to a lender in connection
with borrowed money or the deferred purchase price of assets that are
considered "interest expense" under Generally Accepted Accounting
Principles, PLUS (b) the portion of rent paid or payable (without
duplication) for that fiscal period under Capital Lease Obligations that
should be treated as interest in accordance with Financial Accounting
Standards Board Statement No. 13.
"INVESTMENT" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means
of a loan, advance creating a debt, capital contribution, guaranty or
other debt or equity participation or interest in any other Person,
INCLUDING any partnership and joint venture interests of such Person.
The amount of any Investment shall be the amount actually invested
without adjustment for subsequent increases or decreases in the value of
such Investment.
"ISSUING BANK" means First Interstate Bank of California.
"LANDLORD ACKNOWLEDGMENT AND CONSENT" means a landlord
acknowledgment and consent substantially in the form of EXHIBIT D.
"LAWS" means, collectively, all international, foreign, federal,
state and local statutes, treaties,
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rules, regulations, ordinances, codes and administrative or judicial
precedents.
"LETTERS OF CREDIT" means, collectively, the Line A Letters of
Credit and the Line B Letters of Credit.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge
of any kind, whether voluntarily incurred or arising by operation of Law
or otherwise, affecting any Property, INCLUDING any conditional sale or
other title retention agreement, any lease in the nature of a security
interest, and/or the filing of any financing statement (OTHER THAN a
precautionary financing statement with respect to a lease that is not in
the nature of a security interest) under the Uniform Commercial Code or
comparable Law of any jurisdiction with respect to any Property.
"LINE A ADVANCE" means an Advance made by a Bank under the Line A
Commitment.
"LINE A COMMITMENT" means, subject to Sections 2.5 and 2.7,
$45,000,000. The respective Pro Rata Shares of the Banks with respect to
the Line A Commitment are set forth in SCHEDULE 1.1.
"LINE A LETTER OF CREDIT" means any of the standby letters of credit
issued by the Issuing Bank under the Line A Commitment pursuant to
Section 2.4.
"LINE A LOAN" means a Loan made by the Banks under the Line A
Commitment.
"LINE A MATURITY DATE" means December 31, 1999.
"LINE A NOTE" means a promissory note made by Borrower in favor of
each Bank substantially in the form of EXHIBIT E, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"LINE B ADVANCE" means an Advance made by a Bank under the Line B
Commitment.
"LINE B COMMITMENT" means, subject to Sections 2.6 and 2.7,
$30,000,000. The respective Pro Rata Shares of the Banks with respect to
the Line B Commitment are set forth in SCHEDULE 1.1.
"LINE B FUNDING DATE" means each date upon which a beneficiary draws
under a Line B Letter of Credit.
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"LINE B LETTER OF CREDIT" means any of the standby letters of credit
issued by the Issuing Bank under the Line B Commitment pursuant to
Section 2.4.
"LINE B LOAN" means the Loan made by the Banks under the Line B
Commitment.
"LINE B MATURITY DATE" means June 30, 1999.
"LINE B NOTE" means a promissory note made by Borrower in favor of
each Bank substantially in the form of EXHIBIT F, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"LOAN" means the aggregate of the Advances made at the same time and
of the same type by the Banks pursuant to a single Request for Loan under
ARTICLE 2.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Subsidiary Guaranty, the Collateral Documents, any Request for Loan, any
Request for Letter of Credit (and any corresponding application and/or
reimbursement agreement with respect to any Letter of Credit), any
Request for Redesignation, any Secured Swap Agreement, any Compliance
Certificate, any Pricing Certificate and any other agreements of any type
or nature hereafter executed and delivered by Borrower or any of its
Subsidiaries or Affiliates to the Agent or to any Bank in any way
relating to or in furtherance of this Agreement, in each case either as
originally executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation G or U.
"MATERIAL ADVERSE EFFECT" means any set of circumstances or events
which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of any Loan
Document, (b) is or could reasonably be expected to be material and
adverse to the condition (financial or otherwise), business operations or
prospects of Borrower and its Subsidiaries, taken as a whole, or
(c) materially impairs or could reasonably be expected to materially
impair the ability of Borrower and its Subsidiaries, taken as a whole, to
perform the Obligations.
"MONTHLY PAYMENT DATE" means December 31, 1995 and the last day of
each calendar month thereafter.
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"MULTIEMPLOYER PLAN" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA.
"NEGATIVE PLEDGE" means a Contractual Obligation that contains a
covenant binding on Borrower or any of its Subsidiaries that prohibits
Liens on any of its or their Property, OTHER THAN (a) any such covenant
contained in a Contractual Obligation granting a Lien permitted under
SECTION 6.8 which affects only the Property that is the subject of such
permitted Lien and (b) any such covenant that does not apply to Liens
securing the Obligations.
"NET INCOME" means, with respect to any fiscal period, the
consolidated net income of Borrower and its Subsidiaries for that period,
determined in accordance with Generally Accepted Accounting Principles,
consistently applied.
"NOTES" means, collectively, the Line A Notes and the Line B Notes.
"OBLIGATIONS" means all present and future obligations of every kind
or nature of Borrower or any Party at any time and from time to time owed
to the Agent or the Banks or any one or more of them, under any one or
more of the Loan Documents, whether due or to become due, matured or
unmatured, liquidated or unliquidated, or contingent or noncontingent,
INCLUDING obligations of performance as well as obligations of payment,
and INCLUDING interest that accrues after the commencement of any
proceeding under any Debtor Relief Law by or against Borrower or any
Subsidiary or Affiliate of Borrower.
"OPINION OF COUNSEL" means the favorable written legal opinion of
Xxxxx Xxxxxxxxxx, counsel to Borrower and its Subsidiaries, substantially
in the form of EXHIBIT G, together with copies of all factual
certificates and legal opinions upon which such counsel has relied.
"PARTY" means any Person other than the Agent and the Banks, which
now or hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereof established under ERISA.
"PENSION PLAN" means any "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA), OTHER THAN a Multiemployer
Plan, which is subject to Title IV of ERISA and is maintained by Borrower
or any of its Subsidiaries or to which Borrower or any of its
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Subsidiaries contributes or has an obligation to contribute.
"PERMITTED ENCUMBRANCES" means:
(a) Inchoate Liens incident to construction on or maintenance
of Real Property; or Liens incident to construction on or
maintenance of Real Property now or hereafter filed of record for
which adequate reserves have been set aside (or deposits made
pursuant to applicable Law) and which are being contested in good
faith by appropriate proceedings and have not proceeded to judgment,
PROVIDED that, by reason of nonpayment of the obligations secured by
such Liens, no such Real Property is subject to a material risk of
loss or forfeiture;
(b) Liens for taxes and assessments on Real Property which are
not yet delinquent; or Liens for taxes and assessments on Real
Property for which adequate reserves have been set aside and are
being contested in good faith by appropriate proceedings and have
not proceeded to judgment, PROVIDED that, by reason of nonpayment of
the obligations secured by such Liens, no such Real Property is
subject to a material risk of loss or forfeiture;
(c) minor defects and irregularities in title to any Real
Property which in the aggregate do not materially impair the fair
market value or use of the Real Property for the purposes for which
it is or may reasonably be expected to be held;
(d) easements, exceptions, reservations, or other agreements
for the purpose of pipelines, conduits, cables, wire communication
lines, power lines and substations, streets, trails, walkways,
drainage, irrigation, water, and sewerage purposes, dikes, canals,
ditches, the removal of oil, gas, coal, or other minerals, and other
like purposes affecting Real Property, facilities, or equipment
which in the aggregate do not materially burden or impair the fair
market value or use of such Real Property for the purposes for which
it is or may reasonably be expected to be held;
(e) easements, exceptions, reservations, or other agreements
for the purpose of facilitating the joint or common use of Property
affecting Real Property which in the aggregate do not materially
burden or impair the fair market value or use of such
-26-
Property for the purposes for which it is or may reasonably be
expected to be held;
(f) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, the use of any Real Property;
(g) rights reserved to or vested in any Governmental Agency
to control or regulate, or obligations or duties to any Governmental
Agency with respect to, any right, power, franchise, grant, license,
or permit;
(h) present or future zoning laws and ordinances or other laws
and ordinances restricting the occupancy, use, or enjoyment of Real
Property;
(i) statutory Liens, other than those described in clauses (a)
or (b) above, arising in the ordinary course of business with
respect to obligations which are not delinquent or are being
contested in good faith, PROVIDED that, if delinquent, adequate
reserves have been set aside with respect thereto and, by reason of
nonpayment, no Property is subject to a material risk of loss or
forfeiture;
(j) covenants, conditions, and restrictions affecting the use
of Real Property which in the aggregate do not materially impair the
fair market value or use of the Real Property for the purposes for
which it is or may reasonably be expected to be held;
(k) rights of tenants under leases and rental agreements
covering Real Property entered into in the ordinary course of
business of the Person owning such Real Property;
(l) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
dischargeable;
(m) Liens consisting of pledges or deposits of Property to
secure performance in connection with operating leases made in the
ordinary course of business to which Borrower or a Subsidiary of
Borrower is a party as lessee, PROVIDED the aggregate value of all
such pledges and deposits in connection with any such lease does not
at any time exceed 20% of the annual fixed rentals payable under
such lease;
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(n) Liens consisting of deposits of Property to secure bids
made with respect to, or performance of, contracts (OTHER THAN
contracts creating or evidencing an extension of credit to the
depositor) in the ordinary course of business;
(o) Liens consisting of any right of offset, or statutory
bankers' lien, on bank deposit accounts maintained in the ordinary
course of business so long as such bank deposit accounts are not
established or maintained for the purpose of providing such right of
offset or bankers' lien;
(p) Liens consisting of deposits of Property to secure
statutory obligations of Borrower or a Subsidiary of Borrower in the
ordinary course of its business;
(q) Liens consisting of deposits of Property to secure (or in
lieu of) surety, performance, appeal or customs bonds in proceedings
to which Borrower or a Subsidiary of Borrower is a party in the
ordinary course of its business;
(r) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or a Subsidiary of Borrower in the
ordinary course of its business which is currently being contested
in good faith by appropriate proceedings, PROVIDED that adequate
reserves have been set aside to the extent required by Generally
Accepted Accounting Principles and no material Property is subject
to a material risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the ordinary course
of business but not in connection with an extension of credit, which
do not in the aggregate, when taken together with all other such
Liens, materially impair the value or use of the Property of the
Borrower and the Subsidiaries of Borrower, taken as a whole.
"PERMITTED RIGHT OF OTHERS" means a Right of Others consisting of
(a) an interest (OTHER THAN a legal or equitable co-ownership interest
and an option or right to acquire a legal or equitable co-ownership
interest) that does not materially impair the value or use of Property
for the purposes for which it is or may reasonably be expected to be
held, (b) an option or right to acquire a Lien that would be a Permitted
Encumbrance, (c) the subordination of a lease or sublease in favor of a
financing entity and (d) a license, or similar right, of
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or to Intangible Assets granted in the ordinary course of business.
"PERSON" means any individual or entity, INCLUDING a trustee,
corporation, general partnership, limited partnership, limited liability
company, joint stock company, trust, estate, unincorporated organization,
business association, firm, joint venture, Governmental Agency, or other
entity.
"PLEDGE AGREEMENT" means the pledge agreement to be executed and
delivered by Borrower and its Subsidiaries, in the form of EXHIBIT H,
either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"PLEDGED COLLATERAL" means the certificates evidencing all of the
shares of capital stock held by Borrower or any of its Subsidiaries in
all Subsidiaries of Borrower.
"PRICING CERTIFICATE" means a certificate in the form of EXHIBIT I,
properly completed and signed by a Senior Officer of Borrower on behalf
of Borrower.
"PRICING PERIOD" means (a) the period commencing on the Closing Date
and ending on August 31, 1996, (b) the period commencing on each
September 1 thereafter and ending on the next following November 30,
(c) the period commencing on each December 1 thereafter and ending on the
next following February 28 or 29, as applicable, (d) the period
commencing on each March 1 thereafter and ending on the next following
May 31 and (e) the period commencing on each June 1 thereafter and ending
on the next following August 31.
"PRIOR DEANCO CREDIT FACILITY" means that certain Amended and
Restated Loan and Security Agreement dated as of October 11, 1994 between
Mellon Bank, N.A. and Deanco, as the same may be amended through the
Closing Date.
"PRIOR XXXXXX CREDIT FACILITY" means that certain Amended and
Restated Loan and Security Agreement dated as of April 7, 1993 between
Sanwa Business Credit Corporation and Borrower, as the same may be
amended through the Closing Date.
"PRIME RATE" means the rate that First Interstate Bank of California
announces from time to time as its prime lending rate, as in effect from
time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any
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customer. First Interstate Bank of California or any other Bank may make
commercial loans or other loans at rates of interest at, above or below
the Prime Rate.
"PROJECTIONS" means the financial projections dated October 31, 1995
distributed by or on behalf of Borrower to the Banks.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PRO RATA SHARE" means, with respect to each Bank, the percentage of
the Commitments set forth opposite the name of that Bank on SCHEDULE 1.1.
"QUARTERLY PAYMENT DATE" means each December 31, March 31, June 30
and September 30.
"RAYCHEM LIEN" means the Lien covering certain inventory of Deanco
heretofore sold to Deanco by RayChem Corporation, and hereafter to be
sold to Deanco and Borrower by RayChem Corporation.
"RAYCHEM LIEN SUBORDINATION" means a subordination agreement
covering the RayChem Lien substantially in the form of EXHIBIT J.
"REAL PROPERTY" means, as of any date of determination, all real
Property then or theretofore owned, leased or occupied by Borrower or any
of its Subsidiaries.
"REGULATION D" means Regulation D, as at any time amended, of the
Board of Governors of the Federal Reserve System, or any other regulation
in substance substituted therefor.
"REGULATIONS G, T, U AND X" means Regulations G, T, U and X, as at
any time amended, of the Board of Governors of the Federal Reserve
System, or any other regulations in substance substituted therefor.
"RENTAL EXPENSE" means, with respect to any fiscal period, all
amounts paid or payable (without duplication) for that fiscal period as
rent under leases or rental agreements for the use of Property (OTHER
THAN Capital Lease Obligations).
"REQUEST FOR LETTER OF CREDIT" means a written request for a Letter
of Credit substantially in the form of EXHIBIT K, accompanied by the
customary form of letter of credit application used by the Issuing Bank,
in each
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case signed by a Responsible Official of Borrower, on behalf of Borrower,
and properly completed to provide all information required to be included
therein.
"REQUEST FOR LOAN" means a written request for a Loan substantially
in the form of EXHIBIT L, signed by a Responsible Official of Borrower,
on behalf of Borrower, and properly completed to provide all information
required to be included therein.
"REQUEST FOR REDESIGNATION" means a written request for
redesignation of a Loan substantially in the form of EXHIBIT M, signed by
a Responsible Official of Borrower, and properly completed to provide all
information required to be included therein.
"REQUIREMENT OF LAW" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"REQUISITE BANKS" means, as of any date of determination, Banks
having in the aggregate 66-2/3% or more of the Commitments then in
effect.
"RESPONSIBLE OFFICIAL" means (a) when used with reference to a
Person OTHER THAN an individual, any (i) corporate officer of such
Person, (ii) manager of any such Person that is a limited liability
company, (iii) general partner of such Person, (iv) corporate officer of
a corporate general partner of such Person, (v) corporate officer of a
corporate general partner of a partnership that is a general partner of
such Person, or (vi) any other responsible official thereof designated by
a Senior Officer duly acting on behalf thereof, and (b) when used with
reference to a Person who is an individual, such Person. Any document or
certificate hereunder that is signed or executed by a Responsible
Official of another Person shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on
the part of such other Person.
"RIGHT OF OTHERS" means, as to any Property in which a Person has an
interest, any legal or equitable right, title or other interest (OTHER
THAN a Lien) held by any other Person in that Property, and any option or
right held by any other Person to acquire any such right, title
-31-
or other interest in that Property, INCLUDING any option or right to
acquire a Lien.
"SECURED SWAP AGREEMENT" means a Swap Agreement between Borrower and
a Bank that is secured by a Lien on the Collateral that complies with the
applicable provisions of SECTION 10.3.
"SECURITY AGREEMENT" means the security agreement to be executed and
delivered by Borrower and its Subsidiaries, in the form of EXHIBIT N,
either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"SENIOR OFFICER" means the (a) chief executive officer,
(b) president, (c) executive vice president, (d) senior vice president,
(e) chief financial officer, (f) treasurer or (g) assistant treasurer of
Borrower.
"SIGNIFICANT LESSOR" means each lessor of premises described in
SCHEDULE 4.7 therein identified by the Agent as a Significant Lessor.
"SPECIAL EURODOLLAR CIRCUMSTANCE" means the application or adoption
after the Closing Date of any Law or interpretation, or any change
therein or thereof, or any change in the interpretation or administration
thereof by any Governmental Agency, central bank or comparable authority
charged with the interpretation or administration thereof, or compliance
by any Bank or its Eurodollar Lending Office with any request or
directive (whether or not having the force of Law) of any such
Governmental Agency, central bank or comparable authority, or the
existence or occurrence of circumstances affecting the Designated
Eurodollar Market generally that are beyond the reasonable control of the
Banks.
"STOCKHOLDERS' EQUITY" means, as of any date of determination and
with respect to any Person, the consolidated stockholders' equity of the
Person as of that date determined in accordance with Generally Accepted
Accounting Principles; PROVIDED that there shall be excluded from
Stockholders' Equity any amount attributable to Disqualified Stock.
"SUBSIDIARY" means, as of any date of determination and with respect
to any Person, any corporation, partnership or limited liability company
(whether or not, in any such case, characterized as such or as a "joint
venture"), whether now existing or hereafter organized or acquired:
(a) in the case of a corporation, of which a majority of the securities
having ordinary voting power for the
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election of directors or other governing body (other than securities
having such power only by reason of the happening of a contingency) are
at the time beneficially owned by such Person and/or one or more
Subsidiaries of such Person, or (b) in the case of a partnership or
limited liability company, of which a majority of the partnership or
other ownership interests are at the time beneficially owned by such
Person and/or one or more of its Subsidiaries.
"SUBSIDIARY GUARANTY" means the continuing guaranty of the
Obligations to be executed and delivered by the Subsidiaries of Borrower,
in the form of EXHIBIT O, either as originally executed or as it may from
time to time be supplemented, modified, amended, extended or
supplemented.
"SWAP AGREEMENT" means a written agreement between Borrower and one
or more financial institutions providing for "swap", "cap", "collar" or
other interest rate protection with respect to any Indebtedness.
"TO THE BEST KNOWLEDGE OF" means, when modifying a representation,
warranty or other statement of any Person, that the fact or situation
described therein is known by the Person (or, in the case of a Person
other than a natural Person, known by a Senior Officer of that Person)
making the representation, warranty or other statement, or with the
exercise of reasonable due diligence under the circumstances (in
accordance with the standard of what a reasonable Person in similar
circumstances would have done) should have been known by the Person (or,
in the case of a Person other than a natural Person, should have been
known by a Senior Officer of that Person).
"TYPE", when used with respect to any Loan or Advance, means the
designation of whether such Loan or Advance is an Alternate Base Rate
Loan or Advance, or a Eurodollar Rate Loan or Advance.
"YORKTOWN ACQUISITION" means the acquisition by Borrower of all or
substantially all of the assets of the "Yorktown" business entity as
described in that certain letter to the Agent dated December 13, 1995.
1.2 USE OF DEFINED TERMS. Any defined term used in the plural
shall refer to all members of the relevant class, and any defined term used in
the singular shall refer to any one or more of the members of the relevant
class.
1.3 ACCOUNTING TERMS. All accounting terms not specifically
defined in this Agreement shall be construed in conformity with, and all
financial data required to be
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submitted by this Agreement shall be prepared in conformity with, Generally
Accepted Accounting Principles applied on a consistent basis, EXCEPT as
otherwise specifically prescribed herein. In the event that Generally Accepted
Accounting Principles change during the term of this Agreement such that the
covenants contained in SECTIONS 6.11 through 6.15 would then be calculated in a
different manner or with different components, (a) Borrower and the Banks agree
to amend this Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating Borrower's financial condition to
substantially the same criteria as were effective prior to such change in
Generally Accepted Accounting Principles and (b) Borrower shall be deemed to be
in compliance with the covenants contained in the aforesaid Sections during the
90-day period following any such change in Generally Accepted Accounting
Principles if and to the extent that Borrower would have been in compliance
therewith under Generally Accepted Accounting Principles as in effect
immediately prior to such change.
1.4 ROUNDING. Any financial ratios required to be maintained by
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.5 EXHIBITS AND SCHEDULES. All Exhibits and Schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 REFERENCES TO "BORROWER AND ITS SUBSIDIARIES". Any reference
herein to "Borrower and its Subsidiaries" shall refer solely to Borrower during
such times, if any, as Borrower shall have no Subsidiaries.
1.7 MISCELLANEOUS TERMS. The term "or" is disjunctive; the term
"and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also apply to
males. The term "including" is by way of example and not limitation.
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Article 2
LOANS AND LETTERS OF CREDIT
2.1 LOANS-GENERAL.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date, to,
but excluding, the Line A Maturity Date, each Bank shall, pro rata
according to that Bank's Pro Rata Share of the then applicable Line A
Commitment, make Line A Advances to Borrower under the Line A Commitment
in such amounts as Borrower may request that do not result in the SUM OF
(i) the aggregate principal Indebtedness outstanding under the Line A
Notes PLUS (ii) the Aggregate Effective Amount of all outstanding Line A
Letters of Credit exceeding the LESSER OF (A) the Borrowing Base then in
effect and (B) the Line A Commitment then in effect. Subject to the
limitations set forth herein, Borrower may borrow, repay and reborrow
under the Line A Commitment without premium or penalty.
(b) Subject to the terms and conditions set forth in this
Agreement, on each Line B Funding Date each Bank shall, pro rata
according to that Bank's Pro Rata Share of the then applicable Line B
Commitment, make an Advance to Borrower under the Line B Commitment in
such amount as Borrower may request that does not result in the SUM OF
(i) the aggregate principal Indebtedness outstanding under the Line B
Notes PLUS (ii) the Aggregate Effective Amount of any Line B Letter of
Credit exceeding the Line B Commitment then in effect. The proceeds of
such Loans shall be paid directly to the Issuing Bank in satisfaction of
Borrower's reimbursement obligations under Section 2.4(d) with respect to
the related Line B Letter of Credit.
(c) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i) date
of such Loan, (ii) type of Loan, (iii) amount of such Loan and (iv) in
the case of a Eurodollar Rate Loan, the Eurodollar Period for such Loan.
Unless the Agent has notified, in its sole and absolute discretion,
Borrower to the contrary, a Loan may be requested by telephone by a
Responsible Official of Borrower, in which case Borrower shall confirm
such request by promptly delivering a Request for Loan in person or by
telecopier conforming to the preceding sentence to the Agent. Agent
shall incur no liability whatsoever hereunder in acting upon any
telephonic request for Loan purportedly made by a Responsible Official of
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Borrower, which hereby agrees to indemnify the Agent from any loss, cost,
expense or liability as a result of so acting.
(d) Promptly following receipt of a Request for Loan, the
Agent shall notify each Bank by telephone or telecopier (and if by
telephone, promptly confirmed by telecopier) of the date and type of the
Loan, the applicable Eurodollar Period, and that Bank's Pro Rata Share of
the Loan. Not later than 11:00 a.m., Los Angeles time, on the date
specified for any Loan (which must be a Banking Day), each Bank shall
make its Pro Rata Share of the Loan in immediately available funds
available to the Agent at the Agent's Office. Upon satisfaction or
waiver of the applicable conditions set forth in ARTICLE 8, all Advances
shall be credited on that date in immediately available funds to the
Designated Deposit Account.
(e) Unless the Requisite Banks otherwise consent, (i) each
Alternate Base Rate Loan shall be not less than $1,000,000 and (ii) each
Eurodollar Rate Loan shall be not less than $2,000,000 and shall be an
integral multiple of $500,000.
(f) The Line A Advances made by each Bank shall be evidenced
by that Bank's Line A Note and the Line B Advances made by each Bank
shall be evidenced by that Bank's Line B Note.
(g) A Request for Loan shall be irrevocable upon the Agent's
first notification thereof.
(h) If a Loan is to be made on the same date that another Loan
is due and payable, Borrower or the Banks, as the case may be, shall make
available to the Agent the net amount of funds giving effect to both such
Loans and the effect for purposes of this Agreement shall be the same as
if separate transfers of funds had been made with respect to each such
Loan.
(i) Borrower may redesignate any outstanding Alternate Base
Rate Loan as a Eurodollar Rate Loan, or any outstanding Eurodollar Rate
Loan as an Alternate Base Rate Loan or as a Eurodollar Rate Loan with a
different Eurodollar Period, in each case pursuant to a Request for
Redesignation delivered to and received by the Agent, at the Agent's
Office, not later than the time required in the case of a Request for
Loan of the applicable type set forth in Sections 2.2 or 2.3. Unless the
Agent has notified, in its sole and absolute discretion, Borrower to the
contrary, redesignation may be requested by telephone by a Responsible
Official of Borrower, in which case
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Borrower shall confirm such request by promptly delivering a Request for
Redesignation in person or by telecopier conforming to the preceding
sentence to the Agent. Any Eurodollar Rate Loan designated in a Request
for Redesignation (or telephonic request) shall be subject to
Section 2.3. If no Request for Redesignation (or telephonic request for
redesignation as referred to in the preceding sentence, if applicable)
has been made with respect to an outstanding Eurodollar Rate Loan within
the requisite notice periods set forth in Sections 2.2 or 2.3, then as of
the day immediately following the last day of the Eurodollar Period for
such Eurodollar Rate Loan, such Eurodollar Rate Loan shall automatically
convert to an Alternate Base Rate Loan.
2.2 ALTERNATE BASE RATE LOANS. Each request by Borrower for an
Alternate Base Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for loan referred to in the second sentence of
Section 2.1(c), if applicable) received by the Agent, at the Agent's Office, not
later than 11:00 a.m. Los Angeles time, at least one (1) Banking Day before the
requested Alternate Base Rate Loan. All Loans shall constitute Alternate Base
Rate Loans unless properly designated or redesignated as a Eurodollar Rate Loan
pursuant to Section 2.1 or 2.3.
2.3 EURODOLLAR RATE LOANS.
(a) Each request by Borrower for a Eurodollar Rate Loan shall
be made pursuant to a Request for Loan (or telephonic or other request
for Loan referred to in the second sentence of Section 2.1(c), if
applicable) received by the Agent, at the Agent's Office, not later than
11:00 a.m., Los Angeles time, at least three (3) Eurodollar Banking Days
before the first day of the applicable Eurodollar Period.
(b) On the date which is two (2) Eurodollar Banking Days
before the first day of the applicable Eurodollar Period, the Agent shall
confirm its determination of the applicable Eurodollar Rate (which
determination shall be conclusive in the absence of manifest error) and
promptly shall give notice of the same to Borrower and the Banks by
telephone or telecopier (and if by telephone, promptly confirmed by
telecopier).
(c) Unless the Agent and the Requisite Banks otherwise
consent, no more than ten (10) Eurodollar Rate Loans shall be outstanding
at any one time.
(d) No Eurodollar Rate Loan may be requested during the
existence of a Default or Event of Default.
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(e) Nothing contained herein shall require any Bank to fund
any Eurodollar Rate Advance from deposits obtained in the Designated
Eurodollar Market.
2.4 LETTERS OF CREDIT.
(a) Subject to the terms and conditions hereof, at any time
and from time to time from the Closing Date to, but not including, the
Line A Maturity Date, the Issuing Bank shall issue such Line A Letters of
Credit as Borrower may request by a Request for Letter of Credit;
PROVIDED that (i) giving effect to all such Line A Letters of Credit, the
SUM of (A) the aggregate principal Indebtedness outstanding under the
Line A Notes PLUS (B) the Aggregate Effective Amount of all outstanding
Line A Letters of Credit do not exceed the LESSER OF (y) the Borrowing
Base then in effect and (z) the Line A Commitment then in effect and
(ii) the Aggregate Effective Amount under all outstanding Line A Letters
of Credit shall not exceed $5,000,000 at any time on or prior to
January 2, 1996, or $3,000,000 at any time thereafter. Subject to the
terms and conditions hereof, on the Closing Date the Issuing Bank shall
issue such Line B Letters of Credit as Borrower may request by a Request
for Letter of Credit; PROVIDED that (i) giving effect to such Line B
Letters of Credit, the SUM OF (A) the aggregate principal Indebtedness
outstanding under the Line B Notes PLUS (B) the Aggregate Effective
Amount of such Line B Letters of Credit does not exceed the Line B
Commitment and (ii) the Issuing Bank shall not be obligated to issue any
Line B Letter of Credit subsequent to the Closing Date. Each Letter of
Credit shall be in a form reasonably acceptable to the Issuing Bank.
Unless the Issuing Bank otherwise consents, the term of any Line A Letter
of Credit shall not exceed 365 days and the term of any Line B Letter of
Credit shall not exceed 45 days. Unless all the Banks otherwise consent
in a writing delivered to the Agent, the term of any Line A Letter of
Credit shall not extend beyond the Line A Maturity Date and the term of
any Line B Letter of Credit shall not extend beyond the Line B Maturity
Date. A Request for Letter of Credit shall be irrevocable absent the
consent of the Issuing Bank, which consent shall not be unreasonably
withheld or delayed.
(b) Each Request for Letter of Credit shall be submitted to
the Issuing Bank, with a copy to the Agent, at least three (3) Banking
Days prior to the date upon which the related Letter of Credit is
proposed to be issued. The Agent shall promptly notify the Issuing Bank
whether such Request for Letter of Credit, and the issuance of a Letter
of Credit pursuant thereto, conforms
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to the requirements of this Agreement. Upon issuance of a Letter of
Credit, the Issuing Bank shall promptly notify the Agent, and the Agent
shall promptly notify the Banks, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Bank shall
be deemed to have purchased a pro rata participation in such Letter of
Credit from the Issuing Bank in proportion to that Bank's Pro Rata Share
of the Line A Commitment or Line B Commitment (as applicable). Without
limiting the scope and nature of each Bank's participation in any Letter
of Credit, to the extent that the Issuing Bank has not been reimbursed by
Borrower for any payment required to be made by the Issuing Bank under
any Letter of Credit, each Bank shall, pro rata according to its Pro Rata
Share of the Line A Commitment or Line B Commitment (as applicable),
reimburse the Issuing Bank through the Agent promptly upon demand for the
amount of such payment. The obligation of each Bank to so reimburse the
Issuing Bank shall be absolute and unconditional and shall not be
affected by the occurrence of an Event of Default or any other occurrence
or event. Any such reimbursement shall not relieve or otherwise impair
the obligation of Borrower to reimburse the Issuing Bank for the amount
of any payment made by the Issuing Bank under any Letter of Credit
together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Bank through the
Agent an amount equal to any payment made by the Issuing Bank with
respect to each Letter of Credit within one (1) Banking Day after demand
made by the Issuing Bank therefor, together with interest on such amount
from the date of any payment made by the Issuing Bank at the rate
applicable to Alternate Base Rate Loans for the period commencing on the
date of any such payment and continuing through the first Banking Day
following such demand and thereafter at the Default Rate. The principal
amount of any such payment shall be used to reimburse the Issuing Bank
for the payment made by it under the Letter of Credit. Each Bank that
has reimbursed the Issuing Bank pursuant to SECTION 2.4(c) for its Pro
Rata Share of any payment made by the Issuing Bank under a Letter of
Credit shall thereupon acquire a pro rata participation, to the extent of
such reimbursement, in the claim of the Issuing Bank against Borrower
under this SECTION 2.4(d) and shall share, in accordance with that
pro-rata participation, in any payment made by Borrower with respect to
such claim. Upon receipt of any such reimbursement from Borrower, the
Issuing Bank shall pay to the Agent, for the ratable benefit of those
Banks that had reimbursed the Issuing Bank pursuant to SECTION 2.4(c) for
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their respective Pro Rata Shares of any payment made by the Issuing Bank under a
Letter of Credit to which such reimbursement applies, the amount of such
reimbursement.
(e) If Borrower fails to make the payment required by
SECTION 2.4(d) within the time period therein set forth, in lieu of the
reimbursement to the Issuing Bank under SECTION 2.4(c) the Issuing Bank
may (but is not required to), without notice to or the consent of
Borrower, instruct the Agent to cause Advances to be made by the Banks
under the Line A Commitment or Line B Commitment (as applicable) in an
aggregate amount equal to the amount paid by the Issuing Bank with
respect to that Letter of Credit and, for this purpose, the conditions
precedent set forth in ARTICLE 8 shall not apply. The proceeds of such
Advances shall be paid to the Issuing Bank to reimburse it for the
payment made by it under the Letter of Credit. Such Advances shall be
payable upon demand and shall bear interest at the Default Rate.
(f) The issuance of any supplement, modification, amendment,
renewal, or extension to or of any Letter of Credit shall be treated in
all respects the same as the issuance of a new Letter of Credit.
(g) The obligation of Borrower to pay to the Issuing Bank the
amount of any payment made by the Issuing Bank under any Letter of Credit
shall be absolute, unconditional and irrevocable, subject only to
performance by the Issuing Bank of its obligations to Borrower under
Section 5109 of the Uniform Commercial Code. Without limiting the
foregoing, Borrower's obligations shall not be affected by any of the
following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, this Agreement, or any other agreement or instrument
relating thereto;
(ii) any amendment or waiver of or any consent to departure
from the Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto, with the consent of Borrower;
(iii) the existence of any claim, setoff, defense or other
rights which Borrower may have at any time against the Issuing Bank,
the Agent or any Bank, any beneficiary of the Letter of Credit (or
any persons or entities for whom any such beneficiary may be acting)
or any other Person, whether in connection with the Letter of
Credit, this Agreement, or any other agreement or instrument
relating thereto, or any unrelated transactions;
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(iv) any demand, statement or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever so long as any such document
reasonably appeared to comply with the terms of the Letter of
Credit;
(v) payment by the Issuing Bank in good faith under the Letter
of Credit against presentation of a draft or any accompanying
document which does not strictly comply with the terms of the Letter
of Credit;
(vi) the existence, character, quality, quantity, condition,
packing, value or delivery of any Property purported to be
represented by documents presented in connection with any Letter of
Credit or for any difference between any such Property and the
character, quality, quantity, condition or value of such Property as
described in such documents;
(vii) the time, place, manner, order or contents of shipments or
deliveries of Property as described in documents presented in
connection with any Letter of Credit or the existence, nature and
extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of
any Property;
(x) any error in the transmission of any message relating to a
Letter of Credit not caused by the Issuing Bank, or any delay or
interruption in any such message;
(xi) any error, neglect or default of any correspondent of the
Issuing Bank in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, war,
insurrection, civil unrest, disturbances, labor disputes, emergency
conditions or other causes beyond the control of the Issuing Bank;
and
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(xiii) so long as the Issuing Bank in good faith determines that
the contract or document appears to comply with the terms of the
Letter of Credit, the form, accuracy, genuineness or legal effect of
any contract or document referred to in any document submitted to
the Issuing Bank in connection with a Letter of Credit.
(h) The Issuing Bank VIS-A-VIS the Banks shall be entitled to
the protection accorded to the Agent VIS-A-VIS the Banks pursuant to
SECTION 10.6, MUTATIS MUTANDIS.
(i) The Uniform Customs and Practices for Documentary Credits,
as published in its most current version by the International Chamber of
Commerce, shall be deemed a part of this Section and shall apply to all
Letters of Credit to the extent not inconsistent with applicable Law.
2.5 VOLUNTARY REDUCTION OF LINE A COMMITMENT. Borrower shall have
the right, at any time and from time to time, without penalty or charge, upon at
least five (5) Banking Days' prior written notice by a Senior Officer of
Borrower to the Agent, voluntarily to reduce, permanently and irrevocably, in
aggregate principal amounts in an integral multiple of $500,000 but not less
than $2,000,000, or to terminate, all or a portion of the then undisbursed
portion of the Line A Commitment, PROVIDED that any such reduction or
termination shall be accompanied by payment of all accrued and unpaid commitment
fees with respect to the portion of the Line A Commitment being reduced or
terminated. The Agent shall promptly notify the Banks of any reduction or
termination of the Line A Commitment under this Section.
2.6 AUTOMATIC REDUCTION OF LINE B COMMITMENT. On each Amortization
Date, the Line B Commitment shall automatically be reduced by the applicable
Amortization Amount.
2.7 OPTIONAL TERMINATION OF COMMITMENTS. Following the occurrence
of a Change in Control, the Requisite Banks may in their sole and absolute
discretion elect, during the sixty (60) day period immediately subsequent to the
LATER OF (a) such occurrence or (b) the EARLIER of (i) receipt of Borrower's
written notice to the Agent of such occurrence or (ii) if no such notice has
been received by the Agent, the date upon which the Agent has actual knowledge
thereof, to terminate the Commitments, in which case the Commitments shall be
terminated effective on the date which is thirty (30) days subsequent to written
notice from the Agent to Borrower thereof.
2.8 AGENT'S RIGHT TO ASSUME FUNDS AVAILABLE FOR ADVANCES. Unless
the Agent shall have been notified by any
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Bank no later than the Banking Day prior to the funding by the Agent of any Loan
that such Bank does not intend to make available to the Agent such Bank's
portion of the total amount of such Loan, the Agent may assume that such Bank
has made such amount available to the Agent on the date of the Loan and the
Agent may, in reliance upon such assumption, make available to Borrower a
corresponding amount. If the Agent has made funds available to Borrower based
on such assumption and such corresponding amount is not in fact made available
to the Agent by such Bank, the Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
promptly shall notify Borrower and Borrower shall pay such corresponding amount
to the Agent. The Agent also shall be entitled to recover from such Bank
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to Borrower to the date
such corresponding amount is recovered by the Agent, at a rate per annum equal
to the daily Federal Funds Rate. Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its share of the Commitments or to prejudice
any rights which the Agent or Borrower may have against any Bank as a result of
any default by such Bank hereunder.
2.9 COLLATERAL AND GUARANTY. The Obligations shall be secured by
the Collateral pursuant to the Collateral Documents and be guaranteed pursuant
to the Subsidiary Guaranty.
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Article 3
PAYMENTS AND FEES
3.1 PRINCIPAL AND INTEREST.
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Advance from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth or
provided for herein before and after default, before and after maturity,
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law, with interest on overdue interest
at the Default Rate to the fullest extent permitted by applicable Laws.
(b) Interest accrued on each Alternate Base Rate Loan shall be
due and payable on each Monthly Payment Date. EXCEPT as otherwise
provided in SECTION 3.8, the unpaid principal amount of any Alternate
Base Rate Loan shall bear interest at a fluctuating rate per annum equal
to the Alternate Base Rate PLUS the Applicable Alternate Base Rate
Margin. Each change in the interest rate under this Section 3.1(b) due
to a change in the Alternate Base Rate shall take effect simultaneously
with the corresponding change in the Alternate Base Rate.
(c) Interest accrued on each Eurodollar Rate Loan shall be due
and payable on the last day of the related Eurodollar Period, UNLESS the
Eurodollar Period is greater than three months, in which case interest
shall be due and payable on the date that is three months after the first
day of the related Eurodollar Period, every three months thereafter and
on the last day of the Eurodollar Period. EXCEPT as otherwise provided
in Sections 3.1(d) and 3.8, the unpaid principal amount of any Eurodollar
Rate Loan shall bear interest at a rate per annum equal to the Eurodollar
Rate for that Eurodollar Rate Loan PLUS the Applicable Eurodollar
Rate Margin.
(d) During the existence of a Default or Event of Default, the
Requisite Banks may determine that any or all then outstanding Eurodollar
Rate Loans shall be converted to Alternate Base Rate Loans. Such
conversion shall be effective upon notice to Borrower from the Requisite
Banks (or from the Agent on behalf of the Requisite Banks) and shall
continue so long as such Default or Event of Default continues to exist.
(e) If not sooner paid, the principal Indebtedness evidenced
by the Notes shall be payable as follows:
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(i) the amount, if any, by which the SUM OF (A) the
principal outstanding Indebtedness evidenced by the Line A Notes
PLUS (B) the Aggregate Effective Amount of all outstanding Line A
Letters of Credit at any time exceeds the LESSER OF (Y) the
Borrowing Base then in effect and (Z) the Line A Commitment then in
effect, shall be payable immediately;
(ii) the amount, if any by which the SUM OF (A) the
principal outstanding Indebtedness evidenced by the Line B Notes
PLUS (B) the Aggregate Effective Amount of all outstanding Line B
Letters of Credit at any time exceeds the Line B Commitment then in
effect, shall be payable immediately;
(iii) the Amortization Amounts under the Line B Notes
shall be payable on each respective Amortization Date;
(iv) the principal outstanding Indebtedness evidenced
by the Line A Notes shall in any event be payable on the Line A
Maturity Date; and
(v) the principal outstanding Indebtedness evidenced
by the Line B Notes shall in any event be payable on the Line B
Maturity Date.
(f) The Line B Notes shall be prepaid, concurrently with the
receipt by Borrower of Cash proceeds from the issuance and sale by
Borrower of any equity security of Borrower, in an amount equal to such
Cash proceeds, net of any out-of-pocket expenses directly related
thereto. Such prepayments shall be applied to the then most remote
Amortization Amount.
(g) The Notes may, at any time and from time to time,
voluntarily be prepaid in whole or in part without premium or penalty;
PROVIDED that with respect to any voluntary prepayment under this
Section (i) any partial prepayment shall be not less than $1,000,000,
(ii) the Agent shall have received written notice of any prepayment by
9:00 a.m. Los Angeles time three (3) Banking Days prior to the date of
prepayment of a Eurodollar Rate Loan, which notice shall identify the
date and amount of the prepayment and the Loan(s) being prepaid,
(iii) each prepayment of principal on any Eurodollar Rate Loan shall be
accompanied by payment of interest accrued to the date of payment on the
amount of principal paid, (iv) any payment or prepayment of all or any
part of any Eurodollar Rate Loan on a day other than the last day of the
applicable Eurodollar Period shall be subject to Section 3.7(d), and
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(v) upon any partial prepayment of a Eurodollar Rate Loan that reduces it
below $2,000,000, the remaining portion thereof shall automatically
convert to an Alternate Base Rate Loan.
3.2 ARRANGEMENT FEE. On the Closing Date, Borrower shall pay to
the Agent an arrangement fee in such amount as heretofore agreed upon by that
certain letter agreement dated November 9, 1995 between Borrower and the Agent.
3.3 AGENCY FEES. Borrower shall pay to the Agent the agency fees
in such amounts and at such times as heretofore agreed upon by that certain
letter agreement dated November 9, 1995 between Borrower and the Agent. Such
fees are for the services of the Agent and are fully earned on the date paid.
The fees paid to the Agent are solely for its own account and are nonrefundable.
3.4 COMMITMENT FEES. From and including the Closing Date, and for
so long as any portion of the Line A Commitment remains in effect, Borrower
shall pay to the Agent, for the ratable accounts of the Banks pro rata according
to their Pro Rata Share of the Line A Commitment, a commitment fee equal to the
Applicable Commitment Fee Rate per annum TIMES the average daily amount by which
the Line A Commitment exceeds the SUM OF (a) the aggregate principal
Indebtedness evidenced by the Line A Notes PLUS (b) the Aggregate Effective
Amount of all Line A Letters of Credit outstanding. The commitment fee shall be
payable quarterly in arrears on each Quarterly Payment Date and on the Line A
Maturity Date.
3.5 LETTER OF CREDIT FEES. Concurrently with the issuance of each
Letter of Credit, Borrower shall pay a letter of credit issuance fee to the
Issuing Bank, for the sole account of the Issuing Bank, in an amount equal to
1/4 of 1% (25 basis points) per annum of the face amount of such Letter of
Credit for the term of such Letter of Credit. Borrower shall also concurrently
pay to the Agent, for the ratable account of the Banks in accordance with their
Pro Rata Share of the Line A Commitment or Line B Commitment (as applicable), a
standby letter of credit fee in an amount equal to the Applicable Standby Letter
of Credit Fee per annum TIMES the face amount of such Letter of Credit for the
term of such Letter of Credit. In addition to the foregoing, in connection with
a Letter of Credit and activity relating thereto, Borrower shall also pay
amendment, transfer, issuance, negotiation and such other fees as the Issuing
Bank normally charges (not to include origination fees), in the amounts set
forth from time to time as the Issuing Bank's published scheduled fees for such
services, which fees shall be solely for the account of the Issuing Bank. Each
of the fees payable with respect to Letters
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of Credit under this Section is earned when due and is nonrefundable.
3.6 INCREASED COMMITMENT COSTS. If any Bank shall determine in
good faith that the introduction after the Closing Date of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change therein
or any change in the interpretation or administration thereof by any central
bank or other Governmental Agency charged with the interpretation or
administration thereof, or compliance by such Bank (or its Eurodollar Lending
Office) or any corporation controlling the Bank, with any request, guideline or
directive regarding capital adequacy (whether or not having the force of law) of
any such central bank or other authority, affects or would affect the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and such Bank's desired
return on capital) determines in good faith that the amount of such capital is
increased, or the rate of return on capital is reduced, as a consequence of its
obligations under this Agreement, then, within ten (10) Banking Days after
demand of such Bank, Borrower shall pay to such Bank, from time to time as
specified in good faith by such Bank, additional amounts sufficient to
compensate such Bank in light of such circumstances, to the extent reasonably
allocable to such obligations under this Agreement.
3.7 EURODOLLAR COSTS AND RELATED MATTERS.
(a) If, after the date hereof, the existence or occurrence of
any Special Eurodollar Circumstance:
(1) shall subject any Bank or its Eurodollar Lending Office to
any tax, duty or other charge or cost with respect to any Eurodollar
Rate Advance, any of its Notes evidencing Eurodollar Rate Loans or
its obligation to make Eurodollar Rate Advances, or shall change the
basis of taxation of payments to any Bank attributable to the
principal of or interest on any Eurodollar Rate Advance or any other
amounts due under this Agreement in respect of any Eurodollar Rate
Advance, any of its Notes evidencing Eurodollar Rate Loans or its
obligation to make Eurodollar Rate Advances, EXCLUDING (i) taxes
imposed on or measured in whole or in part by its overall net
income, gross income or gross receipts or capital and franchise
taxes imposed on it, by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or maintains its
principal office or Eurodollar Lending Office or (B) any
jurisdiction (or political subdivision thereof) in which it is
"doing
-47-
business" (unless it would not be doing business in such
jurisdiction (or political subdivision thereof) absent the
transactions contemplated hereby), (ii) any withholding taxes or
other taxes based on gross income imposed by the United States of
America (other than withholding taxes and taxes based on gross
income resulting from or attributable to any change in any law, rule
or regulation or any change in the interpretation or administration
of any law, rule or regulation by any Governmental Agency) or
(iii) any withholding taxes or other taxes based on gross income
imposed by the United States of America for any period with respect
to which it has failed to provide Borrower with the appropriate form
or forms required by SECTION 11.21, to the extent such forms are
then required by applicable Laws;
(2) shall impose, modify or deem applicable any reserve not
applicable or deemed applicable on the date hereof (INCLUDING,
without limitation, any reserve imposed by the Board of Governors of
the Federal Reserve System, BUT EXCLUDING the Eurodollar Reserve
Percentage taken into account in calculating the Eurodollar Rate),
special deposit, capital or similar requirements against assets of,
deposits with or for the account of, or credit extended by, any Bank
or its Eurodollar Lending Office; or
(3) shall impose on any Bank or its Eurodollar Lending Office
or the Designated Eurodollar Market any other condition affecting
any Eurodollar Rate Advance, any of its Notes evidencing Eurodollar
Rate Loans, its obligation to make Eurodollar Rate Advances or this
Agreement, or shall otherwise affect any of the same;
and the result of any of the foregoing, as determined in good faith by
such Bank, increases the cost to such Bank or its Eurodollar Lending
Office of making or maintaining any Eurodollar Rate Advance or in respect
of any Eurodollar Rate Advance, any of its Notes evidencing Eurodollar
Rate Loans or its obligation to make Eurodollar Rate Advances or reduces
the amount of any sum received or receivable by such Bank or its
Eurodollar Lending Office with respect to any Eurodollar Rate Advance,
any of its Notes evidencing Eurodollar Rate Loans or its obligation to
make Eurodollar Rate Advances (assuming such Bank's Eurodollar Lending
Office had funded 100% of its Eurodollar Rate Advance in the Designated
Eurodollar Market), then, within five (5) Banking Days after demand by
such Bank (with a copy to the Agent), Borrower shall pay to such Bank
such additional amount or amounts as will
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compensate such Bank for such increased cost or reduction (determined as
though such Bank's Eurodollar Lending Office had funded 100% of its
Eurodollar Rate Advance in the Designated Eurodollar Market). Borrower
hereby indemnifies each Bank against, and agrees to hold each Bank
harmless from and reimburse such Bank within ten (10) Banking Days after
demand for (without duplication) all costs, expenses, claims, penalties,
liabilities, losses, reasonable legal fees and damages incurred or
sustained by each Bank in connection with this Agreement, or any of the
rights, obligations or transactions provided for or contemplated herein,
as a direct result of the existence or occurrence of any Special
Eurodollar Circumstance. A statement of any Bank claiming compensation
under this subsection and setting forth in reasonable detail the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. Each Bank agrees to
endeavor promptly to notify Borrower of any event of which it has actual
knowledge, occurring after the Closing Date, which will entitle such Bank
to compensation pursuant to this Section, and agrees to designate a
different Eurodollar Lending Office if such designation will avoid the
need for or reduce the amount of such compensation and will not, in the
good faith judgment of such Bank, otherwise be materially disadvantageous
to such Bank. If any Bank claims compensation under this Section,
Borrower may at any time, upon at least three (3) Eurodollar Banking
Days' prior notice to the Agent and such Bank and upon payment in full of
the amounts provided for in this Section through the date of such payment
PLUS any prepayment fee required by Section 3.6(d), pay in full the
affected Eurodollar Rate Advances of such Bank or convert such Eurodollar
Rate Advances to Alternate Base Rate Advances.
(b) If, after the date hereof, the existence or occurrence of
any Special Eurodollar Circumstance shall, in the good faith opinion of
any Bank, make it unlawful or impossible for such Bank or its Eurodollar
Lending Office to make, maintain or fund its portion of any Eurodollar
Rate Loan, or materially restrict the authority of such Bank to purchase
or sell, or to take deposits of, Dollars in the Designated Eurodollar
Market, or to determine or charge interest rates based upon the
Eurodollar Rate, and such Bank shall so notify the Agent, then such
Bank's obligation to make Eurodollar Rate Advances shall be suspended for
the duration of such illegality or impossibility and the Agent forthwith
shall give notice thereof to the other Banks and Borrower. Upon receipt
of such notice, the outstanding principal amount of such Bank's
Eurodollar Rate Advances, together with accrued interest thereon,
automatically shall be converted to
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Xxxxxxxxx Xxxx Rate Advances with Eurodollar Periods corresponding to the
Eurodollar Loans of which such Eurodollar Rate Advances were a part on
either (1) the last day of the Eurodollar Period(s) applicable to such
Eurodollar Rate Advances if such Bank may lawfully continue to maintain
and fund such Eurodollar Rate Advances to such day(s) or (2) immediately
if such Bank may not lawfully continue to fund and maintain such
Eurodollar Rate Advances to such day(s), PROVIDED that in such event the
conversion shall not be subject to payment of a prepayment fee under
Section 3.7(d). Each Bank agrees to endeavor promptly to notify Borrower
of any event of which it has actual knowledge, occurring after the
Closing Date, which will cause that Bank to notify the Agent under this
Section, and agrees to designate a different Eurodollar Lending Office if
such designation will avoid the need for such notice and will not, in the
good faith judgment of such Bank, otherwise be materially disadvantageous
to such Bank. In the event that any Bank is unable, for the reasons set
forth above, to make, maintain or fund its portion of any Eurodollar Rate
Loan, such Bank shall fund such amount as an Alternate Base Rate Advance
for the same period of time, and such amount shall be treated in all
respects as an Alternate Base Rate Advance. Any Bank whose obligation to
make Eurodollar Rate Advances has been suspended under this Section shall
promptly notify the Agent and Borrower of the cessation of the Special
Eurodollar Circumstance which gave rise to such suspension.
(c) If, with respect to any proposed Eurodollar Rate Loan:
(1) the Agent reasonably determines that, by reason of
circumstances affecting the Designated Eurodollar Market generally
that are beyond the reasonable control of the Banks, deposits in
Dollars (in the applicable amounts) are not being offered to any
Bank in the Designated Eurodollar Market for the applicable
Eurodollar Period; or
(2) the Requisite Banks advise the Agent that the Eurodollar
Rate as determined by the Agent (i) does not represent the effective
pricing to such Banks for deposits in Dollars in the Designated
Eurodollar Market in the relevant amount for the applicable
Eurodollar Period, or (ii) will not adequately and fairly reflect
the cost to such Banks of making the applicable Eurodollar Rate
Advances;
then the Agent forthwith shall give notice thereof to Borrower and the
Banks, whereupon until the Agent notifies
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Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Banks to make any future Eurodollar Rate
Advances shall be suspended. If at the time of such notice there is then
pending a Request for Loan that specifies a Eurodollar Rate Loan, such
Request for Loan shall be deemed to specify an Alternate Base Rate Loan.
(d) Upon payment or prepayment of any Eurodollar Rate Advance
(OTHER THAN as the result of a conversion required under Section 3.7(b)),
on a day other than the last day in the applicable Eurodollar Period
(whether voluntarily, involuntarily, by reason of acceleration, or
otherwise), or upon the failure of Borrower (for a reason other than the
failure of a Bank to make an Advance) to borrow on the date or in the
amount specified for a Eurodollar Rate Loan in any Request for Loan,
Borrower shall pay to the appropriate Bank within ten (10) Banking Days
after demand a prepayment fee or failure to borrow fee, as the case may
be (determined as though 100% of the Eurodollar Rate Advance had been
funded in the Designated Eurodollar Market) equal to the SUM of:
(1) the principal amount of the Eurodollar Rate Advance
prepaid or not borrowed, as the case may be, TIMES [the number of
days between the date of prepayment or failure to borrow, as
applicable, and the last day in the applicable Eurodollar Period],
DIVIDED BY 360, TIMES the applicable Interest Differential (PROVIDED
that the product of the foregoing formula must be a positive
number); PLUS
(2) all out-of-pocket expenses incurred by the Bank reasonably
and directly attributable to such payment, prepayment or failure to
borrow.
Each Bank's determination of the amount of any prepayment fee payable
under this Section shall be conclusive in the absence of manifest error.
3.8 LATE PAYMENTS. If any installment of principal or interest or
any fee or cost or other amount payable under any Loan Document to the Agent or
any Bank is not paid when due, it shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the SUM OF the
Alternate Base Rate PLUS the Applicable Alternate Base Rate Margin PLUS 2%, to
the fullest extent permitted by applicable Laws. Accrued and unpaid interest on
past due amounts (INCLUDING, without limitation, interest on past due interest)
shall be compounded monthly, on the last day of each calendar month, to the
fullest extent permitted by applicable Laws.
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3.9 COMPUTATION OF INTEREST AND FEES. Computation of interest on
Alternate Base Rate Loans shall be calculated on the basis of a year of 365
or 366 days, as the case may be, and the actual number of days elapsed;
computation of interest on Eurodollar Rate Loans and all fees under this
Agreement shall be calculated on the basis of a year of 360 days and the actual
number of days elapsed. Borrower acknowledges that such latter calculation
method will result in a higher yield to the Banks than a method based on a year
of 365 or 366 days. Interest shall accrue on each Loan for the day on which the
Loan is made; interest shall not accrue on a Loan, or any portion thereof, for
the day on which the Loan or such portion is paid. Any Loan that is repaid on
the same day on which it is made shall bear interest for one day.
Notwithstanding anything in this Agreement to the contrary, interest in excess
of the maximum amount permitted by applicable Laws shall not accrue or be
payable hereunder or under the Notes, and any amount paid as interest hereunder
or under the Notes which would otherwise be in excess of such maximum permitted
amount shall instead be treated as a payment of principal.
3.10 NON-BANKING DAYS. If any payment to be made by Borrower or
any other Party under any Loan Document shall come due on a day other than a
Banking Day, payment shall instead be considered due on the next succeeding
Banking Day and the extension of time shall be reflected in computing interest
and fees.
3.11 MANNER AND TREATMENT OF PAYMENTS.
(a) Each payment hereunder (EXCEPT payments pursuant to
SECTIONS 3.6, 3.7, 11.3, 11.11 and 11.22) or on the Notes or under any
other Loan Document shall be made to the Agent, at the Agent's Office,
for the account of each of the Banks or the Agent, as the case may be, in
immediately available funds not later than 11:00 a.m., Los Angeles time,
on the day of payment (which must be a Banking Day). All payments
received after 11:00 a.m., Los Angeles time, on any Banking Day, shall be
deemed received on the next succeeding Banking Day. The amount of all
payments received by the Agent for the account of each Bank shall be
immediately paid by the Agent to the applicable Bank in immediately
available funds and, if such payment was received by the Agent by
11:00 a.m., Los Angeles time, on a Banking Day and not so made available
to the account of a Bank on that Banking Day, the Agent shall reimburse
that Bank for the cost to such Bank of funding the amount of such payment
at the Federal Funds Rate. All payments shall be made in lawful money of
the United States of America.
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(b) Each payment or prepayment on account of any Loan shall be
applied pro rata according to the outstanding Advances made by each Bank
comprising such Loan.
(c) Each Bank shall use its best efforts to keep a record of
Advances made by it and payments received by it with respect to each of
its Notes and, subject to Section 10.6(g), such record shall, as against
Borrower, be presumptive evidence of the amounts owing. Notwithstanding
the foregoing sentence, no Bank shall be liable to any Party for any
failure to keep such a record.
(d) Each payment of any amount payable by Borrower or any
other Party under this Agreement or any other Loan Document shall be made
free and clear of, and without reduction by reason of, any taxes,
assessments or other charges imposed by any Governmental Agency, central
bank or comparable authority, EXCLUDING (i) taxes imposed on or measured
in whole or in part by its overall net income, gross income or gross
receipts or capital and franchise taxes imposed on it, by (A) any
jurisdiction (or political subdivision thereof) in which it is organized
or maintains its principal office or Eurodollar Lending Office or (B) any
jurisdiction (or political subdivision thereof) in which it is "doing
business" (unless it would not be doing business in such jurisdiction (or
political subdivision thereof) absent the transactions contemplated
hereby), (ii) any withholding taxes or other taxes based on gross income
imposed by the United States of America (other than withholding taxes and
taxes based on gross income resulting from or attributable to any change
in any law, rule or regulation or any change in the interpretation or
administration of any law, rule or regulation by any Governmental Agency)
or (iii) any withholding taxes or other taxes based on gross income
imposed by the United States of America for any period with respect to
which it has failed to provide Borrower with the appropriate form or
forms required by SECTION 11.21, to the extent such forms are then
required by applicable Laws (all such excluded taxes, assessments or
other charges being hereinafter referred to as "Excluded Taxes"). To the
extent that Borrower is obligated by applicable Laws to make any
deduction or withholding on account of taxes, assessments and other
charges (OTHER THAN Excluded Taxes) from any amount payable to any Bank
under this Agreement, Borrower shall (i) make such deduction or
withholding and pay the same to the relevant Governmental Agency and
(ii) pay such additional amount to that Bank as is necessary to result in
that Bank's receiving a net after-tax amount equal to the amount to which
that Bank would have been entitled under this Agreement absent such
deduction or withholding.
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If and when receipt of such payment results in an excess payment or
credit to that Bank on account of such taxes, assessments and other
charges, that Bank shall promptly refund such excess to Borrower.
3.12 FUNDING SOURCES. Nothing in this Agreement shall be deemed to
obligate any Bank to obtain the funds for any Loan or Advance in any particular
place or manner or to constitute a representation by any Bank that it has
obtained or will obtain the funds for any Loan or Advance in any particular
place or manner.
3.13 FAILURE TO CHARGE NOT SUBSEQUENT WAIVER. Any decision by the
Agent or any Bank not to require payment of any interest (INCLUDING interest
arising under Section 3.8), fee, cost or other amount payable under any Loan
Document, or to calculate any amount payable by a particular method, on any
occasion shall in no way limit or be deemed a waiver of the Agent's or such
Bank's right to require full payment of any interest (INCLUDING interest arising
under Section 3.8), fee, cost or other amount payable under any Loan Document,
or to calculate an amount payable by another method that is not inconsistent
with this Agreement, on any other or subsequent occasion.
3.14 AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE MADE BY BORROWER.
Unless the Agent shall have been notified by Borrower prior to the date on which
any payment to be made by Borrower hereunder is due that Borrower does not
intend to remit such payment, the Agent may, in its discretion, assume that
Borrower has remitted such payment when so due and the Agent may, in its
discretion and in reliance upon such assumption, make available to each Bank on
such payment date an amount equal to such Bank's share of such assumed payment.
If Borrower has not in fact remitted such payment to the Agent, each Bank shall
forthwith on demand repay to the Agent the amount of such assumed payment made
available to such Bank, together with interest thereon in respect of each day
from and including the date such amount was made available by the Agent to such
Bank to the date such amount is repaid to the Agent at the Federal Funds Rate.
3.15 AUTOMATIC DEBIT. Borrower hereby authorizes the Agent to
automatically debit the Designated Deposit Account for the amount of all
payments (principal, interest, fees and otherwise) due to the Agent or the Banks
pursuant to this Agreement on the date such payments are due. Either Borrower
or the Agent may terminate this automatic debit arrangement upon five (5)
Banking Days notice to the other.
3.16 FEE DETERMINATION DETAIL. The Agent, and any Bank, shall
provide reasonable detail to Borrower regarding the
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manner in which the amount of any payment to the Agent and the Banks, or that
Bank, under ARTICLE 3 has been determined, concurrently with demand for such
payment.
3.17 SURVIVABILITY. All of Borrower's obligations under
Sections 3.6, 3.7 and 3.11(d) shall survive for one (1) year following the date
on which the Commitments are terminated and all Loans hereunder are fully paid.
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Article 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Banks that:
4.1 EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS.
Borrower is a corporation duly formed, validly existing and in good standing
under the Laws of Delaware. Borrower is duly qualified or registered to
transact business and is in good standing in California and each other
jurisdiction in which the conduct of its business or the ownership or leasing of
its Properties makes such qualification or registration necessary, EXCEPT where
the failure so to qualify or register and to be in good standing would not
constitute a Material Adverse Effect. Borrower has all requisite corporate
power and authority to conduct its business, to own and lease its Properties and
to execute and deliver each Loan Document to which it is a Party and to perform
its Obligations. The chief executive office of Borrower is located in
Garden Grove, California. All outstanding shares of capital stock of Borrower
are duly authorized, validly issued, fully paid and non-assessable, and no
holder thereof has any enforceable right of rescission under any applicable
state or federal securities Laws. Borrower is in compliance with all Laws and
other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, EXCEPT where the failure to so
comply, file, register, qualify or obtain exemptions does not constitute a
Material Adverse Effect.
4.2 AUTHORITY; COMPLIANCE WITH OTHER AGREEMENTS AND INSTRUMENTS AND
GOVERNMENT REGULATIONS. The execution, delivery and performance by Borrower and
each Subsidiary of Borrower of the Loan Documents to which it is a Party have
been duly authorized by all necessary corporate action, and do not and will not:
(a) Require any consent or approval not heretofore obtained of
any partner, director, stockholder, security holder or creditor of such
Party;
(b) Violate or conflict with any provision of such Party's
charter, certificates or articles of incorporation or bylaws, as
applicable;
(c) Result in or require the creation or imposition of any
Lien or Right of Others upon or with
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respect to any Property now owned or leased or hereafter acquired by such
Party;
(d) Violate any Requirement of Law applicable to such Party;
(e) Result in a breach of or constitute a default under, or
cause or permit the acceleration of any obligation owed under, any
indenture or loan or credit agreement or any other Contractual Obligation
to which such Party is a party or by which such Party or any of its
Property is bound or affected;
and neither Borrower nor any of its Subsidiaries is in violation of, or default
under, any Requirement of Law or Contractual Obligation, or any indenture, loan
or credit agreement described in Section 4.2(e), in any respect that constitutes
a Material Adverse Effect.
4.3 NO GOVERNMENTAL APPROVALS REQUIRED. No authorization, consent,
approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Agency is or will be required to authorize
or permit under applicable Laws the execution, delivery and performance by
Borrower and its Subsidiaries of the Loan Documents to which it is a Party.
4.4 SUBSIDIARIES.
(a) SCHEDULE 4.4 hereto correctly sets forth the names, form
of legal entity, number of shares of capital stock or equity units issued
and outstanding, number of shares or equity units owned by Borrower or a
Subsidiary of Borrower (specifying such owner) and jurisdictions of
organization of all Subsidiaries of Borrower. Except as described in
SCHEDULE 4.4 or SCHEDULE 6.16, Borrower does not own any capital stock,
equity interest or debt security which is convertible, or exchangeable,
for capital stock or equity interests in any Person. Unless otherwise
indicated in SCHEDULE 4.4, all of the outstanding shares of capital stock
or equity units of each Subsidiary are owned of record and beneficially
by Borrower, there are no outstanding options, warrants or other rights
to purchase capital stock or equity units of any such Subsidiary, and all
such shares or equity units so owned are duly authorized, validly issued,
fully paid and non-assessable, and were issued in compliance with all
applicable state and federal securities and other Laws, and are free and
clear of all Liens and Rights of Others, EXCEPT for Permitted
Encumbrances and Permitted Rights of Others.
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(b) Each Subsidiary is a business entity duly formed, validly
existing and in good standing under the Laws of its jurisdiction of
organization, is duly qualified to do business as a foreign organization
and is in good standing as such in each jurisdiction in which the conduct
of its business or the ownership or leasing of its Properties makes such
qualification necessary (EXCEPT where the failure to be so duly qualified
and in good standing does not constitute a Material Adverse Effect), and
has all requisite power and authority to conduct its business and to own
and lease its Properties.
(c) Except as otherwise disclosed in writing to the Agent and
the Banks on or before the Closing Date, each Subsidiary is in compliance
with all Laws and other requirements applicable to its business and has
obtained all authorizations, consents, approvals, orders, licenses, and
permits from, and each such Subsidiary has accomplished all filings,
registrations, and qualifications with, or obtained exemptions from any
of the foregoing from, any Governmental Agency that are necessary for the
transaction of its business, EXCEPT where the failure to be in such
compliance, obtain such authorizations, consents, approvals, orders,
licenses, and permits, accomplish such filings, registrations, and
qualifications, or obtain such exemptions, does not constitute a Material
Adverse Effect.
4.5 FINANCIAL STATEMENTS. Borrower has furnished to the Banks
(a) the audited unqualified financial statements of Borrower for the Fiscal Year
ended December 31, 1994, (b) the unaudited balance sheet and statement of
operations of Borrower for the Fiscal Quarter ended September 29, 1995, (c) the
unaudited balance sheet and statement of operations of Deanco for the fiscal
period ended September 29, 1995 and (d) the proforma balance sheet of Borrower
and its Subsidiaries giving effect to the consummation of the Deanco
Acquisition, this Agreement and the transactions contemplated hereby and
thereby. The financial statements described in clause (a) fairly present the
financial condition, results of operations and changes in financial position,
and the balance sheet and statement of operations described in clause (b) fairly
present the financial condition and results of operations, of Borrower and its
Subsidiaries as of such dates and for such periods in conformity with Generally
Accepted Accounting Principles, consistently applied. To the best knowledge of
Borrower, the balance sheet and statement of operations described in clause (c)
fairly present in all material respects the financial condition and results of
operations of Deanco as of such date and for such period in conformity with
Generally Accepted Accounting Principles, consistently applied. The proforma
balance sheet described in clause (d) was prepared in
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accordance with reasonable and customary conventions used in the preparation of
proforma financial statements.
4.6 NO OTHER LIABILITIES; NO MATERIAL ADVERSE CHANGES. Borrower
and its Subsidiaries (other than EDAC and Deanco) do not have any material
liability or material contingent liability not reflected or disclosed in the
balance sheet described in Section 4.5(b), other than liabilities and contingent
liabilities arising in the ordinary course of business since the date of such
financial statements and liabilities and contingent liabilities otherwise
disclosed in writing to the Agent and the Banks. To the best knowledge of
Borrower, EDAC and Deanco do not have any material liability or material
contingent liability not reflected or disclosed in the balance sheet described
in Section 4,5(c), other than liabilities and contingent liabilities arising in
the ordinary course of business since the date of such financial statements and
liabilities and contingent liabilities otherwise disclosed in writing to the
Agent and the Banks. As of the Closing Date, no circumstance or event has
occurred that constitutes a Material Adverse Effect since September 29, 1995.
4.7 TITLE TO AND LOCATION OF PROPERTY. Borrower and its
Subsidiaries have valid title to the Property reflected in the balance sheet
described in Section 4.5(b), OTHER THAN items of Property which are immaterial
and Property subsequently sold or disposed of in the ordinary course of
business, free and clear of all Liens and Rights of Others, OTHER THAN Liens
permitted by Section 6.8. Neither Borrower nor any of its Subsidiaries owns any
Property located in any jurisdiction OTHER THAN the jurisdictions set forth in
SCHEDULE 6.19. SCHEDULE 4.7 correctly sets forth a summary description of all
Real Property owned or leased by Borrower and its Subsidiaries, specifying, in
the case of leased Real Property, the name and address of the lessors thereof
and which thereof is a Significant Lessor.
4.8 INTANGIBLE ASSETS. Borrower and its Subsidiaries own, or
possess the right to use to the extent necessary in their respective businesses,
all material trademarks, trade names, copyrights, patents, patent rights,
computer software, licenses and other Intangible Assets that are used in the
conduct of their businesses as now operated, and no such Intangible Asset, to
the best knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or Intangible Asset of any other Person to the
extent that such conflict constitutes a Material Adverse Effect.
4.9 PUBLIC UTILITY HOLDING COMPANY ACT. Neither Borrower nor any
of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affil-
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iate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
4.10 LITIGATION. EXCEPT for (a) any matter fully covered as to
subject matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against Borrower or any of its Subsidiaries
of less than $1,000,000, (c) matters of an administrative nature not involving a
claim or charge against Borrower or any of its Subsidiaries and (d) matters set
forth in SCHEDULE 4.10, there are no actions, suits, proceedings or
investigations pending as to which Borrower or any of its Subsidiaries have been
served or have received notice or, to the best knowledge of Borrower, threatened
against or affecting Borrower or any of its Subsidiaries or any Property of any
of them before any Governmental Agency.
4.11 BINDING OBLIGATIONS. Each of the Loan Documents to which
Borrower or any of its Subsidiaries is a Party will, when executed and delivered
by such Party, constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, EXCEPT as
enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies as
a matter of judicial discretion.
4.12 NO DEFAULT. No event has occurred and is continuing that is a
Default or Event of Default.
4.13 ERISA.
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material respects
with ERISA and any other applicable Laws to the extent that
noncompliance could reasonably be expected to have a Material
Adverse Effect;
(ii) such Pension Plan has not incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) that could
reasonably be expected to have a Material Adverse Effect;
(iii) no "reportable event" (as defined in Section 4043
of ERISA) has occurred that could reasonably be expected to have a
Material Adverse Effect; and
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(iv) neither Borrower nor any of its Subsidiaries has
engaged in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code) that could reasonably be expected to have
a Material Adverse Effect.
(b) neither Borrower nor any of its Subsidiaries has incurred
or expects to incur any withdrawal liability to any Multiemployer Plan
that could reasonably be expected to have a Material Adverse Effect.
4.14 REGULATIONS G, T, U AND X; INVESTMENT COMPANY ACT. No part of
the proceeds of any Loan hereunder will be used to purchase or carry, or to
extend credit to others for the purpose of purchasing or carrying, any Margin
Stock in violation of Regulations G, T, U and X. Neither Borrower nor any of
its Subsidiaries is or is required to be registered as an "investment company"
under the Investment Company Act of 1940.
4.15 DISCLOSURE. No written statement made by a Senior Officer of
Borrower to the Agent or any Bank in connection with this Agreement, or in
connection with any Loan, as of the date thereof contained any untrue statement
of a material fact or omitted a material fact necessary to make the statement
made not misleading in light of all the circumstances existing at the date the
statement was made.
4.16 TAX LIABILITY. Except as otherwise disclosed in writing to
the Agent and the Banks on or before the Closing Date, Borrower and its
Subsidiaries have filed all tax returns which are required to be filed, and have
paid, or made provision for the payment of, all taxes with respect to the
periods, Property or transactions covered by said returns, or pursuant to any
assessment received by it or by them, EXCEPT (a) such taxes, if any, as are
being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained (to the extent required
by Generally Accepted Accounting Principles) and (b) immaterial taxes and
filings so long as no material item or portion of Property of Borrower or any of
its Subsidiaries is in jeopardy of being seized, levied upon or forfeited.
4.17 PROJECTIONS. As of the Closing Date, to the best knowledge of
Borrower, the assumptions set forth in the Projections are reasonable and
consistent with each other and with all facts known to Borrower, and the
Projections are reasonably based on such assumptions. Nothing in this
Section 4.17 shall be construed as a representation or covenant that the
Projections in fact will be achieved.
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4.18 HAZARDOUS MATERIALS. (a) Neither Borrower nor any of its
Subsidiaries at any time has disposed of, discharged, released or threatened the
release of any Hazardous Materials on, from or under the Real Property in
violation of any Hazardous Materials Law that would individually or in the
aggregate constitute a Material Adverse Effect, (b) to the best knowledge of
Borrower, no condition exists that violates any Hazardous Material Law affecting
any Real Property except for such violations that would not individually or in
the aggregate have a Material Adverse Effect, (c) no Real Property or any
portion thereof is or has been utilized by Borrower or any of its Subsidiaries
as a site for the manufacture of any Hazardous Materials and (d) to the extent
that any Hazardous Materials are used, generated or stored by Borrower or any of
its Subsidiaries on any Real Property, or transported to or from such Real
Property by Borrower or any of its Subsidiaries, such use, generation, storage
and transportation are in compliance in all material respects with all Hazardous
Materials Laws.
4.19 SECURITY INTERESTS. Upon the execution and delivery of the
Security Agreement, the Security Agreement will create a valid first priority
security interest in the Collateral described therein securing the Obligations
(subject only to Permitted Encumbrances, Permitted Rights of Others and matters
disclosed in SCHEDULE 6.8 and all action necessary to perfect the security
interests so created, other than filing of the UCC-1 financing statements
delivered to the Agent pursuant to Section 8.1 with the appropriate Governmental
Agency have been taken and completed. Upon the execution and delivery of the
Pledge Agreement, the Pledge Agreement will create a valid first priority
security interest in the Pledged Collateral and, upon delivery of the Pledged
Collateral to the Agent, all action necessary to perfect the security interest
so created has been taken and completed.
4.20 TRADE NAMES. SCHEDULE 4.20 sets forth each trade name used by
Borrower and its Subsidiaries and, to the best knowledge of Borrower, Deanco at
any time during the five (5) year period ending on the Closing Date.
4.21 THE DEANCO ACQUISITION. The Deanco Acquisition has been, or
will concurrently be, effected in compliance with all applicable Laws and
otherwise in accordance with the Deanco Acquisition Agreement. No provision of
the Deanco Acquisition Agreement has been amended or waived in connection with
the Deanco Acquisition except as specifically disclosed in writing to the Agent
and the Banks. All consents and approvals of any Governmental Agency and any
other Person necessary to effect the Deanco Acquisition have been obtained. All
representations and warranties contained in this ARTICLE 4 are made giving
effect to the consummation of the Deanco Acquisition; PROVIDED, however, that to
the extent any such representation and
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warranty applies to EDAC or Deanco, or to the assets, liabilities or business of
EDAC or Deanco, such representations shall be made to the best knowledge of
Borrower. To the best knowledge of Borrower, no material adverse change in the
condition (financial or otherwise), business operations or prospects of Deanco
has occurred since September 29, 1995.
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Article 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Advance remains unpaid, or any other Obligation
remains unpaid or unperformed, or any portion of the Commitments remains in
force, Borrower shall, and shall cause each of its Subsidiaries to, unless the
Agent (with the written approval of the Requisite Banks) otherwise consents:
5.1 PAYMENT OF TAXES AND OTHER POTENTIAL LIENS. Pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof and upon their
respective income or profits or any part thereof, EXCEPT that Borrower and its
Subsidiaries shall not be required to pay or cause to be paid (a) any tax,
assessment, charge or levy that is not yet past due, or is being contested in
good faith by appropriate proceedings so long as the relevant entity has
established and maintains adequate reserves for the payment of the same (to the
extent required by Generally Accepted Accounting Principles) or (b) any
immaterial tax, assessment or governmental charge or levy so long as no material
item or portion of Property of Borrower or any of its Subsidiaries is in
jeopardy of being seized, levied upon or forfeited.
5.2 PRESERVATION OF EXISTENCE. Preserve and maintain their
respective existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business, EXCEPT where the
failure to so preserve and maintain the existence of any Subsidiary and such
authorizations would not constitute a Material Adverse Effect and EXCEPT that a
merger permitted by Section 6.3 shall not constitute a violation of this
covenant; and qualify and remain qualified to transact business in each
jurisdiction in which such qualification is necessary in view of their
respective business or the ownership or leasing of their respective Properties
EXCEPT where the failure to so qualify or remain qualified would not constitute
a Material Adverse Effect.
5.3 MAINTENANCE OF PROPERTIES. Maintain, preserve and protect all
of their respective depreciable Properties in good order and condition, subject
to wear and tear in the ordinary course of business, and not permit any waste of
their respective Properties, EXCEPT that the failure to maintain, preserve and
protect a particular item of depreciable Property
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that is not of significant value, either intrinsically or to the operations of
Borrower and its Subsidiaries, taken as a whole, shall not constitute a
violation of this covenant.
5.4 MAINTENANCE OF INSURANCE. Maintain liability, casualty and
other insurance (subject to customary deductibles and retentions) with
responsible insurance companies in such amounts and against such risks as is
carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and its Subsidiaries
operate and, in any event, the minimum insurance described in SCHEDULE 5.4.
5.5 COMPLIANCE WITH LAWS. Comply with all Requirements of Law
noncompliance with which constitutes a Material Adverse Effect, EXCEPT that
Borrower and its Subsidiaries need not comply with a Requirement of Law then
being contested by any of them in good faith by appropriate proceedings.
5.6 INSPECTION RIGHTS. Upon reasonable notice, at any time during
regular business hours and as often as requested (but not so as to materially
interfere with the business of Borrower or any of its Subsidiaries), permit the
Agent or any Bank, or any authorized employee, agent or representative thereof,
to examine and make copies and abstracts from the records and books of account
of, and to visit and inspect the Properties of, Borrower and its Subsidiaries
and to discuss the affairs, finances and accounts of Borrower and its
Subsidiaries with any of their officers, key employees or accountants and, upon
request, furnish promptly to the Agent or any Bank true copies of all financial
information made available to the board of directors or audit committee of the
board of directors of Borrower.
5.7 AUDIT RIGHTS. Upon reasonable notice, at any time during
regular business hours (but not so as to materially interfere with the business
of Borrower or its Subsidiaries) permit the Agent to audit the Collateral,
INCLUDING examination of documents underlying or supporting the Collateral, and
reimburse the Agent promptly for its reasonable expenses in conducting such
audit; PROVIDED that, absent the existence of a Default or Event of Default, the
Agent shall not be entitled to audit the Collateral more than four (4) times in
a calendar year.
5.8 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep adequate records
and books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles, consistently applied, and in material
conformity with all applicable requirements of any Governmental Agency
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having regulatory jurisdiction over Borrower or any of its Subsidiaries.
5.9 COMPLIANCE WITH AGREEMENTS. Promptly and fully comply with all
Contractual Obligations to which any one or more of them is a party, EXCEPT for
any Contractual Obligation (a) the performance of which would cause a Default,
(b) then being contested by any of them in good faith by appropriate proceedings
or (c) if the failure to comply does not constitute a Material Adverse Effect.
5.10 USE OF PROCEEDS. Use the proceeds of the (a) Line A Loans to
(i) retire all obligations of Borrower under the Prior Xxxxxx Credit Facility,
(ii) retire all obligations of Deanco under the Prior Deanco Credit Facility and
(iii) fund working capital and other corporate requirements of Borrower and its
Subsidiaries and (b) the Line B Loans to fund the reimbursement obligations of
Borrower with respect to the Line B Letter of Credit.
5.11 NEW SUBSIDIARIES. Cause each Person which hereafter becomes a
Subsidiary of Borrower to execute and deliver to the Agent the Subsidiary
Guaranty, the Security Agreement, and, whenever such Person holds any Pledged
Collateral, the Pledge Agreement.
5.12 HAZARDOUS MATERIALS LAWS. Keep and maintain all Real Property
and each portion thereof in compliance in all material respects with all
applicable Hazardous Materials Laws and promptly notify the Agent in writing of
(a) any and all material enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in writing by a
Governmental Agency against any Borrower or Subsidiary or Affiliate of any
Borrower pursuant to any applicable Hazardous Materials Laws, (b) any and all
material claims made or threatened in writing by any Person against any Borrower
or Subsidiary or Affiliate of any Borrower relating to damage, contribution,
cost recovery, compensation, loss or injury resulting from any Hazardous
Materials and (c) discovery by any Senior Officer of Borrower of any material
occurrence or condition on any real Property adjoining or in the vicinity of any
Real Property that could reasonably be expected to cause such Real Property or
any part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such Real Property under any applicable Hazardous
Materials Laws.
5.13 MERGER OF EDAC AND DEANCO. Upon written request by the Agent
made after January 2, 1996, cause EDAC to be merged with and into Borrower as
soon as reasonably practicable thereafter and in any event not later than
thirty (30) days following such request and cause Deanco to be
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merged with and into Borrower as soon as reasonably practicable after the
Indemnity Expiration Date and in any event not later than November 1, 1996.
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Article 6
NEGATIVE COVENANTS
So long as any Advance remains unpaid, or any other Obligation
remains unpaid or unperformed, or any portion of the Commitments remains in
force, Borrower shall not, and shall not permit any of its Subsidiaries to,
unless the Agent (with the written approval of the Requisite Banks or, if
required by SECTION 11.2, of all of the Banks) otherwise consents:
6.1 PREPAYMENT OF INDEBTEDNESS. Pay any principal or interest on
any Indebtedness prior to the date when due, or make any payment or deposit with
any Person that has the effect of providing for the satisfaction of any
Indebtedness prior to the date when due, EXCEPT:
(a) the Obligations;
(b) the EDAC Shareholders Notes, as required by the Deanco
Acquisition Agreement; and
(c) the Former Deanco Shareholders Notes, but only to the
extent necessary to permit the merger of Deanco with and into Borrower
pursuant to Section 5.13.
6.2 DISPOSITION OF PROPERTY. Make any Disposition of its Property,
whether now owned or hereafter acquired EXCEPT the Disposition of the Real
Property located at 00 Xxxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx on fair
market terms.
6.3 MERGERS. Merge or consolidate with or into any Person, EXCEPT
mergers and consolidations of a Subsidiary of Borrower into Borrower or another
of its Subsidiaries, PROVIDED that Borrower and each of such Subsidiaries have
executed such amendments to the Loan Documents as the Agent may reasonably
determine are appropriate as a result of such merger.
6.4 HOSTILE ACQUISITIONS. Directly or indirectly use the proceeds
of any Loan in connection with the acquisition of part or all of a voting
interest of five percent (5%) or more in any corporation or other business
entity if such acquisition is opposed by the board of directors or management of
such corporation or business entity.
6.5 DISTRIBUTIONS. Make any Distribution, whether from capital,
income or otherwise, and whether in Cash or other Property, EXCEPT
(a) Distributions by a Subsidiary of Borrower to Borrower or any other
Subsidiary and (b) dividends payable solely in common stock.
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6.6 ERISA. (a) At any time, permit any Pension Plan to:
(i) engage in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code), (ii) fail to comply in all material respects with
ERISA or any other applicable Laws, (iii) incur any material "accumulated
funding deficiency" (as defined in Section 302 of ERISA) or (iv) terminate in
any manner, which, with respect to each event listed above, could reasonably be
expected to result in a Material Adverse Effect, or (b) withdraw, completely or
partially, from any Multiemployer Plan if to do so could reasonably be expected
to result in a Material Adverse Effect.
6.7 CHANGE IN NATURE OF BUSINESS. Make any material change in the
nature of the business of Borrower and its Subsidiaries, taken as a whole.
6.8 LIENS AND NEGATIVE PLEDGES. Create, incur, assume or suffer to
exist any Lien or Negative Pledge upon or with respect to any of their
respective Properties, or sell any accounts receivable, or engage in any sale
and leaseback transaction with respect to any of their respective Properties,
whether now owned or hereafter acquired, EXCEPT:
(a) Permitted Encumbrances;
(b) Liens and Negative Pledges under the Loan Documents;
(c) Liens and Negative Pledges existing on the Closing Date
and disclosed in SCHEDULE 6.8 and any renewals/extensions or amendments
thereof; PROVIDED that the obligations secured or benefited thereby are
not increased;
(d) the RayChem Lien, so long as the RayChem Lien
Subordination remains in effect;
(e) Liens securing Indebtedness permitted by SECTION 6.9(e) on
the Property which is the subject of the Capital Lease Obligation or was
purchased with the proceeds of the purchase money debt; and
(f) Liens on Property acquired by Borrower or any of its
Subsidiaries that were in existence at the time of the acquisition of
such Property and were not created in contemplation of such acquisition
and any renewals/extensions or amendments thereof, PROVIDED that the
obligations secured or benefitted thereby are not increased.
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6.9 INDEBTEDNESS AND GUARANTY OBLIGATIONS. Create, incur or assume
any Indebtedness or Guaranty Obligation EXCEPT:
(a) Indebtedness and Guaranty Obligations existing on the
Closing Date and disclosed in SCHEDULE 6.9, and renewals, extensions or
amendments that do not increase the amount thereof;
(b) Indebtedness and Guaranty Obligations under the Loan
Documents;
(c) Secured Swap Agreements;
(d) Indebtedness owed on an intercompany basis among Borrower
and its Subsidiaries;
(e) Indebtedness consisting of Capital Lease Obligations or
purchase money debt that does not exceed $500,000 incurred during the
term of this Agreement; and
(f) Guaranty Obligations in support of the obligations of a
wholly-owned Subsidiary.
6.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of
any kind with any Affiliate of Borrower OTHER THAN (a) salary, bonus, employee
stock option and other compensation arrangements with directors or officers in
the ordinary course of business, (b) transactions that are fully disclosed to
the board of directors of Borrower and expressly authorized by a resolution of
the board of directors of Borrower approved by a majority of the directors not
having an interest in the transaction, (c) transactions between or among
Borrower and its wholly-owned Subsidiaries, and (d) transactions, when
considered together with any related transaction or series of transactions of
which such transaction is a part, on overall terms at least as favorable to
Borrower or its Subsidiaries as would be the case in an arm's-length transaction
between unrelated parties of equal bargaining power.
6.11 STOCKHOLDERS' EQUITY. Permit Stockholders' Equity, as of
December 31, 1995 and the last day of each Fiscal Quarter thereafter, to be less
than the SUM OF (a) $26,500,000, PLUS (b) an amount equal to 90% of Net Income
earned in each Fiscal Quarter ending after December 31, 1995 (with no deduction
for a net loss in any such Fiscal Quarter) PLUS (c) an amount equal to 100% of
the aggregate increases in Stockholders' Equity after the Closing Date by reason
of the issuance and sale of capital stock of Borrower (INCLUDING upon any
conversion of debt securities of Borrower into such capital stock).
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6.12 FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge Coverage
Ratio, as of June 30, 1996 and the last day of each Fiscal Month thereafter, to
be less than the ratio set forth below opposite the period during which such
date occurs:
PERIOD RATIO
------ -----
June 30, 1996
through
May 31, 1998 1.60 to 1.00
June 30, 1998
through
May 31, 1999 1.75 to 1.00
June 30, 1999
and thereafter 2.00 to 1.00
6.13 CASH FLOW LEVERAGE. Permit Cash Flow Leverage, as of June 30,
1996 and the last day of each Fiscal Month thereafter, to be greater than the
ratio set forth below opposite the period during which such date occurs:
PERIOD RATIO
------ -----
June 30, 1996
through
May 31, 1997 5.25 to 1.00
June 30, 1997
through
May 31, 1998 4.25 to 1.00
June 30, 1998
through
May 31, 1999 3.25 to 1.00
June 30, 1999
and thereafter 2.50 to 1.00
6.14 NET INCOME. Permit Net Income (a) as of March 31, 1996, to be
less than a positive amount for the Fiscal Quarter then ending, (b) as of
June 30, 1996, to be less than a positive amount for the two (2) Fiscal Quarters
then ending, (c) as of September 30, 1996, to be less than a positive amount for
the three (3) Fiscal Quarters then ending, (d) as of December 31, 1996, to be
less than a positive amount for the four (4) Fiscal Quarters then ending, (e) as
of March 31, 1997 and the last day of each Fiscal Quarter thereafter, to be less
than a positive number for the four (4) Fiscal Quarters then ending and (f) as
of March 31, 1997 and the last day of each Fiscal Quarter thereafter, to be less
than
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a positive amount for that Fiscal Quarter if Net Income for the immediately
preceding Fiscal Quarter was not a positive number; PROVIDED that Net Income for
purposes of clauses (a), (b), (c) and (d) only shall be adjusted by adding back
all Deanco Transactional Costs incurred during the fiscal period described in
such clauses.
6.15 ACCOUNTS PAYABLE TURNOVER. Permit Accounts Payable Turnover,
as of March 31, 1996 and the last day of each Fiscal Month thereafter, to be
greater than 50 days.
6.16 INVESTMENTS. Make or suffer to exist any Investment, OTHER
THAN:
(a) Investments in existence on the Closing Date and disclosed
on SCHEDULE 6.16;
(b) Investments consisting of Cash and Cash Equivalents;
(c) Investments consisting of loans or advances to officers,
directors and employees of Borrower and any of its Subsidiaries for
travel, entertainment, relocation and analogous ordinary business
purposes;
(d) Investments in EDAC and Deanco; PROVIDED that each remains
a wholly-owned Subsidiary (subject to Section 5.13);
(e) Investments in wholly-owned Subsidiaries OTHER THAN EDAC
and Deanco; PROVIDED that, giving effect thereto, the aggregate total
assets of all such Subsidiaries does not exceed 10% of the consolidated
total assets of Borrower and its Subsidiaries;
(f) Investments in Persons engaged in the same or a similar
business as Borrower that do not exceed $10,000 in the aggregate; and
(g) Investments representing all or a portion of the sales
price of Property sold or services provided to another Person in the
ordinary course of business.
6.17 ACQUISITIONS. Make any Acquisition or enter into any
agreement to make any Acquisition EXCEPT (a) the Deanco Acquisition and (b) the
Yorktown Acquisition.
6.18 SUBSIDIARY INDEBTEDNESS. Permit (whether or not otherwise
permitted under SECTION 6.9) any Subsidiary to create, incur, assume or suffer
to exist any Indebtedness or Guaranty Obligation, EXCEPT (a) Indebtedness and
Guaranty Obligations in existence on the Closing Date and
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renewals/extensions or amendments that do not increase the amounts thereof,
(b) the Subsidiary Guaranty, (c) Indebtedness owed to Borrower or another
Subsidiary of Borrower and (d) Capital Lease Obligations and purchase money
obligations of a Subsidiary in respect of Property used by that Subsidiary.
6.19 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICES AND ASSETS.
Relocate the chief executive office of Borrower or any Subsidiary of Borrower
without first giving the Agent thirty (30) days prior written notice of any
proposed relocation or move any equipment or inventory to a location other than
any one of the locations identified in SCHEDULE 4.7 without first giving the
Agent ten (10) calendar days prior written notice of any such proposed
relocation.
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Article 7
INFORMATION AND REPORTING REQUIREMENTS
7.1 FINANCIAL AND BUSINESS INFORMATION. So long as any Advance
remains unpaid, or any other Obligation remains unpaid or unperformed, or any
portion of the Commitments remains in force, Borrower shall, unless the Agent
(with the written approval of the Requisite Banks) otherwise consents, at
Borrower's sole expense, deliver to the Agent for distribution to the Banks the
following:
(a) As soon as reasonably practicable, and in any event within
30 days after the end of each Fiscal Month, the consolidated balance
sheet and statements of operations and cash flow of Borrower and its
Subsidiaries for such Fiscal Month, and the portion of the Fiscal Year
ended with such Fiscal Month, in reasonable detail;
(b) Concurrently with the financial statements described in
Section 7.1(a), a Borrowing Base Certificate and written reports of
accounts receivable, inventory, equipment and accounts payable in such
forms as the Agent may specify, as of the end of such Fiscal Month;
(c) As soon as reasonably practicable, and in any event within
45 days after the end of each Fiscal Quarter, (i) the consolidated
balance sheet of Borrower and its Subsidiaries as at the end of such
Fiscal Quarter and the consolidated statements of operations and cash
flow for such Fiscal Quarter, and the portion of the Fiscal Year ended
with such Fiscal Quarter and (ii) the consolidating balance sheets and
statements of operations and cash flow as at and for the portion of the
Fiscal Year ended with such Fiscal Quarter, all in reasonable detail.
Such financial statements shall be certified by a Senior Officer on
behalf of Borrower as fairly presenting the financial condition, results
of operations and cash flows of Borrower and its Subsidiaries in
accordance with Generally Accepted Accounting Principles (other than
footnote disclosures), consistently applied, as at such date and for such
periods, subject only to normal year-end accruals and audit adjustments;
(d) As soon as reasonably practicable, and in any event within
45 days after the end of each Fiscal Quarter (commencing as of June 30,
1996), a Pricing Certificate setting forth a preliminary calculation of
Cash Flow Leverage as of the last day of such Fiscal Quarter, and
providing reasonable detail as to the calculation thereof, which
calculations shall be based on the preliminary unaudited financial
statements of Borrower
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and its Subsidiaries for such Fiscal Quarter, and as soon as reasonably
practicable thereafter, in the event of any material variance in the
actual calculation of Cash Flow Leverage from such preliminary
calculation, a revised Pricing Certificate setting forth the actual
calculation thereof;
(e) As soon as reasonably practicable, and in any event within
90 days after the end of each Fiscal Year, (i) the consolidated balance
sheet of Borrower and its Subsidiaries as at the end of such Fiscal Year
and the consolidated statements of operations, stockholders' equity and
cash flows, in each case of Borrower and its Subsidiaries for such Fiscal
Year and (ii) consolidating balance sheets and statements of operations,
in each case as at the end of and for the Fiscal Year, all in reasonable
detail. Such financial statements shall be prepared in accordance with
Generally Accepted Accounting Principles, consistently applied, and such
consolidated balance sheet and consolidated statements shall be
accompanied by a report of independent public accountants of recognized
standing selected by Borrower and reasonably satisfactory to the Agent,
which report shall be prepared in accordance with generally accepted
auditing standards as at such date, and shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any
other qualification or exception determined by the Requisite Banks in
their good faith business judgment to be adverse to the interests of the
Banks. Such accountants' report shall be accompanied by a certificate
stating that, in making the examination pursuant to generally accepted
auditing standards necessary for the certification of such financial
statements and such report, such accountants have obtained no knowledge
of any Default or, if, in the opinion of such accountants, any such
Default shall exist, stating the nature and status of such Default, and
stating that such accountants have reviewed Borrower's financial
calculations as at the end of such Fiscal Year (which shall accompany
such certificate) under SECTIONS 6.11 through 6.15, have read such
Sections (including the definitions of all defined terms used therein)
and that nothing has come to the attention of such accountants in the
course of such examination that would cause them to believe that the same
were not calculated by Borrower in the manner prescribed by this
Agreement;
(f) As soon as reasonably practicable, and in any event within
30 days after the commencement of each Fiscal Year, a budget and
projection by Fiscal Quarter for that Fiscal Year, INCLUDING projected
consolidated balance
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sheets, statements of operations and statements of cash flow, all in
reasonable detail;
(g) Promptly after receipt by Borrower thereof, copies of any
detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of
directors) of Borrower by independent accountants in connection with the
accounts or books of Borrower or any of its Subsidiaries, or any audit of
any of them;
(h) Promptly after the same are available, and in any event
within 10 days after filing with the Securities and Exchange Commission,
copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders of Borrower, and copies
of all annual, regular, periodic and special reports and registration
statements which Borrower may file or be required to file with the
Securities and Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and not otherwise required
to be delivered to the Banks pursuant to other provisions of this
SECTION 7.1;
(i) Promptly after request by the Agent or any Bank, copies of
any other report or other document that was filed by Borrower or any of
its Subsidiaries with any Governmental Agency;
(j) Promptly upon a Senior Officer obtaining actual knowledge,
and in any event within ten (10) Banking Days after obtaining actual
knowledge, of the occurrence of any (i) "reportable event" (as such term
is defined in Section 4043 of ERISA) or (ii) "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975 of the Code)
in connection with any Pension Plan or any trust created thereunder,
telephonic notice specifying the nature thereof, and, no more than five
(5) Banking Days after such telephonic notice, written notice again
specifying the nature thereof and specifying what action Borrower or any
of its Subsidiaries is taking or proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service with
respect thereto;
(k) As soon as reasonably practicable, and in any event within
two (2) Banking Days after a Senior Officer becomes aware of the
existence of any condition or event which constitutes a Default or Event
of Default, telephonic notice specifying the nature and period of
existence thereof, and, no more than two (2) Banking Days after such
telephonic notice, written notice again
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specifying the nature and period of existence thereof and specifying what
action Borrower or any of its Subsidiaries are taking or propose to take
with respect thereto;
(l) Promptly upon a Senior Officer obtaining actual knowledge,
and in any event within five (5) Banking Days after obtaining actual
knowledge, that (i) any Person has commenced a legal proceeding with
respect to a claim against Borrower or any of its Subsidiaries that is
$1,000,000 or more in excess of the amount thereof that is fully covered
by insurance, (ii) any creditor under a written credit agreement with
respect to Indebtedness of $1,000,000 or more or any lessor under a
written material lease has asserted a default thereunder on the part of
Borrower or any of its Subsidiaries, (iii) any Person has commenced a
legal proceeding with respect to a claim against Borrower or any of its
Subsidiaries under a contract that is not a credit agreement or material
lease in excess of $1,000,000 or which otherwise may reasonably be
expected to result in a Material Adverse Effect or (iv) any labor union
has notified Borrower of its intent to strike Borrower or any of its
Subsidiaries on a date certain and such strike would involve more than
100 employees of Borrower and its Subsidiaries, a written notice
describing the pertinent facts relating thereto and what actions Borrower
or its Subsidiaries are taking or propose to take with respect thereto;
and
(m) Such other data and information as from time to time may
be reasonably requested by the Agent, any Bank (through the Agent) or the
Requisite Banks.
7.2 COMPLIANCE CERTIFICATES. So long as any Advance remains
unpaid, or any other Obligation remains unpaid or unperformed, or any portion of
the Commitments remains outstanding, Borrower shall, at Borrower's sole expense,
deliver to the Agent for distribution by it to the Banks concurrently with the
financial statements required pursuant to SECTIONS 7.1(a), 7.1(c) and 7.1(e), a
Compliance Certificate signed by a Senior Officer on behalf of Borrower.
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Article 8
CONDITIONS
8.1 INITIAL ADVANCES, ETC.. The obligation of each Bank to make
the initial Advance to be made by it, or the obligation of the Issuing Bank to
issue the initial Letter of Credit (as applicable), is subject to the following
conditions precedent, each of which shall be satisfied prior to the making of
the initial Advances or the issuance of the initial Letter of Credit (as
applicable) (unless all of the Banks, in their sole and absolute discretion,
shall agree otherwise):
(a) The Agent shall have received all of the following, each
of which shall be originals unless otherwise specified, each properly
executed by a Responsible Official of each party thereto, each dated as
of the Closing Date and each in form and substance reasonably
satisfactory to the Agent and its legal counsel (unless otherwise
specified or, in the case of the date of any of the following, unless the
Agent otherwise agrees or directs):
(1) at least one (1) executed counterpart of this Agreement,
together with arrangements satisfactory to the Agent for additional
executed counterparts, sufficient in number for distribution to the
Banks and Borrower;
(2) the Line A Notes executed by Borrower in favor of each
Bank, each in a principal amount equal to that Bank's Pro Rata Share
of the Line A Commitment;
(3) the Line B Notes executed by Borrower in favor of each
Bank, each in a principal amount equal to that Bank's Pro Rata Share
of the Line B Commitment;
(4) the Subsidiary Guaranty executed by each Subsidiary
(INCLUDING EDAC and Deanco) of Borrower;
(5) the Security Agreement executed by Borrower and each of
its Subsidiaries (INCLUDING EDAC and Deanco);
(6) such financing statements on Form UCC-1 executed by
Borrower and each of its Subsidiaries (INCLUDING EDAC and Deanco)
with respect to the Security Agreement as the Agent may request;
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(7) the Pledge Agreement executed by Borrower, together with
the Pledged Collateral accompanied by appropriate stock powers
endorsed in blank;
(8) with respect to Borrower and each of its Subsidiaries
(INCLUDING EDAC and Deanco), such documentation as the Agent may
reasonably require to establish the due organization, valid
existence and good standing of Borrower and each such Subsidiary,
its qualification to engage in business in each material
jurisdiction in which it is engaged in business or required to be so
qualified, its authority to execute, deliver and perform any Loan
Documents to which it is a Party, the identity, authority and
capacity of each Responsible Official thereof authorized to act on
its behalf, INCLUDING certified copies of articles of incorporation
and amendments thereto, bylaws and amendments thereto, certificates
of good standing and/or qualification to engage in business, tax
clearance certificates, certificates of corporate resolutions,
incumbency certificates, Certificates of Responsible Officials, and
the like;
(9) the Opinion of Counsel;
(10) Landlord Acknowledgment and Consents executed by the
Significant Lessors; PROVIDED that the Agent may, in its sole
discretion, waive this condition with respect to any Significant
Lessor on such terms (which may include elimination of inventory
located at the premisses of such Significant Lessor from Eligible
Inventory) as are set forth in a memorandum agreement signed by the
Agent and Borrower;
(11) a Borrowing Base Certificate;
(12) the RayChem Lien Subordination executed by RayChem, Inc.;
(13) written evidence that the Prior Deanco Credit Facility has
been or will be concurrently terminated and that all Liens securing
such facility have been or will be concurrently released;
(14) written evidence that the Prior Xxxxxx Credit Facility has
been or will be concurrently terminated and that all Liens securing
such facility have been or will be concurrently released;
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(15) a certificate of insurance issued by Borrower's insurance
carrier or agent setting forth the insurance policies required
pursuant to Section 5.4, together with lenders' loss payable
endorsements on Form 438BFU or other form acceptable to the Agent;
(16) copies of the Deanco Acquisition Agreement and all related
documents, together with an Officer's Certificate signed by a Senior
Officer on behalf of Borrower to the effect that the same are true
copies and are in full force and effect;
(17) an Officer's Certificate signed by a Senior Officer on
behalf of Borrower affirming, to the best of Borrower's knowledge,
that the representation set forth in Section 4.17 is true;
(18) a Certificate signed by a Senior Officer on behalf of
Borrower certifying that the conditions specified in Sections 8.1(g)
and (h) have been satisfied;
(19) evidence satisfactory to the Agent that all final
approvals of all Governmental Agencies necessary for the Deanco
Acquisition have been received; and
(20) such other assurances, certificates, documents, consents
or opinions as the Agent reasonably may require.
(b) The fees required to be paid on or before the Closing Date
pursuant to SECTIONS 3.2 and 3.3 shall have been paid.
(c) The Agent, through its Commercial Finance Department,
shall have completed its initial audit of the Collateral and the results
of such audit shall be satisfactory to the Requisite Banks in their sole
and absolute discretion.
(d) The Deanco Acquisition shall have been closed or be in a
position to close concurrently.
(e) There shall not be pending or threatened any litigation
relating to the transactions contemplated by this Agreement which the
Requisite Banks deem to be material.
(f) The reasonable costs and expenses of the Agent in
connection with the underwriting and due
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diligence process relating to this transaction and the preparation of the
Loan Documents payable pursuant to Section 11.3, and invoiced to Borrower
prior to the Closing Date, shall have been paid.
(g) The representations and warranties of Borrower contained
in ARTICLE 4 shall be true and correct.
(h) Borrower and any other Parties shall be in compliance with
all the terms and provisions of the Loan Documents, and giving effect to
the initial Advance no Default or Event of Default shall have occurred
and be continuing and no event shall have occurred since September 29,
1995 which constitutes a Material Adverse Effect.
8.2 ANY ADVANCE, ETC. The obligation of each Bank to make any
Advance and the obligation of the Issuing Bank to issue a Letter of Credit, is
subject to the following conditions precedent:
(a) EXCEPT (i) for representations and warranties which
expressly relate to a particular date or are no longer true and correct
as a result of a change which is permitted by this Agreement or the other
Loan Documents or (ii) as disclosed by Borrower and approved in writing
by the Requisite Banks, the representations and warranties contained in
ARTICLE 4 (OTHER THAN Sections 4.4(a), 4.6 (first and second sentences),
4.7 (third sentence), 4.10, 4.17 and 4.19) shall be true and correct on
and as of the date of the Advance as though made on that date;
(b) OTHER THAN matters described in SCHEDULE 4.10 or not
required as of the Closing Date to be therein described, there shall not
be then pending or, to the best knowledge of Borrower and its
Subsidiaries, threatened any action, suit, proceeding or investigation
against or affecting Borrower or any of its Subsidiaries or any Property
of any of them before any Governmental Agency that constitutes a Material
Adverse Effect;
(c) no circumstance or event shall have occurred that
constitutes a Material Adverse Effect since the Closing Date;
(d) the Agent shall have timely received a Request for Loan in
compliance with ARTICLE 2 (or telephonic or other request for Loan
referred to in the second sentence of Section 2.1(c), if applicable) or
the Issuing Bank shall have received a Request for Letter
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Credit, as the case may be, in compliance with ARTICLE 2; and
(e) the Agent shall have received, in form and substance
reasonably satisfactory to the Agent, such other assurances,
certificates, documents or consents related to the foregoing as the Agent
or Requisite Banks reasonably may require.
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Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
9.1 EVENTS OF DEFAULT. The existence or occurrence of any one or
more of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal on any Obligation, or
any portion thereof, on the date when due; or
(b) Borrower fails to pay any interest on any of the Notes, or
any fees under Sections 3.3 or 3.4, or any portion thereof, within
two (2) Banking Days after the date when due; or fails to pay any other
fee or amount payable to the Banks under any Loan Document, or any
portion thereof, within five (5) Banking Days after demand therefor; or
(c) Borrower fails to comply with any of the covenants
contained in ARTICLE 6; or
(d) Borrower fails to comply with (i) Section 7.1(k) in any
respect that is materially adverse to the interests of the Banks, or (ii)
Section 7.1(l) in any respect that is materially adverse to the interests
of the Banks and which, as a consequence of such failure, results in the
Banks being unable to reasonably protect their interests;
(e) Borrower, any of its Subsidiaries or any other Party fails
to perform or observe any other covenant or agreement (not specified in
clause (a), (b), (c) or (d) above) contained in any Loan Document on its
part to be performed or observed within twenty (20) Banking Days after
the giving of notice by the Agent on behalf of the Requisite Banks of
such Default; or
(f) Any representation or warranty of Borrower or any of its
Subsidiaries made in any Loan Document, or in any certificate or other
writing delivered by Borrower or such Subsidiary pursuant to any Loan
Document, proves to have been incorrect when made or reaffirmed in any
respect that is materially adverse to the interests of the Banks; or
(g) Borrower or any of its Subsidiaries (i) fails to pay the
principal, or any principal installment, of any present or future
Indebtedness of $1,000,000 or more, or any guaranty of present or future
Indebtedness
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of $1,000,000 or more, on its part to be paid, when due (or within any
stated grace period), whether at the stated maturity, upon acceleration,
by reason of required prepayment or otherwise or (ii) fails to perform or
observe any other term, covenant or agreement on its part to be performed
or observed, or suffers any event to occur, in connection with any
present or future Indebtedness of $1,000,000 or more, or of any guaranty
of present or future Indebtedness of $1,000,000 or more, if as a result
of such failure or sufferance any holder or holders thereof (or an agent
or trustee on its or their behalf) has the right to declare such
Indebtedness due before the date on which it otherwise would become due;
or
(h) Any Loan Document, at any time after its execution and
delivery and for any reason OTHER THAN the agreement or action (or
omission to act) of the Agent or any Bank or satisfaction in full of all
the Obligations ceases to be in full force and effect or is declared by a
court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect which is materially adverse to the interests
of the Banks; or any Party thereto denies in writing that it has any or
further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind same; or
(i) A final judgment against Borrower or any of its
Subsidiaries is entered for the payment of money in excess of $1,000,000
and, absent procurement of a stay of execution, such judgment remains
unsatisfied for thirty (30) calendar days after the date of entry of
judgment, or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or any writ or warrant of attachment or
execution or similar process is issued or levied against all or any
material part of the Property of any such Person and is not released,
vacated or fully bonded within thirty (30) calendar days after its issue
or levy; or
(j) (i) Borrower or any of its Subsidiaries institute or
consent to the institution of any proceeding under a Debtor Relief Law
relating to it or to all or any material part of its Property, or is
unable or admits in writing its inability to pay its debts as they
mature, or makes an assignment for the benefit of creditors; or applies
for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for
all or any material part of its Property; or (ii) any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of that Person and the
appointment continues
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undischarged or unstayed for sixty (60) calendar days; or any proceeding
under a Debtor Relief Law relating to any such Person or to all or any
material part of its Property is instituted without the consent of that
Person and continues undismissed or unstayed for sixty (60) calendar
days; or
(k) The occurrence of an Event of Default (as such term is or
may hereafter be specifically defined in any other Loan Document) under
any other Loan Document; or
(l) Any Pension Plan maintained by Borrower or any of its
Subsidiaries is determined to have a material "accumulated funding
deficiency" as that term is defined in Section 302 of ERISA and the
result is a Material Adverse Effect.
9.2 REMEDIES UPON EVENT OF DEFAULT. Without limiting any other
rights or remedies of the Agent or the Banks provided for elsewhere in this
Agreement, or the other Loan Documents, or by applicable Law, or in equity, or
otherwise:
(a) Upon the occurrence, and during the continuance, of any
Event of Default OTHER THAN an Event of Default described in
Section 9.1(j):
(1) the Commitments and all other obligations of the Agent or
the Banks under the Loan Documents shall be suspended without notice
to or demand upon Borrower, which are expressly waived by Borrower,
EXCEPT that all of the Banks or the Requisite Banks (as the case may
be, in accordance with Section 11.2) may waive an Event of Default
or, without waiving, determine, upon terms and conditions
satisfactory to the Banks or Requisite Banks, as the case may be, to
reinstate the Commitments and make further Advances, which waiver or
determination shall apply equally to, and shall be binding upon, all
the Banks;
(2) the Issuing Bank may, with the approval of the Agent on
behalf of the Requisite Banks, demand immediate payment by Borrower
of an amount equal to the Aggregate Effective Amount of all
outstanding Letters of Credit to be held by the Issuing Bank in an
interest-bearing cash collateral account as collateral hereunder;
and
(3) the Requisite Banks may request the Agent to, and the
Agent thereupon shall, terminate the Commitments and/or declare all
or any part of the unpaid principal of all Notes, all interest
accrued and unpaid thereon and all other Obligations payable
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under the Loan Documents to be forthwith due and payable, whereupon
the same shall become and be forthwith due and payable, without
protest, presentment, notice of dishonor, demand or further notice
of any kind, all of which are expressly waived by Borrower.
(b) Upon the occurrence of any Event of Default described in
Section 9.1(j):
(1) the Commitments and all other obligations of the Agent or
the Banks under the Loan Documents shall terminate without notice to
or demand upon Borrower, which are expressly waived by Borrower,
EXCEPT that all the Banks may waive the Event of Default or, without
waiving, determine, upon terms and conditions satisfactory to all
the Banks, to reinstate the Commitments and make further Advances,
which determination shall apply equally to, and shall be binding
upon, all the Banks;
(2) an amount equal to the Aggregate Effective Amount of all
outstanding Letters of Credit shall be immediately due and payable
to the Issuing Bank without notice to or demand upon Borrower, which
are expressly waived by Borrower, to be held by the Issuing Bank in
an interest-bearing cash collateral account as collateral hereunder;
and
(3) the unpaid principal of all Notes, all interest accrued
and unpaid thereon and all other amounts payable under the Loan
Documents shall be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any
kind, all of which are expressly waived by Borrower.
(c) Upon the occurrence and during the continuance of any
Event of Default, the Banks and the Agent, or any of them, without notice
to (EXCEPT as expressly provided for in any Loan Document) or demand upon
Borrower, which are expressly waived by Borrower (EXCEPT as to notices
expressly provided for in any Loan Document), may proceed (but only with
the consent of the Requisite Banks) to protect, exercise and enforce
their rights and remedies under the Loan Documents against Borrower and
any other Party and such other rights and remedies as are provided by Law
or equity.
(d) The order and manner in which the Banks' rights and
remedies are to be exercised shall be determined by the Requisite Banks
in their sole discretion, and
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all payments received by the Agent and the Banks, or any of them, shall
be applied first to the costs and expenses (including reasonable
attorneys' fees and disbursements and the reasonably allocated costs of
attorneys employed by the Agent) of the Agent and of the Banks, and
thereafter paid pro rata to the Banks in the same proportions that the
aggregate Obligations owed to each Bank under the Loan Documents bear to
the aggregate Obligations owed under the Loan Documents to all the Banks,
without priority or preference among the Banks. Regardless of how each
Bank may treat payments for the purpose of its own accounting, for the
purpose of computing Borrower's Obligations hereunder and under the
Notes, payments shall be applied FIRST, to the costs and expenses of the
Agent and the Banks, as set forth above, SECOND, to the payment of
accrued and unpaid interest due under any Loan Documents to and including
the date of such application (ratably, and without duplication, according
to the accrued and unpaid interest due under each of the Loan Documents),
and THIRD, to the payment of all other amounts (including principal and
fees) then owing to the Agent or the Banks under the Loan Documents. No
application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the
Loan Documents, or prevent the exercise, or continued exercise, of rights
or remedies of the Banks hereunder or thereunder or at Law or in equity.
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Article 10
THE AGENT
10.1 APPOINTMENT AND AUTHORIZATION. Subject to SECTION 10.8, each
Bank hereby irrevocably appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof or are reasonably incidental, as
determined by the Agent, thereto. This appointment and authorization is
intended solely for the purpose of facilitating the servicing of the Loans and
does not constitute appointment of the Agent as trustee for any Bank or as
representative of any Bank for any other purpose and, EXCEPT as specifically set
forth in the Loan Documents to the contrary, the Agent shall take such action
and exercise such powers only in an administrative and ministerial capacity.
10.2 AGENT AND AFFILIATES. First Interstate Bank of California
(and each successor Agent) has the same rights and powers under the Loan
Documents as any other Bank and may exercise the same as though it were not the
Agent, and the term "Bank" or "Banks" includes First Interstate Bank of
California in its individual capacity. First Interstate Bank of California (and
each successor Agent) and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust or other business with
Borrower, any Subsidiary thereof, or any Affiliate of Borrower or any Subsidiary
thereof, as if it were not the Agent and without any duty to account therefor to
the Banks. First Interstate Bank of California (and each successor Agent) need
not account to any other Bank for any monies received by it for reimbursement of
its costs and expenses as Agent hereunder, or for any monies received by it in
its capacity as a Bank hereunder. The Agent shall not be deemed to hold a
fiduciary relationship with any Bank and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent.
10.3 PROPORTIONATE INTEREST IN ANY COLLATERAL. The Agent, on
behalf of all the Banks, shall hold in accordance with the Loan Documents all
items of any collateral or interests therein received or held by the Agent.
Subject to the Agent's and the Banks' rights to reimbursement for their costs
and expenses hereunder (INCLUDING reasonable attorneys' fees and disbursements
and other professional services and the reasonably allocated costs of attorneys
employed by the Agent or a Bank) and subject to the application of payments in
accordance with SECTION 9.2(d), each Bank shall have an interest in the Banks'
interest in the Collateral or interests therein in the same proportions that the
aggregate Obligations
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owed such Bank under the Loan Documents bear to the aggregate Obligations owed
under the Loan Documents to all the Banks, without priority or preference among
the Banks, EXCEPT that Obligations owed to any Bank under a Secured Swap
Agreement shall be secured on a PARI PASSU basis with all other Obligations up
to an amount equal to the Agent's then customary credit risk factor for Swap
Agreements times the notional amount of Indebtedness covered by such Secured
Swap Agreement and shall be secured on a subordinate basis as to amounts in
excess of such amount.
10.4 BANKS' CREDIT DECISIONS. Each Bank agrees that it has,
independently and without reliance upon the Agent, any other Bank or the
directors, officers, agents, employees or attorneys of the Agent or of any other
Bank, and instead in reliance upon information supplied to it by or on behalf of
Borrower and upon such other information as it has deemed appropriate, made its
own independent credit analysis and decision to enter into this Agreement. Each
Bank also agrees that it shall, independently and without reliance upon the
Agent, any other Bank or the directors, officers, agents, employees or attorneys
of the Agent or of any other Bank, continue to make its own independent credit
analyses and decisions in acting or not acting under the Loan Documents.
10.5 ACTION BY AGENT.
(a) The Agent may assume that no Default has occurred and is
continuing, unless the Agent (or the Bank that is then the Agent) has
received notice from Borrower stating the nature of the Default or has
received notice from a Bank stating the nature of the Default and that
such Bank considers the Default to have occurred and to be continuing.
(b) The Agent has only those obligations under the Loan
Documents as are expressly set forth therein.
(c) EXCEPT for any obligation expressly set forth in the Loan
Documents and as long as the Agent may assume that no Event of Default
has occurred and is continuing, the Agent may, but shall not be required
to, exercise its discretion to act or not act, EXCEPT that the Agent
shall be required to act or not act upon the instructions of the
Requisite Banks (or of all the Banks, to the extent required by
SECTION 11.2) and those instructions shall be binding upon the Agent and
all the Banks, PROVIDED that the Agent shall not be required to act or
not act if to do so would be contrary to any Loan Document or to
applicable Law or would result, in the reasonable judgment of the Agent,
in substantial risk of liability to the Agent.
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(d) If the Agent has received a notice specified in clause
(A), the Agent shall immediately give notice thereof to the Banks and
shall act or not act upon the instructions of the Requisite Banks (or of
all the Banks, to the extent required by SECTION 11.2), PROVIDED that the
Agent shall not be required to act or not act if to do so would be
contrary to any Loan Document or to applicable Law or would result, in
the reasonable judgment of the Agent, in substantial risk of liability to
the Agent, and EXCEPT that if the Requisite Banks (or all the Banks, if
required under SECTION 11.2) fail, for five (5) Banking Days after the
receipt of notice from the Agent, to instruct the Agent, then the Agent,
in its sole discretion, may act or not act as it deems advisable for the
protection of the interests of the Banks.
(e) The Agent shall have no liability to any Bank for acting,
or not acting, as instructed by the Requisite Banks (or all the Banks, if
required under SECTION 11.2), notwithstanding any other provision hereof.
10.6 LIABILITY OF AGENT. Neither the Agent nor any of its
directors, officers, agents, employees or attorneys shall be liable for any
action taken or not taken by them under or in connection with the Loan
Documents, EXCEPT for their own gross negligence or willful misconduct. Without
limitation on the foregoing, the Agent and its directors, officers, agents,
employees and attorneys:
(a) May treat the payee of any Note as the holder thereof
until the Agent receives notice of the assignment or transfer thereof, in
form satisfactory to the Agent, signed by the payee, and may treat each
Bank as the owner of that Bank's interest in the Obligations for all
purposes of this Agreement until the Agent receives notice of the
assignment or transfer thereof, in form satisfactory to the Agent, signed
by that Bank.
(b) May consult with legal counsel (INCLUDING in-house legal
counsel), accountants (INCLUDING in-house accountants) and other
professionals or experts selected by it, or with legal counsel,
accountants or other professionals or experts for Borrower and/or its
Subsidiaries or the Banks, and shall not be liable for any action taken
or not taken by it in good faith in accordance with any advice of such
legal counsel, accountants or other professionals or experts.
(c) Shall not be responsible to any Bank for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report,
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request or other statement (written or oral) given or made in connection
with any of the Loan Documents.
(d) EXCEPT to the extent expressly set forth in the Loan
Documents, shall have no duty to ask or inquire as to the performance or
observance by Borrower or its Subsidiaries of any of the terms,
conditions or covenants of any of the Loan Documents or to inspect any
Collateral or the Property, books or records of Borrower or its
Subsidiaries.
(e) Will not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, effectiveness,
sufficiency or value of any Loan Document, any other instrument or
writing furnished pursuant thereto or in connection therewith, or any
Collateral.
(f) Will not incur any liability by acting or not acting in
reliance upon any Loan Document, notice, consent, certificate, statement,
request or other instrument or writing reasonably believed by it to be
genuine and signed or sent by the proper party or parties.
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by the Borrower or any Subsidiary or
Affiliate thereof or paid or payable to or received or receivable from
any Bank under any Loan Document, INCLUDING, without limitation,
principal, interest, commitment fees, Advances and other amounts;
PROVIDED that, promptly upon discovery of such an error in computation,
the Agent, the Banks and (to the extent applicable) Borrower and/or its
Subsidiaries or Affiliates shall make such adjustments as are necessary
to correct such error and to restore the parties to the position that
they would have occupied had the error not occurred.
10.7 INDEMNIFICATION. Each Bank shall, ratably in accordance with
its Pro Rata Share of the Commitments, indemnify and hold the Agent and its
directors, officers, agents, employees and attorneys harmless against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(INCLUDING, without limitation, attorneys' fees and disbursements and allocated
costs of attorneys employed by the Agent) that may be imposed on, incurred by or
asserted against it or them in any way relating to or arising out of the Loan
Documents (other than losses incurred by reason of the failure of Borrower to
pay the Indebtedness represented by the Notes) or any action taken or not taken
by it as Agent thereunder, EXCEPT such as result from its own gross negligence
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or willful misconduct. Without limitation on the foregoing, each Bank shall
reimburse the Agent upon demand for that Bank's Pro Rata Share of any
out-of-pocket cost or expense incurred by the Agent in connection with the
negotiation, preparation, execution, delivery, amendment, waiver, restructuring,
reorganization (INCLUDING a bankruptcy reorganization), enforcement or attempted
enforcement of the Loan Documents, to the extent that Borrower or any other
Party is required by SECTION 11.3 to pay that cost or expense but fails to do so
upon demand. Nothing in this SECTION 10.7 shall entitle the Agent to recover
any amount from the Banks if and to the extent that such amount has theretofore
been recovered from Borrower or any of its Subsidiaries.
10.8 SUCCESSOR AGENT. The Agent may, and at the request of the
Requisite Banks shall, resign as Agent upon thirty (30) days' notice to the
Banks and Borrower. If the Agent shall resign as Agent under this Agreement,
the Requisite Banks shall appoint from among the Banks a successor Agent for the
Banks, which successor agent shall be approved by Borrower (and such approval
shall not be unreasonably withheld or delayed). If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and the Borrower, a successor agent
from among the Banks. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this ARTICLE 10, and Sections 11.3, 11.11 and 11.22, shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If (a) the Agent has not been paid its fees under
Section 3.3 or has not been reimbursed for any expense reimbursable to it under
Section 11.3, in either case for a period of at least one (1) year and (b) no
successor agent has accepted appointment as Agent by the date which is thirty
(30) days following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective and the
Requisite Banks (subject to the provisions specified in Section 11.2 requiring
consent of all the Banks) shall perform all of the duties of the Agent hereunder
until such time, if any, as the Requisite Banks appoint a successor agent as
provided for above.
10.9 NO OBLIGATIONS OF BORROWER. Nothing contained in this
ARTICLE 10 shall be deemed to impose upon Borrower any obligation in respect of
the due and punctual performance by the Agent of its obligations to the Banks
under any provision of this Agreement, and Borrower shall have no liability to
the
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Agent or any of the Banks in respect of any failure by the Agent or any Bank to
perform any of its obligations to the Agent or the Banks under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing or the delivery
of documents under the Loan Documents provides that such payments shall be made
or documents delivered by Borrower to the Agent for the account of the Banks,
Borrower's obligations to the Banks in respect of such payments and documents
shall be deemed to be satisfied upon the making of such payments or delivery of
such documents to the Agent in the manner provided by this Agreement.
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Article 11
MISCELLANEOUS
11.1 CUMULATIVE REMEDIES; NO WAIVER. The rights, powers,
privileges and remedies of the Agent and the Banks provided herein or in any
Note or other Loan Document are cumulative and not exclusive of any right,
power, privilege or remedy provided by Law or equity. No failure or delay on
the part of the Agent or any Bank in exercising any right, power, privilege or
remedy may be, or may be deemed to be, a waiver thereof; nor may any single or
partial exercise of any right, power, privilege or remedy preclude any other or
further exercise of the same or any other right, power, privilege or remedy.
The terms and conditions of ARTICLE 8 hereof are inserted for the sole benefit
of the Agent and the Banks; the same may be waived in whole or in part, with or
without terms or conditions, in respect of any Loan without prejudicing the
Agent's or the Banks' rights to assert them in whole or in part in respect of
any other Loan.
11.2 AMENDMENTS; CONSENTS. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by the Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Requisite Banks or by the Agent with
the written approval of the Requisite Banks (and, in the case of any amendment,
modification or supplement of or to any Loan Document to which any Borrower is a
Party, signed by Borrower and, in the case of any amendment, modification or
supplement to ARTICLE 10, signed by the Agent), and then only in the specific
instance and for the specific purpose given; and, without the approval in
writing of all the Banks, no amendment, modification, supplement, termination,
waiver or consent may be effective:
(a) To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on, any
Note, or the amount of the Commitments or the Pro Rata Share of any Bank
(except as otherwise provided in Section 11.8) or the amount of any
commitment fee payable to any Bank, or any other fee or amount payable to
any Bank under the Loan Documents or to waive an Event of Default
consisting of the failure of Borrower to pay when due principal, interest
or any commitment fee;
(b) To postpone any date fixed for any payment of principal
of, prepayment of principal of or any installment of interest on, any
Note or any installment of any
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commitment fee, or to extend the term of the Commitments, or to release
the Subsidiary Guaranty;
(c) to release any material portion of the Collateral (EXCEPT
as otherwise expressly provided in any Loan Document);
(d) To amend the provisions of the definition of "REQUISITE
BANKS", ARTICLES 8 OR 9 or this SECTION 11.2 or to amend or waive
SECTION 6.4; or
(e) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Banks.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this SECTION 11.2 shall apply equally to, and shall be binding upon, all the
Banks and the Agent.
11.3 COSTS, EXPENSES AND TAXES. Borrower shall pay within five (5)
Banking Days after demand, accompanied by an invoice therefor, the reasonable
costs and expenses of the Agent in connection with the negotiation, preparation,
syndication, execution and delivery of the Loan Documents and any amendment
thereto or waiver thereof. Borrower shall also pay on demand, accompanied by an
invoice therefor, the reasonable costs and expenses of the Agent and the Banks
in connection with the refinancing, restructuring, reorganization (INCLUDING a
bankruptcy reorganization) and enforcement or attempted enforcement of the Loan
Documents, and any matter related thereto. The foregoing costs and expenses
shall include filing fees, recording fees, title insurance fees, appraisal fees,
search fees, and other out-of-pocket expenses and the reasonable fees and out-
of-pocket expenses of any legal counsel (INCLUDING reasonably allocated costs of
legal counsel employed by the Agent or any Bank), independent public accountants
and other outside experts retained by the Agent or any Bank, whether or not such
costs and expenses are incurred or suffered by the Agent or any Bank in
connection with or during the course of any bankruptcy or insolvency proceedings
of Borrower or any Subsidiary thereof. Such costs and expenses shall also
include, in the case of any amendment or waiver of any Loan Document requested
by Borrower, the administrative costs of the Agent reasonably attributable
thereto. Borrower shall pay any and all documentary and other taxes, EXCLUDING
Excluded Taxes, and all costs, expenses, fees and charges payable or determined
to be payable in connection with the filing or recording of this Agreement, any
other Loan Document or any other instrument or writing to be delivered hereunder
or thereunder, or in connection with any transaction pursuant hereto or thereto,
and shall reimburse, hold harmless and indemnify the Agent and the Banks from
and against any and all loss, liability or legal or
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other expense with respect to or resulting from any delay in paying or failure
to pay any such tax, cost, expense, fee or charge or that any of them may suffer
or incur by reason of the failure of any Party to perform any of its
Obligations. Any amount payable to the Agent or any Bank under this
SECTION 11.3 shall bear interest from the second Banking Day following the date
of demand for payment at the Default Rate, EXCEPT that any such amount payable
under the first sentence of this SECTION 11.3 shall bear such interest from the
sixth (6th) Banking Day following the date of demand for payment.
11.4 NATURE OF BANKS' OBLIGATIONS. The obligations of the Banks
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the Agent or
the Banks or any of them pursuant hereto or thereto may, or may be deemed to,
make the Banks a partnership, an association, a joint venture or other entity,
either among themselves or with Borrower or any Affiliate of Borrower. Each
Bank's obligation to make any Advance pursuant hereto is several and not joint
or joint and several, and in the case of the initial Advance only is conditioned
upon the performance by all other Banks of their obligations to make initial
Advances. A default by any Bank will not increase the Pro Rata Share of the
Commitments attributable to any other Bank. Any Bank not in default may, if it
desires, assume in such proportion as the nondefaulting Banks agree the
obligations of any Bank in default, but is not obligated to do so. The Agent
agrees that it will use its best efforts either to induce the other Banks to
assume the obligations of a Bank in default or to obtain another Bank,
reasonably satisfactory to Borrower, to replace such a Bank in default.
11.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making of the Loans
hereunder and the execution and delivery of the Notes, and have been or will be
relied upon by the Agent and each Bank, notwithstanding any investigation made
by the Agent or any Bank or on their behalf.
11.6 NOTICES. EXCEPT as otherwise expressly provided in the Loan
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied, dispatched by commercial courier or
delivered to the appropriate party at the address set forth on the signature
pages of this Agreement or other applicable Loan Document or, as to any party to
any Loan Document, at any other address as may be designated by it in a
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written notice sent to all other parties to such Loan Document in accordance
with this SECTION 11.6. EXCEPT as otherwise expressly provided in any Loan
Document, if any notice, request, demand, direction or other communication
required or permitted by any Loan Document is given by mail it will be effective
on the earlier of receipt or the third calendar day after deposit in the United
States mail with first class or airmail postage prepaid; if given by telegraph
or cable, when delivered to the telegraph company with charges prepaid; if given
by telecopier during regular business hours of the recipient, when sent; if
given by telecopier outside regular business hours of the recipient, at the
opening of business on the next business day; if dispatched by commercial
courier, on the scheduled delivery date; or if given by personal delivery, when
delivered.
11.7 EXECUTION OF LOAN DOCUMENTS. Unless the Agent otherwise
specifies with respect to any Loan Document, (a) this Agreement and any other
Loan Document may be executed in any number of counterparts and any party hereto
or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of this
Agreement or any other Loan Document, as the case may be, when taken together
will be deemed to be but one and the same instrument and (b) execution of any
such counterpart may be evidenced by a telecopier transmission of the signature
of such party. The execution of this Agreement or any other Loan Document by
any party hereto or thereto will not become effective until counterparts hereof
or thereof, as the case may be, have been executed by all the parties hereto or
thereto.
11.8 BINDING EFFECT; ASSIGNMENT.
(a) Subject to the provisions of this SECTION 11.8, this Agreement
and the other Loan Documents to which Borrower is a Party will be binding
upon and inure to the benefit of Borrower, the Agent, each of the Banks,
and their respective successors and assigns, EXCEPT that Borrower may not
assign its rights hereunder or thereunder or any interest herein or
therein without the prior written consent of all the Banks. Each Bank
represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (subject to any requirement that disposition of such Note must be
within the control of such Bank). Any Bank may at any time pledge its
Note or any other instrument evidencing its rights as a Bank under this
Agreement to a Federal Reserve Bank, but no such pledge shall release
that Bank from its obligations hereunder or grant to such Federal Reserve
Bank the rights of a Bank hereunder absent foreclosure of such pledge.
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(b) From time to time following the Closing Date, each Bank may
assign to one or more Eligible Assignees all or any portion of its Pro
Rata Share of the Commitments; PROVIDED that (i) such Eligible Assignee,
if not then a Bank or an Affiliate of the assigning Bank, shall be
approved by each of the Agent and Borrower (neither of which approvals
shall be unreasonably withheld or delayed), (ii) such assignment shall be
evidenced by a Commitment Assignment and Acceptance, a copy of which
shall be furnished to the Agent as hereinbelow provided, (iii) EXCEPT in
the case of an assignment to an Affiliate of the assigning Bank, to
another Bank or of the entire remaining Commitment of the assigning Bank,
the assignment shall not assign a Pro Rata Share of the Commitments
equivalent to less than $10,000,000, (iv) the assignment shall assign the
same Pro Rata Share of the Line A Commitment and the Line B Commitment,
(v) such assignment shall not subject Borrower (solely as a consequence
of the assignment) to any additional costs, expenses, liabilities, taxes,
assessments or other charges under SECTIONS 3.6, 3.7 or 3.9(d) and
(vi) the effective date of any such assignment shall be as specified in
the Commitment Assignment and Acceptance, but not earlier than the date
which is three (3) Banking Days after the date the Agent has received the
Commitment Assignment and Acceptance. Upon the effective date of such
Commitment Assignment and Acceptance, the Eligible Assignee named therein
shall be a Bank for all purposes of this Agreement, with the Pro Rata
Share of the Commitments therein set forth and, to the extent of such Pro
Rata Share, the assigning Bank shall be released from its further
obligations under this Agreement. Borrower agrees that it shall execute
and deliver (against delivery by the assigning Bank to Borrower of such
Bank's Note) to such assignee Bank, Notes evidencing that assignee Bank's
Pro Rata Share of the Commitments, and to the assigning Bank, Notes
evidencing the remaining balance Pro Rata Share retained by the assigning
Bank.
(c) By executing and delivering a Commitment Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and agrees
that: (i) other than the representation and warranty that it is the legal
and beneficial owner of the Pro Rata Share of the Commitments being
assigned thereby free and clear of any adverse claim, the assigning Bank
has made no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness or sufficiency of this Agreement or any other
Loan Document; (ii) the assigning Bank has made no representation or
warranty and
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assumes no responsibility with respect to the financial condition of
Borrower or the performance by Borrower of the Obligations; (iii) it has
received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.1 and such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Commitment Assignment
and Acceptance; (iv) it will, independently and without reliance upon the
Agent or any Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) it appoints and
authorizes the Agent to take such action and to exercise such powers
under this Agreement as are delegated to the Agent by this Agreement; and
(vi) it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(d) The Agent shall maintain at the Agent's Office a copy of
each Commitment Assignment and Acceptance delivered to it. After receipt
of a completed Commitment Assignment and Acceptance executed by any Bank
and an Eligible Assignee, and receipt of an assignment fee of $2,500 from
such Eligible Assignee, the Agent shall, promptly following the effective
date thereof, provide to Borrower and the Banks a revised SCHEDULE 1.1
giving effect thereto.
(e) Any Bank may from time to time grant participations to one
or more banks or other financial institutions (INCLUDING another Bank) in
a portion of its Pro Rata Share of the Commitments; PROVIDED, HOWEVER,
that (i) such Bank's obligations under this Agreement shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating banks or other financial institutions shall not be a Bank
hereunder for any purpose EXCEPT, if the participation agreement so
provides, for the purposes of SECTIONS 3.6, 3.7, 11.11 and 11.22 but only
to the extent that the cost of such benefits to Borrower does not exceed
the cost which Borrower would have incurred in respect of such Bank
absent the participation, (iv) Borrower, the Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement, (v) the
participation interest shall be expressed as a percentage of the granting
Bank's Pro Rata Share of the Commitments as it then exists and shall not
restrict an increase in the Commitments, or in the granting Bank's Pro
Rata Share of
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the Commitments, so long as the amount of the participation interest is
not affected thereby and (vi) the consent of the holder of such
participation interest shall not be required for amendments or waivers of
provisions of the Loan Documents OTHER THAN those which (A) extend the
Line A Maturity Date, Line B Maturity Date or any other date upon which
any payment of money is due to the Banks, (B) reduce the rate of interest
on the Notes, any fee or any other monetary amount payable to the Banks,
(C) reduce the amount of any installment of principal due under the
Notes, (D) change the definition of "Requisite Banks" or (E) release any
material portion of the Collateral.
11.9 RIGHT OF SETOFF. If an Event of Default has occurred and is
continuing, the Agent or any Bank (but only with the consent of the Requisite
Banks) may exercise its rights under Article 9 of the Uniform Commercial Code
and other applicable Laws and, to the extent permitted by applicable Laws, apply
any funds in any deposit account maintained with it by Borrower and/or any
Property of Borrower in its possession against the Obligations.
11.10 SHARING OF SETOFFS. Each Bank severally agrees that if it,
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Bank, through any means, receives in payment
of the Obligations held by that Bank, then, subject to applicable Laws: (a) the
Bank exercising the right of setoff, banker's lien or counterclaim or otherwise
receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from the other Bank a participation in the Obligations
held by the other Bank and shall pay to the other Bank a purchase price in an
amount so that the share of the Obligations held by each Bank after the exercise
of the right of setoff, banker's lien or counterclaim or receipt of payment
shall be in the same proportion that existed prior to the exercise of the right
of setoff, banker's lien or counterclaim or receipt of payment; and (b) such
other adjustments and purchases of participations shall be made from time to
time as shall be equitable to ensure that all of the Banks share any payment
obtained in respect of the Obligations ratably in accordance with each Bank's
share of the Obligations immediately prior to, and without taking into account,
the payment; PROVIDED that, if all or any portion of a disproportionate payment
obtained as a result of the exercise of the right of setoff, banker's lien,
counterclaim or otherwise is thereafter recovered from the purchasing Bank by
Borrower or any Person claiming through or succeeding to the rights of Borrower,
the purchase of a participation shall be rescinded and the purchase price
thereof shall be restored to the extent of the recovery, but without interest.
Each Bank that purchases a participation
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in the Obligations pursuant to this Section 11.10 shall from and after the
purchase have the right to give all notices, requests, demands, directions and
other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Bank were the
original owner of the Obligations purchased. Borrower expressly consents to the
foregoing arrangements and agree that any Bank holding a participation in an
Obligation so purchased may exercise any and all rights of setoff, banker's lien
or counterclaim with respect to the participation as fully as if the Bank were
the original owner of the Obligation purchased.
11.11 INDEMNITY BY BORROWER. Borrower agrees to indemnify, save
and hold harmless the Agent and each Bank and their directors, officers, agents,
attorneys and employees (collectively the "INDEMNITEES") from and against:
(a) any and all claims, demands, actions or causes of action arising out of or
relating to any act or omission (or alleged act or omission) of Borrower, its
Affiliates or any of its officers, directors or stockholders relating to the
Commitment, the use or contemplated use of proceeds of any Loan, or the
relationship of Borrower and the Banks under this Agreement; (b) any
administrative or investigative proceeding by any Governmental Agency arising
out of or related to a claim, demand, action or cause of action described in
clause (a) above; and (c) any and all liabilities, losses, costs or expenses
(INCLUDING reasonable attorneys' fees and the reasonably allocated costs of
attorneys employed by any Indemnitee and disbursements of such attorneys and
other professional services) that any Indemnitee suffers or incurs as a result
of the assertion of any foregoing claim, demand, action or cause of action;
PROVIDED that no Indemnitee shall be entitled to indemnification for any of the
foregoing caused by its own gross negligence or willful misconduct or breach of
any of its obligations under this Agreement and the other Loan Documents or for
any of the foregoing asserted against it by another Indemnitee. If any claim,
demand, action or cause of action is asserted against any Indemnitee, such
Indemnitee shall promptly notify Borrower, but the failure to so promptly notify
Borrower shall not affect Borrower's obligations under this Section unless such
failure materially prejudices Borrower's right to participate in the contest of
such claim, demand, action or cause of action, as hereinafter provided. Such
Indemnitee may (and shall, if requested by Borrower in writing) contest the
validity, applicability and amount of such claim, demand, action or cause of
action and shall permit Borrower to participate in such contest. Any Indemnitee
that proposes to settle or compromise any claim or proceeding for which Borrower
may be liable for payment of indemnity hereunder shall give Borrower written
notice of the terms of such proposed settlement or compromise reasonably in
advance of settling or compromising such claim or proceeding and shall obtain
Borrower's prior consent (which shall not be
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unreasonably withheld or delayed). In connection with any claim, demand, action
or cause of action covered by this Section 11.11 against more than one
Indemnitee, all such Indemnitees shall be represented by the same legal counsel
(which may be a law firm engaged by the Indemnitees or attorneys employed by an
Indemnitee or a combination of the foregoing) selected by the Indemnitees and
reasonably acceptable to Borrower; PROVIDED, that if such legal counsel
determines in good faith that representing all such Indemnitees would or could
result in a conflict of interest under Laws or ethical principles applicable to
such legal counsel or that a defense or counterclaim is available to an
Indemnitee that is not available to all such Indemnitees, then to the extent
reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each Indemnitee shall
be entitled to separate representation by legal counsel selected by that
Indemnitee and reasonably acceptable to Borrower, with all such legal counsel
using reasonable efforts to avoid unnecessary duplication of effort by counsel
for all Indemnitees; and FURTHER PROVIDED that the Agent (as an Indemnitee)
shall at all times be entitled to representation by separate legal counsel
(which may be a law firm or attorneys employed by the Agent or a combination of
the foregoing). Any obligation or liability of Borrower to any Indemnitee under
this Section 11.11 shall survive the expiration or termination of this Agreement
and the repayment of all Loans and the payment and performance of all other
Obligations owed to the Banks.
11.12 NONLIABILITY OF THE BANKS. Borrower acknowledges and agrees
that:
(a) Any inspections of any Property of Borrower made by or
through the Agent or the Banks are for purposes of administration of the
Loan only and Borrower is not entitled to rely upon the same (whether or
not such inspections are at the expense of Borrower);
(b) By accepting or approving anything required to be
observed, performed, fulfilled or given to the Agent or the Banks
pursuant to the Loan Documents, neither the Agent nor the Banks shall be
deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance or approval thereof shall not
constitute a warranty or representation to anyone with respect thereto by
the Agent or the Banks;
(c) The relationship between Borrower and the Agent and the
Banks is, and shall at all times remain, solely that of borrower and
lenders; neither the Agent nor the Banks shall under any circumstance be
construed to be
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partners or joint venturers of Borrower or its Affiliates; neither the
Agent nor the Banks shall under any circumstance be deemed to be in a
relationship of confidence or trust or a fiduciary relationship with
Borrower or its Affiliates, or to owe any fiduciary duty to Borrower or
its Affiliates; neither the Agent nor the Banks undertake or assume any
responsibility or duty to Borrower or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Borrower or its
Affiliates of any matter in connection with their Property or the
operations of Borrower or its Affiliates; Borrower and its Affiliates
shall rely entirely upon their own judgment with respect to such matters;
and any review, inspection, supervision, exercise of judgment or supply
of information undertaken or assumed by the Agent or the Banks in
connection with such matters is solely for the protection of the Agent
and the Banks and neither Borrower nor any other Person is entitled to
rely thereon; and
(d) The Agent and the Banks shall not be responsible or liable
to any Person for any loss, damage, liability or claim of any kind
relating to injury or death to Persons or damage to Property caused by
the actions, inaction or negligence of Borrower and/or its Affiliates and
Borrower hereby indemnifies and holds the Agent and the Banks harmless
from any such loss, damage, liability or claim.
11.13 NO THIRD PARTIES BENEFITED. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Agent and the Banks in connection with the Loans, and is made for
the sole benefit of Borrower, the Agent and the Banks, and the Agent's and the
Banks' successors and assigns. EXCEPT as provided in Sections 11.8 and 11.11,
no other Person shall have any rights of any nature hereunder or by reason
hereof.
11.14 CONFIDENTIALITY. Each Bank agrees to hold any confidential
information that it may receive from Borrower pursuant to this Agreement in
confidence, EXCEPT for disclosure: (a) to other Banks; (b) to legal counsel and
accountants for Borrower or any Bank; (c) to other professional advisors to
Borrower or any Bank, provided that the recipient has been informed in advance
of the confidential nature of such information; (d) to regulatory officials
having jurisdiction over that Bank; (e) as required by Law or legal process or
in connection with any legal proceeding or litigation involving that Bank and
Borrower; and (f) to another financial institution in connection with a
disposition or proposed disposition to that financial institution of all or part
of that Bank's interests hereunder or a participation interest in its Note,
provided that the recipient has been informed in
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advance of the confidential nature of such information. For purposes of the
foregoing, "confidential information" shall mean any information respecting
Borrower or its Subsidiaries reasonably considered by Borrower to be
confidential, OTHER THAN (i) information previously filed with any Governmental
Agency and available to the public, (ii) information previously published in any
public medium from a source other than, directly or indirectly, that Bank, and
(iii) information previously disclosed by Borrower to any Person not associated
with Borrower without a confidentiality agreement or obligation substantially
similar to this Section 11.14. Nothing in this Section shall be construed to
create or give rise to any fiduciary duty on the part of the Agent or the Banks
to Borrower.
11.15 FURTHER ASSURANCES. Borrower and its Subsidiaries shall, at
their expense and without expense to the Banks or the Agent, do, execute and
deliver such further acts and documents as any Bank or the Agent from time to
time reasonably requires for the assuring and confirming unto the Banks or the
Agent of the rights hereby created or intended now or hereafter so to be, or for
carrying out the intention or facilitating the performance of the terms of any
Loan Document.
11.16 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; PROVIDED that the inclusion of supplemental
rights or remedies in favor of the Agent or the Banks in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
11.17 GOVERNING LAW. EXCEPT to the extent otherwise provided
therein, each Loan Document shall be governed by, and construed and enforced in
accordance with, the local Laws of California.
11.18 SEVERABILITY OF PROVISIONS. Any provision in any Loan
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions
or the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end
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the provisions of all Loan Documents are declared to be severable.
11.19 HEADINGS. Article and Section headings in this Agreement and
the other Loan Documents are included for convenience of reference only and are
not part of this Agreement or the other Loan Documents for any other purpose.
11.20 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.
11.21 FOREIGN BANKS AND PARTICIPANTS. Each Bank, and each holder
of a participation interest herein, that is incorporated or otherwise organized
under the Laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia shall deliver to Borrower (with a copy
to the Agent), within twenty (20) days after the Closing Date (or after
accepting an assignment or receiving a participation interest herein pursuant to
Section 11.8, if applicable) two duly completed copies, signed by a Responsible
Official, of either Form 1001 (relating to such Person and entitling it to a
complete exemption from withholding on all payments to be made to such Person by
Borrower pursuant to this Agreement) or Form 4224 (relating to all payments to
be made to such Person by the Borrower pursuant to this Agreement) of the United
States Internal Revenue Service or such other evidence (INCLUDING, if reasonably
necessary, Form W-9) satisfactory to Borrower and the Agent that no withholding
under the federal income tax laws is required with respect to such Person.
Thereafter and from time to time, each such Person shall (a) promptly submit to
Borrower (with a copy to the Agent), such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and the Agent of any available
exemption from, United States withholding taxes in respect of all payments to be
made to such Person by Borrower pursuant to this Agreement and (b) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Bank, and as may be reasonably necessary (including the
re-designation of its Eurodollar Lending Office, if any) to avoid any
requirement of applicable Laws that Borrower makes any deduction or withholding
for taxes from amounts payable to such Person. Unless and until Borrower and
the Agent have received such forms and other documents described in this Section
11.21 reasonably satisfactory to them establishing that each Bank is entitled to
receive payments under this Agreement without deduction or withholding of any
United States Federal income taxes, Borrower or the Agent (if not withheld by
Borrower) shall withhold taxes from such payment at the applic-
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able statutory rate, without any obligation to "gross-up" or increase amounts
payable hereunder or under any of the other Loan Documents.
11.22 HAZARDOUS MATERIAL INDEMNITY. Borrower hereby agrees to
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Agent) the Agent and each of the Banks and their respective directors, officers,
employees, agents, successors and assigns from and against any and all claims,
losses, damages, liabilities, fines, penalties, charges, administrative and
judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind, and all costs and expenses incurred in
connection therewith (including but not limited to reasonable attorneys' fees
and the reasonably allocated costs of attorneys employed by the Agent or any
Bank, and expenses to the extent that the defense of any such action has not
been assumed by Borrower), arising directly or indirectly out of (i) the
presence on, in, under or about any Real Property of any Hazardous Materials, or
any releases or discharges of any Hazardous Materials on, under or from any Real
Property and (ii) any activity carried on or undertaken on or off any Real
Property by Borrower or any of its predecessors in title, whether prior to or
during the term of this Agreement, and whether by Borrower or any predecessor in
title or any employees, agents, contractors or subcontractors of Borrower or any
predecessor in title, or any third persons at any time occupying or present on
any Real Property, in connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous Materials at
any time located or present on, in, under or about any Real Property. The
foregoing indemnity shall further apply to any residual contamination on, in,
under or about any Real Property, or affecting any natural resources, and to any
contamination of any Property or natural resources arising in connection with
the generation, use, handling, storage, transport or disposal of any such
Hazardous Materials, and irrespective of whether any of such activities were or
will be undertaken in accordance with applicable Laws, but the foregoing
indemnity shall not apply to Hazardous Materials in, on, under or about any Real
Property or any other Property, the presence of which is caused by the Agent or
the Banks or any of their respective employees, agents, contractors or
subcontractors. Borrower hereby acknowledges and agrees that, notwithstanding
any other provision of this Agreement or any of the other Loan Documents to the
contrary, the obligations of Borrower under this Section (and under
Sections 4.18 and 5.12) shall be unlimited corporate obligations of Borrower and
shall NOT be secured by any deed of trust on any Real Property.
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11.23 ARBITRATION REFERENCE.
(a) BINDING ARBITRATION. Upon the written demand of any party
("Loan Party/Loan Parties"), to a Document (as defined below), whether made
before the institution of any judicial proceeding or not more than 60 days after
service of a complaint, third party complaint, cross-claim or counterclaim or
any answer thereto or any amendment to any of the above, any Dispute (as defined
below) shall be resolved by binding arbitration in accordance with the terms of
this arbitration program ("Arbitration Program"). A "Dispute" shall include any
action, dispute, claim or controversy of any kind, whether founded in contract,
tort, statutory or common law, equity, or otherwise, now existing or hereafter
arising between any of the Loan Parties arising out of, pertaining to or in
connection with any agreement, document or instrument to which this Arbitration
Program is attached or in which it appears or is referenced or any related
agreements, documents, or instruments ("Documents"). Any Loan Party who fails
to submit to binding arbitration following a lawful demand by another Loan Party
shall bear all costs and expenses, including reasonable attorneys' fees
(including those incurred in any trial, bankruptcy proceeding or on appeal),
incurred by the other Loan Party in obtaining a stay of any pending judicial
proceeding and compelling arbitration of any Dispute. The Loan Parties agree
that any agreement, document or instrument which includes, attaches to or
incorporates this Arbitration Program represents a transaction involving
commerce as that term is used in the Federal Arbitration Act, Title 9 United
States Code ("FAA"). THE LOAN PARTIES UNDERSTAND THAT BY THIS AGREEMENT THEY
HAVE DECIDED THAT THEIR DISPUTES SHALL BE RESOLVED BY BINDING ARBITRATION RATHER
THAN IN COURT, AND ONCE DECIDED BY ARBITRATION NO DISPUTE CAN LATER BE BROUGHT,
FILED OR PURSUED IN COURT.
(b) GOVERNING RULES. Arbitrations conducted pursuant to this
Arbitration Program shall be administered by the American Arbitration
Association ("AAA"), or other mutually agreeable administrator ("Administrator")
in accordance with the terms of this Arbitration Program and the Commercial
Arbitration Rules of the AAA. Proceedings hereunder shall be governed by the
provisions of the FAA. The arbitrator(s) shall resolve all Disputes in
accordance with the applicable substantive law designated in the Documents.
Judgment upon any award rendered hereunder may be entered in any court having
jurisdiction; PROVIDED, HOWEVER, that nothing herein shall be construed to be a
waiver by any Loan Party that is a bank of the protections afforded pursuant to
12 U.S.C. 91 or any similar applicable state law.
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(c) ARBITRATOR POWERS AND QUALIFICATIONS; AWARDS. The Loan Parties
agree to select a neutral qualified arbitrator or a panel of three qualified
arbitrators to resolve any Dispute hereunder. "Qualified" means a retired judge
or practicing attorney, with not less than 10 years practice in commercial law,
licensed to practice in the state of the applicable substantive law designated
in the Documents. A Dispute in which the claims or amounts in controversy do
not exceed $1,000,000, shall be decided by a single arbitrator. A single
arbitrator shall have authority to render an award up to but not to exceed
$1,000,000.00 including all damages of any kind whatsoever, costs, fees,
attorneys' fees and expenses. Submission to a single arbitrator shall be a
waiver of all Loan Parties' claims to recover more than $1,000,000.00. A
Dispute involving claims or amounts in controversy exceeding $1,000,000.00 shall
be decided by a majority vote of a panel of three qualified arbitrators. All
three arbitrators on the arbitration panel must actively participate in all
hearings and deliberations. The arbitrator(s) shall be empowered to, at the
written request of any Loan Party in any Dispute, 1) to consolidate in a single
proceeding any multiple party claims that are substantially identical or based
upon the same underlying transaction; 2) to consolidate any claims and Disputes
between other Loan Parties which arise out of or relate to the subject matter
hereof, including all claims by or against borrowers, guarantors, sureties
and/or owners of collateral; and 3) to administer multiple arbitration claims as
class actions in accordance with Rule 23 of the Federal Rules of Civil
Procedure. In any consolidated proceeding the first arbitrator(s) selected in
any proceeding shall conduct the consolidated proceeding unless disqualified due
to conflict of interest. The arbitrators(s) shall be empowered to resolve any
dispute regarding the terms of this arbitration clause, including questions
about the arbitrability of any Dispute, but shall have no power to change or
alter the terms of the Arbitration Program. The prevailing Loan Party in any
Dispute shall be entitled to recover its reasonable attorneys' fees in any
arbitration, and the arbitrator(s) shall have the power to award such fees. The
award of the arbitrator(s) shall be in writing and shall set forth the factual
and legal basis for the award.
(d) REAL PROPERTY COLLATERAL. Notwithstanding the provisions of
subparagraphs (a) through (c), no Dispute shall be submitted to arbitration
without the consent of all Loan Parties if, at the time of the proposed
submission, such Dispute arises from or relates to an obligation which is
secured directly or indirectly and in whole or in part by real property
collateral. If all Loan Parties do not consent to submission of such a Dispute
to arbitration, the Dispute shall be determined as provided in subparagraph (e)
below.
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(e) JUDICIAL REFERENCE. At the request of any Loan Party, a
Dispute which is not submitted to arbitration as provided and limited in
subparagraphs (a) through (d) above shall be determined by a reference in
accordance with California Code of Civil Procedure Section 638 et seq. If such
an election is made, the Loan Parties shall designate to the court a referee or
referees selected under the auspices of the AAA, unless otherwise agreed to in
writing by all parties. With respect to a Dispute in which the amounts in
controversy do not exceed $1,000,000, a single referee shall be chosen and shall
resolve the Dispute. The referee shall have authority to render an award up to
but not to exceed $1,000,000, including all damages of any kind whatsoever,
including costs, fees, attorneys' fees and expenses. A Dispute involving
amounts in controversy exceeding $1,000,000 shall be decided by a majority vote
of a panel of three referees (a "Referee Panel"), PROVIDED, HOWEVER, that all
three referees on the Referee Panel must actively participate in all hearings
and deliberations. Referees, including any Referee Panel, may grant any remedy
of relief deemed just and equitable and within the scope of this Arbitration
Program and may also grant such ancillary relief as is necessary to make
effective any award. The presiding referee of the Referee Panel, or the referee
if there is a single referee, shall be a retired judge. Judgment upon the award
rendered by such referee(s) shall be entered in the court in which such
proceeding was commenced in accordance with California Code of Civil Procedure
Sections 644 and 645. Determinations and awards by a referee or Referee Panel
shall be binding on all Loan Parties and shall not be subject to further review
or appeal except as allowed by applicable Law.
(f) PRESERVATION OF REMEDIES. No provision of, nor the exercise of
any rights under, this Arbitration Program shall limit the right of any Loan
Party to: (1) foreclose against and/or sale of any real or personal property
collateral or other security, or obtain a personal or deficiency award;
(2) exercise self-help remedies (including repossession and setoff rights); or
(3) obtain provisional or ancillary remedies such as injunctive relief,
sequestration, attachment, replevin, garnishment, or the appointment of a
receiver from a court having jurisdiction. Such rights can be exercised at any
time except to the extent such action is contrary to a final award or decision
in any arbitration proceeding. The institution and maintenance of an action as
described above shall not constitute a waiver of the right of any Loan Party to
submit the Dispute to arbitration, nor render inapplicable the compulsory
arbitration provisions hereof. Any claim or dispute related to the exercise of
any self-help, auxiliary or other rights under this paragraph shall be a Dispute
hereunder.
(g) MISCELLANEOUS. All statutes of limitation applicable to any
Dispute shall apply to any proceeding in
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accordance with this Arbitration Program. The Loan Parties agree, to the
maximum extent practicable, to take any action necessary to conclude an
arbitration hereunder within 180 days of the filing of a Dispute with the
Administrator. The arbitrator(s) shall be empowered to impose sanctions for any
Loan Party's failure to proceed within the times established herein.
Arbitrations shall be conducted in the state of the applicable substantive law
designated in the Documents. The provisions of this Arbitration Program shall
survive an termination, amendment, or expiration hereof or of the Documents
unless the Loan Parties otherwise expressly agree in writing. Each Loan Party
agrees to keep all Disputes and arbitration proceedings strictly confidential,
except for disclosures of information required in the ordinary course of
business of the Loan Parties or as required by applicable Law. If any provision
of this Arbitration Program is declared invalid by any court, the remaining
provisions shall not be affected thereby and shall remain fully enforceable.
11.24 PURPORTED ORAL AMENDMENTS. BORROWER EXPRESSLY ACKNOWLEDGES
THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR
MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT IT
WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR
WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE AGENT OR ANY BANK THAT DOES NOT
COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR
SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
XXXXXX ELECTRONICS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Cacciatone
--------------------------------------
Its: CEO & President
--------------------------------
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Its: CFO
--------------------------------
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Address for the foregoing:
Xxxxxx Electronics, Inc.
0000 Xxxxxxx Xxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
FIRST INTERSTATE BANK OF CALIFORNIA,
as Agent
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
Vice President
Address:
First Interstate Bank of California
000 Xxxxxxxx Xxxxxxxxx, X00-00
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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FIRST INTERSTATE BANK OF CALIFORNIA,
as a Bank
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx
Vice President
Address:
First Interstate Bank of California
Los Angeles Commercial Banking Center
000 Xxxxxxxx Xxxxxxxxx, X00-00
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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