1
Exhibit 10.22
================================================================================
CREDIT AGREEMENT
DATED AS OF FEBRUARY 19, 1997
BETWEEN
PLANTRONICS, INC.
AND
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
================================================================================
2
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(b) The Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(c) Certain Common Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(d) Performance; Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(e) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(g) Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(h) Independence of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(i) Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.03 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE II
THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . 29
2.01 Amounts and Terms of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.02 Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.03 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.04 Conversion and Continuation Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.05 Voluntary Termination or Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.06 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.07 Mandatory Prepayments; Mandatory Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.08 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.09 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.10 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.11 Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.12 Payments by the . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE III
THE LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . 35
3.01 The Letter of Credit Subfacility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.02 Issuance, Amendment and Renewal of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.03 Drawings and Reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.04 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.05 Cash Collateral Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.06 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.07 Uniform Customs and Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . . . . . . . 40
4.01 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.02 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.03 Increased Costs and Reduction of Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.04 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.05 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.06 Certificate of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE V
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 44
5.01 Conditions of Effectiveness of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(a) Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(b) Incumbency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(c) Articles of Incorporation; By-laws and Good Standing . . . . . . . . . . . . . . . . . . . . . 44
(d) Payment of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(e) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(f) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(g) Prior Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(h) Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.02 Conditions to All Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(a) Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(b) Continuation of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 45
(c) No Existing Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(d) No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VI
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . 46
6.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.02 Corporate Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.03 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.04 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.06 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.07 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.08 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.10 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.11 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.12 Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.13 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ii
4
Section Page
6.15 Copyrights, Patents, Trademarks and Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.16 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.18 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VII
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 52
7.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.02 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.04 Preservation of Corporate Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.05 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.06 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.07 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.08 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.09 Inspection of Property and Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.10 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.11 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.12 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.13 Internal Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.14 Board Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VIII
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 58
8.01 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.02 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.03 Consolidations and Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.04 Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.05 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.06 Limitation on Indebtedness; Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.07 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.08 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.09 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.10 Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.11 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.12 Net Funded Debt to EBITDA Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.13 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.14 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.15 Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.16 Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.17 Amendments to Senior Note Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
iii
5
Section Page
ARTICLE IX
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 72
9.01 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(a) Non-Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(b) Representation or Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(c) Specific Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(d) Other Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(e) Cross-Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(f) Insolvency; Voluntary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(g) Involuntary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(h) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(i) Monetary Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(j) Non-Monetary Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(k) Invalidity of Company Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.03 Rights Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 76
10.01 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.04 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.05 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
(a) General Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
(b) Survival; Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.06 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.07 Assignments, Participations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.08 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.09 Automatic Debits of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.12 No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.13 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.14 Governing Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.15 Arbitration; Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(a) Mandatory Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(b) Judicial Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(c) Provisional Remedies and Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.16 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
iv
6
SCHEDULES
Schedule 6.05 Litigation
Schedule 6.06 ERISA Matters
Schedule 6.10 Permitted Liabilities
Schedule 6.15 Intellectual Property Matters
Schedule 6.16 Subsidiaries and Equity Investments
Schedule 8.01 Permitted Liens
Schedule 8.04 Permitted Investments
Schedule 8.06 Permitted Indebtedness and Contingent Obligations
EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B Notice of Conversion/Continuation
Exhibit C Compliance Certificate
Exhibit D Form of Legal Opinion
Exhibit E Form of L/C Applications
Exhibit F Form of L/C Amendment Applications
v
7
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of February 19, 1997, between
Plantronics, Inc., a Delaware corporation (the "Company") and Bank of America
National Trust and Savings Association (the "Bank").
WHEREAS, the Bank has agreed to make available to the Company a
revolving credit facility with a letter of credit subfacility upon the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Defined Terms. In addition to the terms defined elsewhere in
this Agreement, the following terms have the following meanings:
"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an Acquisition from such Person, or (b)
existing at the time such Person becomes a Subsidiary of any other
Person.
"Acquiree" has the meaning specified in subsection 8.05.
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person (other than a Person that is a Subsidiary of the Company), or
of any business or division of a Person (other than a Person that is a
Subsidiary of the Company), (b) the acquisition, of in excess of 50%
of the capital stock, partnership interests or equity of any Person
(other than a Person that is a Subsidiary of the Company) or otherwise
causing any such Person to become a Subsidiary of the Company, or (c)
a merger or consolidation or any other combination with another Person
(other than a Person that is a Subsidiary of the Company) provided
that the Company or the Company's Subsidiary is the surviving entity
or the surviving or
1
8
resulting entity is under the control of, or under common control
with, the Company.
"Adjusted EBITDA" means, for any period, for the Company and
its Subsidiaries on a consolidated basis, determined in accordance
with GAAP, EBITDA for such period less Capital Expenditures incurred
in such period.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" means this Credit Agreement, as amended,
supplemented or modified from time to time.
"Applicable Rate" means, for any day, with respect to any
Offshore Rate Loan, CD Rate Loan or Base Rate Loan and the commitment
and standby letter of credit fees payable hereunder, as the case may
be, the applicable rate per annum set forth in the chart below under
the caption "Offshore Rate Margin," "CD Rate Margin," "Base Rate
Margin," "Commitment Fee," and "Standby Letter of Credit Fee," as the
case may be, based upon the respective Performance Levels in effect on
such day as set forth below.
CD Rate Offshore Base Rate Commit- Standby Letter
Margin Rate Margin Margin ment Fee of Credit Fee
Performance Xxxxx 0 0.6250% 0.5000% 0.0000% 0.1250% 0.5000%
-------------------
Net Funded Debt to EBITDA
Ratio
< 1.50 to 1.00
Performance Xxxxx 0 0.7500% 0.6250% 0.0000% 0.1500% 0.6250%
-------------------
Net Funded Debt to EBITDA
Ratio
< 2.00 to 1.00 but
> 1.50 to 1.00
-
Performance Xxxxx 0 1.1250% 1.0000% 0.0000% 0.2000% 1.0000%
-------------------
Net Funded Debt to EBITDA
Ratio
< 2.50 to 1.00 but
> 2.00 to 1.00
-
2
9
Performance Xxxxx 0 1.3750% 1.2500% 0.2500% 0.3000% 1.2500%
-------------------
Net Funded Debt to EBITDA
Ratio
> 2.50 to 1.00
-
The applicable Performance Level as of any day shall be
determined by reference to the Net Funded Debt to EBITDA Ratio as of
the last day of the fiscal quarter most recently ended on or prior to
such day, and any change in the Performance Level shall become
effective upon the delivery to the Bank of the Compliance Certificate
required to accompany the financial statements delivered pursuant to
Section 7.01 upon which such change is based, which Compliance
Certificate shall set forth in reasonable detail the calculation of
the Net Funded Debt to EBITDA Ratio.
Each change in the Applicable Rate shall apply during the
period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such
change. Notwithstanding the foregoing, at any time prior to the time
the first delivery of financial statements under Section 7.01 after
the Closing Date, the Applicable Rate shall be determined as if the
Net Funded Debt to EBITDA Ratio were at Performance Level 1.
"Approved Replacement Director" means (i) any director of the
Company that has been approved by two-thirds of the Board of Directors
as constituted at the beginning of any relevant period or by a
Permitted Holder or (ii) any director of the Company that has been
approved by two-thirds of those members of the Board of Directors, as
constituted at the beginning of any relevant period, entitled pursuant
to the Organization Documents of the Company to vote for such
director, together with any directors referred to in the preceding
clause (i) or previously approved in accordance with this clause (ii),
or by a Permitted Holder.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease or other disposition to any Person other than the
Company or a Subsidiary of the Company, in one transaction or a series
of related transactions, of (i) any Capital Stock of any Subsidiary of
the Company or (ii) any other Property of the Company or any
Subsidiary of the Company other than sales of inventory or other
assets in the Ordinary Course of Business and other than isolated
transactions which do not exceed $250,000, individually, or $500,000,
in the aggregate. For purposes of this definition, as used in Section
8.02, the term "Asset Sale" shall not include (x) any disposition of
the Property
3
10
of the Company or any Subsidiary of the Company that is governed under
and complies with Section 8.03 or any disposition of Investments of
the type described in subsections 8.04 (b), (c), (e) (f) and (l); or
(y) any issuance by the Company of its Capital Stock.
"Assignee" has the meaning specified in subsection 10.07(a).
"Attorney Costs" means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"Bank" means Bank of America National Trust and Savings
Association, a national banking association.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. Section 101, et seq.).
"Bank's Payment Office" means the address for payments set
forth on the signature page hereto in relation to the Bank or such
other address as the Bank may from time to time specify in accordance
with Section 10.02.
"Base Rate" means, for any day, the higher of:
(a) the rate of interest in effect for such day as
publicly announced from time to time by the Bank in San
Francisco, California, as its "reference rate." It is a rate
set by the Bank based upon various factors including the Bank's
costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced
rate; and
(b) 0.50% per annum above the latest Federal Funds
Rate.
Any change in the reference rate announced by the Bank shall
take effect at the opening of business on the day specified in the
public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the
Base Rate.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or San Francisco
are authorized or required by law to close and, if the applicable
Business Day relates to any
4
11
Offshore Rate Loan, means such a day on which dealings are carried on in
the applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Expenditures" means, for any period, the expenditures
(whether paid in cash or accrued as a liability, including the portion
of Capital Leases that is capitalized on the consolidated balance sheet
of the Company and its Subsidiaries, but excluding capitalized interest
and items paid in cash that had been accrued and counted as a Capital
Expenditure in a prior period) by the Company and its Subsidiaries
during that period that are or should be included in "capital
expenditures", "additions to property, plant or equipment" or comparable
items, determined in accordance with GAAP in the statement of cash flow
of the Company and its Subsidiaries.
"Capital Lease" has the meaning specified in the definition of
"Capital Lease Obligations."
"Capital Lease Obligations" means all monetary obligations of
the Company or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, is classified as a capital
lease ("Capital Lease"), and, for the purpose of this Agreement, the
amount of such obligations at any date shall be the capitalized amount
thereof at such date, determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents
(however designated and whether voting or non-voting) of, such Person's
capital stock (including any partnership interest), whether outstanding
on the Closing Date or issued after the Closing Date, and any and all
rights, warrants or options exchangeable for or convertible into such
capital stock.
"Cash Collateralize" means to pledge and deposit with or deliver
to the Bank as collateral for the Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to
the Bank. Derivatives of such term shall have corresponding meaning.
The Company hereby grants the Bank a security interest in all such cash
5
12
and deposit account balances. Cash collateral shall be maintained in
blocked, non-interest-bearing deposit accounts at the Bank.
"Cash Equivalents" means:
(a) any evidence of Indebtedness with a maturity of 365
days or less issued or directly and fully guaranteed or insured
by the United States or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is
pledged in support thereof);
(b) certificates of deposit or acceptances with a
maturity of 365 days or less of any financial institution that
is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than
$100,000,000;
(c) commercial paper with a maturity of 365 days or
less issued by a corporation (other than an Affiliate of the
Company) organized under the laws of any state of the United
States or the District of Columbia and rated at least A-1 by
Standard & Poor's Corporation or P-1 by Xxxxx'x Investors
Services, Inc.;
(d) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States government or
issued by any agency thereof and backed by the full faith and
credit of the United States government, in each case maturing
within one year from the date of acquisition, provided that the
terms of such agreements comply with the guidelines set forth in
the Federal Financial Agreements of Depository Institutions with
Securities and Others, as adopted by the Comptroller of the
Currency of the United States;
(e) deposit accounts maintained with financial
institutions referred to in the preceding clause (b); and
(f) investments in mutual funds which invest
exclusively in items described in the preceding clauses (a)
through (e) above.
"Cash Interest Expense" means, for any period, on a consolidated
basis, total interest expense for the period (including all commissions,
discounts, fees and other charges in connection with standby letters of
credit and
6
13
similar instruments) for the Company and its Subsidiaries, less non-cash
items included in such interest expense (including any amortization of
discount or interest expense not payable in cash).
"CD Rate" means, for each Interest Period in respect of any CD
Rate Loans, the rate of interest (rounded upward to the nearest 1/100th
of 1%) determined pursuant to the following formula:
CD Rate = Certificate of Deposit Rate + Assessment
1.00 - Reserve Percentage Rate
Where:
"Assessment Rate" means for any day of any Interest
Period for CD Rate Loans, the rate determined by the Bank as
equal to the annual assessment rate in effect on such day that
is payable to the FDIC by a member of the Bank Insurance Fund
that is classified as adequately capitalized and within
supervisory subgroup "A" (or a comparable successor assessment
risk classification within the meaning of 12 C.F.R. Section
327.3) for insuring time deposits at offices of such member in
the United States, or, in the event that the FDIC shall at any
time hereafter cease to assess time deposits based upon such
classifications or successor classifications, equal to the
maximum annual assessment rate in effect on such day that is
payable to the FDIC by commercial banks (whether or not
applicable to the Bank) for insuring time deposits at offices of
such banks in the United States.
"Certificate of Deposit Rate" means for any Interest
Period for CD Rate Loans the rate of interest per annum
determined by the Bank to be the arithmetic mean (rounded upward
to the nearest 1/100th of 1%) of the rates notified to the Bank
as the rates of interest bid by two or more certificate of
deposit dealers of recognized standing selected by the Bank for
the purchase at face value of dollar certificates of deposit
issued by major United States banks, for a maturity comparable
to such Interest Period and in the approximate amount of the CD
Rate Loans to be made, at the time selected by the Bank on the
first day of such Interest Period.
"Reserve Percentage" means for any day for any Interest
Period for CD Rate Loans the maximum reserve
7
14
percentage (expressed as a decimal, rounded upward to the
nearest 1/100th of 1%), as determined by the Bank, in effect on
such day (including any ordinary, marginal, emergency,
supplemental, special and other reserve percentages) prescribed
by the Federal Reserve Board for determining the maximum
reserves to be maintained by member banks of the Federal Reserve
System with deposits exceeding $1,000,000,000 for new
non-personal time deposits for a period comparable to such
Interest Period and in an amount of $100,000 or more.
"CD Rate Loan" means a Loan that bears interest based on the CD
Rate.
"CERCLA" has the meaning specified in the definition of
"Environmental Laws."
"Change of Control" means the occurrence, after the date of this
Agreement, of any of the following: (i) the direct or indirect sale,
lease, exchange or other transfer of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole, to any
Person or group of Persons acting in concert as a partnership or other
group (a "group of persons"), other than a Permitted Holder; (ii) the
merger or consolidation of the Company with or into another corporation
with the effect that a Person or group of persons (such Person or group
of persons, the "Acquiring Persons"), other than Permitted Holders, has
become the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the surviving Person of such merger or
consolidation or the corporation resulting from such merger or
consolidation representing 35% or more of the combined voting power of
the then outstanding securities of such surviving or resulting Person,
as the case may be, ordinarily (and apart from rights arising under
special circumstances) having the right to vote in the election of
directors, provided that such a merger or consolidation shall not be a
Change of Control if, after giving effect to such merger or
consolidation, Permitted Holders are then the beneficial owner of
securities of such surviving Person representing combined voting power
in excess of the combined voting power of such securities as to which
the Acquiring Persons have become the beneficial owner; (iii) after
giving effect to the changes in the composition of the Board of
Directors of the Company contemplated by the Restructure (such changes,
the "Contemplated Change"), a further change to the composition of such
Board of Directors, over a two-year period (or such shorter period as
may then have elapsed following the Contemplated Change), such that the
directors
8
15
who constituted such Board of Directors at the beginning of such period,
together with all Approved Replacement Directors elected since the
beginning of such period, shall cease to constitute a majority of such
Board of Directors; and (iv) a Person or group of persons (such Person
or group of persons, the "Purchasers"), other than Permitted Holders,
shall, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, have become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing 35% or more of the combined
voting power of the then outstanding securities of the Company
ordinarily (and apart from rights accruing under special circumstances)
having the right to vote in the election of directors, provided that
such a change of ownership shall not be a Change of Control if, after
giving effect to such change, Permitted Holders are then the beneficial
owner of securities of the Company representing combined voting power in
excess of the combined voting power of such securities as to which the
Purchasers have become the beneficial owner.
"Closing Date" means the date on which all conditions precedent
set forth in Section 5.01 are satisfied or waived by the Bank.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any regulations promulgated thereunder.
"Commitment" has the meaning specified in subsection 2.01(a).
"Company Documents" means this Agreement, the L/C- Related
Documents and any other consents, waivers and other agreements and
instruments entered into by the Company with (or in favor of) the Bank
pursuant to the requirements of this Agreement or the L/C-Related
Documents.
"Compliance Certificate" means a certificate, substantially in
the form of Exhibit C, executed and delivered on behalf of the Company
by a Responsible Officer.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to any Person for any period, the ratio of the aggregate amount of
Adjusted EBITDA plus Capital Expenditures incurred in such period of
such Person for the four full fiscal quarters for which financial
information in respect thereof is available immediately preceding the
date of the transaction (the "Transaction Date") giving rise to
9
16
the need to calculate the Consolidated Fixed Charge Coverage Ratio (such
four full fiscal quarter period being referred to herein as the "Four
Quarter Period") to the aggregate amount of Consolidated Fixed Charges
of such Person for the Four Quarter Period. In addition to and without
limitation of the foregoing, for purposes of this definition, "Adjusted
EBITDA" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma basis for the period of such calculation
to, without duplication, (a) any incurrences, and permanent repayments
out of the proceeds of such incurrences, of Indebtedness of such Person
or any of its Subsidiaries occurring during the period commencing on the
first day of the Four Quarter Period to and including the Transaction
Date (the "Reference Period"), including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such
calculation, as if such incurrence or repayment, as the case may be,
occurred on the first day of the Reference Period, but excluding
Indebtedness incurred or repaid under any revolving credit or similar
facility pursuant to which amounts incurred may be repaid and reborrowed
for working capital purposes (it being understood that such incurrences
and repayments referred to in this exclusion are included in the
calculation of the "Consolidated Fixed Charge Coverage Ratio" on an
actual basis), unless a permanent reduction in the commitments is
effected by such repayment and (b) any Asset Sales or Acquisitions
(including, without limitation, any Acquisition giving rise to the need
to make such calculation as a result of such person or one of its
Subsidiaries (including any person who becomes a Subsidiary as a result
of the Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as if such
Asset Sale or Acquisition occurred on the first day of the Reference
Period. Without limiting the generality of the foregoing, in making any
calculation of the Consolidated Fixed Charge Coverage Ratio for any
period commencing prior to January 26, 1994, the recapitalization which
took effect on such date shall be deemed to have occurred on the first
day of the Reference Period. Furthermore, in calculating "Consolidated
Interest Expense" and "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio," (i) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction
Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of
interest on such Indebtedness in effect on the Transaction Date; (ii) if
interest on any Indebtedness actually incurred on the Transaction Date
may optionally be
10
17
determined at an interest rate based upon a factor of a prime or similar
rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Reference Period; and (iii) notwithstanding
clause (i) and (ii) above, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements
relating to Interest Rate Protection Obligations, shall be deemed to
have accrued at the rate per annum resulting after giving effect to such
agreements. If such Person or any of its Subsidiaries directly or
indirectly enters into a Guaranty Obligation with respect to
Indebtedness of a third person (other than Indebtedness of a
consolidated Subsidiary of such person or with respect to a consolidated
Subsidiary of the Company other than Indebtedness of the Company), the
above clause shall give effect to the incurrence of such Guaranty
Obligation as if such person or such Subsidiary had directly incurred or
otherwise assumed such Guaranty Obligation.
"Consolidated Fixed Charges" means, with respect to any Person
for any period, the amounts for such period of (i) Consolidated Interest
Expense and (ii) the aggregate amount of dividends and other
distributions paid or accrued during such period in respect of
Disqualified Capital Stock of such Person and its Subsidiaries on a
consolidated basis; provided that if, during such period, such Person or
any of its Subsidiaries shall have made any Asset Sales or Acquisitions,
Consolidated Fixed Charges for such Person and its Subsidiaries for such
period shall be adjusted to give pro forma effect to the Consolidated
Fixed Charges directly attributable to the assets which are the subject
of such Asset Sales or Acquisitions during such period.
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the sum of (i) the interest
expense of such Person and its Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP, including,
without limitation, (a) any amortization of debt discount, (b) the net
cost under Interest Rate Protection Obligations (including any
amortization of discounts), (c) the interest portion of any deferred
payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing and (e) all accrued interest, (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid
or accrued by such person and its Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP and (iii)
one-third of the amount of all lease
11
18
payments (other than Capitalized Lease Obligations) paid, accrued and/or
scheduled to be paid or accrued by such person and its Subsidiaries
during such period as determined on a consolidated basis in accordance
with GAAP.
"Contingent Obligation" means, as to any Person, (a) any
Guaranty Obligation of that Person; and (b) any direct or indirect
obligation or liability, contingent or otherwise, of that Person, (i) in
respect of any Surety Instrument issued for the account of that Person
or as to which that Person is otherwise liable for reimbursement of
drawings or payments; provided, that the amount in respect thereto to be
included as a Contingent Obligation shall mean only that portion of such
obligation or liability as is contingent, (ii) to purchase any
materials, supplies or other Property from, or to obtain the services
of, another Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other
Property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other Property is ever made or
tendered, or such services are ever performed or tendered, or (iii) in
respect of any Interest Rate Protection Obligation that is not entered
into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person. The amount of any Contingent
Obligation shall (subject, in the case of Guaranty Obligations, to the
last sentence of the definition of "Guaranty Obligation") be deemed
equal to the maximum reasonably anticipated liability in respect
thereof, and shall, with respect to item (b)(iii) of this definition, be
marked to market on a current basis.
"Contractual Obligations" means, as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or
any of its Property is bound.
"Conversion Date" means any date on which the Company converts a
Base Rate Loan to an Offshore Rate Loan or a CD Rate Loan; a CD Rate
Loan to an Offshore Rate Loan or a Base Rate Loan; or an Offshore Rate
Loan to a CD Rate Loan or a Base Rate Loan.
"Credit Extension" means and includes (a) the making of any Loan
hereunder, and (b) the Issuance of any Letter of Credit hereunder.
12
19
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any of its Subsidiaries against
fluctuations in currency value.
"Default" means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would (if not cured or otherwise
remedied) constitute an Event of Default.
"Disqualified Capital Stock" means, with respect to any Person,
any 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 exchangeable
for Indebtedness, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the Revolving Termination Date.
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"Domestic Subsidiary" means any Subsidiary that is organized
under the laws of the United States or any state thereof.
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) the net income (or net loss) for such period, plus
(b) all amounts treated as expenses for depreciation and interest and
the amortization of intangibles of any kind to the extent included in
the determination of such net income (or loss), plus (c) all accrued
taxes on or measured by income to the extent included in the
determination of such net income (or loss), plus (d) all non-cash
expenses or charges for management stock compensation to the extent
included in the determination of such net income (or loss), provided,
however, that net income (or loss) shall be computed for these purposes
without giving effect to extraordinary losses or extraordinary gains.
"Effective Amount" means (i) with respect to any Loans on any
date, the aggregate outstanding principal amount thereof after giving
effect to any Loans made and prepayments or repayments of Loans
occurring on such date, and (ii) with respect to any outstanding L/C
Obligations on any date, the amount of such L/C Obligations on such date
after giving effect to any Issuances of Letters of Credit
13
20
occurring on such date and any other changes in the aggregate amount of
the L/C Obligations as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Letters of
Credit or any reductions in the maximum amount available for drawing
under Letters of Credit taking effect on such date.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural
resources damage, or otherwise alleging liability or responsibility for
damages (punitive or otherwise), cleanup, removal, remedial or response
costs, restitution, civil or criminal penalties, injunctive relief, or
other type of relief, resulting from or based upon the presence,
placement, discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or non-sudden,
accidental or non-accidental, placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from
Property, whether or not owned by the Company.
"Environmental Laws" means all federal, state or local laws,
statutes, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental matters; including
the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 ("CERCLA"), the Clean Air Act, the Federal Water Pollution
Control Act of 1972, the Solid Waste Disposal Act, the Federal Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act, the California
Hazardous Waste Control Law, the California Solid Waste Management,
Resource, Recovery and Recycling Act, the California Water Code and the
California Health and Safety Code.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and regulations promulgated
thereunder.
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in
14
21
Section 4001(a)(2) of ERISA) or a cessation of operations which is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) the
filing of a notice of intent to terminate, the treatment of a plan
amendment as a termination under Section 4041 or 4041A of ERISA or the
commencement of proceedings by the PBGC to terminate a Pension Plan
subject to Title IV of ERISA; (d) a failure by the Company to make
required contributions to a Pension Plan or other Plan subject to
Section 412 of the Code; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Company; or (g) an application for a funding
waiver or an extension of any amortization period pursuant to Section
412 of the Code with respect to any Pension Plan.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances
specified in Section 9.01.
"Exchange Act" means the Securities and Exchange Act of 1934,
and the rules and regulations promulgated thereunder.
"Fair Market Value" means, with respect to any Property, the
price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction. Fair Market Value shall be determined by the Company
acting in good faith; provided that, in the case of any transaction in
excess of $500,000, Fair Market Value shall be determined by the Board
of Directors of the Company acting in good faith and shall be evidenced
by a certified copy of a resolution of such Board of Directors delivered
to the Bank.
"FDIC" means the Federal Deposit Insurance Corporation, or any
entity succeeding to any of its principal functions.
"Federal Funds Rate" means, for any period, the rate per annum
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 day opposite the
caption "Federal Funds (Effective)". If on any relevant day such rate
is not yet published in H.15(519), the rate for such
15
22
day 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 day under the caption "Federal Funds
Effective Rate". If on any relevant day the appropriate rate for such
previous day is not yet published in either H.15(519) or the Composite
3:30 p.m. Quotations, the rate for such day will be the arithmetic mean
as determined by the Bank of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York time) on
that day by each of three leading brokers of Federal funds transactions
in New York City selected by the Bank.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any entity succeeding to any of its principal
functions.
"FDIC" means the Federal Deposit Insurance Corporation, or any
entity succeeding to any of its principal functions.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person that is not a Domestic Subsidiary of such
Person.
"GAAP" means generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or
in such other statements by such other entity as may be in general use
by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Guaranty Obligation" means, as applied to any Person, any
obligation of that Person guaranteeing or intending to
16
23
guarantee any Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person, whether or not
contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect
security therefor, or (b) to advance or provide funds (i) for the
payment or discharge of any such primary obligation, or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of
income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation, or (d) otherwise to
assure or hold harmless the holder of any such primary obligation
against loss in respect thereof; in each case (a), (b), (c) or (d),
including arrangements wherein the rights and remedies of the holder of
the primary obligation are limited to repossession or sale of certain
Property of such Person ("Non-Recourse Guarantees"). The amount of any
Guaranty Obligation shall be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof (the "Guaranty
Amount"); provided that the amount of any Guaranty Obligation which is a
Non-Recourse Guarantee shall be the lesser of the Guaranty Amount of
such Guaranty Obligation or the Fair Market Value of the Property
subject to such Non-Recourse Guaranty.
"Hazardous Materials" means all those substances which are
regulated by, or which may form the basis of liability under, any
Environmental Law, including all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste,
hazardous constituent, special waste, hazardous substance, hazardous
material, or toxic substance, or petroleum or petroleum derived
substance or waste.
"Indebtedness" of any Person means without duplication, (a) all
indebtedness of such Person for borrowed money; (b) all obligations
issued, undertaken or assumed as the deferred purchase price of property
or services; (c) all non-contingent reimbursement or payment obligations
with respect to Surety Instruments; (d) all obligations evidenced by
notes, bonds, debentures or similar instruments issued by such Person,
including obligations so evidenced incurred in connection with the
acquisition of property, assets or
17
24
businesses; (e) all indebtedness of such Person created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by such
Person (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or
sale of such property); (f) all Capital Lease Obligations of such
Person; (g) all net obligations with respect to Interest Rate Protection
Obligations and Currency Agreements of such Person; (h) all indebtedness
referred to in clauses (a) through (g) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person (but only to the
extent of the lesser of such Indebtedness or the fair market value of
the Property subject to such Lien, where such Lien secures a second
person's indebtedness), even though such Person has not assumed or
become liable for the payment of such Indebtedness; and (i) all Guaranty
Obligations of such Person in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above;
provided, that Indebtedness shall not include trade payables and accrued
expenses (including those between the Company and its Subsidiaries), in
each case arising in the Ordinary Course of Business.
"Indemnified Person" has the meaning specified in subsection
10.05(a).
"Indemnified Liabilities" has the meaning specified in
subsection 10.05(a).
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in each case (a) and (b)
undertaken under U.S. Federal, State or foreign law, including the
Bankruptcy Code.
"Interest Coverage Ratio" means, as of any date of
determination, in respect of the Company and its Subsidiaries on a
consolidated basis, (a) Adjusted EBITDA divided by (b) Cash Interest
Expense, said amounts being calculated on a rolling four-quarter basis
(all to and
18
25
including the then-most recent quarter end for which the Company has
delivered to the Bank a Compliance Certificate).
"Interest Rate Protection Obligations" means the obligations of
any Person pursuant to any arrangement with any other Person whereby,
directly or indirectly, such Person is entitled to receive from time to
time periodic payments calculated by applying either a floating or a
fixed rate of interest on a stated notional amount in exchange for
periodic payments made by such person calculated by applying a fixed or
floating rate of interest on the same notional amount and shall include,
without limitation, interest rate swaps, caps, floors, collars and
similar agreements.
"Interest Payment Date" means, with respect to any CD Rate Loan
or Offshore Rate Loan, the last day of each Interest Period applicable
to such Loan and, with respect to Base Rate Loans, the last Business Day
of each calendar quarter and each date a Base Rate Loan is converted
into an Offshore Rate Loan or a CD Rate Loan; provided, however, that if
any Interest Period for a CD Rate Loan or Offshore Rate Loan exceeds 90
days or three months, respectively, the date which falls 90 days or
three months (as the case may be) after the beginning of such Interest
Period and after each Interest Payment Date thereafter shall also be an
Interest Payment Date.
"Interest Period" means, (a) with respect to any Offshore Rate
Loan, the period commencing on the Business Day the Loan is disbursed or
continued or on the Conversion Date on which the Loan is converted to
the Offshore Rate Loan and ending on the date one, two, three or six
months thereafter, as selected by the Company in its Notice of Borrowing
or Notice of Conversion/Continuation; and (b) with respect to any CD
Rate Loan, the period commencing on the Business Day the CD Rate Loan is
disbursed or continued or on the Conversion Date on which a Loan is
converted to the CD Rate Loan and ending 30, 60, 90 or 180 days
thereafter, as selected by the Company in its Notice of Borrowing or
Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period pertaining to an
Offshore Rate Loan or CD Rate Loan would otherwise end on a day
which is not a Business Day, that Interest Period shall be
extended to the next succeeding Business Day unless, in the case
of an Offshore Rate Loan, the result of such extension would be
to carry such Interest Period into another calendar month, in
19
26
which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the date
set forth in clause (a) of the definition of "Revolving
Termination Date".
"Issue" means, with respect to any Letter of Credit, to issue or
to extend the expiry of, or to renew or increase the amount of, such
Letter of Credit; and the terms "Issued", "Issuing" and "Issuance" have
corresponding meanings.
"Joint Venture" means a single-purpose corporation, partnership,
joint venture or other similar legal arrangement (whether created
pursuant to contract in the case of a partnership or joint venture or
conducted through a separate legal entity) now or hereafter formed by
the Company or any of its Subsidiaries with another Person in order to
conduct a common venture or enterprise with such Person.
"L/C Amendment Application" means an application in
substantially the form of Exhibit F, or such other application form for
amendment of outstanding commercial or standby letters of credit as
shall at any time be in use by the Bank, as the Bank shall request.
"L/C Application" means an application in substantially the form
of Exhibit E, or such other application form for issuance of commercial
or standby letters of credit as shall at any time be in use by the Bank,
as the Bank shall request.
"L/C Commitment" means the commitment of the Bank to issue
Letters of Credit to the Company in an aggregate amount outstanding not
to exceed on any date $10,000,000, which commitment is a component of
(and not an addition to) the Commitment.
"L/C Obligations" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then
20
27
outstanding, plus (b) the amount of all unreimbursed drawings under all
Letters of Credit.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit.
"Lending Office" means the office or offices of the Bank
specified on the signature page hereto, or such other office or offices
of the Bank as it may from time to time specify to the Company.
"Letter of Credit" means any commercial or standby letter of
credit issued by the Bank pursuant to subsection 2.01(b).
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory
or other) or other similar preferential arrangement, all of the
foregoing for security purposes, of any kind or nature whatsoever
(including those created by, arising under or evidenced by any
conditional sale or other title retention agreement, the interest of a
lessor under a Capital Lease, any financing lease having substantially
the same economic effect as any of the foregoing, or the filing of any
financing statement with respect to any of the foregoing naming the
owner of the asset to which such lien relates as debtor, under the UCC
or any comparable law) and any contingent or other agreement to provide
any of the foregoing, but not including the interest of a lessor under
an Operating Lease.
"Loan" means an extension of credit by the Bank to the Company
pursuant to subsection 2.01(a), and may be a Base Rate Loan, CD Rate
Loan or an Offshore Rate Loan.
"Loan Documents" means this Agreement, the L/C-Related Documents
and any and all other consents, waivers, agreements, instruments and
certificates delivered to the Bank in connection herewith or therewith.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, any of the operations, business,
properties or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole; (b) a material impairment of the ability
of the
21
28
Company to perform its payment obligations under any of the Company
Documents; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability of any Company Document.
"Material Subsidiary" means, with respect to any Person, a
Subsidiary of such Person that would, on a pro forma basis after giving
effect to any Transfer permitted hereunder, constitute a "significant
subsidiary" as such term is defined under Rule 1.02(v) of Regulation S-X
of the SEC.
"Net Funded Debt" means, as of any date of determination, (i)
Indebtedness (other than the types described in clause (i) of the
definition thereof) and, without duplication, all Guaranty Obligations
with respect to any such Indebtedness of another Person less (ii) cash
and Cash Equivalents, to the extent not subject to any Lien, and to the
extent exceeding in aggregate the amount of $5,000,000, in each case on
a consolidated basis for the Company and its Subsidiaries.
"Net Funded Debt to EBITDA Ratio" means, as of any date of
determination, the ratio of Net Funded Debt to EBITDA, calculated on a
rolling four-quarter basis (to and including the then-most recent
quarter end for which the Company has delivered to the Bank a Compliance
Certificate).
"Net Proceeds" means, in the case of any sale, lease, conveyance
or other disposition of Property (including a sale/leaseback), the gross
consideration received in cash, checks or other cash equivalent
financial instruments (including Cash Equivalents) as and when received
by the Person making the disposition from such disposition (other than
liabilities assumed directly or indirectly by the buyer), less (i) the
amount of actual liabilities for taxes reasonably anticipated by the
Company to be attributable to such disposition; (ii) the amount of any
reserves against any liabilities associated with such disposition
required to be retained by the Person making such disposition after the
disposition in conformity with GAAP (but only for the period required to
be retained as a reserve); (iii) the amount of Indebtedness required to
be repaid or defeased under the terms thereof or under the terms of the
disposition in connection with the disposition; and (iv) the amount of
fees and commissions payable to Persons other than the Person making the
disposition and other costs and expenses related to the disposition that
are to be paid in cash, in each case only to the extent customarily
borne by a seller in an arm's-length transaction; provided that gross
consideration
22
29
shall not include the amount of intercompany indebtedness forgiven in
connection with the disposition.
"Notice of Borrowing" means a notice given by the Company to the
Bank pursuant to Section 2.03, in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice given by the
Company to the Bank pursuant to Section 2.04, in substantially the form
of Exhibit B.
"Notice of Lien" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's
office, central filing office or other Governmental Authority for the
purpose of evidencing, creating, perfecting or preserving the priority
of a Lien securing obligations owing to a Governmental Authority.
"Obligations" means all Loans, L/C Obligations of the type
described in clause (b) of the definition thereof, advances, debts,
liabilities, and other payment obligations (including any obligation to
Cash Collateralize), owing by the Company to the Bank or any other
Person required to be indemnified under any Loan Document, that arises
under any Loan Document, whether arising by reason of an extension of
credit, loan, guaranty, indemnification or in any other manner, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and
however acquired.
"Offshore Rate" means, for each Interest Period in respect of
any Offshore Rate Loan, an interest rate per annum (rounded upward to
the nearest 1/16th of 1%) determined pursuant to the following formula:
Offshore Rate = IBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for
any Interest Period the maximum reserve percentage (expressed as
a decimal, rounded upward to the nearest 1/100th of 1%) in
effect such day (whether or not applicable to the 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
23
30
(currently referred to as "Eurocurrency liabilities") having a
term comparable to such Interest Period; and
"IBOR" means the rate of interest per annum determined
by the Bank as the rate at which dollar deposits in the
approximate amount of the Offshore Rate Loan and having a
maturity comparable to such Interest Period would be offered by
the Bank's Grand Cayman Branch, Grand Cayman B.W.I. (or such
other office as may be designated for such purpose by the Bank),
to major banks in the offshore dollar interbank market upon
request of such banks at approximately 11:00 a.m. (New York City
time) two Business Days prior to the commencement of such
Interest Period.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Operating Lease" means, as applied to any Person, any lease of
Property which is not a Capital Lease.
"Ordinary Course of Business" means, in respect of any
transaction involving the Company or any Subsidiary of the Company, the
ordinary course of such Person's business, as undertaken by such Person
in good faith and not for the specific purpose of evading any covenant
or restriction in any Company Document.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Other Senior Debt" means Indebtedness evidenced by notes issued
pursuant to the Senior Note Indenture and other Indebtedness of the
Company ranking pari passu in right of payment with the Obligations and
which contains provisions requiring that the Net Proceeds of any Asset
Sale be used to offer to purchase or repay such Indebtedness when
Obligations are required to be repaid so long as such provisions are not
inconsistent with this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any of its principal functions under ERISA.
24
31
"PBV" means Plantronics B.V., a Netherlands corporation, and a
Wholly-Owned Subsidiary of the Company.
"Participant" has the meaning specified in subsection 10.07(b).
"Pension Plan" means a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which the Company sponsors or
maintains, or to which it makes, is making, or is obligated to make,
contributions, or in the case of a multiple employer plan (as described
in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five plan years.
"Permitted Holders" means Citicorp Venture Capital Ltd. and its
Affiliates.
"Permitted Liens" has the meaning specified in Section 8.01.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make, contributions and
includes any Pension Plan.
"Plantronics UK" means Plantronics Limited, a United Kingdom
corporation, and a Wholly-Owned Subsidiary of the Company.
"Plantronics Germany" means Plantronics Gmbh, a German
Corporation, and a Wholly-Owned Subsidiary of the Company.
"Prior Credit" means all credit extended by the Bank under the
Prior Facility.
"Prior Facility" means the Amended and Restated Credit Agreement
among the Bank, the Company and Xxxxxx Equipment Corporation dated as of
August 25, 1994, effective as of July 5, 1994, as amended.
"Property" means any estate or interest in any kind of property
or asset, whether real, personal or mixed, and whether tangible or
intangible.
25
32
"Purchase Money Indebtedness" means any Indebtedness incurred in
the Ordinary Course of Business by a Person to finance the cost
(including the cost of construction) of an item of Property, the
principal amount of which Indebtedness does not exceed the sum of (i)
100% of such cost and (ii) reasonable fees and expenses of the Company
incurred in connection therewith.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of
its property is subject.
"Responsible Officer" means the chief executive officer, the
president, or the chief financial officer (or, if at the relevant time
there is no chief financial officer, the Senior General Counsel and
Secretary) of the Company, or any other officer having substantially the
same authority and responsibility or, with respect to compliance with
financial covenants, the chief financial officer (or, if at the relevant
time there is no chief financial officer, the Senior General Counsel and
Secretary) or the treasurer of the Company, or any other officer having
substantially the same authority and responsibility.
"Revolving Termination Date" means the earlier to occur of:
(a) February 18, 1998; and
(b) the date on which the Commitment shall terminate
in accordance with the provisions of this Agreement.
"Santa Xxxx Property" means those certain three buildings
containing an aggregate of approximately 160,000 square feet owned by
the Company and located in Santa Cruz, California.
"SEC" means the Securities and Exchange Commission, or any
entity succeeding to any of its principal functions.
26
33
"Senior Note Indenture" means that certain Indenture dated as of
January 15, 1994 between the Company, as issuer, and State Street Bank
and Trust Company of California, N.A., as trustee, pursuant to which the
Company has issued its 10.00% Senior Notes Due January 15, 2001 in the
original aggregate principal amount of $85,000,000, with an outstanding
aggregate principal amount as of the Closing Date of $65,050,000.
"Solvent" means, as to any Person at any time, that (a) the fair
value of the Property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for
purposes of Section 101(31) of the Bankruptcy Code and, in the
alternative, for purposes of the California Uniform Fraudulent Transfer
Act; (b) the present fair saleable value of the Property of such Person
is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay
its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of
business; and (d) such Person is not engaged in business or a
transaction for which such Person's property would constitute
unreasonably small capital.
"Subordinated Indebtedness" means any Indebtedness of the
Company which is by its terms subordinated in any manner in right of
payment to the Obligations.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than
50% of the voting stock or other equity interests (in the case of
Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the
Person, or a combination thereof.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"Tangible Net Worth" means, as of the date of determination, the
gross book value of the assets of the Company and its consolidated
Subsidiaries (exclusive of goodwill, licensing agreements, patents,
trademarks, trade names, organization expenses, treasury stock,
unamortized debt discount and premium, deferred charges and other like
27
34
intangibles) less all applicable reserves and liabilities (including
accrued and deferred income taxes and all liabilities whether or not by
their terms they are subordinated liabilities).
"UCC" means the Uniform Commercial Code as in effect in the
State of California.
"Unfunded Pension Liability" means the excess of a Pension
Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Pension Plan's assets, determined in accordance
with the assumptions used by the Plan's actuaries for funding the
Pension Plan pursuant to section 412 of the Code for the applicable plan
year.
"United States" and "U.S." each means the fifty states and the
District of Columbia comprising the United States of America.
"Wholly-Owned Domestic Subsidiary" means a Domestic Subsidiary
that is a Wholly-Owned Subsidiary.
"Wholly-Owned Subsidiary" means any Subsidiary of the Company,
100% of the Capital Stock of each class having ordinary voting power of
which, and 100% of the Capital Stock of every other class of which, in
each case (other than shares of Capital Stock representing any
director's qualifying shares or investments by foreign nationals
mandated by applicable law) is owned, beneficially and of record, at the
time as of which any determination is being made, by the Company, or by
one or more of the other Wholly-Owned Subsidiaries, or by a combination
thereof.
1.02 Other Interpretive Provisions.
(a) Defined Terms. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto. The meaning of defined terms shall be equally applicable to the
singular and plural forms of the defined terms. Terms (including uncapitalized
terms) not otherwise defined herein and that are defined in the UCC shall have
the meanings therein described.
(b) The Agreement. The words "hereof", "herein",
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection,
28
35
schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(d) Performance; Time. Whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be due or
required to be satisfied on a day other than a Business Day, such performance
shall be made or satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each
mean "to but excluding", and the word "through" means "to and including." If
any provision of this Agreement refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be interpreted to encompass any and all means, direct or indirect, of
taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) Laws. Unless otherwise expressly provided herein,
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending or replacing the
statute or regulation.
(g) Captions. The captions and headings of this Agreement
are for convenience of reference only and shall not affect the interpretation
of this Agreement.
(h) Independence of Provisions. The parties acknowledge
that this Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters, and
that such limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
29
36
(i) Interpretation. This Agreement is the result of
negotiations among and has been reviewed by counsel to the Bank and the
Company, and is the product of all parties hereto. Accordingly, this Agreement
and the other Loan Documents shall not be construed against the Bank merely
because of the Banks' involvement in the preparation of such documents and
agreements.
1.03 Accounting Principles.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitment.
(a) The Bank agrees, on the terms and conditions set forth
herein, to make Loans to the Company from time to time on any Business Day
during the period from the Closing Date to the Revolving Termination Date, in
an aggregate amount not to exceed at any time outstanding the amount of
$20,000,000 (such amount as the same may be reduced pursuant to Section 2.05 or
Section 2.07 or as a result of one or more assignments pursuant to Section
10.07, the "Commitment"); provided, however, that after giving effect to any
Loan, the Effective Amount of all Loans and all L/C Obligations shall not
exceed at any time the Commitment. Within the limits of the foregoing, and
subject to the other terms and conditions hereof, the Company may borrow under
this subsection 2.01(a), prepay pursuant to Section 2.06 and reborrow pursuant
to this subsection 2.01(a).
(b) The Bank agrees to provide a revolving letter of credit
subfacility to the Company within the Commitment, in accordance with the terms
and conditions of Article III and as otherwise provided herein.
(c) As of the Closing Date, all Prior Credit shall be deemed to
be credit extended hereunder (i.e. loans thereunder shall be deemed to be Loans
hereunder and letters of credit issued thereunder shall be deemed to be Letters
of Credit issued
30
37
hereunder) and shall be subject to the terms and conditions of this Agreement
and shall be a utilization of the Commitment.
2.02 Loan Accounts. The Loans and the L/C Obligations shall be
evidenced by one or more accounts maintained by the Bank in the ordinary course
of business. The accounts or records maintained by the Bank shall be prima
facie evidence of the amount of the Loans and L/C Obligations made by the Bank
to or for the account of the Company and the interest and payments thereon.
Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount
owing with respect to the Loans or L/C Obligations.
2.03 Procedure for Borrowing.
(a) Each Loan shall be made upon the irrevocable written
notice of the Company in the form of a Notice of Borrowing (which notice must
be received by the Bank prior to 9:00 a.m. (San Francisco time) (i) three
Business Days prior to the requested Borrowing date, in the case of Offshore
Rate Loans and CD Rate Loans, and (ii) on the requested Borrowing date, in the
case of Base Rate Loans, specifying:
(A) the amount of the Loan, which shall be in
an aggregate minimum principal amount of $500,000, in the case
of Offshore Rate Loans and CD Rate Loans, or $100,000 for Base
Rate Loans (provided that if there shall have been a partial
assignment to an Assignee pursuant to Section 10.07, the minimum
principal amount for Base Rate Loans shall be $500,000), or any
integral multiple of $100,000 in excess thereof;
(B) the requested Borrowing date, which shall
be a Business Day;
(C) whether the Loan is to be an Offshore Rate
Loan, a Base Rate Loan or a CD Rate Loan; and
(D) the duration of the Interest Period
applicable to the Loan included in such notice. If the Notice
of Borrowing shall fail to specify the duration of the Interest
Period for any CD Rate Loan or Offshore Rate Loan, such Interest
Period shall be 90 days or three months, respectively;
(b) After giving effect to any Loan, there shall not be
more than five different Interest Periods in effect.
31
38
2.04 Conversion and Continuation Elections.
(a) The Company may upon irrevocable written notice to the
Bank in accordance with subsection 2.04(b):
(i) elect to convert on any Business Day, any Base
Rate Loan or Loans (or any part thereof in an aggregate amount not less
than $500,000, or that is in an integral multiple of $100,000 in excess
thereof) into an Offshore Rate Loan or CD Rate Loan or;
(ii) elect to convert on the last day of the
applicable Interest Period any Offshore Rate Loan or CD Rate Loan having
an Interest Period maturing on such day (or any part thereof in an
amount not less than $100,000, or that is in an integral multiple of
$100,000 in excess thereof) into a Base Rate Loan; provided that if
there shall have been a partial assignment to an Assignee pursuant to
Section 10.07, the minimum principal amount which may be converted into
Base Rate Loans shall be $500,000 or any integral multiple of $100,000
in excess thereof; and provided, further, that after giving effect to
any partial conversion of an Offshore Rate Loan or CD Rate Loan into a
Base Rate Loan, the principal balance of such Offshore Rate Loan or CD
Rate Loan not so converted shall be not less than $500,000; or
(iii) elect to renew on the last day of the applicable
Interest Period any Offshore Rate Loan or CD Rate Loan having an
Interest Period maturing on such day (or any part thereof in an amount
not less than $500,000, or that is in an integral multiple of $100,000
in excess thereof);
provided, that if the amount of any CD Rate Loan or Offshore Rate Loan shall
have been reduced by payment, prepayment, or conversion of part thereof to be
less than $500,000, such CD Rate Loan or Offshore Rate Loan shall automatically
convert into a Base Rate Loan, and on and after such date the right of the
Company to convert such Loan into, an Offshore Rate Loan or a CD Rate Loan, as
the case may be, shall terminate.
(b) The Company shall deliver in writing a Notice of
Conversion/Continuation to be received by the Bank not later than 9:00 a.m.
(San Francisco time) at least (i) three Business Days in advance of the
Conversion Date or continuation date, if the Loans are to be converted into or
continued as Offshore Rate Loans or CD Rate Loans; and (ii) on the Conversion
Date or continuation date, if the Loans are to be converted into or renewed as
Base Rate Loans, specifying:
32
39
(A) the proposed Conversion Date or
continuation date;
(B) the aggregate amount of Loans to be
converted or renewed;
(C) the nature of the proposed conversion
or continuation; and
(D) the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period
applicable to any CD Rate Loan or Offshore Rate Loan, the Company has failed to
select timely a new Interest Period to be applicable to such CD Rate Loan or
Offshore Rate Loan, as the case may be, or if any Default or Event of Default
shall then exist, the Company shall be deemed to have elected to convert such
CD Rate Loan or Offshore Rate Loan into a Base Rate Loan effective as of the
expiration date of such current Interest Period.
(d) Unless the Bank shall otherwise agree, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued beyond the end of the applicable Interest
Period as an Offshore Rate Loan or a CD Rate Loan.
(e) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any Loans,
there shall not be more than five different Interest Periods in effect.
2.05 Voluntary Termination or Reduction of Commitment. The Company
may, upon not less than five Business Days' prior written notice to the Bank,
terminate the Commitment or permanently reduce the Commitment by an aggregate
minimum amount of $1,000,000 or any multiple of $100,000 in excess thereof (or
of the balance of the Commitment, if less); provided that no such reduction or
termination shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the (i)
then-Effective Amount of the Loans plus L/C Obligations would exceed the amount
of the Commitment then in effect; or (ii) then-Effective Amount in respect of
L/C Obligations would exceed the L/C Commitment; provided, further, that once
reduced in accordance with this Section 2.05, the Commitment may not be
increased. All accrued commitment fees to, but not including the effective
date of any reduction or termination of Commitment with respect to the portion
thereof being so reduced or terminated, shall be paid on
33
40
the effective date of such reduction or termination. Any notice of commitment
reduction or termination shall specify to what extent (if any) to which any
such reduction shall be applied to reduce as well the L/C Commitment. Any
termination of all of the Commitment shall terminate as well the L/C
Commitment.
2.06 Optional Prepayments. Subject to Section 4.04, the Company may, at
any time or from time to time, upon at least three Business Days' written
notice to the Bank in the case of Offshore Rate Loans or CD Rate Loans, or
notice given no later than 10:00 a.m. on the date of prepayment in the case of
Base Rate Loans, prepay Loans in whole or in part, in amounts of $500,000 or
any multiple of $100,000 in excess thereof in the case of Offshore Rate Loans
or CD Rate Loans, or in amounts of $100,000 or any multiple in excess of
$100,000 thereof in the case of Base Rate Loans. Such notice of prepayment
shall specify the date and amount of such prepayment and whether such
prepayment is of Base Rate Loans, CD Rate Loans or Offshore Rate Loans, or any
combination thereof. Such notice shall not thereafter be revocable by the
Company. If such notice is given by the Company, the Company shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
4.04.
2.07 Mandatory Prepayments; Mandatory Reductions.
(a) Change of Control. No later than 45 days after the
Bank has received notice of a Change of Control pursuant to subsection 7.03(i)
(or upon and at any time after the occurrence of any Change of Control if the
Company is in default of its obligations to deliver such a notice), the Bank
may by notice to such effect to the Company (i) declare the Commitment
(including the L/C Commitment) to be terminated, whereupon the Commitment shall
forthwith be terminated, and (ii) declare an amount equal to the maximum
aggregate amount that is or at any time thereafter may become available for
drawing under any outstanding Letters of Credit (whether or not any beneficiary
shall have presented, or shall be entitled at such time to present, the drafts
or other documents required to draw under such Letters of Credit) to be
immediately due and payable, or demand that the Company Cash Collateralize the
L/C Obligations to the extent of outstanding and wholly or partially undrawn
Letters of Credit, whereupon the Company shall so Cash Collateralize the L/C
Obligations; and declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due
34
41
and payable; without presentment, demand or protest, all of which are hereby
expressly waived by the Company.
(b) General. Any prepayments pursuant to this Section 2.07
shall be applied first to any Base Rate Loans then outstanding and then to CD
Rate Loans and Offshore Rate Loans with the shortest Interest Periods
remaining. All prepayments of Loans pursuant to this Section 2.07 shall be
made together with accrued interest to the date of such payment on the
principal amount repaid, together with any amounts payable under Section 4.04;
provided, that if any such prepayment would cause the Company to incur
Obligations pursuant to Section 4.04 with respect to CD Rate Loans or Offshore
Rate Loans, the Company may Cash Collateralize such CD Rate Loans or Offshore
Rate Loans until the last day of the Interest Period related thereto, at which
time such Cash Collateral shall be applied by the Bank to pay such Loans.
2.08 Repayment. The Company shall repay to the Bank in full on the
Revolving Termination Date the aggregate principal amount of the Loans
outstanding on such date.
2.09 Interest.
(a) Subject to subsection 2.09(c), each Loan shall bear
interest on the outstanding principal amount thereof from the date when made at
a rate per annum equal to the Offshore Rate, the Base Rate or the CD Rate, as
the case may be, plus the Applicable Rate.
(b) Interest on each Loan shall be payable in arrears on
each Interest Payment Date. Interest shall also be payable on the date of any
prepayment of Loans pursuant to Section 2.06 or 2.07 for the portion of the
Loans so prepaid and upon payment (including prepayment) in full thereof and,
during the existence of any Event of Default, interest shall be payable on
demand.
(c) While any Event of Default exists or after
acceleration, the Company shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
Obligations due and unpaid, at a rate per annum which is determined by adding
2% per annum to the Applicable Rate then in effect for such Loans and, in the
case of Obligations not subject to an Applicable Rate, at a rate per annum
equal to the Base Rate plus 2%; provided, however, that, on and after the
expiration of any Interest Period applicable to any Offshore Rate Loan or CD
Rate Loan outstanding on the date of occurrence of such Event of Default or
acceleration, the principal amount of such Loan shall, during the continuation
of
35
42
such Event of Default or after acceleration, bear interest at a rate per annum
equal to the Base Rate plus 2%.
2.10 Commitment Fee. The Company shall pay to the Bank a commitment
fee equal to the Applicable Rate per annum times the average daily unused
amount of the Commitment. Such fee shall accrue from the Closing Date to the
later of (i) the Revolving Termination Date or (ii) the date that all Loans and
L/C Obligations outstanding on the Revolving Termination Date are paid in full,
and shall be due and payable quarterly in arrears on the last Business Day of
each calendar quarter commencing on the last day of the calendar quarter within
which the Closing Date occurs through the later of the dates referred to in
clauses (i) and (ii) above, with the final payment to be made on the later of
such dates.
2.11 Computation of Fees and Interest.
(a) All computations of interest payable in respect of Base
Rate Loans at all times as the Base Rate is determined by the Bank's "reference
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest under
this Agreement shall be made on the basis of a 360-day year and actual days
elapsed, which results in more interest being paid than if computed on the
basis of a 365-day year. Interest and fees shall accrue during each period
during which interest or such fees are computed from the first day thereof to
the last day thereof.
(b) Any change in the interest rate on a Loan resulting
from a change in the Applicable Rate, Reserve Percentage, Eurocurrency Reserve
Percentage, or the Assessment Rate shall become effective as of the opening of
business on the day on which such change in the Applicable Rate, Reserve
Percentage, Eurocurrency Reserve Percentage, or the Assessment Rate becomes
effective.
(c) Each determination of an interest rate by the Bank
pursuant to any provision of this Agreement shall be conclusive and binding on
the Company in the absence of manifest error.
2.12 Payments by the Company.
(a) All payments (including prepayments) to be made by the
Company on account of principal, interest, fees and other amounts required
hereunder shall be made without set-off or counterclaim; shall, except as
otherwise expressly provided herein, be made to the Bank at the Bank's Payment
Office, and shall be made in dollars and in immediately available funds, no
36
43
later than 11:00 a.m. (San Francisco time) on the date specified herein. Any
payment which is received by the Bank later than 11:00 a.m. (San Francisco
time) shall be deemed to have been received on the immediately succeeding
Business Day and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall instead be due and
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or fees, as the case may
be; subject to the provisions set forth in the definition of "Interest Period"
herein.
ARTICLE III
THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility.
(a) On the terms and conditions set forth herein, the Bank
agrees (i) from time to time on any Business Day during the period from the
Closing Date to the Revolving Termination Date to issue Letters of Credit for
the account of the Company (or for the account of any Subsidiary of the
Company, provided, that the applicable L/C Application shall be submitted
jointly and severally by the Company and its Subsidiary and the Company shall
be liable for all L/C Obligations with respect to such Letter of Credit, which
shall be deemed for all purposes hereof to be a Letter of Credit issued for the
account of such Company), and to amend or renew Letters of Credit previously
issued by it, in accordance with subsection 3.02(b), and (ii) to honor drafts
under the Letters of Credit; provided, that the Bank shall not be obligated to
Issue any Letter of Credit if as of the date of Issuance of such Letter of
Credit (A) the Effective Amount of all L/C Obligations plus the Effective
Amount of all Loans shall exceed the Commitment, or (B) the Effective Amount of
all L/C Obligations shall exceed the L/C Commitment. Within the foregoing
limits, and subject to the other terms and conditions hereof, the Company's
ability to obtain Letters of Credit shall be fully revolving, and, accordingly,
the Company may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit which have expired or which have been drawn upon and
reimbursed.
(b) The Bank shall be under no obligation to Issue any
Letter of Credit if:
37
44
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain
the Bank from Issuing such Letter of Credit, or any Requirement of Law
applicable to the Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with
jurisdiction over the Bank shall prohibit, or request that the Bank
refrain from, the Issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Bank with respect to
such Letter of Credit any restriction, reserve or capital requirement
(for which the Bank is not otherwise compensated hereunder) not in
effect on the Closing Date, or shall impose upon the Bank any
unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the Bank in good xxxxx xxxxx material to it;
(ii) the expiry date of any requested Letter of Credit
is (A) more than 360 days after the date of Issuance, or (B) more than
180 days after the Revolving Termination Date; provided, that any such
Letter of Credit may contain an automatic renewal clause satisfactory to
the Bank in its sole discretion;
(iii) any requested Letter of Credit does not provide
for drafts, or is not otherwise in form and substance acceptable to the
Bank, or the Issuance of a Letter of Credit shall violate any applicable
policies of the Bank; or
(iv) any Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other Person or
for the purpose of supporting any borrowed money debt.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the
irrevocable written request of the Company received by the Bank at least three
Business Days prior to the proposed date of issuance. Each such request for
issuance of a Letter of Credit shall be by facsimile, confirmed promptly in an
original writing, in the form of an L/C Application, and shall specify in form
and detail satisfactory to the Bank: (i) the proposed date of issuance of the
Letter of Credit (which shall be a Business Day); (ii) the face amount of the
Letter of Credit; (iii) the expiry date of the Letter of Credit; (iv) the name
and address of the beneficiary thereof; (v) the documents to be presented by
the beneficiary of the Letter of Credit in case of any drawing thereunder; (vi)
the full text of any certificate to be
38
45
presented by the beneficiary in case of any drawing thereunder; and (vii) such
other matters relating to such Letter of Credit as the Bank may reasonably
require.
(b) From time to time while a Letter of Credit is
outstanding and prior to the Revolving Termination Date, the Bank will, upon
the written request of the Company received by the Bank at least three Business
Days prior to the proposed date of amendment, amend any Letter of Credit issued
by it. Each such request for amendment of a Letter of Credit shall be made by
facsimile, confirmed promptly in an original writing, made in the form of an
L/C Amendment Application and shall specify in form and detail satisfactory to
the Bank: (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment of the Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters relating to such
proposed amendment as the Bank may reasonably require. The Bank shall be under
no obligation to amend any Letter of Credit if: (A) the Bank would have no
obligation at such time to issue such Letter of Credit in its amended form
under the terms of this Agreement; or (B) the beneficiary of any such Letter of
Credit does not accept the proposed amendment to the Letter of Credit.
(c) This Agreement shall control in the event of any
conflict with any L/C-Related Document (other than any Letter of Credit).
3.03 Drawings and Reimbursements. In the event of any request for a
drawing under a Letter of Credit by the beneficiary or transferee thereof, the
Bank will promptly notify the Company. The Company may, subject to
satisfaction of all conditions to borrowing set forth in this Agreement,
convert the amount of each drawing into Loans consisting of Base Rate Loans
(which conversion shall be deemed to be a new Credit Extension) in accordance
with the procedures for borrowing set forth in Section 2.03. With respect to
any unreimbursed drawing which is not converted into Loans consisting of Base
Rate Loans to the Company in whole or in part, because of the Company's failure
to satisfy the conditions set forth in Section 5.03 or for any other reason,
the Company shall reimburse the Bank prior to 11:00 a.m. (San Francisco time),
on each date that any amount is paid by the Bank under any Letter of Credit, in
an amount equal to the amount so paid by the Bank. Such reimbursement
obligations in respect of drawings, if not paid when due, shall accrue interest
at the Base Rate plus 2%.
3.04 Obligations Absolute. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Bank for a drawing
under a Letter of Credit, shall be
39
46
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement and each such other L/C-Related Document under all
circumstances, including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the obligations of
the Company or any Subsidiary of the Company in respect of any Letter of
Credit or any other amendment or waiver of or any consent to departure
from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or
other right that the Company or any Subsidiary of the Company may have
at any time against any beneficiary or any transferee of any Letter of
Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or
by the L/C-Related Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate or inaccurate in any respect; or any loss or delay
in the transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit;
(v) any payment by the Bank under any Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit (provided that the
foregoing shall not limit any affirmative claim the Company may have
against the Bank due to the Bank's gross negligence or willful
misconduct); or any payment made by the Bank under any Letter of Credit
to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or
any transferee of any Letter of Credit, including any arising in
connection with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or
40
47
any of the obligations of the Company or any Subsidiary of the Company
in respect of any Letter of Credit; or
(vii) to the extent permitted by applicable law, any
other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the
Company or a guarantor.
3.05 Cash Collateral Pledge. Upon (i) the request of the Bank, if, as
of the Revolving Termination Date, any Letters of Credit may for any reason
remain outstanding and partially or wholly undrawn, or (ii) the occurrence of
the circumstances described in Section 2.07 requiring the Company to Cash
Collateralize Letters of Credit, then, the Company shall immediately Cash
Collateralize the L/C Obligations.
3.06 Letter of Credit Fees.
(a) The Company shall pay to the Bank a letter of credit fee
with respect to standby Letters of Credit equal to the Applicable Rate per
annum of the average daily maximum amount available to be drawn on the
outstanding standby Letters of Credit, computed on a quarterly basis in arrears
on the last Business Day of each calendar quarter based upon standby Letters of
Credit outstanding for that quarter, as calculated by the Bank. Such letter of
credit fee shall be due and payable quarterly in arrears on the last Business
Day of each calendar quarter during which standby Letters of Credit are
outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving Termination Date (or such later date upon
which the outstanding standby Letters of Credit shall expire), with the final
payment to be made on the Revolving Termination Date (or such later expiration
date).
(b) The Company shall pay to the Bank upon the issuance of each
commercial Letter of Credit or such other times as the Bank may advise, such
fees as the Bank may customarily impose with respect to commercial letters of
credit similar to such commercial Letter of Credit.
(c) The Company shall pay to the Bank from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the Bank relating to letters of credit
as from time to time in effect.
3.07 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as published by the International Chamber of Commerce
most recently at the time of
41
48
issuance of any Letter of Credit shall (unless otherwise expressly provided in
the Letters of Credit) apply to the Letters of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes.
(a) (i) If any taxes (other than taxes on net income (A)
imposed by the country or any subdivision of the country in which the
Bank's principal office or actual lending office is located and (B)
measured by the United States taxable income the Bank would have
received if all payments under or in respect of this Agreement and any
instrument or agreement required hereunder were exempt from taxes levied
by the Company's country) are at any time after the Closing Date imposed
on any payments under or in respect of this Agreement or any instrument
or agreement required hereunder including, but not limited to, payments
made pursuant to this Section 4.01, the Company shall pay all such taxes
and shall also pay to the Bank, at the time interest is paid, all
additional amounts which the Bank specifies as necessary to preserve the
after-tax yield the Bank would have received if such taxes had not been
imposed.
(ii) The additional amounts necessary to preserve the
after-tax yield the Bank would have received if such taxes had not been
imposed shall be calculated pursuant to the formula:
(w)(t)(i)
y = ----------------
1-w-t
where the terms are defined as follows:
y = additional payment to be made to Bank
w = withholding tax rate levied by foreign government
t = the Bank's combined Federal and state tax rate
i = stated interest to be paid on credit (base rate
plus quoted spread)
1 = one
42
49
(b) The Company will provide the Bank with original tax receipts,
notarized copies of tax receipts, or such other documentation as will prove
payment of tax in a court of law applying the United States Federal Rules of
Evidence, for all taxes paid by the Company pursuant to subsection 4.01(a)
above. The Company will deliver receipts to the Bank within 30 days after the
due date for the related tax.
(c) If the Company is required to pay additional amounts to the Bank
pursuant to subsection 4.01(a), then the Bank shall use its reasonable best
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue if such change in the
judgment of the Bank is not otherwise disadvantageous to the Bank.
4.02 Illegality.
(a) If the Bank shall determine that the introduction of
any Requirement of Law, or any change after the Closing Date in any Requirement
of Law or in the interpretation or administration thereof, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for the Bank or its Lending Office to make Offshore Rate
Loans, then, on notice thereof by the Bank to the Company, the obligation of
the Bank to make Offshore Rate Loans shall be suspended until the Bank shall
have notified the Company that the circumstances giving rise to such
determination no longer exists.
(b) If the Bank shall determine that it is unlawful to
maintain any Offshore Rate Loan, the Company shall prepay in full all Offshore
Rate Loans of the Bank then outstanding, together with interest accrued
thereon, either on the last day of the Interest Period thereof if the Bank may
lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Bank may not lawfully continue to maintain such Offshore
Rate Loans, together with any amounts required to be paid in connection
therewith pursuant to Section 4.04.
4.03 Increased Costs and Reduction of Return.
(a) If the Bank shall determine that, due to either (i) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the CD Rate or
the Offshore Rate) in or in the interpretation of any law or regulation after
the Closing Date or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority
43
50
after the Closing Date (whether or not having the force of law), there shall be
any increase in the cost to the Bank of agreeing to make or making, funding or
maintaining any Offshore Rate Loans or CD Rate Loans, then the Company shall be
liable for, and shall from time to time, upon demand therefor by the Bank pay
to the Bank additional amounts as are sufficient to compensate the Bank for
such increased costs, not later than 30 days following demand therefor.
(b) If the Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration
of any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Bank (or its Lending Office) or any corporation controlling
the Bank, with any Capital Adequacy Regulation, in each case, after the Closing
Date; affects or would affect the amount of capital required or expected to be
maintained by the Bank or any corporation controlling the Bank and (taking into
consideration the Bank's or such corporation's policies with respect to capital
adequacy and the Bank's desired return on capital) determines that the amount
of such capital is increased as a consequence of its loans, credits or
obligations under this Agreement, then, upon demand of the Bank the Company
shall upon demand pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for such increase, not
later than 30 days following demand therefor.
4.04 Funding Losses. The Company agrees to reimburse the Bank and to
hold the Bank harmless from any actual loss or expense which the Bank may
sustain or incur as a consequence of:
(a) the failure of the Company to make any payment or
mandatory prepayment of principal of any Offshore Rate Loan or CD Rate Loan
(including payments made after any acceleration thereof);
(b) the failure of the Company to borrow, continue or
convert a Loan after the Company has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/ Continuation;
(c) the failure of the Company to make any prepayment after
the Company has given a notice in accordance with Section 2.06 or 2.07;
(d) the prepayment (including pursuant to Section 2.07) by
the Company of an Offshore Rate Loan or a CD
44
51
Rate Loan on a day which is not the last day of the Interest Period with
respect thereto; or
(e) the conversion by the Company pursuant to Section 2.04
of any Offshore Rate Loan or CD Rate Loan to a Base Rate Loan on a day that is
not the last day of the respective Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or CD Rate Loans
hereunder or from fees payable to terminate the deposits from which such funds
were obtained. Solely for purposes of calculating amounts payable by the
Company to the Bank under this Section 4.04 and under subsection 4.03(a), (i)
each Offshore Rate Loan (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the IBOR used
in determining the Offshore Rate for such Offshore Rate Loan by a matching
deposit or other borrowing in the interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Offshore Rate Loan is
in fact so funded, and (ii) each CD Rate Loan made (and each related reserve,
special deposit or similar requirement) shall be conclusively deemed to have
been funded at the Certificate of Deposit Rate used in determining the CD Rate
for such CD Rate Loan by the issuance of its certificate of deposit in a
comparable amount and for a comparable period, whether or not such CD Rate Loan
is in fact so funded.
4.05 Inability to Determine Rates. If the Bank shall have determined
that for any reason adequate and reasonable means do not exist for ascertaining
the Offshore Rate or the CD Rate for any requested Interest Period with respect
to a proposed Offshore Rate Loan or CD Rate Loan or that the Offshore Rate or
the CD Rate applicable pursuant to subsection 2.09(a) for any requested
Interest Period with respect to a proposed Offshore Rate Loan or CD Rate Loan
does not adequately and fairly reflect the cost to the Bank of funding such
Loan, the Bank will forthwith give notice of such determination to the Company.
Thereafter, the obligation of the Bank to make or maintain CD Rate Loans or
Offshore Rate Loans, as the case may be, hereunder shall be suspended until the
Bank revokes such notice in writing. Upon receipt of such notice, the Company
may revoke any Notice of Borrowing or Notice of Conversion/Continuation then
submitted by it. If the Company does not revoke such notice, the Bank shall
make, convert or continue the Loans, as proposed by the Company, in the amount
specified in the applicable notice submitted by the Company, but such Loans
shall be made, converted or continued as Base Rate Loans instead of CD Rate
Loans or Offshore Rate Loans, as the case may be.
45
52
4.06 Certificate of Bank. The Bank, if claiming reimbursement or
compensation pursuant to this Article IV, shall deliver to the Company a
certificate setting forth in reasonable detail the amount payable to the Bank
hereunder and such certificate shall be prima facie evidence of such amount.
If the Bank fails to notify the Company that the Bank intends to claim any such
reimbursement or compensation within one year after the Bank has knowledge of
its claim therefor, the Company shall not be obligated to compensate the Bank
for the amount of the Bank's claim accruing prior to the date which is one year
before the date on which the Bank first notifies the Company that it intends to
make such claim; it being understood that the calculation of the actual amounts
may not be possible within such period and the Bank may provide such
calculation as soon as reasonably practicable thereafter without affecting or
limiting the Company's payment obligations hereunder.
4.07 Survival. The agreements and obligations of the Company in this
Article IV shall survive the payment of all other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions of Effectiveness of Agreement. The effectiveness of
this Agreement is subject to satisfaction or waiver of the condition that the
Bank shall have received on or before the Closing Date all of the following, in
form and substance satisfactory to the Bank and its counsel:
(a) Credit Agreement. This Agreement, executed by the
Company;
(b) Incumbency. A certificate of the Secretary or
Assistant Secretary of the Company certifying as of the Closing Date the names
and true signatures of the officers of the Company authorized to execute and
deliver, as applicable, this Agreement, and all other Loan Documents to be
delivered hereunder;
(c) Articles of Incorporation; By-laws and Good Standing.
Each of the following documents:
(i) the articles or certificate of incorporation and
the bylaws of the Company, each as in effect on the Closing Date,
certified by the Secretary or Assistant
46
53
Secretary of the Company as of the Closing Date as being in effect on
such date; and
(ii) good standing and tax good standing
certificates for the Company from the Secretary of State (or similar,
applicable Governmental Authority) of its state of incorporation and
each state where the Company is qualified to do business as a foreign
corporation as of a recent date;
(d) Payment of Fees. The Company shall have paid all
costs, accrued and unpaid fees and expenses incurred by the Bank, to the extent
then due and payable on the Closing Date.
(e) Certificate. Certificates signed by a Responsible
Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in
Article VI are true and correct in all material respects on and as of
such date, as though made on and as of such date (except to the extent
such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct in all material
respects as of such earlier date);
(ii) no Default or Event of Default exists or would
result from the execution and delivery of the Company Documents; and
(iii) there has occurred since March 30, 1996, no
Material Adverse Effect.
(f) Legal Opinion. An opinion of Wilson, Sonsini,
Xxxxxxxx & Xxxxxx, P.C., counsel to the Company, addressed to the Bank,
substantially in the form of Exhibit D, dated as of the Closing Date;
(g) Prior Credit. The Company shall have paid all
interest and fees due under the Prior Facility, the parties agreeing that upon
the Closing Date hereunder, the Bank shall have no further commitment to extend
credit or other obligations under the Prior Facility; and
(h) Other Documents. Such other approvals, opinions or
documents as the Bank may reasonably request.
5.02 Conditions to All Credit Extensions. The obligation of the Bank
to make any Credit Extension (including the initial Credit Extension) is
subject to the satisfaction of the following conditions precedent on the
relevant borrowing date:
47
54
(a) Documentation. The Bank shall have received, in
respect of any Borrowing, a Notice of Borrowing, and in respect of any Issuance
of any Letter of Credit, the L/C Application or the L/C Amendment Application,
as applicable;
(b) Continuation of Representations and Warranties. The
representations and warranties made by the Company contained in Article VI
shall be true and correct in all material respects on and as of such borrowing
date with the same effect as if made on and as of such borrowing date (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct in all material respects as
of such earlier date);
(c) No Existing Default. No Default or Event of Default
shall exist or shall result from such Credit Extension; and
(d) No Adverse Change. There shall not have occurred a
Material Adverse Effect.
Each Notice of Borrowing, L/C Application or L/C Amendment Application
submitted by the Company hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of each such notice or
application and as of the date of each Credit Extension, that the conditions in
Section 5.02 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants, as to itself and each of its
Subsidiaries, to the Bank that:
6.01 Corporate Existence and Power. The Company and each of its
Material Subsidiaries:
(a) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals to (i) own its assets and
carry on its business as presently conducted and (ii) execute, deliver, and
perform its obligations under, the Loan Documents;
48
55
(c) is duly qualified as a foreign corporation, and
licensed and in good standing, under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (b)(i), clause (c) or clause (d), to
the extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
6.02 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company of this Agreement, and any other
Company Document to which the Company is party, have been duly authorized by
all necessary corporate action, and do not and will not:
(a) contravene the terms of any of the Company's
Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing
any Contractual Obligation to which the Company is a party or any order,
injunction, writ or decree of any Governmental Authority to which the Company
or its Property is subject; or
(c) violate any Requirement of Law.
6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company of
the Agreement or any other Company Document to which the Company is a party.
6.04 Binding Effect. This Agreement and each other Company Document
to which the Company is a party constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
6.05 Litigation. Except as specifically disclosed in Schedule 6.05,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of the Company, threatened, at law, in equity, in arbitration or
before any
49
56
Governmental Authority, against the Company or its Subsidiaries or any of their
respective Properties which:
(a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or
(b) could reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order or any order
of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein
provided.
6.06 ERISA Compliance.
(a) Except as specifically disclosed in Schedule 6.06,
each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law. Each Plan which
is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS, except to the extent the
requirements for qualification may be satisfied by adopting retroactive
amendments under Section 401(b) of the Code and the regulations thereunder or
under Section 1140 of the Tax Reform Act of 1986, and to the best knowledge of
the Company, nothing has occurred which would cause the loss of such
qualification.
(b) There are no pending, or to the best knowledge of the
Company, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which have resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or other violation of the fiduciary responsibility rule with
respect to any Plan which could reasonably be expected to result in a Material
Adverse Effect.
(c) Except as specifically disclosed in Schedule 6.06, to
the best of the Company's knowledge, no ERISA Event has occurred or is
reasonably expected to occur with respect to any Pension Plan.
(d) Except as specifically disclosed in Schedule 6.06, no
Pension Plan has any Unfunded Pension Liability. The aggregate unfunded
Pension Liability for all Pension Plans does not exceed $500,000.
50
57
(e) Except as specifically disclosed in Schedule 6.06,
the Company has not incurred, nor reasonably expects to incur, any liability in
excess of $250,000 under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA).
(f) Except as specifically disclosed in Schedule 6.06,
the Company has not transferred any Unfunded Pension Liability to any person or
otherwise engaged in a transaction that could be subject to Section 4069 of
ERISA.
(g) No trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b),
(c), (m) or (o)) maintains or contributes to any Pension Plan or other Plan
subject to Section 412 of the Code. Neither the Company nor entity under
common control with the Company as described in the preceding sentence has ever
contributed to any multiemployer plan within the meaning of Section 4001(a)(3)
of ERISA.
6.07 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are intended to be and shall be used solely for the purposes set forth in and
permitted by Section 7.11, and are intended to be and shall be used in
compliance with Section 8.08. Neither the Company nor any of its Subsidiaries
is generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
6.08 Title to Properties. The Company and each of its Subsidiaries
have good record and marketable title in fee simple to, or valid leasehold
interests in, all real Property necessary in the ordinary conduct of their
businesses, except for such defects in title as could not, individually or in
the aggregate, be reasonably expected to have a Material Adverse Effect. As of
the Closing Date, the Property of the Company and its Subsidiaries is subject
to no Liens, other than Permitted Liens.
6.09 Taxes. The Company and its Subsidiaries have filed all Federal
and other material tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income or assets in
accordance with such returns and reports, except those which are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided to the extent required under GAAP and no Notice of
Lien has been filed or recorded. The Company has received no notice from any
Governmental Authority of any deficiency in respect of any such
51
58
return or report in an amount which, if assessed or required to be paid, would
have a Material Adverse Effect.
6.10 Financial Condition.
(a) The audited consolidated financial statements of
financial condition of the Company dated March 30, 1996 and the unaudited
consolidated financial statements of financial condition of the Company dated
December 28, 1996 for the nine months then ended, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal year or quarter, respectively, ended on each such date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein;
(ii) fairly present in all material respects the
consolidated financial condition of the Company as of the date thereof
and the consolidated results of operations for the period covered
thereby, respectively (subject, in the case of the foregoing clauses
(i) and (ii) as they relate to the financial statements at, or for the
period ended, December 28, 1996, to the absence of footnotes and
normal year-end adjustments); and
(iii) except as specifically disclosed in Schedule
6.10, show all material Indebtedness and material Operating Leases of
the Company and its consolidated Subsidiaries as of the date thereof.
(b) Since March 30, 1996, there has been no Material
Adverse Effect of the type described in clause (a) of the definition thereof.
6.11 Environmental Matters.
(a) The on-going operations of the Company and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which could not be reasonably expected to result in a Material
Adverse Effect.
(b) The Company and each of its Subsidiaries have
obtained all licenses, permits, authorizations and registrations required under
any Environmental Law ("Environmental Permits") and necessary for their
respective ordinary course operations, all such Environmental Permits are in
good standing, and the Company and each of its Subsidiaries are in compliance
with all material terms and conditions of such Environmental Permits,
52
59
except where the failure to obtain such Environmental Permits, maintain any
such Environmental Permits in good standing or comply with such Environmental
Permits could not be reasonably expected to result in a Material Adverse
Effect.
(c) None of the Company nor any of its Subsidiaries has
received any notice that any of them or any of their respective present
Property or operations is subject to any outstanding written order from or
agreement with any Governmental Authority, nor subject to any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material, except any such notice that could
not be reasonably expected to result in a Material Adverse Effect.
(d) There are no Hazardous Materials or other conditions
or circumstances existing with respect to any Property, or arising from
operations prior to the Closing Date, of the Company or any of its Subsidiaries
that could reasonably be expected to result in a Material Adverse Effect. In
addition, (i) neither the Company nor any of its Subsidiaries has any
underground storage tanks (x) that are not properly registered or permitted
under applicable Environmental Laws, or (y) that are leaking or disposing of
Hazardous Materials off-site, except where such failure to register or obtain
permits, or such leakage or disposal could not be reasonably expected to result
in a Material Adverse Effect, and (ii) the Company and its Subsidiaries have
notified all of their employees of the existence, if any, of any health hazard
arising from the conditions of their employment and have met all notification
requirements under Title III of CERCLA and all other Environmental Laws, except
where the failure to give such notice and meet such notification requirements
could not be reasonably expected to have a Material Adverse Effect.
6.12 Regulated Entities. None of the Company, any Person controlling
the Company or any Subsidiary of the Company is (a) an "Investment Company"
within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or, to
the knowledge of such Company, any other Federal or state statute or regulation
limiting its ability to incur Indebtedness, the conditions to which the Company
has not satisfied.
6.13 Solvency. The Company is Solvent, and, as of the Closing Date
(i) the Company does not intend to, and does not believe that it will, incur
debts beyond the Company's ability to pay as such debts mature, and (ii) the
Company is not about
53
60
to engage in a transaction, after giving effect to which the Company's
remaining property would constitute unreasonably small capital for the business
conducted or transactions engaged in by the Company.
6.14 Labor Relations. There are no strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or , to the best of
the Company's knowledge, threatened against or affecting the Company or any of
its Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority
which, in the case of any of the foregoing, could reasonably be expected to
have a Material Adverse Effect.
6.15 Copyrights, Patents, Trademarks and Licenses, etc. Except as
specifically disclosed in Schedule 6.15, the Company or its Subsidiaries own or
are licensed or otherwise have the right to use (or could obtain ownership of,
licenses to use or other rights to use on terms not materially adverse to the
Company and its Subsidiaries and under circumstances which could not be
reasonably expected to have a Material Adverse Effect) all of the patents,
trademarks, service marks, trade names, copyrights, and other intellectual
property rights and licenses to the foregoing that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person, except where such conflict could not be reasonably
expected to have a Material Adverse Effect. Except as specifically disclosed
in Schedule 6.05, no claim or litigation regarding any of the foregoing is
pending or, to the Company's knowledge, threatened, and, to the knowledge of
the Company, no patent, invention, device, application, principle is pending or
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
6.16 Subsidiaries. As of the Closing Date, the Company has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
6.16 and has no equity investments in any other corporation or entity
constituting in excess of 5% of the outstanding equity of such Person other
than those specifically disclosed in part (b) of Schedule 6.16. As of the
Closing Date, the Material Subsidiaries of the Company are as listed in part
(c) of Schedule 6.16.
6.17 Insurance. The Properties of the Company and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Company, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar
businesses
54
61
and owning similar Properties in localities where the Company or such
Subsidiary operates.
6.18 Full Disclosure. The documents, certificates and written
statements furnished by any Responsible Officer to the Bank pursuant to any
provision of this Agreement, taken together with all such documents,
certificates and written statements, do not contain any untrue statement of a
material fact or omit any material fact necessary to make the statements made
therein, taken together, in light of the circumstances under which they were
made, not misleading. It is recognized by the Bank that projections and
forecasts provided by or on behalf of the Company, although reflecting the
Company's good faith projections or forecasts based on methods and data which
the Company believes to be reasonable and accurate, are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections and forecasts may (and are likely to) differ from the projected or
forecasted results.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as the Bank shall have
any Commitment hereunder, or any Loan, Letter of Credit (other than a Letter of
Credit that has been fully Cash Collateralized) or other payment Obligation
shall remain outstanding, unless the Bank waives compliance in writing:
7.01 Financial Statements. The Company shall deliver to the Bank,
in form and detail satisfactory to the Bank:
(a) as soon as available, but not later than 90 days
after the end of each fiscal year, a copy of the audited consolidated balance
sheet of the Company as at the end of such year and the related consolidated
statements of income or operations, shareholders' equity and cash flows for
such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Price
Waterhouse or another nationally-recognized independent public accounting firm
which report shall state that such consolidated financial statements present
fairly in all material respects the consolidated financial position for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years, except as noted therein; and
(b) as soon as available, but not later than 45 days
after the end of each fiscal quarter of each year (other than
55
62
the last fiscal quarter of each fiscal year), a copy of the unaudited
consolidated balance sheet of the Company as of the end of such quarter and the
related consolidated statements of income, shareholders' equity and cash flows
for the period commencing on the first day and ending on the last day of such
quarter, and certified by an appropriate Responsible Officer as being complete
and correct in all material respects and fairly presenting in all material
respects, in accordance with GAAP, the consolidated financial position as at
the dates indicated and the consolidated results of operations of the Company,
for the periods indicated, subject to changes resulting from normal year-end
adjustments and the absence of footnotes.
7.02 Certificates; Other Information. The Company shall furnish to
the Bank:
(i) so long as (and to the extent) not contrary to the
then current recommendations of the American Institute of Public Accountants,
concurrently with the delivery of the financial statements referred to in
subsection 7.01(a) above, a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or
Event of Default solely arising by virtue of a breach of Sections 8.01, 8.02,
8.03, 8.04, 8.05, 8.06, 8.10, 8.11, 8.12, 8.13, 8.14 and 8.16, except as
specified in such certificate, and stating that the Bank may rely on such
certificate;
(ii) concurrently with the delivery of the financial
statements referred to in subsections 7.01(a) and (b) above, a Compliance
Certificate;
(iii) promptly after the same are sent, copies of all
financial statements and reports which the Company sends to its shareholders
generally; and promptly after the same are filed, copies of all final
registration statements on Form S-1 and Form S-3 (without exhibits unless
specifically requested) or their successor forms relating to offerings of debt
or equity by the Company and copies of all reports on Form 10-K, Form 10-Q and
Form 8-K or their successor forms (without exhibits unless specifically
requested) which the Company may make to, or file with, the SEC or any
successor or similar Governmental Authority; and
(iv) promptly, such additional business, financial, corporate
affairs and other information as the Bank may from time to time reasonably
request, subject to the second proviso of Section 7.09.
56
63
7.03 Notices. The Company shall promptly notify the Bank:
(a) promptly after any Responsible Officer becomes aware
thereof, of the occurrence of any Default or Event of Default;
(b) promptly after any Responsible Officer becomes aware
thereof, of (i) any breach or non-performance of, or any default under, any
Contractual Obligation of the Company or any of its Subsidiaries which could
reasonably be expected to result in a Material Adverse Effect; and (ii) any
dispute, litigation, investigation, proceeding or suspension which may exist at
any time between the Company or any of its Subsidiaries and any Governmental
Authority which could reasonably be expected to have a Material Adverse Effect;
(c) promptly after any Responsible Officer becomes aware
thereof, of the commencement of, or any material adverse development in, any
other litigation or proceeding affecting the Company or any Subsidiary (i) in
which the amount of damages claimed and not covered by insurance is $2,000,000
or more (or its equivalent in another currency or currencies), or (ii) in which
injunctive or similar relief is sought and which could reasonably be expected
to have a Material Adverse Effect, or (iii) in which the relief sought is an
injunction or other stay of the performance of this Agreement or any Loan
Document;
(d) promptly after any Responsible Officer becomes aware
thereof, of any of the following if it could reasonably be expected to have a
Material Adverse Effect upon, but in no event later than 10 days after,
becoming aware of (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened against
the Company or any of its Subsidiaries or any of their respective Properties
pursuant to any applicable Environmental Laws, (ii) all other Environmental
Claims, and (iii) any environmental or similar condition on any real property
adjoining or in the vicinity of the property of the Company or any Subsidiary
that could reasonably be anticipated to cause such property or any part thereof
to be subject to any restrictions on the ownership, occupancy, transferability
or use of such property under any Environmental Laws;
(e) promptly after any Responsible Officer becomes aware
thereof, of any other litigation or proceeding affecting the Company or any of
its Subsidiaries which the Company would be required to report to the SEC
pursuant to the Exchange Act, and in any event within ten days after reporting
the same to the SEC (provided that the notice requirements set forth in this
57
64
subsection 7.03(e) shall be satisfied if the Company furnishes the Bank with a
copy of any such report to the SEC);
(f) promptly after any Responsible Officer becomes aware
thereof, any of the following events affecting the Company, together with a
copy of any notice with respect to such event that may be required to be filed
with a Governmental Authority and any notice delivered by a Governmental
Authority to the Company with respect to such event:
(i) an ERISA Event;
(ii) if any of the representations and warranties in
Section 6.06 cease to be true and correct;
(iii) the adoption of any new Pension Plan or other
Plan subject to Section 412 of the Code;
(iv) the adoption of any amendment to a Pension Plan
or other Plan subject to Section 412 of the Code, if such amendment
results in a material increase in contributions or Unfunded Pension
Liability; or
(v) the commencement of contributions to any Pension
Plan or other Plan subject to Section 412 of the Code;
(g) not later than delivery of the next consolidated
financial statements the Company pursuant to Section 7.01 after the date of any
such change, of any change in accounting policies or financial reporting
practices by the Company or any of its Subsidiaries (provided that this notice
requirement shall be satisfied if the next consolidated financial statements of
the Company delivered to the Bank following any such change (or the Compliance
Certificate delivered in connection therewith pursuant to Section 7.02)
describes any such change in reasonable detail);
(h) promptly after any Responsible Officer becomes aware
thereof, of any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or
involving the Company or any of its Subsidiaries;
(i) promptly after any Responsible Officer becomes aware
thereof, of a Change of Control, or of the execution of an agreement by the
Company providing for a Change of Control; and
(j) promptly after any Responsible Officer becomes aware
thereof, if the Company or any of its Subsidiaries shall
58
65
at any time or from time to time execute an agreement for an Asset Sale
permitted by subsection 8.02(g), of such proposed sale (including the amount of
the estimated Net Proceeds to be received by the Company or such Subsidiary in
respect thereof).
Each notice pursuant to this Section shall be accompanied by a
written statement by a Responsible Officer setting forth reasonable details of
the occurrence referred to therein, and, except for a notice pursuant to
subsection (i) of this Section, stating what action, if any, the Company
proposes to take with respect thereto.
7.04 Preservation of Corporate Existence, Etc. Except as otherwise
permitted by Section 8.02, 8.03 or 8.05, the Company shall, and shall cause
each of its Material Subsidiaries to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation;
(b) use commercially reasonable efforts to preserve and
maintain in full force and effect all rights, privileges, qualifications,
permits, licenses and franchises necessary or material to the normal conduct of
its business, the non-preservation of which could reasonably be expected to
have Material Adverse Effect; and
(c) use commercially reasonable efforts to preserve or
renew all of its registered patents, copyrights, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
7.05 Maintenance of Property. The Company shall maintain, and shall
cause each of its Subsidiaries to maintain in good working order and condition,
ordinary wear and tear excepted, all its Property which are material to the
conduct of business by the Company or the Company and its Subsidiaries taken as
a whole.
7.06 Insurance. The Company shall maintain, and shall cause each of
its Subsidiaries to maintain, with financially sound and reputable independent
insurers or pursuant to self-insurance plans to the extent standard and
customary for Persons engaged in the same or similar business under similar
circumstances, insurance with respect to its Properties and business against
loss or damage of the kinds customarily insured against by Persons engaged in
the same or similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other Persons;
including workers'
59
66
compensation insurance, public liability and property and casualty insurance.
7.07 Payment of Obligations. The Company shall, and shall cause its
Subsidiaries to, pay and discharge as the same shall become due and payable,
(a) all material tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves to the extent
required under GAAP are being maintained by the Company or such Subsidiary; and
(b) all material lawful claims which, if unpaid, would by law become a Lien
upon its Property;
7.08 Compliance with Laws. The Company shall comply, and shall cause
each of its Subsidiaries to comply, in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction over it
or its business (including the Federal Fair Labor Standards Act), except such
as may be contested in good faith or as to which a bona fide dispute may exist,
or non-compliance could not be reasonably expected to have a Material Adverse
Effect.
7.09 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each of its Subsidiaries to maintain, proper books of
record and account, in which, in all material respects, full, true and correct
entries in conformity with GAAP consistently applied (except as therein noted)
shall be made of all financial transactions and financial matters involving the
assets and business of the Company and such Subsidiaries. The Company shall
permit, and shall cause each of its Subsidiaries to permit, representatives of
the Bank to visit and inspect any of their respective Properties, to examine
their respective corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and
independent public accountants, at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
to the Company; provided, however, when an Event of Default exists the Bank may
do any of the foregoing at the expense of the Company at any time during normal
business hours and without advance notice; provided, further, however, that the
Company and its Subsidiaries will not be required to disclose, permit the
inspection, examination, copying or making of extracts of, or discuss, any
document, or any portion thereof, or any information in respect of which and to
the extent that disclosure to the Bank is then prohibited by law or by an
agreement binding on the Company or any of its Subsidiaries entered into by
such Person in good faith and not for the
60
67
specific purpose of evading the provisions of this Section or any other
provision of this Agreement.
7.10 Environmental Laws. Except as otherwise disclosed to the Bank
in writing prior to the date hereof, the Company shall, and shall cause each of
its Subsidiaries to, conduct its operations and keep and maintain its Property
in compliance with all Environmental Laws, except where such non-compliance
could not be reasonably expected to have a Material Adverse Effect.
7.11 Use of Proceeds. The Company shall use, and shall cause its
Subsidiaries to use, the Letters of Credit and shall use the proceeds of the
Loans for working capital and other general corporate purposes (including the
repayment of Indebtedness) not in contravention of any Requirement of Law.
7.12 Solvency. The Company shall at all times be Solvent.
7.13 Internal Controls. The Company will maintain reasonable
internal controls and reporting systems designed to insure that a Responsible
Officer will be promptly informed of all material financial, operational and
compliance matters relevant to compliance with the provisions of the Company
Documents to which it is a party.
7.14 Board Resolutions. The Company shall deliver to the Bank, on or
before May 15, 1997, copies of the resolutions of the board of directors of the
Company approving, authorizing and ratifying the execution, delivery and
performance by the Company of this Agreement and the other Loan Documents to be
delivered by each of them hereunder, and authorizing and ratifying the
borrowing of the Loans and issuance of the Letters of Credit, certified as of
the date of such delivery by the Secretary or an Assistant Secretary of the
Company.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees that, so long as the Bank
shall have any Commitment hereunder, or any Loan, Letter of Credit (other than
a Letter of Credit that has been fully Cash Collateralized) or other payment
Obligation shall remain outstanding, unless the Bank waives compliance in
writing:
8.01 Limitation on Liens. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, directly or
61
68
indirectly, make, create, incur, assume or suffer to exist any Lien upon or
with respect to any part of its Property, whether now owned or hereafter
acquired, other than the following ("Permitted Liens"):
(a) any Lien existing on the Property of the Company or
its Subsidiaries on the Closing Date and set forth in Schedule 8.01;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable without
penalty, or to the extent that non-payment thereof is permitted by Section
7.07, provided that no Notice of Lien has been filed or recorded;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's, laborers', suppliers', employees', or other similar
Liens arising in the Ordinary Course of Business which are not delinquent or
remain payable without penalty or which are being contested in good faith and
by appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the Property subject thereto;
(e) Liens (other than any Lien imposed by ERISA)
consisting of pledges or deposits required in the Ordinary Course of Business
in connection with workers' compensation, unemployment insurance and other
social security legislation;
(f) Liens on the Property of the Company or any of its
Subsidiaries securing (i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, (ii)
contingent obligations on surety and appeal bonds, and (iii) other
non-delinquent obligations of a like nature; in each case, incurred in the
Ordinary Course of Business, provided all such Liens in the aggregate could not
reasonably be expected to cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment
liens, provided that the enforcement of such Liens is effectively stayed and
all such Liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $1,000,000;
(h) easements, reservations, licenses, rights-of-way,
restrictions and other similar encumbrances or title defects affecting real
Property which do not in the aggregate materially interfere with the use of
such Property in the ordinary conduct
62
69
of the business of the Company and its Subsidiaries, taken as an entirety;
(i) Liens on assets or property of a Subsidiary of the
Company existing at the time such assets or property (or such Subsidiary) were
acquired by the Company or such Subsidiary and not incurred as a result of (or
in connection with or in anticipation of) such acquisition; provided, that such
Liens do not extend to or cover any property or assets of the Company or any of
its Subsidiaries other than the property or assets so acquired or the property
or assets of the Subsidiary so acquired.
(j) Purchase money security interests on any Property
acquired or held by the Company or its Subsidiaries in the Ordinary Course of
Business, securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such Property; provided that
(i) such Lien attaches solely to the Property so acquired in such transaction,
(ii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such Property, plus reasonable fees and expenses incurred in
connection therewith, and (iii) the principal amount of the Indebtedness
secured by any and all such purchase money security interests, together with
Indebtedness permitted under subsection 8.06(f), shall not at any time exceed
$5,000,000;
(k) Liens securing Capital Lease Obligations on assets
subject to such Capital Leases, provided that such Capital Leases are permitted
under subsection 8.06(g);
(l) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided that (i) such deposit account is not
a dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated
by the Federal Reserve Board, and (ii) such deposit account is not intended by
the Company or any of its Subsidiaries to provide collateral to the depository
institution;
(m) leases and subleases and licenses and sublicenses of
Property of the Company and its Subsidiaries where the Company or a Subsidiary
of the Company is the lessor or licensor (or sublessor or sublicensor) which,
in the aggregate, do not materially interfere with the ordinary conduct of the
business of the Company and its Subsidiaries, taken as a whole, but excluding
any sale-lease transaction;
63
70
(n) Liens securing or constituting Indebtedness which is
incurred to refinance Indebtedness which has been secured by a Lien permitted
under this Section 8.01 and which is permitted to be refinanced under Section
8.06; provided that such Liens do not extend to or cover any property or assets
of the Company or any of its Subsidiaries not so refinanced;
(o) Liens on insurance policies and the proceeds thereof,
securing the financing of premiums owing by the Company or any Subsidiary with
respect thereto, not to exceed $250,000 in aggregate principal amount
outstanding at any time;
(p) Liens in favor of customs and revenues authorities
arising as a matter of law to secure any payment obligations of the Company and
its Subsidiaries in respect of customs duties in connection with the
importation of goods;
(q) Liens securing the obligations of the Company or any of
its Subsidiaries under documentary letters of credit permitted to be incurred
under Section 8.06; provided that such Liens shall attach only to the goods
covered by such letters of credit, the corresponding documents and the proceeds
thereof;
(r) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by the
Company or any of its Subsidiaries in the Ordinary Course of Business;
(s) Liens incurred or deposits made in the Ordinary Course of
Business to secure the performance of tenders, statutory obligations, surety,
appeal, reclamation, performance or other similar bonds, leases (including
landlord's Liens), contracts, and other similar obligations incurred in the
Ordinary Course of Business (exclusive of obligations in respect of the payment
for borrowed money);
(t) Liens securing Indebtedness and Contingent Obligations of
a Subsidiary of the Company incurred pursuant to and in compliance with clause
(i) or (ii) of subsection 8.06(h);
(u) Liens on funds and other property of employees of the
Company or any of its Subsidiaries which funds and property are held and
invested by the Company for the benefit of such employees for the purpose of
deferred compensation; and
(v) Liens in favor of the Trustee, the Paying Agent and the
Registrar (each as defined in the Senior Note Indenture) pursuant to Section
7.7 of the Senior Note Indenture.
64
71
8.02 Disposition of Assets. The Company shall not, and shall
not suffer or permit any of its Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any Property (including accounts and notes receivable,
with or without recourse, and Capital Stock of any Subsidiary) or enter into
any agreement (other than an agreement expressly contingent on obtaining the
consent of the Bank thereto) (collectively, "Transfers") to do any of the
foregoing, except:
(a) Transfers in the Ordinary Course of Business, but
excluding any Transfers of real Property;
(b) the sale of equipment to the extent that such
equipment is exchanged for credit against the purchase price of similar
replacement equipment, or the proceeds of such sale are reasonably promptly
applied to the purchase price of such replacement equipment;
(c) Transfers of Property for fair market value where the
Net Proceeds thereof do not exceed $1,000,000 in the aggregate and on a
cumulative basis in each case in any fiscal year;
(d) (i) Transfers from any Subsidiary of the Company to
the Company, (ii) Transfers from any Subsidiary of the Company to any other
Subsidiary of the Company, and (iii) Transfers constituting Investments
permitted by subsections 8.04(j), (n), (o), (p) or (q);
(e) Transfers of equipment to Plamex, S.A. where the net
book value of such equipment does not exceed $5,000,000 in the aggregate and on
a cumulative basis for any one fiscal year;
(f) sales of no more than 100,000 square feet in the
aggregate and on a cumulative basis of the Santa Xxxx Property; provided, that
(i) at the time of any such sale, no Event of Default shall exist and be
continuing or shall result from such sale, (ii) the gross sales price from such
sale shall be paid to the Company at least 80% in cash or Cash Equivalents, and
(iii) the price received (as established by independent appraisal satisfactory
to the Bank in the event of a sale to an Affiliate, or as determined in good
faith by the Board of Directors of the Company in the event of a sale to any
other Person) shall be not less than fair market value;
(g) Asset Sales (provided that the provisions of this
subsection 8.02(g) shall apply to Transfers permitted under the foregoing
subsections of this Section 8.02 where such Transfers
65
72
constitute Asset Sales), where (i) the Company or its Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least equal to
the Fair Market Value of the Property subject to such Asset Sale, (ii) at least
80% of such consideration consists of any combination of (x) cash or Cash
Equivalents or (y) Indebtedness of the Company or such Subsidiary assumed by
the purchaser of the Property subject to such Asset Sale and the Company or
such Subsidiary is unconditionally released from such Indebtedness or (z)
obligations of the purchaser of Property which are by their terms convertible
into, and actually converted into, cash or Cash Equivalents at least equal to
the Fair Market Value of such obligations at the time of the relevant Asset
Sale within 60 days of such Asset Sale and (iii) the Company or any Subsidiary
of the Company shall, within 360 days of such Asset Sale, make an offer to
purchase from, repay to, or Cash Collateralize, as the case may be (an "Asset
Sale Offer") the Bank and all holders of Other Senior Debt, up to a maximum
principal amount (expressed as a multiple of $1,000) of Loans and L/C
Obligations hereunder, and Other Senior Debt, at a purchase price equal to 100%
of the principal amount thereof, plus (without duplication in the case of Other
Senior Debt referred to in the last sentence hereof) accrued and unpaid
interest thereon, if any to the date of purchase, as the case may be (the
"Asset Sale Payment Date"); provided that the Company will not be required to
so apply Net Cash Proceeds received from any Asset Sale if, and only to the
extent that such Net Cash Proceeds are applied to acquire or construct property
or assets in lines of business related to, or representing natural extensions
of, the businesses of the Company and its Subsidiaries within 360 days after
the consummation of such Asset Sale; provided, further, that the Company may
defer the Asset Sale Offer until there is an aggregate unutilized Net Cash
Proceeds from such Asset Sales equal to or in excess of $5,000,000 at which
time the entire unutilized amount from the immediately preceding four fiscal
quarters, and not just the amount in excess of $5,000,000, shall be applied as
required pursuant to this subsection. The Asset Sale Offer, if required to be
made, must be consummated within the 360-day period referred to above.
Notwithstanding the foregoing, this subsection (g) shall not apply to an Asset
Sale or Asset Sales to the extent they involve not in excess of 100,000 square
feet of the Santa Xxxx Property, which shall be governed by subsection 8.02(f).
As used in this subsection, "principal amount" means, with respect to any Other
Senior Debt which was issued with original issue discount as of the date of any
Asset Sale Offer, the accreted value thereof at such date;
(h) Transfers on or after April 1, 1996 of existing raw
materials, work in process and finished goods inventory from the Company to
PBV; and
66
73
(i) Non-exclusive licensing (but exclusive as to region) of
technology by the Company to PBV in connection with the research and
development of related technology or the manufacture of inventory by PBV for
sale to the Company and for sale to non-U.S. customers.
8.03 Consolidations and Mergers. The Company shall not, and shall
not suffer or permit any of its Subsidiaries to, merge or consolidate with or
into any Person, except:
(a) any Subsidiary of the Company may merge with the
Company, provided that the Company shall be the continuing or surviving
corporation, or with any one or more Subsidiaries of the Company, provided that
if any transaction shall be between a Subsidiary and a Wholly-Owned Subsidiary,
the Wholly-Owned Subsidiary shall be the continuing or surviving corporation;
and
(b) mergers pursuant to Acquisitions permitted by Section
8.05.
8.04 Loans and Investments. The Company shall not purchase or
acquire, or suffer or permit any of its Subsidiaries to purchase or acquire, or
make any commitment therefor, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any Person, or make or
commit to make any Acquisitions, or make or commit to make any advance, loan,
extension of credit or capital contribution to or any other investment in, any
Person including any Affiliate of the Company (collectively, "Investments"),
except for:
(a) Investments existing on the Closing Date and listed in
Schedule 8.04;
(b) Investments in cash and Cash Equivalents, and
Investments in operating deposit accounts maintained in the Ordinary Course of
Business for operating fund purposes;
(c) Investments arising from transactions by the Company
or its Subsidiaries with customers or suppliers in the Ordinary Course of
Business, including Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers and suppliers and
in settlement of delinquent obligations of, and other disputes with, customers
or suppliers arising in the Ordinary Course of Business;
(d) Investments accepted in connection with a Transfer
permitted by and in accordance with the terms of subsections 8.02 (c), (f), or
(g);
67
74
(e) Investments consisting of (i) travel advances, employee
relocation loans, and other employee loans and advances in the Ordinary Course
of Business, (ii) loans to employees, officers or directors relating to their
purchase of equity securities of the Company or its Subsidiaries, or (iii)
other loans to officers and employees approved by the Board of Directors of the
Company provided that all of the foregoing do not in an aggregate exceed
$5,000,000 outstanding at any one time;
(f) notes receivable of, or prepaid royalties and other
credit extensions to, customers and suppliers in the Ordinary Course of
Business so long as such notes, prepaid royalties or other credit extensions
are due within one year of the date of acquisition thereof or cover no more
than one year's obligations to such customers or suppliers, as the case may be;
(g) Acquisitions permitted by Section 8.05;
(h) Currency Agreements and Investments with respect to
Interest Rate Protection Obligations not prohibited by Section 8.06;
(i) Investments by Foreign Subsidiaries in the Ordinary
Course of Business or required by local law or regulation;
(j) Investments by the Company in Subsidiaries of the Company
in an aggregate amount for all such Investments not to exceed $15,000,000 at
any time outstanding; provided that for purposes of calculating such amount,
(i) the aggregate amount of (A) all repayments of advances to, dividends paid
to, and Investments made in, and the Fair Market Value of all Property which
has been transferred to, pursuant to a Transfer permitted pursuant to Section
8.02, the Company by all such Subsidiaries and (B) mergers of Subsidiaries with
the Company, pursuant to mergers permitted pursuant to subsection 8.03(a),
shall be subtracted from the amount of such Investments to the extent the
foregoing amounts have not been previously netted against such Investments, and
(ii) the aggregate amount of Guaranty Obligations made pursuant to subsection
8.06(n) shall be added to the amount of such Investments;
(k) Investments in notes issued pursuant to the Senior Note
Indenture to the extent such notes are purchased solely with the proceeds of an
Asset Sale, to be shared pro rata with the Bank, as contemplated by subsection
8.02(g);
68
75
(l) Investments made by the Company for the benefit of
employees of the Company or its Subsidiaries for the purposes of deferred
compensation;
(m) Investments in notes issued pursuant to the Senior Note
Indenture to the extent such notes are not purchased with the proceeds of an
Asset Sale;
(n) Investments by the Company in PBV in the form of
prepayments to PBV for inventory to be purchased from PBV in an aggregate
cumulative amount not to exceed $20,000,000;
(o) Investments in the Company by Plantronics UK and
Plantronics Germany, in each case in the form of intercompany loans from such
Subsidiaries to the Company, in an aggregate cumulative amount not to exceed
$11,000,000;
(p) Investments by the Company or the Company's Wholly-Owned
Subsidiaries in Plantronics UK and Plantronics Germany, in each case in the
form of intercompany loans or capital contributions from the Company or such
Wholly-Owned Subsidiaries, as the case may be, in an aggregate cumulative
amount not to exceed $8,000,000;
(q) Investments by the Company in PBV in the form of deferred
payment obligations by PBV for the transfer on or after April 1, 1996 of title
to PBV of existing raw materials, work in process and finished goods inventory
of the Company; and
(r) other Investments not otherwise permitted under this
Section not exceeding an amount equal to $5,000,000 plus 15% times consolidated
cumulative net income of the Company for the period from and after the Closing
Date (provided, that if such cumulative net income is negative in respect of
such cumulative period, such net income shall be deemed to be zero),
outstanding at any one time.
8.05 Acquisitions. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, enter into or commit to undertake any
Acquisition, unless (a) such Acquisition is undertaken in accordance with all
material applicable Requirements of Law; (b) if any Person or business so
acquired (the "Acquiree") is subject to Section 12 of the Exchange Act or
subject to the requirements of Section 15(d) of such Act, the prior, effective
written consent of the board of directors or equivalent governing body of the
Acquiree is obtained and delivered to the Bank; and (c) immediately after
giving effect to any such Acquisition, there shall exist no Default or Event of
Default.
69
76
8.06 Limitation on Indebtedness; Contingent Obligations. The Company
shall not, and shall not suffer or permit any of its Subsidiaries to, create,
incur, assume, suffer to exist, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness or Contingent Obligations,
except for the following, each of which will be given independent effect:
(a) Indebtedness incurred pursuant to the Company
Documents;
(b) Indebtedness and Contingent Obligations existing on
the Closing Date and set forth in Schedule 8.06;
(c) Indebtedness and Contingent Obligations of Foreign
Subsidiaries of the Company incurred for working capital purposes; provided the
aggregate outstanding principal amount of Indebtedness and Contingent
Obligations incurred under this subsection (c) at the time of the incurrence
thereof shall not at any time exceed the lesser of (i) $5,000,000 or (ii) the
sum of (x) 85% of the net book value of the accounts receivable of the Foreign
Subsidiaries of the Company and (y) 50% of the net book value of the inventory
of the Foreign Subsidiaries of the Company, in the case of both clause (x) and
(y) calculated in accordance with GAAP at the time of each incurrence;
(d) Indebtedness of the Company under the Senior Note
Indenture and the notes issued pursuant thereto;
(e) Indebtedness and Contingent Obligations of the
Company and its Subsidiaries if, at the time of and after giving pro forma
effect to the incurrence of such Indebtedness and Contingent Obligations
(including the application of the proceeds thereof), the Consolidated Fixed
Charge Coverage Ratio of the Company is equal to or greater than 3:00 to 1:00;
provided that (i) in no event may the aggregate principal amount of
Indebtedness and Contingent Obligations incurred under this subsection (e) by
Subsidiaries of the Company exceed $2,500,000 at any time outstanding and (ii)
Indebtedness and Contingent Obligations incurred by the Company under this
subsection (e) shall not provide for any scheduled principal payment, mandatory
redemption or amortization or sinking fund requirement prior to February 18,
1998, except, in the case of Other Senior Debt, for any such payment,
redemption or amortization to be made solely with the proceeds of an Asset
Sale, to be shared pro rata with the Bank, as contemplated by subsection
8.02(g);
(f) (i) Purchase Money Indebtedness of the Company and
its Subsidiaries and (ii) Indebtedness of the Company or any Subsidiary of the
Company represented by trade letters of credit
70
77
incurred in the ordinary course of business, which are to be repaid in full not
more than one year after which such Indebtedness is originally incurred, to
finance the purchase of goods by the Company or a Subsidiary of the Company
such that the aggregate principal amount at any time outstanding under this
subsection (f) does not exceed $5,000,000;
(g) Capital Lease Obligations of the Company and its
Subsidiaries in an aggregate principal amount (determined in accordance with
GAAP) not to exceed $2,500,000 at any time outstanding under this subsection
(g).
(h) (i) Indebtedness and Contingent Obligations of a
Domestic Subsidiary of the Company owed to the Company or any of its
Wholly-Owned Domestic Subsidiaries so long as, in the case of Indebtedness and
Contingent Obligations owed by a Subsidiary of the Company to the Company, such
Indebtedness or Contingent Obligation is not subordinated in right of payment
to any other Indebtedness of such Subsidiary and (ii) Indebtedness or
Contingent Obligations of a Subsidiary of the Company owed to the Company or a
Subsidiary of the Company (other than Indebtedness or Contingent Obligations
governed by the immediately preceding clause (i)) incurred pursuant to and in
compliance with Section 8.04, and (iii) Subordinated Indebtedness of the
Company owed to a Subsidiary of the Company; provided that in the case of the
sale or disposition of the Capital Stock of any Subsidiary of the Company that
is owed Indebtedness or Contingent Obligations of the Company or another
Subsidiary of the Company referred to in this subsection (h) such that it
ceases to be a Subsidiary of the Company, such Indebtedness shall be deemed to
have been incurred again and subject to this Section 8.06;
(i) any replacements, renewals, refinancing and
extensions of outstanding Indebtedness or Contingent Obligations permitted by
subsections (b) (other than Indebtedness or Contingent Obligations to be repaid
out of the proceeds of the stock and debt offerings described in subsection
5.02(g)), (d) or (e) of this Section 8.06, provided that (i) any such
replacement, renewal, refinancing or extension of Indebtedness or Contingent
Obligations shall not be incurred by a Subsidiary of the Company (except in the
case of a replacement, renewal, refinancing or extension of Indebtedness or
Contingent Obligations of a Subsidiary of the Company referred to in subsection
(c) of this Section 8.06) and (ii) any such replacement, renewal, refinancing
or extension (x) shall not provide for any mandatory redemption, amortization
or sinking fund requirement in an amount greater than or at a time prior to the
amounts and times specified in the Indebtedness or Contingent Obligation being
replaced, renewed, refinanced or
71
78
extended and (y) shall not exceed the sum of (1) the principal amount (plus
accrued interest and an amount equal to the required prepayment premium, if
any) of the Indebtedness or Contingent Obligation being replaced, renewed,
refinanced or extended and (2) the reasonable fees and expenses of the Company
or its Subsidiaries, as the case may be, incurred in connection with such
replacement, renewal, refinancing or extension;
(j) (i) Indebtedness and Contingent Obligations under
Interest Rate Protection Obligations of the Company or any Subsidiary of the
Company; provided that (x) any Indebtedness to which any such Interest Rate
Protection Obligation relates bears interest at fluctuating interest rates and
is otherwise permitted by this Section 8.06 and (y) the notional principal
amount of any such Interest Rate Protection Obligation does not exceed the
principal amount of the Indebtedness or Contingent Obligation to which such
Interest Rate Protection Obligation relates and (ii) Indebtedness under
Currency Agreements of the Company; provided that such Currency Agreements do
not increase the Indebtedness of the Company and its Subsidiaries in aggregate
other than as a result of fluctuations in foreign currency exchange rates;
(k) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the Ordinary Course of Business, provided that such Indebtedness is
extinguished within three Business Days of its incurrence;
(l) (i) Guaranty Obligations of the Company with respect
to Indebtedness of Foreign Subsidiaries of the Company permitted under
subsection 8.06(c), and (ii) Guaranty Obligations of any Subsidiary of the
Company with respect to Indebtedness of the Company permitted hereunder;
(m) endorsements for collection or deposit in the Ordinary
Course of Business;
(n) Guaranty Obligations of the Company with respect to
Indebtedness of any Subsidiary of the Company, to the extent permitted by
Section 8.04(j);
(o) Indebtedness of PBV to the Company in respect of advances
by the Company to PBV for inventory to be purchased from PBV in an aggregate
cumulative amount not to exceed $20,000,000;
(p) Indebtedness of PBV to the Company in the form of
deferred payment obligations by PBV for the transfer on or after
72
79
April 1, 1996 of title to PBV of existing raw materials, work in process and
finished goods inventory of the Company;
(q) Indebtedness of the Company to Plantronics UK and
Plantronics Germany in an aggregate cumulative amount not to exceed $11,000,000
and Indebtedness of Plantronics UK and Plantronics Germany to the Company or
its Wholly-Owned Subsidiaries in an aggregate cumulative amount not to exceed
$8,000,000; and
(r) in addition to the items referred to in subsections (a)
through (q) above, Indebtedness and Contingent Obligations of the Company and
its Subsidiaries in an aggregate principal amount not to exceed $10,000,000 at
any one time outstanding; provided that in no event shall the amount of
Indebtedness and Contingent Obligations incurred by Subsidiaries of the Company
under this subsection (r) exceed $2,000,000 at any one time outstanding.
8.07 Transactions with Affiliates. The Company shall not, and shall
not suffer or permit any of its Subsidiaries to, enter into any transaction
with any Affiliate of the Company or of any such Subsidiary, except (a) as
expressly permitted by this Agreement, or (b) not otherwise prohibited by this
Agreement; in each case (a) and (b), upon fair and reasonable terms (when taken
in the light of any related series of transactions of which such transaction is
a part, if any) no less favorable to the Company or such Subsidiary than would
obtain in a comparable arm's-length transaction with a Person not an Affiliate
of the Company or such Subsidiary. For purposes of this Section 8.07, the
Company and its Subsidiaries shall not be deemed to be Affiliates of one
another.
8.08 Use of Proceeds. The Company shall not use any portion of the
Loan proceeds, or any Letter of Credit, directly or indirectly, (i) to purchase
or carry Margin Stock, (ii) to repay or otherwise refinance indebtedness of the
Company or others incurred to purchase or carry Margin Stock, (iii) to extend
credit for the purpose of purchasing or carrying any Margin Stock, or (iv) to
acquire any security in any transaction that is subject to Section 13 or 14 of
the Exchange Act.
8.09 Joint Ventures. The Company shall not and shall not suffer or
permit any of its Subsidiaries to enter into any Joint Venture, other than in
the Ordinary Course of Business (which shall include joint development
agreements for the development of technology or products).
8.10 Lease Obligations. The Company shall not, and shall not suffer
or permit any of its Subsidiaries to, create or
73
80
suffer to exist any obligations under any Operating Leases, except for:
(a) Operating Leases of the Company and its Subsidiaries
in existence on the Closing Date and any renewal, extension or refinancing
thereof;
(b) Operating Leases entered into by the Company or any
of its Subsidiaries after the Closing Date in the Ordinary Course of Business;
provided that the aggregate annual rental payments for all such Operating
Leases shall not exceed $3,000,000 in any fiscal year;
(c) Operating Leases entered into by the Company or any
of its Subsidiaries after the Closing Date, provided, that immediately prior to
giving effect to such lease, the Property subject to such lease was sold by the
Company or any such Subsidiary to the lessor pursuant to a transaction
permitted under Section 8.02.
8.11 Restricted Payments. The Company shall not, and shall not
suffer or permit any of its Subsidiaries (other than Wholly-Owned Subsidiaries)
to, declare or make any dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities (other than to the Company
or to any Wholly-Owned Subsidiary of the Company) on account of any shares of
any class of its capital stock, or purchase, redeem or otherwise acquire for
value any shares of its capital stock or any warrants, rights or options to
acquire such shares, or purchase, redeem or otherwise acquire for value any
notes issued under the Senior Note Indenture, now or hereafter outstanding;
except that the Company may:
(a) declare and make dividend payments or other
distributions to the extent payable in its common stock;
(b) purchase, redeem or otherwise acquire shares of its
common stock or warrants or options to acquire any such shares with the
proceeds received from the substantially concurrent issue of new shares of its
common stock;
(c) pay, purchase or redeem notes issued under the Senior
Note Indenture in accordance with the terms thereof (including payments,
purchases or redemptions made solely with the proceeds of an Asset Sale, to be
shared pro rata with the Bank, as contemplated by subsection 8.02(g));
(d) declare or pay cash dividends to its common stock
shareholders or repurchase its common stock or pay, purchase or redeem notes
issued under the Senior Note Indenture (to the
74
81
extent not permitted under subsection 8.12(c)), not to exceed as of any date of
declaration or payment 50% of the amount of cumulative consolidated net income
of the Company and its Subsidiaries (net of cumulative losses) for the period
from the Closing Date through such date of declaration or payment;
(e) purchase, redeem or otherwise acquire shares of its
common stock pursuant to any agreement entered into between it, or any
Subsidiary of the Company, and any officer, director, employee or consultant to
the Company or any of its Subsidiaries, entered into in the Ordinary Course of
Business, in which the Company is obligated or has the option to repurchase
from such officer, director, employee or consultant shares of common stock of
the Company upon such Person's termination of employment or services with the
Company or any such Subsidiary, not in excess of $250,000 in the aggregate; and
(f) repay, convert, exchange or redeem any Indebtedness
permitted under Section 8.06 which by its terms is convertible or exchangeable,
or constitutes the right to purchase any shares of any class of Capital Stock.
8.12 Net Funded Debt to EBITDA Ratio. The Company shall not permit
as of the last day of any fiscal quarter the Net Funded Debt to EBITDA Ratio to
be less than 3.00:1.00.
8.13 Tangible Net Worth. The Company shall not permit Tangible Net
Worth on a consolidated basis as of the last day of any fiscal quarter to be
less than the sum of (a) 90% of Tangible Net Worth as of the quarter ended
December 28, 1996 minus (b) the lesser of (i) the amount of its stock
repurchased by the Company after December 28, 1996; provided that such
repurchases are otherwise permitted hereunder, and (ii) $20,000,000 plus (c)
50% of the Company's consolidated net income (but not less any net losses for
any period) earned in each fiscal quarter starting with the quarter ended March
29, 1997 plus (d) 75% of the net proceeds of any equity securities issued after
December 28, 1996 plus (e) 75% of any increase in stockholders' equity
resulting from the conversion of debt securities to equity securities after
December 28, 1996.
8.14 Interest Coverage Ratio. The Company shall not permit the
Interest Coverage Ratio as of the last day of any fiscal quarter to be less
than 3.00:1.00.
8.15 Change in Business. The Company shall not, and shall not permit
any of its Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it on the
date hereof, except businesses
75
82
contemplated by it as have been disclosed to the Bank in writing prior to the
date hereof.
8.16 Accounting Changes. The Company shall not, and shall not suffer
or permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required or permitted by GAAP, or
change the fiscal year of the Company or of any of its consolidated
Subsidiaries, except that the Company may change its fiscal year and the fiscal
year of its consolidated Subsidiaries to a calendar year provided it obtains
any required consents of Governmental Authorities in connection therewith.
8.17 Amendments to Senior Note Indenture. The Company shall not (i)
amend, modify, supplement, waive or otherwise modify any provision of, the
Senior Note Indenture, or (ii) take or fail to take any action under the Senior
Note Indenture that, in the case of either clause (i) or (ii), has or is likely
to have a Material Adverse Effect.
ARTICLE IX
EVENTS OF DEFAULT
9.01 Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. The Company fails to pay, (i) when and
as required to be paid herein, any amount of principal of any Loan, or (ii)
within three Business Days after the same shall become due, any interest or fee
payable hereunder, or (iii) any other amount payable hereunder or pursuant to
any other Company Document after the same shall become due within 30 days of
notice by the Bank to such effect; or
(b) Representation or Warranty. Any representation or
warranty by the Company or any of its Subsidiaries made or deemed made herein
or in any Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or
observe any term, covenant or agreement contained in Sections 7.01, 7.02, 7.03,
7.11 or 7.12 or Article VIII; or
(d) Other Defaults. The Company fails to perform or
observe any other term or covenant contained in this Agreement or any Company
Document, and such default shall continue
76
83
unremedied for a period of 30 days after the earlier of (i) the date upon which
a Responsible Officer knew of such failure or (ii) the date upon which written
notice thereof is given to the Company by the Bank; or
(e) Cross-Default. The Company or any of its
Subsidiaries (i) fails to make any payment of principal or interest in respect
of any Indebtedness or Contingent Obligation which Indebtedness or Contingent
Obligation has an aggregate principal amount (including amounts owing
thereunder to all creditors under any combined or syndicated credit
arrangement) of more than $5,000,000 outstanding when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto; or (ii) fails to perform or observe
any other condition or covenant, or any other event shall occur or condition
exist, under any agreement or instrument relating to any such Indebtedness or
Contingent Obligation of more than $5,000,000 outstanding, and such failure
continues after the applicable grace or notice period, if any, specified in the
document relating thereto if the effect of such failure, event or condition is
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness
to be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof
to be demanded, and such failure shall not have been cured to the satisfaction
of the Bank for a period of 15 days after the earlier of (A) the date on which
a Responsible Officer knew of such default, or (B) the date upon which written
notice thereof is given to the Company by the Bank; or (iii) any such
Indebtedness or such Contingent Obligation shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment) or cash collateralized, prior to the stated maturity
thereof; or
(f) Insolvency; Voluntary Proceedings. The Company or
any of its Material Subsidiaries (i) ceases or fails to be Solvent, or
generally fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency Proceeding with respect to
itself; or (iv) takes any formal action through its Board of Directors or
through a Responsible Officer or comparable officer of such Material Subsidiary
to effectuate or authorize any of the foregoing; or
77
84
(g) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Company or any Material
Subsidiary of the Company, or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a substantial part of
the Company's or any of its Material Subsidiaries' Properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) the
Company or any of its Material Subsidiaries admits the material allegations of
a petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Company or any of its Material Subsidiaries acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its Property or business;
(h) ERISA. (i) An ERISA Event shall occur with respect
to a Pension Plan which has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the Pension Plan or PBGC
in an aggregate amount in excess of $1,000,000; (ii) the commencement or
increase of contributions to, or the adoption of or the amendment of a Pension
Plan by the Company which has resulted or could reasonably be expected to
result in an increase in Unfunded Pension Liability among all Pension Plans in
an aggregate amount in excess of $1,000,000; or (iii) any of the following
shall occur which, individually or in combination, has resulted or could
reasonably be expected to result in a Material Adverse Effect: (1) the
representations and warranties contained in Section 6.07 (a) or (b) shall cease
to be true and correct; or (2) the Company shall fail to satisfy its
contribution requirements under Section 412(c)(11) of the Code for a Plan,
whether or not it has sought a waiver under Section 412(d) of the Code.
(i) Monetary Judgments. Any final monetary judgments
orders, or decrees shall be entered against the Company or any of its Material
Subsidiaries involving in the aggregate a liability (excluding amounts covered
by independent third-party insurance to the extent to which such insurer has
not contested coverage) as to any single or related series of transactions,
incidents or conditions, of $1,000,000 or more, and the same shall remain
unpaid, unvacated, unbonded and unstayed for a period of 45 consecutive days
after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment,
order or decree shall be rendered against the Company
78
85
or any of its Material Subsidiaries which does or would reasonably be expected
to have a Material Adverse Effect, and there shall be any period of 45
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(k) Invalidity of Company Documents. Any of the Company
Documents after delivery thereof shall for any reason be revoked or
invalidated, or otherwise cease to be in full force and effect, or the Company
shall contest in any manner the validity or enforceability thereof, or the
Company shall deny that it has any further liability or obligation thereunder.
9.02 Remedies. If any Event of Default occurs and is continuing, the
Bank may:
(a) declare by written notice to the Company its
Commitment to make Loans and Issue Letters of Credit to be terminated,
whereupon such Commitment shall forthwith be terminated;
(b) declare by written notice to the Company the unpaid
principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any other
Company Document to be immediately due and payable; without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Company;
(c) declare by written notice to the Company an amount equal
to the maximum aggregate amount that is or at any time thereafter may become
available for drawing under any then-outstanding Letters of Credit (whether or
not any beneficiary shall have presented, or shall be entitled at such time to
present, the drafts or other documents required to draw under such Letters of
Credit) to be immediately due and payable and to demand that the Company Cash
Collateralize the Obligations to the extent of outstanding and wholly or
partially undrawn Letters of Credit issued on its account, whereupon the
Company shall so Cash Collateralize; and
(d) exercise all rights and remedies available to it
under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in paragraph
(f) or (g) of Section 9.01 above with respect to the Company (in the case of
clause (i) of paragraph (g) upon the expiration of the 60-day period mentioned
therein), the obligation of the Bank to make Loans and Issue Letters of Credit
shall automatically terminate and the unpaid principal
79
86
amount of all outstanding Loans and L/C Obligations and all interest and other
amounts as aforesaid shall automatically become due and payable without further
act of the Bank.
9.03 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Company therefrom, shall be effective unless
the same shall be in writing and signed by the Bank, and then such waiver shall
be effective only in the specific instance and for the specific purpose for
which given.
10.02 Notices.
(a) All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered, to the
address or number specified for notices on the applicable signature page
hereof; or to such other address as shall be designated by such party in a
written notice to the other parties, and as to each other party, at such other
address as shall be designated by such party in a written notice to the other
party.
(b) All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile,
telexed or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery;
except that notices pursuant to Article II or Article III shall not be
effective until actually received by the Bank.
(c) The Company acknowledges and agrees that any
agreement of the Bank at Articles II and III herein to receive certain notices
by facsimile is solely for the convenience and
80
87
at the request of the Company. The obligation of the Company to repay the
Loans and L/C Obligations shall not be affected in any way or to any extent by
any failure by the Bank to receive written confirmation of any facsimile notice
or the receipt by the Bank of a confirmation which is at variance with the
terms understood by the Bank to be contained in the facsimile notice.
10.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
10.04 Costs and Expenses. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) pay or reimburse the Bank within 30 Business Days
after demand for all reasonable costs and expenses incurred by the Bank in
connection with the development, preparation, delivery, and execution of, and
any amendment, supplement, waiver or modification to, this Agreement, any Loan
Document and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including the reasonable Attorney Costs incurred by the Bank with respect
thereto; provided, that such costs in connection with the development,
preparation, delivery, execution and closing hereof shall not exceed $15,000;
(b) pay or reimburse the Bank within ten Business Days
after demand for all costs and expenses incurred by it in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
during the existence of an Event of Default (including in connection with any
"workout" or restructuring regarding the Loans) under this Agreement, any other
Loan Document, and any such other documents, including Attorney Costs, incurred
by the Bank; and
(c) pay or reimburse the Bank within ten Business Days
after demand for all appraisal (including the allocated cost of internal
appraisal services), audit, environmental inspection and review (including the
allocated cost of such internal services), search and filing costs, fees and
expenses, incurred or sustained by the Bank in connection with the matters
referred to under paragraphs (a) and (b) of this Section.
81
88
10.05 Indemnity. Whether or not the transactions contemplated hereby
shall be consummated:
(a) General Indemnity. The Company shall pay, indemnify,
and hold the Bank and each of its officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses or disbursements (including
reasonable Attorney Costs) of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement and any other Loan Documents, or the transactions contemplated hereby
and thereby, and with respect to any investigation, litigation or proceeding
related to this Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that the Company shall
have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities arising from the gross negligence or willful misconduct
of such Indemnified Person.
(b) Survival; Defense. The obligations in this Section
10.05 shall survive payment of all other Obligations. At the election of any
Indemnified Person, the Company shall defend such Indemnified Person using
legal counsel reasonably satisfactory to the Company and such Indemnified
Person, at the sole cost and expense of the Company. All amounts owing under
this Section 10.05 shall be paid within 30 days after demand.
10.06 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that the Company may not
assign or transfer any of its rights or obligations under this Agreement (other
than by operation of law pursuant to any merger or consolidation permitted by
Section 8.03) without the prior written consent of the Bank.
10.07 Assignments, Participations, etc.
(a) The Bank may at any time assign and delegate to one
or more Persons (each an "Assignee") all or any part of the Loans, the L/C
Obligations, the Commitment and the other rights and obligations of the Bank
hereunder in an amount no less than $5,000,000 to each Assignee; provided,
however, that the Company may continue to deal solely and directly with the
Bank in connection with the interest so assigned to an Assignee until written
notice of such assignment, together with payment
82
89
instructions, addresses and related information with respect to the Assignee,
shall have been given to the Company by the Bank and the Assignee; and
provided, further, that any such Assignee shall be (i) a commercial bank
organized under the laws of the United States, or any state thereof, and having
a combined capital and surplus of at least $100,000,000; or (ii) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, provided that such bank is acting through a
branch or agency located in the United States.
(b) The Bank may at any time sell to one or more Persons
(a "Participant") participating interests in any Loans, L/C Obligations, the
Commitment and the other interests of the Bank hereunder and under the other
Loan Documents; provided, that, the Bank shall not transfer or grant any
participating interest under which the Participant shall have rights to approve
any amendment to, or any consent or waiver with respect to the Company
Documents except to the extent such amendment, consent or waiver would (i)
increase or extend the Commitment or subject the Bank to any additional
obligations; (ii) postpone or delay any date fixed for any payment of
principal, interest, fees or other amounts due under any Company Document;
(iii) reduce the principal of, or the rate of interest specified herein on any
Loan, or of any fees or other amounts payable under any Company Document. In
the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Company Documents, and all amounts
payable by the Company hereunder shall be determined as if the Bank had not
sold such participation, except that if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as the Bank
under this Agreement. The Company shall not be required to incur any expense
in connection with any such participation.
(c) The Bank agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
non-public information provided to it by the Company or any Subsidiary of the
Company in connection with this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information for any
purpose or in any manner other than as contemplated by this Agreement; except
to the extent such information (i) was or
83
90
becomes generally available to the public other than as a result of a
disclosure by the Bank, or (ii) was or becomes available on a non-confidential
basis from a source other than the Company, provided that such source is not
bound by a confidentiality agreement with the Company known to the Bank;
provided, that the Bank may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Authority to which the Bank is
subject or in connection with an examination of the Bank by any such authority;
(B) pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to the
Bank's independent auditors and other professional advisors; (E) to the extent
reasonably required in connection with any litigation or proceeding to which
the Bank or any of its Affiliates may be party; and (F) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; and provided, further that in the event of a
disclosure pursuant to clause (B), (C) or (E) of this subsection, the Bank
shall, unless prohibited from doing so by any applicable Requirement of Law,
give notice to the Company prior to any such disclosure and shall use
commercially reasonable efforts to cooperate with the Company (at no cost to
the Bank) to seek a protective order with respect to the information requested
to be disclosed. Notwithstanding the foregoing, the Company authorizes the
Bank to disclose to any Participant or Assignee and to any prospective
Participant or Assignee, such financial and other information in the Bank's
possession concerning the Company or its Subsidiaries which has been delivered
to the Bank pursuant to this Agreement or which has been delivered to the Bank
by the Company in connection with the Bank's credit evaluation of the Company
prior to entering into this Agreement; provided that, unless otherwise agreed
by the Company, such Participant or Transferee agrees in writing to the Bank to
keep such information confidential to the same extent required of the Bank
hereunder.
10.08 Set-off. In addition to any rights and remedies of the Bank
provided by law, if an Event of Default exists, the Bank is authorized at any
time and from time to time, without prior notice to the Company, any such
notice being waived by the Company to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing to, the Bank to or for the credit or the account of the Company against
any and all Obligations of the Company owing to the Bank, now or hereafter
existing, irrespective of whether or not the Bank shall have made demand under
this Agreement or any Loan Document. The Bank agrees promptly to notify the
Company after any such set-off and application made by the Bank; provided,
however, that the
84
91
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Bank under this Section 10.08 are in addition
to the other rights and remedies (including other rights of set-off) which the
Bank may have.
10.09 Automatic Debits of Fees. With respect to any facility fee or
other regularly scheduled fee or cost, due and payable to the Bank hereunder by
the Company, the Company hereby authorizes the Bank, until such authorization
is revoked by the Company in writing, to debit any deposit account of the
Company with the Bank in an amount such that the aggregate amount debited from
all such deposit accounts does not exceed such fee or cost due from the
Company. If there are insufficient funds in such deposit accounts to cover the
amount of the fee or other cost or expense then due, such debits will be
reversed (in whole or in part, in the Bank's sole discretion) and such amount
not debited shall be deemed to be unpaid. No such debit under this Section
10.09 shall be deemed a setoff.
10.10 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument.
10.11 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.12 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company and the Bank and
their permitted successors and assigns, and no other Person shall be a direct
or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents. Neither the Bank nor, except to the extent expressly set forth
herein, the Company (or any of its Subsidiaries) shall have any obligation to
any Person not a party to this Agreement or other Loan Documents.
10.13 Time. Time is of the essence as to each term or provision of
this Agreement and each of the other Loan Documents.
85
92
10.14 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE BANK
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) SUBJECT TO SECTION 10.15, ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT AND ANY OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR
THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE COMPANY AND THE BANK CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE JURISDICTION OF THOSE COURTS. SUBJECT TO SECTION
10.15, EACH OF THE COMPANY AND THE BANK IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO. THE COMPANY AND THE BANK EACH WAIVE PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY CALIFORNIA LAW.
10.15 Arbitration; Reference.
(a) Mandatory Arbitration. Any controversy or claim
between or among the parties, including but not limited to those arising out of
or relating to this Agreement or any agreements or instruments relating hereto
or delivered in connection herewith and any claim based on or arising from an
alleged tort, shall at the request of any party be determined by arbitration.
The arbitration shall be conducted in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitrator(s) shall give effect to
statutes of limitation in determining any claim. Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator(s).
Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief
or pursuit of a provisional or ancillary remedy shall not constitute a waiver
of the right of any party, including the plaintiff, to submit the controversy
or claim to arbitration if any other party contests such action for judicial
relief.
(b) Judicial Reference. At the request of any party a
controversy or claim which is not submitted to arbitration as provided and
limited in subsection (a) of this Section shall be determined by a reference in
accordance with California Code of
86
93
Civil Procedure Section 638 et seq. If such an election is made, the parties
shall designate to the court a referee or referees selected under the auspices
of the AAA in the same manner as arbitrators are selected in AAA-sponsored
proceedings. The presiding referee of the panel, or the referee if there is a
single referee, shall be an active attorney or retired judge. Judgment upon
the award rendered by such referee or referees shall be entered in the court in
which such proceeding was commenced in accordance with California Code of Civil
Procedure Sections 644 and 645.
(c) Provisional Remedies and Setoff. No provision of
this Section shall limit the right of any party to this Agreement to exercise
the right of setoff, or to seek or obtain provisional or ancillary remedies
from a court of competent jurisdiction before, after, or during the pendency of
any arbitration or other proceeding. The exercise of a remedy does not waive
the right of either party to resort to arbitration or reference.
10.16 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between the Company
and the Bank, and supersedes all prior or contemporaneous Agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
87
94
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
PLANTRONICS, INC.
By: /s/Xxxx X. Xxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President-Legal,
Senior General Counsel
and Secretary
Address for notices:
000 Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Address for notices:
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: San Francisco Corporate
Banking #3838
Facsimile: (000) 000-0000
Lending Office:
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Bank's Payment Office:
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
88
95
SCHEDULE 6.05
LITIGATION
1. In May, 1996, the Company received notice from the Bureau of
Competition of the Federal Trade Commission ("FTC") that the FTC staff
is conducting a non-public investigation to determine whether certain
manufacturers of lightweight telephone headsets may be engaged in
anticompetitive practices in violation of Section 5 of the Federal Trade
Commission Act. The Company has not been notified that it is a
particularized subject of the investigation. There can be no assurance
that the Company will not become a particularized subject of the
investigation, that the FTC staff or the FTC itself will not proceed to
a full public investigation in this matter, or that the outcome of any
public investigation will not have a Material Adverse Effect.
SCHEDULE 6.05
Page 1 of 1
96
SCHEDULE 6.06
ERISA MATTERS
NONE
SCHEDULE 6.06
Page 1 of 1
97
SCHEDULE 6.10
PERMITTED LIABILITIES
MATERIAL INDEBTEDNESS NOT INCLUDED IN FINANCIAL STATEMENTS:
None.
MATERIAL OPERATING LEASES NOT INCLUDED IN FINANCIAL STATEMENTS:
1. Effective April 1, 1997, Xxxxxx Equipment Corporation, a wholly owned
subsidiary of the Company, will merge into the Company. Effective on
that date, the Company will take assignment of and be responsible on the
following Material Operating Lease:
Lessor: Market Place Leasing, Inc.
Lessee: Plantronics, Inc., as assignee of Xxxxxx Equipment
Corporation.
Location: Ringgold, GA
Term: Two years, commencing August 1, 1996.
Rent: $52,600.50 per year, through July 31, 1997; $58,445.00 per
year, in period from August 1, 1997, through July 31, 1998.
SCHEDULE 6.10
Page 1 of 1
98
SCHEDULE 6.15
INTELLECTUAL PROPERTY MATTERS
NONE
SCHEDULE 6.15
Page 1 of 1
99
SCHEDULE 6.16
SUBSIDIARIES AND OTHER EQUITY INVESTMENTS
(a) Subsidiaries of Plantronics, Inc.
(b) Equity Investments
(c) Material Subsidiaries
SCHEDULE 6.16
Page 1 of 4
100
SCHEDULE 6.16(a)
SUBSIDIARIES OF PLANTRONICS, INC.
COMPANY NAME JURISDICTION OF
INCORPORATION
Emtel, S.A. Mexico
Xxxxxxxxx Electronics Corporation Maryland
Pacific Plantronics, Inc. California
Plamex, S.A. de C.V. Mexico
Plantronics Acoustics Italia, S.r.l. Italy
Plantronics B.V. Netherlands
Plantronics Canada Limited Canada
Plantronics France S.A.R.L. France
Plantronics Futurecomms, Inc. California
Plantronics GmbH Germany
Plantronics Holdings Limited Canada
Plantronics International do Brasil, Ltda. Brazil
Plantronics K.K. Japan
Plantronics Limited United Kingdom
Plantronics, A.G. Switzerland
Xxxxxx Equipment Corporation Georgia
SCHEDULE 6.16
Page 2 of 4
101
SCHEDULE 6.16(b)
EQUITY INVESTMENTS
NONE
SCHEDULE 6.16
Page 3 of 4
102
SCHEDULE 6.16(c)
MATERIAL SUBSIDIARIES
Plantronics B.V.
Plantronics Limited
SCHEDULE 6.16
Page 4 of 4
103
SCHEDULE 8.01
PERMITTED LIENS
1. Financing Statement by and between Xxxxxx Equipment Corporation
("Debtor") and Pitney Xxxxx Credit Corporation ("Secured Party")
recorded January 26, 1989 with the Catoosa County Clerk, Ringgold,
Georgia, File Number 89-4675.
2. Financing Statement by and between Plantronics, Inc. ("Lessee") and AT&T
Credit Corporation ("Lessor") recorded December 21, 1989, with the
Secretary of State of the State of California, File Number 893241742.
3. Financing Statement by and between Plantronics, Inc. ("Lessee") and AT&T
Credit Corporation ("Lessor") recorded October 31, 1991, with the
Secretary of State of the State of California, File Number 91233579.
4. Financing Statement by and between Plantronics, Inc. ("Lessee") and
Advanta Leasing Corp. ("Lessor") recorded October 17, 1994, with the
Secretary of State of the State of California, File Number 9431260783.
SCHEDULE 8.01
Page 1 of 1
104
SCHEDULE 8.04
PERMITTED INVESTMENTS
NAME OF ENTITY INVESTMENT AMOUNT
Coastcom Holdings, Inc. 42,500 shares, Series A Preferred $500,013
stock [Cost basis]
Telequest 100 shares, common stock $356
[Cost basis]
Greyhound Lines, Inc. 60 shares, common stock $0
[Cost Basis]
Greyhound Lines, Inc. 10% Senior Note, Due 2001 $1,000
[Estimated,
Cost Basis]
SCEcorp 7,440 shares, common stock $89,272
[Estimated,
Cost Basis]
Continental Airlines, Inc. 17 shares, common stock $0
[Cost Basis]
Plantronics, Inc. 349,475 shares, common stock, $12,822,237.75
repurchased by the Company and [Estimated,
held as Treasury Stock Cost Basis]
SCHEDULE 8.04
Page 1 of 1
105
SCHEDULE 8.06
PERMITTED INDEBTEDNESS AND
CONTINGENT LIABILITIES
PROMISSORY NOTES:
1. Promissory Notes in the aggregate principal amount of $65,050,000,
issued under the Senior Note Indenture, as that term is defined in
Section 1.01 of the Credit Agreement.
FOREIGN LINES OF CREDIT:
DATE BORROWER LENDER MAXIMUM
[PURPOSE] AMOUNT
12/00/95 Plantronics, Ltd. Midland Bank, Plc. L980,000
[Duty deferrals, negotiation
cheques and issuance of
irrevocable documentary
letters of credit]
CONTINGENT OBLIGATIONS - EXISTING/OPEN LETTERS OF CREDIT:
None except those issued by Bank of America under existing Credit Agreement and
shown upon the February 3, 1997, statement of account of Bank of America and
restated below:
NUMBER DATE - EXP. DATE AMOUNT
220201 1/20/97-7/15/97 306,805.00(1)
[Stand-by]
222081 11/21/94-12/01/97 200,000.00
1002279 01/30/96-01/30/97 129,477.60
------------
(1) The Company believes the amount should be $164,975.00 to reflect payment
upon the account secured by the subject letter of credit.
SCHEDULE 8.06
Page 1 of 2
106
CONTINGENT OBLIGATIONS - EXISTING/OPEN LETTERS OF CREDIT [CON'T]:
1005172 05/13/96-03/31/97 483,293.26
1007532 07/12/96-03/31/97 42,900.00
1012645 10/03/96-02/28/97 968,853.18
1014103 11/08/96-01/31/97 84,757.60
CONTINGENT OBLIGATIONS - GUARANTEES:
DATE GUARANTOR PRINCIPAL OBLIGOR CREDITOR
[INSTRUMENT OR
TRANSACTION
07/00/93 Plantronics, Inc. Plamex, S.A. de C.V. Inmobiliaria Mex-
[Guarantee of real Hong, S.A. de C.V.
property lease (Lessor)
obligations]
10/27/95 Plantronics, Inc. Plantronics, Ltd. Midland Bank, Plc.
[Duty deferrals,
negotiation of
cheques and issuance
of irrevocable
documentary letters
of credit]]
SCHEDULE 8.06
Page 2 of 2
107
EXHIBIT A
NOTICE OF BORROWING
-------------------
Date: _________________, 199_
To: Bank of America National Trust and Savings Association, relating to the
Credit Agreement dated as of February 19, 1997 (as extended, renewed,
amended or restated from time to time, the "Credit Agreement") between
Plantronics, Inc. and Bank of America National Trust and Savings
Association.
Ladies and Gentlemen:
The undersigned, Plantronics, Inc. (the "Company"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.03 of
the Credit Agreement, of the borrowing specified herein:
1. The Business Day of the proposed borrowing is ____________
____________________________, 19__.
2. The aggregate amount of the proposed borrowing is
$_________________.
3. The borrowing is to be comprised of [a Base Rate] [a CD
Rate Loan] [an Offshore Rate] Loan.
4. [If applicable:] The duration of the Interest Period for
the [CD Rate Loan] [Offshore Rate Loan] included in the borrowing shall
be ___________ [months] [days].
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representatives and warranties of the Company
contained in Article VI of the Credit Agreement are true and correct in
all material respects as though made on and as of such date (except to
the extent such representations and warranties relate to an earlier
date, in which case they are true and correct in all material respects
as of such date);
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed borrowing;
(c) there has not occurred a Material Adverse Effect; and
X-0
000
(x) the proposed borrowing will not cause the Effective Amount
of all Loans and L/C Obligations to exceed the Commitment.
Plantronics, Inc.
By:
------------------------------------
Title:
---------------------------------
A-2
109
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: ______________, 199__
To: Bank of America National Trust and Savings Association relating to the
Credit Agreement dated as of February 19, 1997 (as extended, renewed,
amended or restated from time to time, the "Credit Agreement") between
Plantronics, Inc. and Bank of America National Trust and Savings
Association.
Ladies and Gentlemen:
The undersigned, Plantronics, Inc. (the "Company"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.04 of
the Credit Agreement, of the (conversion) (continuation) of the Loans specified
herein, that:
1. The date of the (conversion) (continuation) is
____________, 19__.
2. The aggregate amount of the Loans to be (converted)
(continued) is $___________.
3. The Loans are to be (converted into) (continued as) (CD
Rate) (Offshore Rate) (Base Rate) Loans.
4. (If applicable:) The duration of the Interest Period for the
Loans included in the (conversion) (continuation) shall be (____ days)
(____ months).
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed (conversion)
(continuation), before and after giving effect thereto and to the application
of the proceeds therefrom:
(a) no Default or Event of Default has occurred and is
continuing, or would result from such proposed (conversion)
(continuation); and
B-1
110
(b) the proposed (conversion) (continuation) will not cause the
Effective Amount of all Loans and all L/C Obligations to exceed the
Commitment.
Plantronics, Inc.
By: ________________________________
Title: _____________________________
B-2
111
EXHIBIT C
PLANTRONICS, INC.
COMPLIANCE CERTIFICATE
Date: _____________________
Reference is made to that certain Credit Agreement dated as of February
19, 1997 between Plantronics, Inc. (the "Company") and Bank of America National
Trust and Savings Association, a national banking association ("Bank"). Unless
otherwise defined herein, capitalized terms used herein have the respective
meanings assigned to them in the Credit Agreement.
The undersigned Responsible Officer of Plantronics, Inc. hereby
certifies as of the date hereof that he/she is the _____________________________
of the Company, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Bank on the behalf of the Company and its consolidated
Subsidiaries and not as an individual, and that:
(Use the following paragraph if this Certificate is delivered in connection
with the financial statements required by subsection 7.01(a) of the Agreement.)
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
audited consolidated balance sheet of the Company as at the end of the fiscal
year ended __________________, 199__ and (b) the related consolidated statements
of income or operations, shareholders' equity and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, accompanied by the opinion of Price Waterhouse (or another
nationally-recognized certified independent public accounting firm).
or
(Use the following paragraph if this Certificate is delivered in connection
with the financial statements required by subsection 7.01(b) of the Agreement.
1. Attached as Schedule 1 hereto is (a) a true and correct copy of the
unaudited consolidated balance sheet of the Company as of the end of such
quarter ended ________________, 199__, and (b) the related consolidated
statements of income, shareholders' equity and cash flows of the Company and
its consolidated Subsidiaries for the period commencing on the first day and
ending on the last day of such quarter.
C-1
112
2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and conditions (financial or otherwise) of
the Company during the accounting period covered by the attached financial
statements.
3. The attached financial statements are complete and correct in all
material respects, and have been prepared in accordance with GAAP on a basis
consistent with prior periods (subject to changes resulting from normal
year-end adjustments and the absence of footnotes (for financial statements
required by subsection 7.01(b) of the Agreement)).
4. The attached financial statements are certified by a Responsible
Officer of the Company and fairly state the consolidated financial conditions
and results of operations of the Company in all material respects when
considered in relation to the consolidated financial statements of the Company
taken as a whole.
5. To the best of the undersigned's knowledge, the Company during such
period, has observed, performed or satisfied in all material respects all of
its covenants and other agreements, and satisfied in all material respects
every condition in the Agreement to be observed, performed or satisfied by the
Company, and the undersigned has no knowledge of any Default or Event of
Default occurring during and existing at the end of the accounting period
covered by the attached financial statements, which has not been previously
disclosed in writing to the Bank.
6. The following financial covenants analyses and information set
forth on Schedule 2 attached hereto are true and accurate on and as of the date
of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________________, 199__.
PLANTRONICS, INC.
By: _______________________________
Title: ____________________________
C-2
113
Date: ______________, _____
For the fiscal quarter/year
ended ______________, _____
SCHEDULE 2
to the Compliance Certificate
($ in 000's)1/
Actual Required/Permitted
------ ------------------
1. Section 8.12 Net Funded Debt to
EBITDA Ratio.
The ratio of:
A. Net Funded Debt:
the difference of:
(i) Indebtedness2/ __________
plus
(ii) Guaranty Obligations2/ __________
less
(iii) cash and Cash Equivalents3/
__________
(i)+(ii)-(iii) = __________
B. EBITDA4/
the sum of:
(i) net income or loss5/ __________
plus
(ii) depreciation __________
plus
(iii) amortization __________
plus
(iv) interest __________
plus
(v) taxes on income __________
plus
1/ All items determined on a consolidated basis and in accordance
with GAAP, consistently applied.
2/ See definition of Net Funded Debt for certain items excluded.
3/ Not subject to any Lien, and to extent exceeding $5,000,000.
4/ Calculated on a rolling four-quarter basis.
5/ Without giving effect to extraordinary losses or gains
C-3
114
Actual Required/Permitted
------ ------------------
(vi) non-cash expenses or charges for
management stock compensation
__________
(i)+(ii)+(iii)+(iv)+(v)+(vi) = __________
A
-----
B = Not more than 3.00
==========
2. Section 8.13 Tangible Net Worth.
-------------------------------
Tangible Net Worth: Not to be less than the sum of:
(i) gross book value of assets __________ A. Tangible Net Worth as of
12/28/96:
less
----
(i) gross book value
(ii) goodwill, licensing agreements, patents, of assets __________
trademarks, trade names, organization
expenses, treasury stock, unamortized less
debt discount and premium, deferred ----
charges and other like intangibles
(ii) goodwill, licensing
agreements, patents, trade-
less marks, trade names, organi-
---- zation expenses, treasury
__________ stock, unamortized debt
(iii) reserves applicable to assets (including discount and premium, deferred
reserves for depreciation and charges and other like
amortization) intangibles __________
less
----
less
---------- ----
(iii) reserves applicable
to assets (including reserves
for depreciation and
amortization) __________
(iv) all liabilities (including less
accrued and deferred income taxes and ----
any subordinated
liabilities) (iv) all liabilities
__________ (including accrued and
deferred income taxes and
(i)-(ii)-(iii)-(iv) = subordinated liabilities) __________
==========
(i)-(ii)-(iii)-(iv) = __________
x 90%
------------------
6/
==========
less
----
----------------------------------
6/ Calculation will need to be done for first compliance certificate
only; thereafter, this number will be inserted.
C-4
115
Actual Required/Permitted
------ ------------------
B. Stock repurchases after
12/28/96 (not to exceed
$20,000,000) __________
plus
C. 50% of net income after
income taxes (without
subtracting losses)
earned after 12/28/96 __________
plus
C-5
116
Actual Required/Permitted
------ ------------------
D. 75% of net proceeds
from any equity
securities issued
after 12/28/96 __________
plus
----
E. 75% of any increase
in stockholder's
equity resulting
from the conversion
of debt securities
to equity securities
after 12/28/96 __________
A - B + C + D + E =
==========
3. Section 8.14 Interest Coverage
Ratio.7/.
The ratio of:
A. Adjusted EBITDA
(i) EBITDA (from 1(B) above) __________
less
----
(ii) Capital Expenditures __________
(i) - (ii) __________
B. Cash Interest Expense
(i) Total interest expense
(including commissions,
discounts, fees and other charges in
connection with standby letters of
credit and similar instruments
__________
less
----
(ii) Non-cash items included in (i)
__________
(i) - (ii) __________
A
-----
B = Not less than 3.00
==========
----------------------------------
7/ Calculated on a rolling four-quarter basis.
-
C-6
117
EXHIBIT D
FORM OF LEGAL OPINION
(Attached)
D-1
118
As of February 19, 1997
To Bank of America National Trust
and Savings Association
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
RE: PLANTRONICS, INC. CREDIT AGREEMENT
Ladies and Gentlemen:
We have acted as special counsel for Plantronics, Inc., a Delaware
corporation (the "Company"), in connection with the execution and delivery of
(i) the Credit Agreement, dated as of February 19, 1997 (the "Credit
Agreement"), between the Company and Bank of America National Trust and Savings
Association (the "Bank") and (ii) forms of the Application and Agreement for
Commercial Letter of Credit, Application for Amendment to Commercial Letter of
Credit, Application and Agreement for Standby Letter of Credit, and Application
for Amendment to Standby Letter of Credit (collectively, the "L/C
Applications," and, together with the Credit Agreement, the "Loan Documents").
This opinion is provided to the Bank as required pursuant to Section
5.01(f) of the Credit Agreement. Terms defined in the Credit Agreement and
used without other definition herein shall have the respective meanings
assigned, directly or indirectly by reference, to such terms in the Credit
Agreement, and terms used herein and not defined herein or in the Credit
Agreement shall have the respective meanings assigned to such terms in the
Uniform Commercial Code as in effect in the State of California on the date
hereof (the "UCC").
In connection with this opinion, we have examined:
(i) executed copies of the Credit Agreement;
(ii) unexecuted forms of the L/C Applications, excluding the terms
and conditions interlined on the reverse side thereof, as delivered to us for
review;
000
Xxxx xx Xxxxxxx National Trust
and Savings Association
As of February 19, 1997
Page 2
(iii) the Certificate of Incorporation and Bylaws of the Company, as
amended to date;
(iv) records of proceedings, consisting of draft minutes of a
meeting of the Board of Directors of the Company, during or by which
resolutions were adopted relating to matters covered by this opinion not yet
approved by the Board;
(v) the respective certificates of the Secretary and certain
officers of the Company as to certain factual matters (copies of which have
been delivered to the Bank pursuant to Sections 5.01(b), (c) and (e) of the
Credit Agreement); and
(vi) each of the agreements listed on Annex A hereto (the "Reviewed
Agreements").
In addition, we have made such other investigations as we have deemed
necessary to enable us to render the opinions hereinafter set forth. We advise
you that, as to all matters of fact, we have relied upon such examination and
investigation, and the representations and warranties of the Company contained
in the aforedescribed certificates, Article VI of the Credit Agreement (but
only to the extent such representations and warranties address factual matters)
and the Certificate appended hereto as Annex B (but only to the extent such
Certificate addresses factual matters). We have assumed (a) the genuineness of
all signatures of persons (other than representatives of the Company) signing
the Loan Documents; (b) the authenticity of all documents submitted to us as
originals (c) the conformity to authentic original documents of all documents
submitted to us as certified, conformed or photostatic copies, and (d) except
as specifically covered in the opinions set forth below, the due authorization,
execution, and delivery on behalf of the respective parties thereto of
documents referred to herein and the legal, valid and binding effect thereof on
such parties.
As used in this opinion, the expression "to our knowledge" or "known
to us" with reference to matters of fact means that during the course of our
representation of the Company in connection with the Loan Documents no
information has come to the attention of the attorneys of our firm involved in
this engagement which would give the actual knowledge of the existence or
absence of such facts; however, except to the extent expressly set forth
herein, we have made no independent investigation to determine the existence or
absence of such facts, and any limited inquiry undertaken by us during the
preparation of this opinion should not be regarded as such an investigation.
No inference as to our knowledge of the existence or absence of such facts
should be drawn from the fact of our representation of the Company.
Based upon the foregoing, and further subject to the exceptions,
limitations, qualifications and assumptions, set forth below, we hereby advise
you that in our opinion:
120
Bank of America National Trust
and Savings Association
As of February 19, 1997
Page 3
1. The Company has been duly incorporated and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation. The Company has the corporate power and authority to
own and operate (or lease, as the case may be) its properties, to
conduct the business in which it is currently engaged and to execute,
deliver and perform its obligations under the Loan Documents. The
Company is qualified to do business as a foreign corporation in each
jurisdiction wherein the ownership or leasing of properties or the
conduct of its business renders such qualification necessary, except
insofar as the failure to be so qualified would not have a Material
Adverse Effect. The jurisdictions in which the Company is qualified
to do business are listed on Schedule 1 to Annex B hereto.
2. The Loan Documents and the Credit Extensions pursuant
to the Credit Agreement have been duly authorized by the Company and
no further corporate action is required in connection therewith. The
execution and delivery of the Loan Documents by the Company and the
due performance by the Company of its obligations thereunder do not
and will not (i) violate or be in conflict with the Company's Articles
of Incorporation or Bylaws or any law or regulation having
applicability to the Company, or (ii) to our knowledge, violate,
contravene or result in the creation of a Lien upon any of the assets
or properties of the Company under, any material judgment, decree,
injunction, writ or order of any court, or any arbitrator or other
Governmental Authority, having jurisdiction over the Company or its
properties or by which the Company may be bound. No material consent,
approval, authorization, registration or filing with any Governmental
Authority which has not been obtained is required in connection with
the execution, delivery or performance by the Company of the Loan
Documents, except as contemplated thereby.
3. The Loan Documents (except the unexecuted L/C
Applications) have been duly executed and delivered by the Company.
Each of the Loan Documents (other than the unexecuted L/C
Applications) constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with their
respective terms. The unexecuted L/C Applications, when duly executed
and delivered, will constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms.
4. To our knowledge, there are no actions, suits, or
proceedings pending, or, threatened, against the Company before any
court, regulatory agency or administrative agency, at law or in
equity, in arbitration or before any Governmental Authority which seek
to restrain
000
Xxxx xx Xxxxxxx National Trust
and Savings Association
As of February 19, 1997
Page 4
the Company's performance of its obligations under the Loan Documents
or which would reasonably be expected to have a Material Adverse
Effect.
5. To our knowledge, there are no governmental licenses,
authorizations, consents or approvals required in order for the
Company to own its assets and carry on its business as presently
conducted, the failure to obtain which would reasonably be expected to
have a Material Adverse Effect, which the Company has not obtained.
6. The Credit Agreement, the Credit Extensions proposed
to be made thereunder, the other Loan Documents and the performance by
the Company of its obligations thereunder do not and will not violate
or conflict with, constitute a default under or result in the
termination of, accelerate the performance required by, or result in
the creation of any Lien upon the assets or properties of the Company
(except as contemplated by the Loan Documents) under, any Reviewed
Agreement.
7. The Company is not (a) an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended,
nor (b) subject to the regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act or any California public
utilities code.
8. To our knowledge, the Company does not intend to use
the proceeds of any extension of credit under the Credit Agreement for
the purpose of purchasing "margin stock" within the meaning of
Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System.
The foregoing opinions are subject to the exceptions, limitations,
qualifications and assumptions set forth below.
A. We are admitted to practice law only in the State of
California. We express no opinion as to any matter relating
to laws of any jurisdiction other than the laws of the State
of California, the statutes comprising the General Corporation
Laws of the State of Delaware and the federal laws of the
United States, as such are in effect on the date hereof. For
purposes of our review of the Reviewed Agreements, we have
assumed that the laws governing such Reviewed Agreements
(including the effect and appropriate interpretation thereof)
are identical in all relevant respects to the laws of the
State of California.
122
Bank of America National Trust
and Savings Association
As of February 19, 1997
Page 5
B. We express no opinion as to (i) the effect of any bankruptcy,
insolvency, reorganization, arrangement, moratorium or other
similar laws relating to or affecting the rights of creditors
generally including, without limitation, the effect of
statutory or other laws regarding fraudulent transfers or
conveyances or preferential transfers, or (ii) the effect of
general principles of equity, including without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific
performance, injunctive relief or other equitable relief,
whether considered in a proceeding in equity or at law.
C. We express no opinion (i) regarding the rights or remedies
available to any party for violations or breaches of any
provisions which are immaterial or for violations or breaches
of any provisions the enforcement of which a court determines
would be unreasonable under the then existing circumstances,
(ii) regarding the rights or remedies available to any party
insofar as such party may take discretionary action which is
arbitrary, unreasonable or capricious, or is not taken in good
faith or in a commercially reasonable manner, whether or not
such action is permitted under the Credit Agreement, or (iii)
as to the effect of the exercise of judicial discretion,
whether in a proceeding in equity or at law.
D. We express no opinion as to the legality, validity, binding
nature or enforceability of (i) provisions in any Loan
Document providing for the payment or reimbursement of costs
or expenses or indemnifying a party, to the extent such
provisions may be held to be unreasonable in amount,
unenforceable as contrary to public policy, (ii) provisions
regarding the Bank's ability to collect attorneys' fees and
costs in an action involving any Loan Document, if the Bank is
not the prevailing party in such action (we call your
attention to the effect of Section 1717 of the California
Civil Code, which provides that, where a contract permits one
party thereto to recover attorneys' fees, the prevailing party
in any action to enforce any provision of the contract shall
be entitled to recover its reasonable attorneys' fees) or
(iii) provisions of any Loan Document imposing penalties or
forfeitures, late payment charges or any increase in interest
rate, upon delinquency in payment or the occurrence of a
default to the extent they constitute a penalty or forfeiture
or are otherwise contrary to public policy.
E. We express no opinion with respect to the legality, validity,
binding nature or enforceability of (i) any vague or broadly
stated waivers including, without limitation, the waivers of
diligence, presentment, demand, protest or notice, (ii) any
waivers or
000
Xxxx xx Xxxxxxx National Trust
and Savings Association
As of February 19, 1997
Page 6
consents (whether or not characterized as a waiver or consent
in the relevant Loan Document) relating to the rights of the
Company or duties owing to it existing as a matter of law,
including, without limitation, waivers of the benefits of
statutory or constitutional provisions, to the extent such
waivers or consents are found by California courts to be
against public policy or which are ineffective pursuant to
California statutes and judicial decisions or (iii) any
waivers of any statute of limitations to the extent such
waivers are in excess of four years beyond the statutory
period.
F. We express no opinion as to the effect of judicial decisions
and statutes limiting the enforceability of provisions
requiring payment of additional consideration or a higher rate
of interest upon prepayment, late payment, maturity, default
or a lender's election to accelerate a loan, or as a
consequence of the imposition of governmental charges on a
lender as a result of the taking, or failure to take, of any
action by such lender, particularly in cases where (i) the
additional amount bears no reasonable relation to the damage
suffered by the lender or is otherwise held to be a penalty
(see, e.g., Lazzarechi Inv. Co. v. San Francisco Federal
Savings and Loan Assoc., 22 Cal. App. 3d 303 (1971), and
Hellenbaum x. Xxxxxx Savings & Loan Association, 274 Cal. App.
2d 456 (1969)), or (ii) such increases constitute penalties or
forfeitures or are otherwise contrary to public policy.
G. We express no opinion with respect to the legality, validity,
binding nature or enforceability of any provision of any Loan
Document to the effect that rights or remedies are cumulative
or are not exclusive, that the election of some particular
remedy or remedies does not preclude recourse to one or more
other remedies or that failure to exercise or delay in
exercising rights or remedies will not operate as a waiver of
any such right or remedy.
H. We express no opinion as to any provision of any Loan Document
requiring written amendments or waivers of such documents
insofar as it suggests that oral or other modifications,
amendments or waivers could not be effectively agreed upon by
the parties or that the doctrine of promissory estoppel might
not apply.
I. We have assumed that there are no agreements or understandings
between or among the Company, the Bank, or any third parties
which would expand, modify or otherwise affect the terms of
any Loan Document or the respective rights or obligations of
the
000
Xxxx xx Xxxxxxx National Trust
and Savings Association
As of February 19, 1997
Page 7
parties thereunder and that each of the Loan Documents
correctly and completely set forth the intent of all parties
thereto.
J. We have assumed that all parties to the Loan Documents have
filed all required franchise tax returns, if any, and paid all
required taxes, if any, under the California Revenue &
Taxation Code.
K. We have assumed that the Credit Agreement has been duly
authorized, executed and delivered by the Bank and that the
Bank has full power, authority and legal right to enter into
and perform the terms and conditions of the Credit Agreement
on its part to be performed and that the Credit Agreement
constitutes the legal, valid and binding obligation of the
Bank, enforceable against it in accordance with its terms.
L. We express no opinion as to the applicability or effect of
compliance or non-compliance by the Bank with any state,
federal or other laws applicable to the Bank or to the
transactions contemplated by the Loan Documents because of the
nature of its business, including its legal or regulatory
status.
M. We have assumed that the Bank is either (i) a "Bank" as
defined in and operating under that certain act known as the
"Bank Act" approved March 1, 1909, as amended, (ii) a bank
created and operating under and pursuant to the laws of the
State of California or of the United States or (iii) a foreign
bank complying with the criteria set forth in Section 1716 of
the California Financial Code, as amended, and is therefore
exempt from the provisions of Article XV of the California
Constitution and related statutes.
N. We express no opinion regarding compliance or non-compliance
(or the effect thereof) with applicable anti-fraud provisions
of federal or state securities laws, or with respect to the
"Blue Sky" laws of any state other than the State of
California.
O. This opinion speaks only at and as of its date and is based
solely on the facts and circumstances existing as of such
date. We express no opinion as to the effect on the Bank's
rights under the Loan Documents of any statute, rule,
regulation or other law which is enacted or becomes effective
after, or of any court decision which changes the law relevant
to such rights which is rendered after, the date of this
opinion or the conduct of the parties following the closing of
the contemplated transaction. In addition, in rendering this
opinion, we assume no obligation to revise or supplement
000
Xxxx xx Xxxxxxx National Trust
and Savings Association
As of February 19, 1997
Page 8
this opinion should the present laws of the jurisdictions
mentioned herein be changed by legislative action, judicial
decision or otherwise.
P. We express no opinion as to any provision of any Loan Document
purporting to exculpate from liability an issuing bank which
makes payments against a presentment under any letter of
credit, to the extent the documents presented do not strictly
comply with the terms of such letter of credit.
Q. Without limitation of clause (i) of paragraph B above, we
express no opinion as to the effect of Sections 544 and 548 of
the Bankruptcy Code, Sections 3439 et. seq. of the California
Civil Code, or any other applicable federal or state,
statutory or common law relating to fraudulent transfers.
R. We express no opinion as to the effect of any provision of any
Loan Document purporting to relieve a secured party of any
duty it may have to preserve the value of collateral in its
possession (see California UCC Section 9207; see, also, e.g.
Citibank, N.A. v. Data Lease Financial Corporation 828 F.2d
686 (11th Cir. 1987)).
S. Our opinions set forth in paragraph 2 above is intended to
express our opinion that the execution, delivery and
performance by the Company of the respective Loan Documents to
which each is a party are neither prohibited by, nor subject
to the Company to a fine, penalty or similar sanction that
would be materially adverse to the Company under, any statute
or regulation of the State of California, the statutes
comprising the Delaware Corporation Laws or federal law that a
lawyer exercising customary professional diligence would
reasonably recognize as applicable to the Company or the Loan
Documents and the transactions contemplated thereby.
This opinion is made with the knowledge and understanding that you
(but no other Person) may rely thereon in entering into the Credit Agreement
and is solely for your benefit. This opinion may not be quoted to or relied
upon by any Person other than you without our prior written consent; provided,
that (i) this opinion may be disclosed to bank regulatory authorities having
jurisdiction over you requesting (or requiring) such disclosure and (ii) this
opinion may be disclosed to and relied upon by assignees of the Credit
Extensions if (a) such assignments are permitted under and made in accordance
with the Credit Agreement and (b) such assignees come within paragraph M above;
provided that in no event does this opinion extend to any issue or matter
related to any such assignment or arising from or out of any such assignment
(as distinct from the subject transaction).
000
Xxxx xx Xxxxxxx National Trust
and Savings Association
As of February 19, 1997
Page 9
We would expect any Person to whose receipt hereof we consented, whether
directly or through the exceptions contained in the foregoing proviso, to be
bound by the provisions of this paragraph.
Very truly yours,
XXXXXX XXXXXXX XXXXXXXX & XXXXXX,
Professional Corporation
127
ANNEX A
MATERIAL AGREEMENTS
1. Indenture dated as of January 15, 1994, by and between the Company and
State Street Bank & Trust Company of California, N.A. as successor in
interest to The First National Bank of Boston, as Trustee.
128
ANNEX B
CERTIFICATE AND DECLARATION
As of February 19, 1997
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
RE: CREDIT AGREEMENT WITH BANK OF AMERICA
NATIONAL TRUST & SAVINGS ASSOCIATION
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of the date hereof
(the "Credit Agreement") by and between the undersigned (the "Company"), and
Bank of America National Trust & Savings Association (the "Bank"). We have
requested you to render the legal opinion required by Section 5.01(f) of the
Credit Agreement (the "WSGR Opinion"; capitalized terms defined in the WSGR
Opinion, whether directly or indirectly by reference, and used without
definition herein to have the respective meanings herein assigned to such terms
in the WSGR Opinion). With the understanding you will rely on the statements
of fact contained in this Certificate and Declaration (the "Certificate") in
delivering the WSGR Opinion, after due investigation, the Company hereby
certifies as follows:
1. Representations and Warranties. The Company confirms to
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C. ("WSGR") the accuracy and completeness
of the representations and warranties of the Company contained in Article VI of
the Credit Agreement, and acknowledges and agrees that WSGR is entitled to rely
thereon in connection with the WSGR Opinion.
2. Board Presentation. The material terms and conditions of the
original credit facility refinanced by the Credit Agreement and the other Loan
Documents were fairly and accurately presented to the Board of Directors of the
Company and approved by the Board prior to their execution and delivery in
January 1994. Prior to the approval of the minutes of the January, 1997
meeting of the Board, the Directors will have an opportunity to discuss and
review the terms of the Credit Agreement and the other Loan Documents,
particularly those material terms which have been modified from the prior
credit facility.
Duly Incorporated; Good Standing. The Company has been duly
incorporated and is in good standing under the laws of its jurisdiction of
incorporation, with power and authority
129
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
As of February 9, 1997
Page 2
(corporate and other) to own its properties and carry on its business as
currently conducted. The Company is qualified to do business as a foreign
corporation and is in good standing in every jurisdiction wherein the nature of
its business or property requires such qualification and standing, except where
the failure to obtain such qualification or maintain such standing would not
have a Material Adverse Effect. The jurisdictions in which the Company is so
qualified are listed on Schedule 1 hereto.
3. Use of Proceeds. The Company is not engaged, nor does the
Company propose to become engaged, in the business of extending credit for the
purpose of buying or carrying margin stock (as hereinafter defined) and no part
of the proceeds of any Credit Extension will be used to purchase or carry any
such margin stock or to extend credit to others for the purpose of purchasing
or carrying margin stock. As used herein, "margin stock" means (a) any equity
security registered or having unlisted trading privileges on a national
securities exchange, (b) any stock traded in the over-the-counter market and
designated as a margin security by the Board of Governors of the Federal
Reserve System, (c) any security designated as qualified for trading in the
National Market System of the National Association of Securities Dealers, Inc.,
(d) any debt security convertible into the foregoing securities or carrying a
warrant or right to subscribe to or purchase the foregoing securities, (e) any
warrant or right to subscribe to or purchase the foregoing securities, or (f)
any security issued by an investment company within the contemplation of the
Investment Company Act of 1940.
4. No Investment Companies. The Company is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
("Investment Company"). The Company is not, does not hold itself out as being
or propose to become, engaged primarily in the business of investing,
reinvesting, or trading securities. The Company is not engaged in, nor does
the Company propose to engage in, the business of issuing face-amount
certificates of the installment type, nor does the Company have any such
certificates outstanding. The Company does not own or propose to acquire
investment securities exceeding forty percent (40%) of the Company's total
assets on an unconsolidated basis. "Investment securities" means all
securities other than government securities, securities issued by employees'
securities companies, and securities issued by majority-owned Subsidiaries of
the Company which are not Investment Companies.
5. No Public Utilities. The Company does not directly or
indirectly, own, control, or hold with power to vote, 10 per cent or more of
the outstanding voting securities of a public-utility company (as hereinafter
defined) or of a company which, directly or indirectly, owns, controls, or
holds with power to vote, 10 per cent or more of the outstanding voting
securities of a public-utility holding company (as hereinafter defined). The
Securities and Exchange Commission has not determined that the Company,
directly or indirectly, exercises controlling influence over the management or
policies of any public-utility holding company or any subsidiary of such
public-utility holding company, no public-utility holding company or subsidiary
thereof (i) directly or indirectly owns, controls or holds with power to vote
10 per cent or more of the outstanding voting securities of the Company or (ii)
has been determined by the Securities and Exchange Commission to exercise a
controlling influence, directly or indirectly, over the Company. The Company
is not an affiliate (as hereinafter defined) of a public-utility holding
company or a subsidiary of a public-utility holding
130
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
As of February 9, 1997
Page 3
company. A "public-utility company" means either (i) a company which owns or
operates facilities used for the generation, transmission, or distribution of
electric energy for sale, other than sale to tenants or employees of the
company operating such facilities for their own use and not for resale, or (ii)
a company which owns or operates facilities used for the distribution at retail
(other than distribution only in enclosed portable containers, or distribution
to tenants or employees of the company operating such facilities for their own
use and not for resale) of natural or manufactured gas for heat, light or
power. A "public-utility holding company" means any company which (i) directly
or indirectly, owns, controls or holds with power to vote, 10 per cent or more
of the outstanding voting securities of a public-utility company or of
public-utility holding company or (ii) has been determined by the Securities
and Exchange Commission to, directly or indirectly, exercise controlling
influence over the management and policies of a public-utility company or
public-utility holding company. "Affiliate" of a specified company means, for
the purposes of this paragraph, (i) any person that directly or indirectly
owns, controls or holds with power to vote, 5 per cent or more of the
outstanding voting securities of the specified company, (ii) any company, 5 per
cent or more of whose outstanding voting securities are owned, controlled or
held with power to vote, directly or indirectly, by the specified company,
(iii) any individual who is an officer or director of the specified company or
any company which is an affiliate thereof under clause (i), and (iv) any person
or class of persons determined by the Securities and Exchange Commission to be
an affiliate of the specified company. The Company makes no representation
regarding Citicorp Venture Capital for the purposes of this paragraph.
6. Regulations G, T, U and X. The Company is not engaged, and
does not propose to become engaged, in the business of extending credit for the
purpose of buying or carrying margin stock (as hereinafter defined) and no part
of the proceeds of any Credit Extension will be used to purchase or carry any
such margin stock or to extend credit to others for the purpose of purchasing
or carrying margin stock. As used herein, "margin stock" means (i) any equity
security registered or having unlisted trading privileges on a national
securities exchange, (ii) any stock traded in the over-the-counter market and
designated as a margin security by the Board of Governors of the Federal
Reserve System, (iii) any security designated as qualified for trading in the
National Market System of the National Association of Securities Dealers, Inc.,
(iv) any debt security convertible into the foregoing securities or carrying a
warrant or right to subscribe to or purchase the foregoing securities, (v) any
warrant or right to subscribe to or purchase the foregoing securities, or (vi)
any security issued by an investment company within the contemplation of the
Investment Company Act of 1940.
7. No Consents. To the Company's knowledge, there are no
governmental licenses, permits, consents or approvals which are required as of
the date hereof for the ownership and operation of their respective properties
and for the conduct of its business the failure to obtain which would
reasonably be expected to have a Material Adverse Effect, which the Company has
not obtained.
8. Chief Executive Offices. The chief executive office of the
Company is located at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxx, XX 00000.
131
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
As of February 9, 1997
Page 4
9. Verification. The undersigned has taken all reasonably
necessary steps to verify the information set forth in this Certificate. The
undersigned has examined such corporate records, and has made such inquiries of
officers and executives of the Company, as the undersigned has deemed
reasonable and necessary in order to ensure the accuracy of the representations
set forth herein. To the extent such representations refer to legal
conclusions, as opposed to matters of fact or to matters of fact, the accuracy
of which are dependent upon legal conclusions, the undersigned or another
representative of the Company has had the opportunity to have such
consultations with you as the undersigned or another representative of the
Company has deemed necessary to resolve all known or potential legal matters
based upon each of the undersigned's knowledge of the applicability of matters
of law to the Company, its business activities or agreements or the Loan
Documents and the transactions contemplated thereby and is relying on the
advice so received. Neither the undersigned nor the Company is aware of any
fact or circumstance which would render any conclusion reached in the WSGR
Opinion inaccurate or misleading.
Very truly yours,
PLANTRONICS, INC.
/s/Xxxx X. Xxxxxxx
------------------------
By: Xxxx X. Xxxxxxx
Title: Secretary and
Senior General Counsel
132
Schedule 1
Foreign Jurisdictions in which Plantronics
is Qualified to do business
California
Maryland
Pennsylvania
133
EXHIBIT E-1
FORM OF LC APPLICATION FOR STANDBY LETTERS OF CREDIT
(Bank form "Application and Agreement for Standby Letter of Credit" to be used
-- specimen of version current as of the Closing Date attached. Reverse of form
may be crossed out as indicated on the attached.)
X-0-0
000
XXXX XX XXXXXXX
=============================================================================
APPLICATION AND AGREEMENT
FOR STANDBY LETTER OF CREDIT
-------------------------------
for Bank Use Only
L/C No. ____________________
-------------------------------
TO: Bank of America National Trust and Savings Association ("Bank")
A. APPLICATION.
______________________ ("Customer") requests Bank to issue an irrevocable
standby letter of credit ("Letter of Credit") as follows:
[ ] Full text teletransmission [ ] Airmail with brief preliminary
teletransmission advice
[ ] Airmail [ ] Courier
For account of In favor of
(Customer Name and Address) (Beneficiary name and Address)
________________________________ ________________________________
________________________________ ________________________________
________________________________ ________________________________
________________________________
Advising Bank ________________________________
________________________________ ________________________________
________________________________ ________________________________
________________________________
Amount_______________(_________ ) Expiration Date: Drafts to be drawn on
In Words and Figures and presented at Bank's issuing unit on
or before:____________________ , 19___
Currency________________________
Available by drafts drawn at sight on Bank's issuing unit when accompanied by
the following documentation:
1. The original standby letter of credit.
2. The signed statement of the beneficiary worded as follows (state
exact wording that is to appear in the statement accompanying the
draft):
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Special Instructions: ________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Customer understands that the risk to Customer is greater if Customer
requests a standby letter of credit which requires only a draft rather than a
standby letter of credit which requires supporting documentation.
Customer understands that the final form of the Letter of Credit may be
subject to such revisions and changes as are deemed necessary or appropriate by
Bank's letter of credit issuing unit and Customer hereby consents to such
revisions and changes.
135
This Application and Agreement is executed by and is an L/C Application made
Customer on _____________________, 19____/ under that certain Credit
Agreement between Customer and
Bank dated as of February 19,
____________________________________________ 1997, as amended, restated,
(Name of Customer) modified, supplemented,
extended or renewed from
time to time.
By:____________________________________ Title:_________________________________
By:____________________________________ Title:_________________________________
-------------------------------------------------------------------------------
FOR OFFICE USE ONLY
-------------------------------------------------------------------------------
FX-149 TO: [ ] International Trade Banking Division--Los Angeles Operations
Center #5655
-------------------------------------------------------------------------------
COMMISSION [ ] Per MISC-42 [ ] Other_____________________________________
[ ] Charge Branch [ ] Charge directly
[ ] Commissions and Charges only
[ ] Drawings, Commissions and Charges
-------------------------------------------------------------------------------
FINANCIAL SERVICES OFFICER NAME (Type or Print)
-------------------------------------------------------------------------------
BANKAMERINET NO.
-------------------------------------------------------------------------------
CDA/DDA CUSTOMER A/C#
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
FINANCIAL SERVICES OFFICER SIGNATURE
-------------------------------------------------------------------------------
BRANCH/DEPT. NAME
-------------------------------------------------------------------------------
BRANCH/DEPT. NO.
-------------------------------------------------------------------------------
136
EXHIBIT E-2
FORM OF L/C APPLICATION FOR COMMERCIAL LETTERS OF CREDIT
[Bank form "Application and Agreement for Commercial Letter of Credit" to be
used -- specimen of version current as of the Closing Date attached. Reverse of
form may be crossed out as indicated on the attached.]
E-2-1
137
[logo] BANK OF AMERICA APPLICATION AND AGREEMENT
FOR COMMERCIAL LETTER OF CREDIT
-------------------------------------------------------------------------------
To: Bank of America National Trust and Savings Association ("Bank")
A. APPLICATION
________________________ ("Customer") requests Bank to issue an irrevocable
commercial letter of credit ("Letter of Credit") as follows:
[ ] Full text teletransmission
[ ] Airmail with brief preliminary teletransmission advice
[ ] Airmail [ ] Courier
-----------------------------------------------------------------------------------------------------------------------------------
1. Advising bank and address | 4. For account of (Customer Name and Address)
(if left blank, Bank will reject advising bank) |
|
|
|
|
|
|
|
|
-----------------------------------------------------------------------|
FOR BANK USE ONLY | 5. In favor of (Beneficiary Name and Address)
-----------------------------------------------------------------------|
2. L/C No. |
__________________________________ |
_______________________________________________________________________|
3. Expiration Date: Drafts to be drawn and presented to the |
negotiating or paying bank on or before: |___________________________________________________________
|
| 6. Amount: ____________________________________________
_______________________________, 19___ | [____________________________] [In word and figures.]
| Currency ____________________________________________
_______________________________________________________________________|___________________________________________________________
7. Covering ___________% of invoice value. (Full invoice value unless otherwise specified.)
-----------------------------------------------------------------------------------------------------------------------------------
8. Available by drafts at (Tenor) _____________________ on Bank, Bank's branch or Bank's correspondent, at Bank's option,
or Bank may waive draft requirement.
-----------------------------------------------------------------------------------------------------------------------------------
9. Partial Shipment | 10. Transhipment (Not applicable to Air Shipments or Combined Transport Shipments.)
[ ] Permitted [ ] Not Permitted | [ ] Permitted [ ] Not Permitted
-----------------------------------------------------------------------------------------------------------------------------------
11. Shipment/Diagram/Taking in Charge from/At Latest For Transportation to
| |
___________________________________________________|______________________|________________________________________________________
12. Merchandise to be described in invoice as (omit unnecessary details and specify price basis in box 13).
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
-----------------------------------------------------------------------------------------------------------------------------------
13. Price basis (Check one):
[ ] FOB [ ] CFR [ ] CIF [ ] Other: __________________________________________________________________________________
-----------------------------------------------------------------------------------------------------------------------------------
14. Documents required (Check applicable boxes below):
[ ] Signed commercial invoice in duplicate.
[ ] Marine and war insurance policy or certificate for 110$ Invoice value in duplicate.
Insurance to be effected by: __________________________________________________________________________________________
[ ] Original clean [ ] Air [ ] Truck [ ] Rail transport document.
Consigned to: _________________________________________________________________________________________________________
Notify (if different from consignee): _________________________________________________________________________________
[ ] Full set of originals clean on board vessel marine xxxx of lading, to order of shipper, blank endorsed, marked:
"Notify _____________________________________________________________________________________________________________."
[ ] Full set of originals clean combined transport xxxx of lading, to order of shipper, blank endorsed, marked:
"Notify _____________________________________________________________________________________________________________."
[ ] If combined transport xxxx of lading is required, check: [ ] on board vessel [ ] on board inland carrier.
[ ] Xxxx of lading marked (select one): [ ] freight prepaid [ ] freight collect.
[ ] Other documents: ______________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
-----------------------------------------------------------------------------------------------------------------------------------
15. Special Instructions to be included in the Letter of Credit: ______________________________________________________________
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
-----------------------------------------------------------------------------------------------------------------------------------
Special Instructions to Bank: _____________________________________________________________________________________________
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
-----------------------------------------------------------------------------------------------------------------------------------
Documents must be presented to the negotiating or paying bank no later than _____ days after date of transport document (on board
validation applicable for ocean shipment) but within the validity of the Letter of Credit. All documents to be forwarded in one
cover, by airmail, unless otherwise stated under Special Instructions.
-----------------------------------------------------------------------------------------------------------------------------------
Customer understands that the final form of the Letter of Credit may be subject to such revisions and changes as are deemed
necessary or appropriate by Bank's letter of credit leasing unit and Customer hereby consents to such revisions and changes.
-----------------------------------------------------------------------------------------------------------------------------------
XX-000 X-00
138
B. Agreement.
In consideration of Bank issuing for the account of Customer the Letter
of Credit, Customer agrees to the following
7. Customer will obtain, or cause to be obtained, insurance on all
goods described in the Letter of Credit. The insurance will cover fire and
other usual risks, and any additional risks Bank may request. Customer
authorizes and empowers Bank to effect the proceeds of any insurance and apply
such proceeds against any of Customer's obligations to Bank under the
Application and Agreement.
8. Customer represents and warrants to Bank that Customer has obtained
all import and export licences and other governmental approvals required for the
goods and the documents described in the Letter of Credit.
9. All directions and correspondence relating to the Letter of Credit
are to be sent at Customer's risk and expense.
10. (a) Customer hereby grants to Bank a security interest in the
following described property, whether now owned or hereafter acquired by
Customer ("Collateral"):
(i) All goods and documents described in the Letter of
Credit;
(ii) All negotiable and nonnegotiable documents of title
covering any of the above-described property;
(iii) All rights under contracts of insurance covering any of
the above-described property;
(iv) All deposit accounts now or hereafter maintained with
Bank with respect to the Letter of Credit; and
(v) All proceeds of any of the above-described property.
(b) The Collateral securities and will secure all obligations and
liabilities of Customer to Bank under or in respect of this Application
Agreement, whether now existing or thereafter incurred or created, whether due
or to become due, and whether absolute or contingent.
(c) If Customer defaults under any provision of this application and
Agreement, Bank may enforce the security interest granted hereunder pursuant
to the California Uniform Commercial Code or any other applicable law in the
event of any deficiency. Customer will immediately pay the same to Bank.
(d) in the event the Collateral should suffer any decline in
value Customer shall, on demand, deliver to Bank additional Collateral
satisfactory to Bank.
This Application and Agreement is executed by Customer on _______________, 19__
and is an L/C Application made under that Credit Agreement
_______________________________________
(Name of Customer)
By:____________________________________ Title:_________________________________
By:____________________________________ Title:_________________________________
-------------------------------------------------------------------------------
FOR OFFICE USE ONLY
-------------------------------------------------------------------------------
FX-150 TO: [ ] TRADE FINANCE SERVICES: Concord #6569
[ ] TRADE FINANCE SERVICES - Los Angeles 5655
-------------------------------------------------------------------------------
COMMISSION [ ] Per MISC-42 [ ] Other_____________________________________
[ ] Charge Branch [ ] Charge directly
[ ] Commissions and Charges only
[ ] Drawings, Commissions and Charges
-------------------------------------------------------------------------------
FINANCIAL SERVICES OFFICER NAME (Type or Print)
-------------------------------------------------------------------------------
BANKAMERINET NO.
-------------------------------------------------------------------------------
DDA CUSTOMER A/C#
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
FINANCIAL SERVICES OFFICER SIGNATURE
-------------------------------------------------------------------------------
BRANCH/DEPT. NAME
-------------------------------------------------------------------------------
BRANCH/DEPT NO.
* or that certain Credit Agreement dated as of February 19, 1997 between
Customer and Bank, as amended, restated, modified, supplemented, renewed or
extended from time to time (the "Credit Agreement")
139
EXHIBIT F-1
FORM OF L/C AMENDMENT APPLICATION FOR STANDBY LETTERS OF CREDIT
[Bank form "Application for Amendment to Standby Letter of Credit" to be used
-- specimen of version current as of the Closing Date attached.]
F-1-1
140
[LOGO] BANK OF AMERICA Application for Amendment
to Standby Letter of Credit
-------------------------------------------------------------------------------
Location: Date:
-------------------------------------------------------------------------------
TO: Bank of America NT&SA I request you to [ ] Airmail
AMEND by the irrevocable Documentary [ ] Teletransmission
Letter of Credit No.____________________________
-------------------------------------------------------------------------------
For Account of (Applicant) In Favor of [Beneficiary]
-------------------------------------------------------------------------------
Please amend the credit as follows:
I understand that this amendment is subject to acceptance by the beneficiary.
All other terms and conditions of the Letter of Credit remain unchanged.
-------------------------------------------------------------------------------
The bank agrees to the amendment described above. Name of Applicant
Bank of America NT&SA
-------------------------------------------------------------------------------
By Signature Signature
X
-------------------------------------------------------------------------------
Name and Title of Signer Name and Title of Signer
-------------------------------------------------------------------------------
ADMINISTRATION USE OFFICE USE
-------------------------------------------------------------------------------
Retail Financial Services [ ] Recommend--CR-32/CH115 [ ] Approved--One copy
To: Regional Administration in triplicate attached of CR-32/CR-115 or
Credit No._________________ Forward to Regional/ CR-116 to Credit
Division Credit Review Center
___________________________ Administration [Reporting Only]
World Banking Division _________________________________________________
To: [ ] Division Credit Financial Services Office Name (Type or Print)
Administration
No._________________
[ ] Division Area Office
No._________________
_____________________________ Signature
APPROVAL
X______________________________________________
-------------------------------------------------------------------------------
Date Branch/AMG Name NO
-------------------------------------------------------------------------------
Credit Administrator [ ] Credit Amendment Fee Min. $
[ ] Prepayment [UFE attached]
-------------------------------------------------------------------------------
141
EXHIBIT F-2
FORM OF L/C AMENDMENT APPLICATION FOR
COMMERCIAL LETTERS OF CREDIT
-------------------------------------
[Bank form "Application for Amendment to Commercial Letter of Credit" to be
used -- specimen of version current as of the Closing Date attached.]
F-2-1
142
[LOGO] BANK OF AMERICA Application for Amendment
Commercial Letter of Credit
-------------------------------------------------------------------------------
Location: Date:
-------------------------------------------------------------------------------
TO: Bank of America NT&SA I request you to [ ] Airmail
AMEND by the irrevocable Documentary [ ] Teletransmission
Letter of Credit No.____________________________
-------------------------------------------------------------------------------
For Account of Applicant In Favor of [Beneficiary]
-------------------------------------------------------------------------------
Please amend the credit as follows:
I understand that this amendment is subject to acceptance by the beneficiary.
All other terms and conditions of the Letter of Credit remain unchanged.
-------------------------------------------------------------------------------
Name of Applicant Signature
X
--------------------------------------------------------------------------------
Name and Title of Signer
-------------------------------------------------------------------------------
ADMINISTRATION USE OFFICE USE
-------------------------------------------------------------------------------
Retail Financial Services [ ] Recommend--CR-32/CH115 [ ] Approved--One copy
To: Regional Administration in triplicate attached of CR-32/CR-115 or
Credit No._________________ Forward to Regional/ CR-116 to Credit
Division Credit Review Center
___________________________ Administration [Reporting Only]
World Banking Division _________________________________________________
To: [ ] Division Credit Financial Services Office Name (Type or Print)
Administration
No._________________
[ ] Division Area Office
No._________________
_____________________________ Signature
APPROVAL
X______________________________________________
-------------------------------------------------------------------------------
Date Branch/AMG Name NO
-------------------------------------------------------------------------------
Credit Administrator [ ] Credit Amendment Fee Min. $
[ ] Prepayment [UFE attached]
-------------------------------------------------------------------------------
143
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as
of May __, 1997, effective for all purposes as of February 19, 1997, is entered
into by and between PLANTRONICS, INC., a Delaware corporation (the "Company")
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bank").
RECITALS
A. The Company and the Bank are parties to a Credit Agreement dated
as of February 19, 1997 (the "Credit Agreement") pursuant to which the Bank has
extended certain credit facilities to the Company.
B. The Company and the Bank desire to amend the Credit Agreement to
correct an error therein, subject to the terms and conditions of this
Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings, if any, assigned to them in the Credit
Agreement.
2. Amendments to Credit Agreement.
(a) Section 8.12 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
8.12 Net Funded Debt to EBITDA Ratio. The Company shall not
permit as of the last day of any fiscal quarter the Net Funded Debt to
EBITDA Ratio to be more than 3.00:1.00.
(b) Schedule 2 to Exhibit C to the Credit Agreement (the
form of Compliance Certificate) is hereby amended and restated in its entirety
to read as set forth in Schedule 2 attached hereto.
3. Representations and Warranties. The Company hereby represents and
warrants to the Bank that the execution, delivery and performance by the
Company of this Amendment have been duly authorized by all necessary corporate
and other action and do not and will not require any registration with, consent
or approval of, notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable.
144
4. Reservation of Rights. The Company and the Bank acknowledge
and agree that the execution and delivery by the parties of this Amendment
shall not be deemed to create a course of dealing or otherwise obligate the
Bank or the Company to execute similar amendments under the same or similar
circumstances in the future.
5. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants
and provisions of the Credit Agreement are and shall remain in full force and
effect and all references therein to such Credit Agreement shall henceforth
refer to the Credit Agreement as amended by this Amendment. This Amendment
shall be deemed incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Amendment.
(c) This Amendment shall be governed by and construed in
accordance with the law of the State of California.
(d) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
(e) This Amendment, together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with
reference to the matters discussed herein and therein. This Amendment
supersedes all prior drafts and communications with respect thereto. This
Amendment may not be amended except in accordance with the provisions of
Section 10.01 of the Credit Agreement.
(f) If any term or provision of this Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Amendment or
the Credit Agreement, respectively.
2
145
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first above written.
PLANTRONICS, INC.
By: ___________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President-Legal,
Senior General Counsel
and Secretary
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: ____________________________
Name: _________________________
Title: Managing Director
3
146
Date: ______________, _____
For the fiscal quarter/year
ended ______________, _____
SCHEDULE 2
to the Compliance Certificate
($ in 000's)1/
Actual Required/Permitted
------ ------------------
1. Section 8.12 Net Funded Debt to
EBITDA Ratio.
The ratio of:
A. Net Funded Debt:
the difference of:
(i) Indebtedness2/ __________
plus
(ii) Guaranty Obligations2/ __________
less
(iii) cash and Cash Equivalents3/
__________
(i)+(ii)-(iii) = __________
B. EBITDA4/
the sum of:
(i) net income or loss5/ __________
plus
(ii) depreciation __________
plus
(iii) amortization __________
plus
(iv) interest __________
plus
(v) taxes on income __________
plus
1/ All items determined on a consolidated basis and in accordance
with GAAP, consistently applied.
2/ See definition of Net Funded Debt for certain items excluded.
3/ Not subject to any Lien, and to extent exceeding $5,000,000.
4/ Calculated on a rolling four-quarter basis.
5/ Without giving effect to extraordinary losses or gains
4
147
Actual Required/Permitted
------ ------------------
(vi) non-cash expenses or charges for
management stock compensation
__________
(i)+(ii)+(iii)+(iv)+(v)+(vi) = __________
A
-----
B = Not more than 3.00
==========
2. Section 8.13 Tangible Net Worth.
-------------------------------
Tangible Net Worth: Not to be less than the sum of:
(i) gross book value of assets __________ A. Tangible Net Worth as of
12/28/96:
less
----
(i) gross book value
(ii) goodwill, licensing agreements, patents, of assets __________
trademarks, trade names, organization
expenses, treasury stock, unamortized less
debt discount and premium, deferred ----
charges and other like intangibles
(ii) goodwill, licensing
agreements, patents, trade-
less marks, trade names, organi-
---- zation expenses, treasury
__________ stock, unamortized debt
(iii) reserves applicable to assets (including discount and premium, deferred
reserves for depreciation and charges and other like
amortization) intangibles __________
less
----
less
---------- ----
(iii) reserves applicable
to assets (including reserves
for depreciation and
amortization) __________
(iv) all liabilities (including less
accrued and deferred income taxes and ----
any subordinated
liabilities) (iv) all liabilities
__________ (including accrued and
deferred income taxes and
(i)-(ii)-(iii)-(iv) = subordinated liabilities) __________
==========
(i)-(ii)-(iii)-(iv) = __________
x 90%
------------------
6/
==========
less
----
----------------------------------
6/ Calculation will need to be done for first compliance certificate
only; thereafter, this number will be inserted.
5
148
Actual Required/Permitted
------ ------------------
B. Stock repurchases after
12/28/96 (not to exceed
$20,000,000) __________
plus
C. 50% of net income after
income taxes (without
subtracting losses)
earned after 12/28/96 __________
plus
6
149
Actual Required/Permitted
------ ------------------
D. 75% of net proceeds
from any equity
securities issued
after 12/28/96 __________
plus
----
E. 75% of any increase
in stockholder's
equity resulting
from the conversion
of debt securities
to equity securities
after 12/28/96 __________
A - B + C + D + E =
==========
3. Section 8.14 Interest Coverage
Ratio.7/.
The ratio of:
A. Adjusted EBITDA
(i) EBITDA (from 1(B) above) __________
less
----
(ii) Capital Expenditures __________
(i) - (ii) __________
B. Cash Interest Expense
(i) Total interest expense
(including commissions,
discounts, fees and other charges in
connection with standby letters of
credit and similar instruments
__________
less
----
(ii) Non-cash items included in (i)
__________
(i) - (ii) __________
A
-----
B = Not less than 3.00
==========
----------------------------------
7/ Calculated on a rolling four-quarter basis.
-
7