EXHIBIT 10.1
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CREDIT AGREEMENT
DATED AS OF JANUARY 31, 2000
AMONG
XXXXXXX-XXXXXXX COMPANY,
AS BORROWER,
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT,
BT COMMERCIAL CORPORATION,
AS CO-ARRANGER AND SYNDICATION AGENT,
AND
THE LENDERS LISTED HEREIN,
AS LENDERS,
ARRANGED BY:
CIBC WORLD MARKETS CORP.,
LEAD ARRANGER AND BOOKRUNNER
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Section 1. DEFINITIONS ......................................................................2
1.1 Certain Defined Terms ............................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement ....................................................31
1.3 Other Definitional Provisions and Rules of Construction .........................31
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND
LOANS ...........................................................................32
2.1 Commitments; Making of Loans; Optional Notes ....................................32
2.2 Interest on the Loans ...........................................................36
2.3 Fees ............................................................................40
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments;
Application of Proceeds of Collateral and Payments Under
Subsidiary Guaranty .............................................................41
2.5 Use of Proceeds .................................................................50
2.6 Special Provisions Governing Eurodollar Rate Loans ..............................51
2.7 Increased Costs; Taxes; Capital Adequacy ........................................53
2.8 Obligation of Lenders and Issuing Lenders to Mitigate ...........................57
Section 3. LETTERS OF CREDIT ...............................................................58
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein ..........................................................58
3.2 Letter of Credit Fees ...........................................................61
3.3 Drawings and Reimbursement of Amounts Paid Under Letters
of Credit .......................................................................62
3.4 Obligations Absolute ............................................................64
3.5 Indemnification; Nature of Issuing Lenders' Duties ..............................65
3.6 Increased Costs and Taxes Relating to Letters of Credit .........................66
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT .......................................67
4.1 Conditions to Term Loans and Initial Revolving Loans ............................67
4.2 Conditions to All Loans .........................................................74
4.3 Conditions to Letters of Credit .................................................75
Section 5. BORROWER'S REPRESENTATIONS AND WARRANTIES .......................................76
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5.1 Organization. Powers, Qualification, Good Standing, Business
and Subsidiaries.................................................................76
5.2 Authorization of Borrowing, etc .................................................77
5.3 Financial Condition .............................................................78
5.4 No Material Adverse Change; No Restricted Junior Payments .......................78
5.5 Title to Properties; Liens; Real Property .......................................79
5.6 Litigation; Adverse Facts .......................................................79
5.7 Payment of Taxes ................................................................80
5.8 Performance of Agreements; Materially Adverse Agreements;
Material Contracts ..............................................................80
5.9 Governmental Regulation .........................................................80
5.10 Securities Activities ...........................................................81
5.11 Employee Benefit Plans ..........................................................81
5.12 Certain Fees ....................................................................82
5.13 Environmental Protection ........................................................82
5.14 Employee Matters ................................................................83
5.15 Solvency ........................................................................83
5.16 Matters Relating to Collateral ..................................................83
5.17 Related Agreements ..............................................................84
5.18 Disclosure ......................................................................84
5.19 Year 2000 Compliance ............................................................85
Section 6. BORROWER'S AFFIRMATIVE COVENANTS ................................................85
6.1 Financial Statements and Other Reports ..........................................85
6.2 Corporate Existence, etc ........................................................91
6.3 Payment of Taxes and Claims; Tax Consolidation ..................................91
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds .................................................91
6.5 Inspection Rights; Audits of Inventory and Accounts
Receivable; Lender Meeting ......................................................94
6.6 Compliance with Laws, etc .......................................................94
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Borrower's Actions Regarding Hazardous Materials' Activities,
Environmental Claims and Violations of Environmental Laws .......................94
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6.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries ....................................................................97
6.9 Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral .............................................98
6.10 Deposit Accounts and Cash Management Systems ...................................100
6.11 Year 2000 Compliance ..........................................................100
Section 7. BORROWER'S NEGATIVE COVENANTS ..................................................101
7.1 Indebtedness ...................................................................101
7.2 Liens and Related Matters ......................................................102
7.3 Investments ....................................................................103
7.4 Contingent Obligations .........................................................104
7.5 Restricted Junior Payments .....................................................104
7.6 Financial Covenants ............................................................104
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions ...................................................................106
7.8 Restriction on Leases ..........................................................107
7.9 Sales and Lease-Backs ..........................................................107
7.10 Sale or Discount of Receivables ................................................108
7.11 Transactions with Shareholders and Affiliates ..................................108
7.12 Disposal of Subsidiary Stock ...................................................108
7.13 Conduct of Business ............................................................109
7.14 Amendments or Waivers of Related Agreements ....................................109
7.15 Fiscal Year and Fiscal Quarters ................................................109
7.16 Interest Rate Hedge ............................................................109
7.17 [Non-Material Subsidiaries].....................................................109
Section 8. EVENTS OF DEFAULT ..............................................................109
8.1 Failure to Make Payments When Due ..............................................109
8.2 Default in Other Agreements ....................................................110
8.3 Breach of Certain Covenants ....................................................110
8.4 Breach of Warranty .............................................................110
8.5 Other Defaults Under Loan Documents ............................................110
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc ...........................110
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8.7 Voluntary Bankruptcy; Appointment of Receiver, etc .............................111
8.8 Judgments and Attachments.......................................................111
8.9 Dissolution ....................................................................111
8.10 Employee Benefit Plans .........................................................112
8.11 Palo Alto Lease ................................................................112
8.12 Material Adverse Effect ........................................................112
8.13 Change in Control ..............................................................112
8.14 Invalidity of Subsidiary Guaranty; Failure of Security;
Repudiation of Obligations .....................................................112
8.15 Failure to Consummate Recapitalization .........................................113
Section 9. ADMINISTRATIVE AGENT ...........................................................114
9.1 Appointment ....................................................................114
9.2 Powers and Duties; General Immunity ............................................115
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness ..................................................117
9.4 Right to Indemnity .............................................................117
9.5 Successor Administrative Agent .................................................117
9.6 Collateral Documents and Guaranties ............................................118
9.7 Co-Agent, Co-Arranger and Syndication Agent ....................................118
Section 10. MISCELLANEOUS ..................................................................119
10.1 Assignments and Participations in Loans and Letters of Credit ..................119
10.2 Expenses .......................................................................122
10.3 Indemnity ......................................................................123
10.4 Set-Off; Security Interest in Deposit Accounts .................................124
10.5 Ratable Sharing ................................................................124
10.6 Amendments and Waivers .........................................................125
10.7 Independence of Covenants ......................................................127
10.8 Notices ........................................................................127
10.9 Survival of Representations, Warranties and Agreements .........................127
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative ..........................127
10.11 Marshalling; Payments Set Aside ................................................128
10.12 Severability ...................................................................128
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10.13 Obligations Several; Independent Nature of Lenders' Rights .....................128
10.14 Headings .......................................................................128
10.15 Applicable Law .................................................................128
10.16 Successors and Assigns .........................................................129
10.17 Consent to Jurisdiction and Service of Process .................................129
10.18 Waiver of Jury Trial ...........................................................130
10.19 Confidentiality ................................................................130
10.20 Counterparts; Effectiveness ....................................................131
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TRANCHE A TERM NOTE
V FORM OF TRANCHE B TERM NOTE
VI FORM OF REVOLVING NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII FORM OF OPINION OF COUNSEL TO LOAN PARTIES
IX FORM OF OPINION OF O'MELVENY & XXXXX LLP
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF CERTIFICATE RE NON-BANK STATUS
XII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIII FORM OF SECURITY AGREEMENT
XIV FORM OF SUBSIDIARY GUARANTY
XV FORM OF MORTGAGE
XVI FORM OF COLLATERAL ACCESS AGREEMENT
XVII FORM OF BORROWING BASE CERTIFICATE
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SCHEDULES
1.1A ELIGIBLE ACCOUNT DEBTORS
1.1B POST-TRANSACTION CASH FLOWS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1C EXISTING LETTERS OF CREDIT
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP;
MANAGEMENT
4.1H TRANSACTION COSTS
5.1 SUBSIDIARIES OF BORROWER
5.5 TITLE TO PROPERTY; REAL PROPERTY
5.6 LITIGATION; ADVERSE FACTS
5.8 MATERIAL CONTRACTS
5.13 ENVIRONMENTAL MATTERS
6.10 DEPOSIT ACCOUNTS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
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XXXXXXX-XXXXXXX
COMPANY CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of January 31, 2000 and entered into
by and among XXXXXXX-XXXXXXX COMPANY, a California corporation, THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as "LENDERS"), CANADIAN IMPERIAL BANK OF
COMMERCE ("CIBC"), as administrative agent for Lenders (in such capacity,
"ADMINISTRATIVE AGENT"), BT COMMERCIAL CORPORATION, as syndication agent for
Lenders (in such capacity, the "SYNDICATION AGENT") and as co-arranger (in such
capacity, the "CO-ARRANGER"), IBM CREDIT CORPORATION, as co-agent (in such
capacity, the "CO-AGENT") and CIBC WORLD MARKETS CORP., as lead arranger and
bookrunner (in such capacity, the "LEAD ARRANGER").
RECITALS
WHEREAS, XX-XX (this and other capitalized terms used in these recitals
without definition being used as defined in subsection 1.1) has been formed by
Fox Xxxxx for the purpose of merging with and into Borrower;
WHEREAS, the Fox Xxxxx Investors have contributed at least $50,000,000
in cash to XX-XX (including funds used to purchase shares directly from the
Xxxxxxx Trust) in order to provide funds which, together with the initial Term
Loans, will be sufficient to fund the Recapitalization Financing Requirements;
WHEREAS, the Xxxxxxx Trust has purchased the 219,020 shares of WJ
Preferred Stock in exchange for all of the shares of common stock of Borrower
owned by it immediately prior to the Recapitalization;
WHEREAS, on the Closing Date, pursuant to the Recapitalization
Agreement (i) XX-XX will be merged with and into Borrower, with Borrower being
the surviving corporation in such merger, (ii) all of the outstanding shares of
common stock of Borrower (other than shares as to which dissenters rights are
perfected) will be converted into the right to receive the Recapitalization
Consideration, (iii) each outstanding share of WJ Preferred Stock will be
converted into one share of common stock of the surviving corporation, and (iv)
each outstanding share of XX-XX Common Stock will be converted into one share of
common stock of the surviving corporation; "
WHEREAS, upon consummation of the Recapitalization, Fox Xxxxx Capital
Fund will own at least 80% of the outstanding shares of Borrower;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Borrower, the proceeds of which will be used (i) together with the proceeds of
the purchase of XX-XX Common Stock described above, to fund the Recapitalization
Financing Requirements, and (ii) to provide ongoing financing for working
capital and other general corporate purposes of Borrower and its Subsidiaries;
WHEREAS, Borrower desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a first priority Lien on substantially all of its real,
personal and mixed property, including a pledge of all of the ownership
interests of each of its domestic Subsidiaries and 650 of the ownership
interests of its foreign Subsidiaries; and
WHEREAS, all of the Material Subsidiaries of Borrower have agreed to
guarantee the Obligations hereunder and under the other Loan Documents and to
secure their guaranties by granting to Administrative Agent, on behalf of
Lenders, a first priority Lien on substantially all of their respective real,
personal and mixed property, including a pledge of all of the ownership
interests of each of their respective domestic Subsidiaries and 650 of the
ownership interests of their respective foreign Subsidiaries:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders and Administrative
Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACCOUNTS" means all present and future rights of the Borrower to
payment for goods sold or leased or for services rendered (including any such
rights evidenced by instruments or chattel paper), whether due or to become due,
whether now existing or hereinafter arising and wherever arising, and whether or
not they have been earned by performance.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) obtained by
DIVIDING (x) the rate of interest equal to (a) the interest rate per annum for
deposits in Dollars in an amount approximately equal to such Interest Period
which appears on page 3750 of the Dow Xxxxx Telerate Screen as of 11:00 A.M.
(London time) two (2) Business Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period, or (b) if such a
rate does not appear on page 3750 of the Dow Xxxxx Telerate Screen, the average
(rounded upwards, if necessary, to the nearest 1/100 of 1%) of the rates per
annum at which Dollar deposits in immediately available funds are offered to
CIBC in the interbank Eurodollar market as at or about 11:00 A.M. (New York City
time) two (2) Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of CIBC's Eurodollar Rate Loan and for a
period
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approximately equal to such Interest Period, BY (y) a percentage equal to
100% MINUS the stated maximum rate (expressed as a percentage) of all reserve
requirements (including any marginal, emergency, supplemental, special or
other reserves) applicable on such Interest Rate Determination Date to any
member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AFFILIATED FUND" means, with respect to any Lender that is a fund that
invests (in whole or in part) in commercial loans, any other fund that invests
(in whole or in part) in commercial loans and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5.
"AGREEMENT" means this Credit Agreement dated as of the date hereof.
"APPLICABLE BASE RATE MARGIN" means, as at any date of determination, a
percentage per annum equal to the Applicable Eurodollar Rate Margin, less 1.00%.
"APPLICABLE EURODOLLAR RATE MARGIN" means, as at any date of
determination, a percentage per annum as set forth below opposite the applicable
Consolidated Total Leverage Ratio:
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CONSOLIDATED APPLICABLE EURODOLLAR RATE MARGIN
TOTAL LEVERAGE -------------------------------------------------------------------------
RATIO TRANCHE A LOAN TRANCHE B LOAN REVOLVING LOAN
--------------------------- ------------------------- ----------------------- -----------------------
greater than or equal to 3.25% 3.75% 3.25%
3.00:1.00
less than 3.00:1.00 but 3.00% 3.50% 3.00%
greater than or equal to
2.25:1.00
less than 2.25:1.00 but 2.75% 3.50% 2.75%
greater than or equal to
1.50:1.00
less than 1.50:1.00 2.50% 3.50% 2.50%
; PROVIDED that until the initial Margin Reset Date, the Consolidated Total
Leverage Ratio shall be deemed to be greater than 3.00:1.00, and thus the
Applicable Eurodollar Rate Margin for Tranche A Term Loans and Revolving Loans
that are Eurodollar Rate Loans shall be 3.25% per annum, and the Applicable
Eurodollar Rate Margin for Tranche B Term Loans that are Eurodollar Rate Loans
shall be 3.75% per annum.
"ASSET SALE" means the sale by Borrower or any of its Subsidiaries to
any Person other than Borrower or any of its wholly-owned Subsidiaries of (i)
any of the stock of any of Borrower's Subsidiaries, (ii) substantially all of
the assets of any division or line of business of Borrower or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Borrower or any of its Subsidiaries (other than (a) inventory sold in the
ordinary course of business and (b) any such other assets to the extent that the
aggregate value of such assets sold in any single transaction or related series
of transactions is equal to $150,000 or less). "Asset Sale" shall also include
any sublease or sale of any portion of Borrower's interest in the Palo Alto
Lease or any other transfer of the Palo Alto Lease.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of EXHIBIT X annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (x) the Reference Rate or
(y) the rate which is one-half of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
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"BORROWER" means Xxxxxxx-Xxxxxxx Company, a California corporation.
"BORROWING BASE" means the sum of 75% of the face amount of Eligible
Accounts Receivable and 40% of the lower of the cost or fair market value of
Eligible Inventory, plus the face amount of the Palo Alto Letter of Credit.
"BORROWING BASE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT XVII annexed hereto delivered to Administrative Agent and
Lenders by Borrower pursuant to subsection 6.l(i).
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate of any Eurodollar Rate Loans, any day that is a Business Day described in
clause (i) above and that is also a day for trading by and between banks in
Dollar deposits in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Xxxxx'x.
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"CERTIFICATE OF DESIGNATION" means the Certificate of Determination of
Series A Convertible Participating Preferred Stock setting forth the Rights,
Preferences, Privileges and Restrictions of such Series of Preferred Stock of
Borrower filed with the Secretary of State of the State of California effective
as of January 21, 2000.
"CERTIFICATE OF MERGER" means the Certificate of Merger dated as of
October 25, 1999 and executed as of January 2l, 2000 by and between XX-XX and
Borrower, in the form delivered to Administrative Agent and Lenders prior to
their execution of this Agreement and as such agreement may be amended from time
to time thereafter to the extent permitted under subsection 7.14.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of EXHIBIT XI annexed hereto delivered by a Lender to Administrative
Agent pursuant to subsection 2.7B(iii).
"CIBC" has the meaning assigned to that term in the introduction to
this Agreement.
"CLASS" means, as applied to Lenders, each of the following three
classes of Lenders: (i) Lenders having Tranche A Term Loan Exposure, (ii)
Lenders having Tranche B Term Loan Exposure, and (iii) Lenders having Revolving
Loan Exposure.
"CLOSING DATE" means the date on or before January 31, 2000, on which
the initial Loans are made.
"CO-AGENT" has the meaning assigned to such term in the introduction to
this Agreement. The Co-Agent, in its capacity as Co-Agent, shall have no duties
or responsibilities in addition to those of a Lender as provided under this
Agreement.
"CO-ARRANGER" has the meaning assigned to such term in the introduction
to this Agreement. The Co-Arranger, in its capacity as Co-Arranger, shall have
no duties or responsibilities in addition to those of a Lender as provided under
this Agreement.
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any Collateral
is located or any warehouseman or processor in possession of any Inventory of
any Loan Party, substantially in the form of EXHIBIT XVI annexed hereto with
such changes thereto as may be agreed to by Administrative Agent in the
reasonable exercise of its discretion.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in the
Collateral Account Agreement.
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"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account Agreement
executed and delivered by Borrower and Administrative Agent on the Closing Date,
substantially in the form of EXHIBIT XII annexed hereto.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Collateral
Account Agreement, the Mortgages and all other instruments or documents
delivered by any Loan Party pursuant to this Agreement or any of the other Loan
Documents in order to grant to Administrative Agent, on behalf of Lenders, a
Lien on any real, personal or mixed property of that Loan Party as security for
the Obligations.
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1.A.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT VII annexed hereto delivered to Administrative Agent and Lenders by
Borrower pursuant to subsection 6.1 (iv).
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain Confidential
Information Memorandum relating to the $55 million Senior Secured Credit
Facility for Borrower dated November, 1999.
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has agreed in writing for the benefit of Administrative
Agent (which writing has been delivered to Administrative Agent), whether under
the terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of "Landlord
Consent and Estoppel," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum of
(i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability, in each case without duplication, and
including that portion of Capital Leases which is capitalized on the
consolidated balance sheet of Borrower and its Subsidiaries) by Borrower and its
Subsidiaries during that period that, in conformity with GAAP, are included in
"additions to property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Borrower and its Subsidiaries PLUS (ii)
to the extent not covered by clause (i) of this definition, the aggregate of all
expenditures by Borrower and its Subsidiaries during that period (a) to purchase
or develop computer software or systems (but only to the extent such
expenditures are capitalized on the consolidated balance sheet of Borrower and
its Subsidiaries in conformity with GAAP) or (b) to acquire (by purchase or
otherwise) the business, property or fixed assets of any Person, or the stock or
other evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of Borrower; PROVIDED HOWEVER that for the
purposes of calculating the financial covenant set forth in subsection 7.6B,
Consolidated Capital Expenditures shall only be calculated since the Closing
Date.
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"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period EXCLUDING, HOWEVER, any interest
expense not payable in Cash (including amortization of discount and amortization
of debt issuance costs).
"CONSOLIDATED CURRENT ASSETS" means, as at any date of determination,
the total assets of Borrower and its Subsidiaries on a consolidated basis that
may properly be classified as current assets in conformity with GAAP, EXCLUDING
Cash, Cash Equivalents and deferred tax assets.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Borrower and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, EXCLUDING the current portions of Consolidated Total Debt
and deferred tax liabilities.
"CONSOLIDATED EBITDA" means, for any period, the sum of the amounts for
such period of (i) Consolidated Net Income, (ii) Consolidated Cash Interest
Expense, (iii) provisions for taxes based on income, (iv) total depreciation
expense, (v) total amortization expense, and (vi) other non-recurring and
non-cash items reducing Consolidated Net Income LESS interest income and any
non-recurring and non-cash items increasing Consolidated Net Income, all of the
foregoing as determined on a consolidated basis for Borrower and its
Subsidiaries in conformity with GAAP; provided that Consolidated EBITDA for the
Second Fiscal Quarter of the 1999 Fiscal Year shall be $4,449,000, Consolidated
EBITDA for the Third Fiscal Quarter of the 1999 Fiscal Year shall be $1,874,000,
and Consolidated EBITDA for the Fourth Fiscal Quarter of the 1999 Fiscal Year
shall be calculated based on the methodology for calculating Consolidated EBITDA
for the Second and Third Fiscal Quarter of the 1999 Fiscal Year used in the
Confidential Information Memorandum; provided further that Consolidated EBITDA
commencing on the Closing Date shall not include non-recurring, pre-closing
items related to the Recapitalization.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital
Adjustment MINUS (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures), (c) Consolidated Cash Interest Expense, and
(d) the provision for current taxes based on income of Borrower and its
Subsidiaries and payable in cash with respect to such period, less any
Post-Transaction Cash Flows for Fiscal Year 2000 or Fiscal Year 2001.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash Interest
Expense, (ii) provisions for taxes based on income, and (iii) all scheduled
principal payments to be made by Borrower or any of its Subsidiaries (whether or
not such payments are actually made), all of the foregoing as determined on a
consolidated basis for Borrower and its Subsidiaries in conformity with GAAP;
provided, that for calculating Consolidated Fixed Charges for the four
consecutive
8
Fiscal Quarter period ending September 29, 2000, (a) the amount of
Consolidated Cash Interest Expense and taxes based on income shall be deemed to
equal the product of (x) the aggregate correlative amounts for such items for
the three consecutive Fiscal Quarter period ending September 29, 2000, and (y)
1.33, and (b) scheduled principal payments shall be calculated only since the
Closing Date.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Borrower and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; PROVIDED
that there shall be excluded (i)the income (or loss) of any Person (other than a
Subsidiary of Borrower) in which any other Person (other than Borrower or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Borrower or any of its
Subsidiaries by such Person during such period, (ii) the income of any
Subsidiary of Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, and (iii) (to the extent not included in clauses
(i) through (ii) above) any net non-cash extraordinary gains or net non-cash
extraordinary losses, and PROVIDED FURTHER that for purposes of calculating
Consolidated Net Income for any Fiscal Quarters ending during Fiscal Year 2000,
Consolidated Net Income shall not include any Transaction Costs
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the aggregate
amount of all rents paid or payable by Borrower and its Subsidiaries on a
consolidated basis during that period under all Operating Leases to which
Borrower or any of its Subsidiaries is a party as lessee (but excluding any of
the following although characterized as rent or additional rent, unless it is
not separately charged from the base rent: common area maintenance charges,
property taxes, utility charges and other charges, costs and expenses relating
to leasehold estates), net of sublease income to the extent received in cash.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness and Contingent
Obligations of Borrower and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP; provided, however, that Consolidated Total Debt shall
not include obligations of the Borrower under the Palo Alto Lease or the Palo
Alto Letter of Credit.
"CONSOLIDATED TOTAL LEVERAGE RATIO" means, as at the last day of any
Fiscal Quarter, the ratio of (a) Consolidated Total Debt as of the last day of
such Fiscal Quarter, to (b) Consolidated EBITDA for the four Fiscal Quarter
period then ended; provided that for the purpose of calculating the Consolidated
Total Leverage Ratio as of the end of the Second
9
Fiscal Quarter of Fiscal Year 2000, the Consolidated Total Leverage Ratio
shall use the Consolidated Total Debt as of August 4, 2000.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of determination,
the excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof,
(ii) with respect to any letter of credit issued for the account of that Person
or as to which that Person is otherwise liable for reimbursement of drawings, or
(iii) under Hedge Agreements. Contingent Obligations shall include (a) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any Security issued by that Person or of any material indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement to which Borrower or any of its Subsidiaries is a
party.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
10
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOCUMENTARY LETTER OF CREDIT" means a Letter of Credit issued in
connection with the importation of goods for the purpose of supporting trade
payables.
"ELIGIBLE ACCOUNT DEBTORS" means those debtors listed on Schedule x.xX
attached hereto, provided that any such Eligible Account Debtor may be removed
from, or added to, Schedule 1.1A at the mutual agreement of the Administrative
Agent and Borrower; provided further that if any Eligible Account Debtor's
long-term credit rating shall fall below investment grade, then such Eligible
Account Debtor shall be deemed removed from Schedule 1.1A; and provided still
further that if any Eligible Account Debtor that as of the date hereof (or the
date it is added to Schedule 1.1A) does not have a long-term credit rating or a
long-term credit rating that is at least investment grade, such Eligible Account
Debtor may be removed from Schedule 1.1A by the Administrative Agent if the
Administrative Agent in its good faith judgment determines that there has been
a material decline in the credit quality of such Eligible Account Debtor since
the date hereof(or the date it is added to Schedule 1.1A, as appropriate).
"ELIGIBLE ACCOUNTS RECEIVABLE" means, as at any date of determination,
the total face amount of those Accounts of Borrower and its Subsidiaries
consisting of ordinary trade accounts receivable owned by Borrower and its
Subsidiaries, payable in cash in Dollars on delivery or at a future date and
arising out of the final sale of Inventory or the provision of services in the
ordinary course of business of Borrower and its Subsidiaries; PROVIDED that in
determining the eligibility of Eligible Accounts Receivable for Borrower and its
Subsidiaries, there shall be excluded (to the extent not included above):
(i) Accounts with respect to which more than 90 days have
elapsed since the invoice date;
(ii) Accounts with respect to which the Account debtor is a
director, officer, shareholder, employee or an Affiliate of Borrower if
the terms of such Accounts are less favorable to Borrower or any such
Subsidiary than those which might be obtained at the time from a Person
who is not such a director, officer, shareholder, employee or an
Affiliate;
(iii) Accounts with respect to which the Account debtor is the
United States of America or any department, agency or instrumentality
thereof, except for those Accounts as to which the Borrower or any such
Subsidiary has assigned its right to payment thereof to the
Administrative Agent, and the assignment has been acknowledged pursuant
to the Assignment of Claims Act of 1940 (31 U.S.C. 3727);
(iv) Accounts, other than Accounts with an Eligible Account
Debtor, with respect to which the Account debtor is not a resident of
the United States, unless (a) the Account debtor has supplied Borrower
or any such Subsidiary with an irrevocable commercial letter of credit,
issued by a financial institution and in form and substance
satisfactory to the Administrative Agent or (b) the Account debtor is a
resident of a
11
G7 nation and has a long-term unsecured, non-credit enhanced debt
rating of at least investment grade;
(v) Accounts with respect to which the Account debtor has
asserted a counterclaim, allowance or right to set off or which is
otherwise unearned or disputed, including, without limitation, Accounts
which reflect "barter" activity;
(vi) Accounts with respect to which the Administrative Agent,
on behalf of the Lenders and the Issuing Lender, does not have a valid,
first priority and fully perfected Lien or which are not free of all
Liens or other claims of all other Persons other than Liens permitted
under this Agreement;
(vii) Accounts with respect to which the Account debtor is the
subject of bankruptcy or a similar insolvency proceeding, or has made
an assignment for the benefit of creditors, or whose assets have been
conveyed to a receiver or trustee, or who has failed or suspended or
gone out of business;
(viii) Accounts with respect to which the Account debtor's
obligation to pay the Account is conditional upon the Account debtor's
approval or otherwise subject to return rights with respect to the
goods purchased giving rise to any such Account;
(ix) Accounts to the extent that the Account debtor's
indebtedness to Borrower and its Subsidiaries (whether evidenced by
such Accounts or otherwise) exceeds an amount that is (a) for Fiscal
Year 2000 greater than sixty percent (60%) of the face amount of the
then outstanding Eligible Accounts Receivable (determined prior to
giving effect to this subparagraph (ix)) and (b) for any time
thereafter greater than fifty percent (50%) of the face amount of the
then outstanding Eligible Accounts Receivable (determined prior to
giving effect to this subparagraph (ix));
(x) Accounts owed to Borrower by an Account debtor, less than
forty percent (40%) of whose aggregate Accounts owed to Borrower
constitute Eligible Accounts Receivable;
(xi) Accounts which are not in full force and effect or do not
constitute legal, valid and binding obligations of the Account debtor
enforceable against the Account debtor in accordance with their terms;
(xii) Accounts with respect to which the terms or conditions
prohibit or restrict assignment or collection rights;
(xiii) Accounts with respect to which the Account debtor is
located in New Jersey, unless Borrower or such Subsidiary has filed, or
is exempt from filing, a Notice of Business Activities Report with the
New Jersey Division of Taxation for the then current year;
(xiv) Accounts, other than Accounts with an Eligible Account
Debtor, with respect to which the Account debtor is a supplier or a
creditor of Borrower or any of
12
its Subsidiaries up to an amount equal to the amount owed by Borrower
and its Subsidiaries to such Account debtor; and
(xv) SEG Receivables.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized under the
laws of the United States or any state thereof; PROVIDED that such financial
institution has a combined capital and surplus of at least $100,000,000; (ii) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof; PROVIDED that such financial institution has
a combined capital and surplus of at least $100,000,000; (iii) a commercial bank
organized under the laws of any other country or a political subdivision
thereof; PROVIDED that (x) such bank is acting through a branch or agency
located in the United States or (y) such bank is organized under the laws of a
country that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; and (iv) any other
entity which is an "accredited investor" (as defined in Regulation D under the
Securities Act) which extends credit or buys loans as one of its businesses
including insurance companies, mutual funds, lease financing companies and
investment funds and any Affiliated Funds; or (B) any Lender, any Affiliate of
any Lender, or any Affiliated Fund of any Lender; PROVIDED that no Affiliate of
Borrower shall be an Eligible Assignee.
"ELIGIBLE INVENTORY" means, as at any date of determination, all
Inventory of the Borrower and its Subsidiaries consisting of all finished goods,
salable in the ordinary course of business of the Borrower and its Subsidiaries;
PROVIDED that in determining the amount of Eligible Inventory for the Borrower,
there shall be excluded:
(i) Inventory in the possession of any Person, other than the
Borrower or any of its Subsidiaries, or consigned by the Borrower or
any of its Subsidiaries, except Inventory in the possession of or
consigned to an Eligible Account Debtor and (subject to any additional
requirements imposed by the Administrative Agent in its sole and
absolute discretion, to protect the Borrower's or such Subsidiary's
title thereto or the Lien thereon granted in favor of the
Administrative Agent) goods held in storage solely for the account of
the Borrower or such Subsidiary (subject to the Lien thereon granted in
favor of the Administrative Agent), if the Person in possession has
acknowledged in writing the Lien thereon granted in favor of the
Administrative Agent and has not issued a negotiable document of title
as to the goods;
(ii) Inventory with respect to which the Administrative Agent,
on behalf of the Lenders and the Issuing Lender, does not have a valid,
first priority and fully perfected Lien or which is not free of all
Liens or other claims of all other Persons other than Liens in favor of
the Administrative Agent; and
(iii) Inventory to which the Borrower or any such Subsidiary
does not have clear title.
13
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Borrower,
any of its Subsidiaries or any of their respective ERISA Affiliates.
"EMPLOYMENT AGREEMENTS" means those certain Employment Agreements
by and between Xxxxxxx Xxxxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxx, and
Xxxxxx Xxxxxxx, and Borrower, effective as of January 31, 2000.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all statutes, ordinances, orders,
rules, regulations, guidance documents, judgments, Governmental
Authorizations, or any other requirements of governmental authorities
relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare, in any manner applicable to Borrower or
any of its Subsidiaries or any Facility, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9601 ET SEQ.), the Hazardous Materials Transportation Act (49 U.S.C. Section
1801 ET SEQ.), the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 ET SEQ.), the Federal Water Pollution Control Act (33 U.S.C. Section
1251 ET SEQ.), the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 ET SEQ.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 ET SEQ.),
the Occupational Safety and Health Act (29 U.S.C. Section 651 ET SEQ.), the
Oil Pollution Act (33 U.S.C. Section 2701 ET SEQ.) and the Emergency Planning
and Community Right-to-Know Act (42 U.S.C. Section 11001 ET SEQ.), each as
amended or supplemented, any analogous present or future state or local
statutes or laws, and any regulations promulgated pursuant to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Borrower or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Borrower or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Borrower or
14
such Subsidiary and with respect to liabilities arising after such period for
which Borrower or such Subsidiary could be liable under the Internal Revenue
Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (1), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the written assertion of
a material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of written notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or such written notice of the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
15
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"EXISTING LETTERS OF CREDIT" means the Letters of Credit listed on
SCHEDULE 3.1C annexed hereto.
"FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Borrower or any of its Subsidiaries or any of
their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in subsection
6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral and (ii) such Lien is
the only Lien (other than Permitted Encumbrances and Liens permitted pursuant to
subsection 7.2) to which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year, ending on
or around the last business day of each March, June, September and December.
"FISCAL YEAR" means the fiscal year of Borrower and its
Subsidiaries ending on December 31 of each calendar year.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"FOX XXXXX" means Fox Xxxxx & Company, LLC.
"FOX XXXXX CAPITAL FUND" means Fox Xxxxx Capital Fund, L.P., a Delaware
limited partnership.
"FOX XXXXX INVESTORS" means Fox Xxxxx Capital Fund and related managed
funds and accounts and other investors permitted by Fox Xxxxx to invest in
XX-XX.
"FOX XXXXX MANAGEMENT AGREEMENT" means that certain Management
Agreement dated as of January 31, 2000 between Borrower and Fox Xxxxx.
"XX-XX" means XX-XX Acquisition Corp., a California corporation and
wholly-owned subsidiary of Fox Xxxxx.
16
"XX-XX COMMON STOCK" means the common stock of XX-XX Acquisition Corp.,
no par value.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent located at CIBC, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 or (ii) such
other office of Administrative Agent as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent to
Borrower and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority or which
may or could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment,
17
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with
respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations incurred under
ERISA), which purchase price is (a) due more than six months from the date of
incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, and (v) all indebtedness secured by any Lien on
any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
"INDEMNITEE" has the meaning assigned to that term in subsection 10.3.
"INFORMATION SYSTEMS AND EQUIPMENT" means all computer hardware,
firmware and software, as well as other information processing systems, or any
equipment containing embedded microchips, whether directly or indirectly owned,
licensed, leased, operated or otherwise controlled by Borrower or any of its
Subsidiaries, including through third-party service providers, and which, in
whole or in part, are used, operated, relied upon or integral to Borrower's or
any of its Subsidiaries' conduct of their businesses.
"INTELLECTUAL PROPERTY" means all patents, patent rights, patent
applications, licenses, inventions, trade secrets, trademarks, tradenames,
service marks, copyrights, technology, know-how and proprietary techniques
(including processes and substances) used in or necessary for the conduct of the
business of Borrower and its Subsidiaries as currently conducted that are
material to the condition (financial or otherwise), business or operations of
Borrower and its Subsidiaries, taken as a whole.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate Loan,
the last Business Day of each March, June, September and December of each year,
commencing on the first such date to occur after the Closing Date, and (ii) with
respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; PROVIDED that in the case of each Interest Period of
six months "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Borrower or any of its Subsidiaries is a
party.
18
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVENTORY" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Borrower), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Borrower from any Person other than
Borrower or any of its Subsidiaries, of any equity Securities of such
Subsidiary, (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Borrower or any of its Subsidiaries to any other Person (other than a
Subsidiary Guarantor), including all indebtedness and accounts receivable from
that other Person that are not current assets or did not arise from sales to
that other Person in the ordinary course of business, or (iv) Interest Rate
Agreements or Currency Agreements not constituting Hedge Agreements. The amount
of any Investment shall be the original cost of such Investment PLUS the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"IP COLLATERAL" means, collectively, the Collateral consisting of
rights in or to intellectual property under the Security Agreement.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii).
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, A letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Administrative
Agent, pursuant to which such lessor agrees, for the benefit of Administrative
Agent, (i) that without any further consent of such lessor or any further action
on the part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such lessor
shall not terminate such lease as a result of a default by such Loan Party
thereunder without first giving Administrative Agent notice of such default and
at least 60 days (or, if such default cannot reasonably be cured by
Administrative Agent within such period, such longer period as may reasonably be
required) to cure such default, (iii) to the matters contained in a Collateral
Access Agreement, and (iv)
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to such other matters relating to such Leasehold Property as Administrative
Agent may reasonably request.
"LEAD ARRANGER" has the meaning assigned to that term in the
introduction to this Agreement.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral; provided, however, that
Leasehold Property shall not include any leasehold interest in the Palo Alto
Lease or any other Leasehold Property of any Loan Party as of the date hereof
with respect to which no Loan Party has granted a Lien.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1; PROVIDED that the term
"Lenders", when used in the context of a particular Commitment, shall mean
Lenders having that Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means the (a) Palo Alto
Letter of Credit, (b) any standby letter of credit or similar instrument issued
for the purpose of supporting (i) Indebtedness of Borrower or any of its
Subsidiaries in respect of industrial revenue or development bonds or
financings, (ii) workers' compensation liabilities of Borrower or any of its
Subsidiaries, (iii) the obligations of third party insurers of Borrower or any.
of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) obligations with respect to Capital Leases or
Operating Leases of Borrower or any of its Subsidiaries, and (v) performance,
payment, deposit or surety obligations of Borrower or any of its Subsidiaries,
in any case if required by law or governmental rule or regulation or in
accordance with custom and practice in the industry; PROVIDED that Letters of
Credit may not be issued for the purpose of supporting any Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code), and (c) the Existing Letters of Credit.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit, including without
limitation, the Palo Alto Letter of Credit, then outstanding PLUS (ii) the
aggregate amount of all drawings under Letters of Credit, including without
limitation, the Palo Alto Letter of Credit, honored by Issuing Lenders and not
theretofore reimbursed by Borrower (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B).
"LIEN" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
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"LOAN" or "LOANS" means one or more of the Tranche A Term Loans,
Tranche B Term Loans or Revolving Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of Credit
(and any applications for, or reimbursement agreements or other documents or
certificates executed by Borrower in favor of an Issuing Lender relating to, the
Letters of Credit), the Guaranties and the Collateral Documents.
"LOAN PARTY" means each of Borrower, each Material Subsidiary of
Borrower, and any of Borrower's other Subsidiaries from time to time executing a
Loan Document, and XX-XX Acquisition Corp., and "LOAN PARTIES" means all such
Persons, collectively.
"MARGIN DETERMINATION CERTIFICATE" means (a) with respect to each
Fiscal Quarter (other than each fourth Fiscal Quarter), the Compliance
Certificate required pursuant to subsection 6.1(iv) delivered with the financial
statements required pursuant to subsection 6.1(ii), and (b) with respect to each
fourth Fiscal Quarter, within 45 days of the last day of such fourth Fiscal
Quarter, an Officer's Certificate setting forth in reasonable detail the
Consolidated Total Leverage Ratio that is applicable as of the last day of such
Fiscal Quarter.
"MARGIN RESET DATE" means March 1, June 1, September 1, and
December 1 of each Fiscal Year, commencing with September 1, 2000.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"MATERIAL ADVERSE EFFECT" means (i)a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Borrower and its Subsidiaries taken as a whole or (ii) the material
impairment of the ability of any Loan Party to perform, or of Administrative
Agent or Lenders to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Borrower or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.
"MATERIAL SUBSIDIARY" means any domestic Subsidiary of Borrower having
(a) assets which account for 1% or more of the total assets of Borrower and its
Subsidiaries, or (b) revenue which is 1% or more of the total revenue of
Borrower and its Subsidiaries on a consolidated basis, in each case determined
based upon the most recent financial statements delivered pursuant to Section
6.1.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in the form of EXHIBIT XV annexed hereto or in
such other form as may be approved by Administrative Agent in its sole
discretion, in each case with such changes thereto as may be recommended by
Administrative Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices, or (ii) at Administrative Agent's option,
in the case of an Additional Mortgaged Property (as defined in subsection 6.9B),
an amendment to an
21
existing Mortgage, in form satisfactory to Administrative Agent, adding such
Additional Mortgaged Property to the Real Property Assets encumbered by such
existing Mortgage, in either case as such security instrument or amendment
may be amended, supplemented or otherwise modified from time to time.
"MORTGAGES" means all such instruments, including any Additional Mortgages
(as defined in subsection 6.9B), collectively.
"MORTGAGED PROPERTY" means an Additional Mortgaged Property (as
defined in subsection 6.9B).
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Borrower or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Borrower or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Borrower or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Borrower or such Subsidiary in respect thereof.
"NOTES" means one or more of the Tranche A Term Notes, Tranche B Term
Notes or Revolving Notes or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
EXHIBIT I annexed hereto delivered by Borrower to Administrative Agent pursuant
to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of EXHIBIT II annexed hereto delivered by Borrower to Administrative Agent
pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice substantially
in the form of EXHIBIT III annexed hereto delivered by Borrower to
Administrative Agent pursuant to subsection 3.1B(i) with respect to the proposed
issuance of a Letter of Credit.
22
"OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer; PROVIDED that every Officers' Certificate
with respect to the compliance with a condition precedent to the making of any
Loans hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is necessary to enable
them to express an informed opinion as to whether or not such condition has been
complied with, and (iii)a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.
"PALO ALTO LEASE" means the long term lease existing as of the date
hereof of building six located at 0000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx
00000.
"PALO ALTO LETTER OF CREDIT" means the Letter of Credit expiring on
January 31, 2001, or upon the earlier termination thereof, issued hereunder in a
maximum amount of $5,000,000 supporting certain lease payments under the
Borrower's lease of buildings three, four and five located at 0000 Xxxxxxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of
banks and rights of set-off, statutory Liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the
ordinary course of business (a) for amounts not yet overdue or
23
(b) for amounts that are overdue and that (in the
case of any such amounts overdue for a period in excess of 5
days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have
been made for any such contested amounts, and (2) in the case
of a Lien with respect to any portion of the Collateral, such
contest proceedings conclusively operate to stay the sale of
any portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the
ordinary, course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money), so long as no foreclosure,
sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting
an Event of Default under subsection 8.8;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral
Documents and not interfering in any material respect with the
ordinary conduct of the business of Borrower or any of its
Subsidiaries or resulting in a material diminution in the
value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in
title, in each case which do not and will not interfere in any
material respect with the ordinary conduct of the business of
Borrower or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the
Obligations;
(vii) any (a) interest or title of a lessor or
sublessor under any lease permitted by subsection 7.9, (b)
restriction or encumbrance that the interest or title of such
lessor or sublessor may be subject to, or (c) subordination of
the interest of the lessee or sublessee under such lease to
any restriction or encumbrance referred to in the preceding
clause (b), so long as the holder of such restriction or
encumbrance agrees to recognize the rights of such lessee or
sublessee under such lease; and
(viii) Liens arising from filing UCC financing
statements relating solely to leases permitted by this
Agreement.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether
24
federal, state or local, domestic or foreign, and including political
subdivisions thereof) and agencies or other administrative or regulatory
bodies thereof.
"PLEDGED COLLATERAL" means, collectively, the "Pledged Collateral"
as defined in the Security Agreement.
"POST-TRANSACTION CASH FLOWS" means those items set forth on Schedule
1.1B attached hereto.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PRO RATA SHARE" means (i)with respect to all payments, computations
and other matters relating to the Tranche A Term Loan Commitment or the Tranche
A Term Loan of any Lender, the percentage obtained by DIVIDING (x) the Tranche A
Term Loan Exposure of that Lender BY (y)the aggregate Tranche A Term Loan
Exposure of all Lenders, (ii)with respect to all payments, computations and
other matters relating to the Tranche B Term Loan Commitment or the Tranche B
Term Loan of any Lender, the percentage obtained by DIVIDING (x) the Tranche B
Term Loan Exposure of that Lender by (y) the aggregate Tranche B Term Loan
Exposure of all Lenders, (iii)with respect to all payments, computations and
other matters relating to the Revolving Loan Commitment or the Revolving Loans
of any Lender or any Letters of Credit issued or participations therein
purchased by any Lender, the percentage obtained by DIVIDING (x) the Revolving
Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all
Lenders, and (iv)for all other purposes with respect to each Lender, the
percentage obtained by DIVIDING (x)the sum of the Tranche A Term Loan Exposure
of that Lender PLUS the Tranche B Term Loan Exposure of that Lender PLUS the
Revolving Loan Exposure of that Lender by (y) the sum of the aggregate Tranche A
Term Loan Exposure of all Lenders PLUS the aggregate Tranche B Term Loan
Exposure of all Lenders PLUS the aggregate Revolving Loan Exposure of all
Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share of
each Lender for purposes of each of clauses (i), (ii), (iii) and (iv) of the
preceding sentence is set forth opposite the name of that Lender in SCHEDULE 2.1
annexed hereto.
"PROXY STATEMENT" means the Proxy Statement of Borrower dated December
31, 1999 relating to the Recapitalization.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"RECAPITALIZATION" means the merger of XX-XX with and into Borrower in
accordance with the terms of the Recapitalization Agreement and the Certificate
of Merger, with Borrower being the surviving corporation in such
Recapitalization.
"RECAPITALIZATION AGREEMENT" means that certain Agreement and Plan of
Merger by and among XX-XX and Borrower dated as of October 25, 1999, in the form
delivered to Administrative Agent and Lenders prior to their execution of this
Agreement and as such
25
agreement may be amended from time to time thereafter to the extent permitted
under subsection 7.14.
"RECAPITALIZATION CONSIDERATION" means (1) the right to receive $41,125
in cash per share of Xxxxxxx-Xxxxxxx common stock and (2) with respect to each
outstanding option to purchase shares of Xxxxxxx-Xxxxxxx common stock terminated
pursuant to the Recapitalization Agreement, an amount in cash equal to the
product of (i) the total number of shares of Xxxxxxx-Xxxxxxx common stock
subject to such option (but only if and to the extent such option has not
theretofore been exercised), and (ii) the excess, if any, of $41,125 over the
exercise price per share of Xxxxxxx-Xxxxxxx common stock subject to such option
(but only if and to the extent such option has not theretofore been exercised).
"RECAPITALIZATION FINANCING REQUIREMENTS" means the aggregate of all
amounts necessary (i) to pay the Recapitalization Consideration and (ii) to pay
Transaction Costs.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in Administrative Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "RECORD DOCUMENT" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to Administrative Agent.
"REAL PROPERTY ASSET" means, at any time of determination, any interest
then owned by any Loan Party in any real property.
"REFERENCE RATE" means the rate that CIBC announces from time to time
as its prime lending rate, as in effect from time to time. The Reference Rate is
a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. CIBC or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Reference Rate.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means, collectively, the Certificate of Merger,
the Employment Agreements, the Recapitalization Agreement, the Certificate of
Designation and the Shareholders Agreement.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or
26
disposal of any barrels, containers or other closed receptacles containing
any Hazardous Materials), including the movement of any Hazardous Materials
through the air, soil, surface water or groundwater.
"REQUISITE CLASS LENDERS" means, at any time of determination (i) for
the Class of Lenders having Tranche A Term Loan Exposure, Lenders having or
holding more than 50% of the aggregate Tranche A Term Loan Exposure of all
Lenders, (ii) for the Class of Lenders having Tranche B Term Loan Exposure,
Lenders having or holding more than 50% of the aggregate Tranche B Term Loan
Exposure of all Lenders and (iii) for the Class of Lenders having Revolving Loan
Exposure, Lenders having or holding more than 50% of the aggregate Revolving
Loan Exposure of all Lenders.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the sum of the aggregate Tranche A Term Loan Exposure of all Lenders PLUS the
aggregate Tranche B Term Loan Exposure of all Lenders PLUS the aggregate
Revolving Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Borrower or any of its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of Borrower or any of its Subsidiaries now or hereafter
outstanding, and (iii) any payment made to retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire shares of any
class of stock of Borrower or any of its Subsidiaries now or hereafter
outstanding; provided that "Restricted Junior Payment" shall not include any
dividend or other distribution on account of any shares of any class of stock of
any Subsidiary of Borrower to Borrower or any Subsidiary Guarantor.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Borrower pursuant to subsection 2.1A(iii), and "Revolving
Loan Commitments" means such commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means December 31, 2004.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i)prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii)after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender PLUS (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage
in respect of all Letters of Credit issued by that Lender (in each case net of
any participations purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) PLUS (c)without duplication, the aggregate
amount of all participations purchased by that Lender in any outstanding Letters
of Credit or any unreimbursed drawings under any Letters of Credit.
27
"REVOLVING LOANS" means the Loans made by Lenders to Borrower pursuant
to subsection 2.1A(iii).
"REVOLVING NOTES" means any promissory notes of Borrower issued
pursuant to subsection 2.1D to evidence the Revolving Loans of any Lenders,
substantially in the form of EXHIBIT VI annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Borrower and Material Subsidiaries on the Closing Date,
substantially in the form of EXHIBIT XIII annexed hereto.
"SECURITIES ACT" means the Securities Act of 1933.
"SEG RECEIVABLES" means the accounts receivable relating to the WJ
Semiconductor Equipment Group, Inc. retained by Borrower to be collected after
the closing of the transaction with Applied Materials, Inc.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii)such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"SHAREHOLDERS AGREEMENT" means that certain Shareholders Agreement
dated as of the Closing Date by and among Borrower and the owners of the capital
stock of Borrower, in the form delivered to Administrative Agent and Lenders
prior to their execution of this Agreement and as such agreement may be amended
from time to time thereafter to the extent permitted under subsection 7.14.
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"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability Borrower, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"SUBSIDIARY GUARANTOR" means any domestic Material Subsidiary of
Borrower that executes and delivers a counterpart of the Subsidiary Guaranty on
the Closing Date or from time to time thereafter pursuant to subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by existing domestic Material Subsidiaries of Borrower on the Closing
Date and to be executed and delivered by additional domestic Material
Subsidiaries of Borrower from time to time thereafter in accordance with
subsection 6.8, substantially in the form of EXHIBIT XIV annexed hereto.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that
term in subsection 9.1B.
"SYNDICATION AGENT" shall have the meaning assigned to such term. in
the introduction to this Agreement. The Syndication Agent, in its capacity as
Syndication Agent, shall have no duties or responsibilities in addition to those
of a Lender as provided under this Agreement.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; PROVIDED that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"TERM LOANS" means, collectively, the Tranche A Term Loans and the
Tranche B Term Loans.
"TITLE COMPANY" means one or more other title insurance companies
reasonably satisfactory to Administrative Agent.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
reimbursing the applicable
29
Issuing Lender for any amount drawn under any Letter of Credit but not yet so
applied) PLUS (ii) the Letter of Credit Usage.
"TRANCHE A TERRA LOAN COMMITMENT" means the commitment of a Lender to
make a Tranche A Term Loan to Borrower pursuant to subsection 2.1A(i), and
"TRANCHE A TERM LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"TRANCHE A TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i)prior to the funding of the Tranche A Term Loans,
that Lender's Tranche A Term Loan Commitment and (ii) after the funding of the
Tranche A Term Loans, the outstanding principal amount of the Tranche A Term
Loan of that Lender.
"TRANCHE A TERM LOANS" means the Loans made by Lenders to Borrower
pursuant to subsection 2.1A(i).
"TRANCHE A TERM NOTES" means any promissory notes of Borrower issued
pursuant to subsection 2.1D to evidence the Tranche A Term Loans of any Lenders,
substantially in the form of EXHIBIT IV annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a Lender to
make a Tranche B Term Loan to Borrower pursuant to subsection 2.1A(ii), and
"TRANCHE B TERM LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate:
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Tranche B Term Loans,
that Lender's Tranche B Term Loan Commitment and (ii) after the funding of the
Tranche B Term Loans, the outstanding principal amount of the Tranche B Term
Loan of that Lender.
"TRANCHE B TERM LOANS" means the Loans made by Lenders to Borrower
pursuant to subsection 2.1A(ii).
"TRANCHE B TERM NOTES" means any promissory notes of Borrower issued
pursuant to subsection 2.1D to evidence the Tranche B Term Loans of any Lenders,
substantially in the form of EXHIBIT V annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"TRANSACTION COSTS" means the fees, costs and expenses payable or
incurred by XX-XX or Borrower on or about the Closing Date in connection with
the transactions contemplated by the Loan Documents and the Related Agreements
(other than the Employment Agreements), together with the fees, costs and
expenses payable or incurred by Borrower on or about the Closing Date in
connection with the sale of WJ Semiconductor Equipment Group, Inc.
and its telecommunications group, as set forth on SCHEDULE 4.1H.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"XXXXXXX TRUST" means The Xxxxxxx Trust dated September 19, 1988.
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"WJ PREFERRED STOCK" means the Series A Convertible Participating
Preferred Stock, no par value, of Borrower.
"YEAR 2000 COMPLIANT" means that all Information Systems and Equipment
accurately process date data (including without limitation calculating,
comparing and sequencing) in all material respects before, during and after the
year 2000, as well as same and multi-century dates, or between the years 1999
and 2000, taking into account all leap years, including the fact that the year
2000 is a leap year, and further, that when used in combination with, or
interfacing with, other Information Systems and Equipment, shall accurately
accept, release and exchange date data, and shall in all material respects
continue to function in the same manner as it performs today and shall not
otherwise materially impair the accuracy or functionality of Information Systems
and Equipment.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
D. The parties hereto acknowledge that they have each been represented
by counsel and have each cooperated in the drafting and preparation of this
Agreement. Accordingly, the general rule of contract interpretation requiring
any ambiguity to be construed against the drafter in connection with the
interpretation of this Agreement or any Loan Document shall be disregarded and
shall not be applied to construe any portion of this Agreement or any Loan
Document.
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E. (i) Any reference in this Agreement or any Loan Document to any
agreement means such agreement as it may be amended, supplemented or otherwise
modified from time to time; (ii) any reference in this Agreement or any Loan
Document to any law, statute, regulation, rule or other legislative action shall
mean such law, statute, regulation, rule or other legislative action as amended,
supplemented or otherwise modified from time to time, and shall include any rule
or regulation promulgated thereunder; and (iii) any reference in this Agreement
Or any Loan Document to a Person shall include the successor or assignee of such
Person.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; OPTIONAL NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, each Lender hereby severally agrees to make the Loans
described in subsections 2.1A(i), 2.1A(ii) and 2.1A(iii).
(i) TRANCHE A TERM LOANS. Borrower shall deliver to
Administrative Agent a Notice of Borrowing no later than 12:00 Noon
(New York City time) at least one Business Day prior to the Closing
Date, requesting a borrowing of the Tranche A Term Loans. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a
Business Day), and (ii) that such Loans shall be Base Rata Loans. Each
Lender severally agrees to lend to Borrower on the Closing Date an
amount not exceeding its Pro Rata Share of the aggregate amount of the
Tranche A Term Loan Commitments to be used for the purposes identified
in subsection 2.5A. The amount of each Lender's Tranche A Term Loan
Commitment is set forth opposite its name on SCHEDULE 2.1 annexed
hereto and the aggregate amount of the Tranche A Term Loan Commitments
is $25,000,000; PROVIDED that the Tranche A Term Loan Commitments of
Lenders shall be adjusted to give effect to any assignments of the
Tranche A Term Loan Commitments pursuant to subsection 10.1B. Each
Lender's Tranche A Term Loan Commitment shall expire immediately and
without Further action on January 31, 2000 if the Tranche A Term Loans
are not made on or before that date. Borrower may make only one
borrowing under the Tranche A Term Loan Commitments. Amounts borrowed
under this subsection 2.1A(i) and subsequently repaid or prepaid may
not be reborrowed.
(ii) TRANCHE B TERM LOANS. Borrower shall deliver to
Administrative Agent a Notice of Borrowing no later than 12:00 Noon
(New York City time) at least one Business Day prior to the Closing
Date, requesting a borrowing of the Tranche B Term Loans. The Notice of
Borrowing shall specify (i)the proposed Funding Date (which shall be a
Business Day), and (ii)that such Loans shall be Base Rate Loans. Each
Lender severally agrees to lend to Borrower on the Closing Date an
amount not exceeding its Pro Rata Share of the aggregate amount of the
Tranche B Term Loan Commitments to be used for the purposes identified
in subsection 2.5A. The amount of each Lender's Tranche B Term Loan
Commitment is set forth opposite its name on SCHEDULE 2.1 annexed
hereto and the aggregate amount of the Tranche B Term Loan
32
Commitments is $15,000,000; PROVIDED that the Tranche B Term
Loan Commitments of Lenders shall be adjusted to give effect to any
assignments of the Tranche B Term Loan Commitments pursuant to
subsection 10.1B. Each Lender's Tranche B Term Loan Commitment shall
expire immediately and without further action on January 31, 2000 if
the Tranche B Term Loans are not made on or before that date. Borrower
may make only one borrowing under the Tranche B Term Loan Commitments.
Amounts borrowed under this subsection 2.1A(ii) and subsequently
repaid or prepaid may not be reborrowed.
(iii) REVOLVING LOANS. Each Lender severally agrees, subject
to the limitations set forth below with respect to the maximum amount
of Revolving Loans permitted to be outstanding from time to time, to
lend to Borrower from time to time during the period from the Closing
Date to but excluding the Revolving Loan Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate
amount of the Revolving Loan Commitments to be used for the purposes
identified in subsection 2.5B. The original amount of each Lender's
Revolving Loan Commitment is set forth opposite its name on SCHEDULE
2.1 annexed hereto and the aggregate original amount of the Revolving
Loan Commitments is $15,000,000; PROVIDED that the Revolving Loan
Commitments of Lenders shall be adjusted to give effect to any
assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and PROVIDED, FURTHER that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4A(iii), 2.4B(ii) and
2.4B(iii). Each Lender's Revolving Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Revolving Loans and
all other amounts owed hereunder with respect to the Revolving Loans
and the Revolving Loan Commitments shall be paid in full no later than
that date; PROVIDED that each Lender's Revolving Loan Commitment shall
expire immediately and without further action on January 31, 2000 if
the Term Loans are not made on or before that date. Amounts borrowed
under this subsection 2.1A(iii) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Revolving Loans and the Revolving Loan Commitments shall be subject
to the limitation that in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the lesser of the
aggregate Revolving Loan Commitments then in effect and the Borrowing
Base.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date (other
than Revolving Loans made pursuant to subsection 3.3B for the purpose of
reimbursing any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it) shall be in an aggregate minimum amount of $500,000 and
integral multiples of $500,000 in excess of that amount; PROVIDED that Revolving
Loans made on any Funding Date as Eurodollar Rate Loans with a particular
Interest Period shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of that amount. Whenever Borrower
desires that Lenders make Revolving Loans it shall deliver to Administrative
Agent a Notice of Borrowing no later than 12:00 Noon (New York City time) at
least three Business Days in
33
advance of the proposed Funding Date (in the case of a Eurodollar Rate Loan)
or at least one Business Day in advance of the proposed Funding Date (in the
case of a Base Rate Loan). The Notice of Borrowing shall specify (i) the
proposed Funding Date (which shall be a Business Day), (ii) the amount and
type of Loans requested, (iii) in the case of any Loans made on the Closing
Date, that such Loans shall be Base Rate Loans, (iv) in the case of Revolving
Loans not made on the Closing Date, whether such Loans shall be Base Rate
Loans or Eurodollar Rate Loans, and (v) in the case of any Loans requested to
be made as Eurodollar Rate Loans, the initial Interest Period requested
therefor. Term Loans and Revolving Loans may be continued as or converted
into Base Rate Loans and Eurodollar Rate Loans in the manner provided in
subsection 2.2D. In lieu of delivering the above-described Notice of
Borrowing, Borrower may give Administrative Agent telephonic notice by the
required time of any proposed borrowing under this subsection 2.1B; PROVIDED
that such notice shall be promptly confirmed in writing by delivery of a
Notice of Borrowing to Administrative Agent on or before the applicable
Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Borrower in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Borrower or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Borrower shall have effected Loans hereunder.
Borrower shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Borrower is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Borrower of the proceeds
of any Revolving Loans shall constitute a re-certification by Borrower, as of
the applicable Funding Date, as to the matters to which Borrower is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrower shall be bound to make a borrowing in
accordance therewith.
C. DISBURSEMENT OF FUNDS. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender of the proposed
borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on the
applicable Funding Date, in same day funds in Dollars, at the Funding and
Payment Office. Except as provided in subsection 3.3B with respect to Revolving
Loans used to reimburse any Issuing Lender for the amount of a
34
drawing under a Letter of Credit issued by it, upon satisfaction or waiver of
the conditions precedent specified in subsections 4.1 (in the case of Loans
made on the Closing Date) and 4.2 (in the case of all Loans), Administrative
Agent shall make the proceeds of such Loans available to Borrower on the
applicable Funding Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Borrower at the Funding and Payment
Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrower a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Borrower and Borrower shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrower may
have against any Lender as a result of any default by such Lender hereunder.
D. NOTES. Borrower shall execute and deliver on the Closing Date to
each Lender (or to Administrative Agent for that Lender) (a) a Tranche A Term
Loan Note substantially in the form of EXHIBIT IV annexed hereto to evidence
that Lender's Tranche A Term Loan, in the principal amount of that Lender's
Tranche A Term Loan and with other appropriate insertions, (b) a Tranche B Term
Loan Note substantially in the form of EXHIBIT V annexed hereto to evidence that
Lender's Tranche B Term Loan, in the principal amount of that Lender's Tranche B
Term Loan and with other appropriate insertions, and (c) a Revolving Note
substantially in the form of EXHIBIT VI annexed hereto to evidence that Lender's
Revolving Loans, in the principal amount of that Lender's Revolving Loan
Commitment and with other appropriate insertions.
Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent as provided in subsection 10.1B(ii). Any request,
authorization or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, assignee or transferee of that
Note or of any Note or Notes issued in exchange therefor.
35
E. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 10.8, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Tranche A Term Loan Commitment, Tranche B Term Loan Commitment and
Revolving Loan Commitment and the Tranche A Term Loan, Tranche B Term
Loan and Revolving Loans from time to time of each Lender, and each
repayment or prepayment in respect of the principal amount of the Term
Loan or Revolving Loans of each Lender. Any such recordation shall be
conclusive and binding on Borrower and each Lender, absent manifest
error; PROVIDED that failure to make any such recordation, or any error
in such recordation, shall not affect any Lender's Commitments or
Borrower's Obligations in respect of any applicable Loans.
(iii) Each Lender shall record on its internal records
(including the Notes held by such Lender) the amount of the Tranche A
Term Loan, Tranche B Term Loan and each Revolving Loan made by it and
each payment in respect thereof. Any such recordation shall be
conclusive and binding on Borrower, absent manifest error; PROVIDED
that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Commitments or Borrower's
Obligations in respect of any applicable Loans; and PROVIDED FURTHER
that in the event of any inconsistency between the Register and any
Lender's records, the recordations in the Register shall govern.
(iv) Borrower, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for
all purposes hereof, and no assignment or transfer of any such
Commitment or Loan shall be effective, in each case unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall
have been accepted by Administrative Agent and recorded in the Register
as provided in subsection 10.1B(ii). Prior to such recordation, all
amounts owed with respect to the applicable Commitment or Loan shall be
owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitments or
Loans.
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Borrower hereby designates CIBC to serve as Borrower's agent solely for purposes
of maintaining the Register as provided in this subsection 2.1E, and Borrower
hereby agrees that, to the extent CIBC serves in such capacity, CIBC and its
officers, directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 10.3.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. The applicable basis for determining the rate of
interest with respect to any Term Loan or any Revolving Loan shall be selected
by Borrower initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.1B, and the basis for determining the
interest rate with respect to any Term Loan or any Revolving Loan may be changed
from time to time pursuant to subsection 2.2D. If on any day a Term Loan or
Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Tranche A
Term Loans, the Tranche B Term Loans and the Revolving Loans shall bear interest
through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate PLUS
the Applicable Base Rate Margin for such class of Loans; or
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate PLUS the Applicable Eurodollar Rate Margin for
such class of Loans.
Upon delivery of the Margin Determination Certificate by Borrower to
Administrative Agent pursuant to subsection 6.1(xviii), the Applicable Base
Rate Margin and Applicable Eurodollar Rate Margin shall automatically be
adjusted in accordance with such Margin Determination Certificate, such
adjustment to become effective on the next succeeding Margin Reset Date;
PROVIDED that (1) at any time a Margin Determination Certificate is not
delivered at the time required pursuant to subsection 6.1(xviii), from the
Margin Reset Date next succeeding the time such Margin Determination
Certificate was required to be delivered until delivery of such Margin
Determination Certificate, the Applicable Base Rate Margin and the Applicable
Eurodollar Rate Margin shall be the highest percentage provided for in the
pricing matrix set forth in the definitions thereof, and (2) if a Margin
Determination Certificate erroneously indicates an applicable margin more
favorable to Borrower than should be afforded by the actual calculation of
the Consolidated Total Leverage Ratio, Borrower shall promptly pay additional
interest and letter of credit fees to correct for such error.
37
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Borrower may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Borrower's option, either a one, two, three or six month period; PROVIDED
that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case
of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; PROVIDED that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period 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, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Tranche A Term Loans shall extend beyond December 31, 2004, no Interest
Period with respect to any portion of the Tranche B Term Loans shall
extend beyond December 31, 2005 and no Interest Period with respect to
any portion of the Revolving Loans shall extend beyond the Revolving
Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the
Tranche A Term Loans or Tranche B Term Loans shall extend beyond a date
on which Borrower is required to make a scheduled payment of principal
of the Tranche A Term Loans or Tranche B Term Loans, as the case may
be, unless the sum of (a) the aggregate principal amount of Tranche A
Term Loans or Tranche B Term Loans, as the case may be, that are Base
Rate Loans PLUS (b) the aggregate principal amount of Tranche A Term
Loans or Tranche B Term Loans, as the case may be, that are Eurodollar
Rate Loans with Interest Periods expiring on or before such date equals
or exceeds the principal amount required to be paid on the Tranche A
Term Loans or Tranche B Term Loans, as the case may be, on such date;
(vii) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the date on which a permanent
reduction of the Revolving Loan Commitments is scheduled to occur
unless the sum of (a) the aggregate principal
38
amount of Revolving Loans that are Base Rate Loans PLUS (b)
the aggregate principal amount of Revolving Loans that are Eurodollar
Rate Loans with Interest Periods expiring on or before such date PLUS
(c) the excess of the Revolving Loan Commitments then in effect over
the aggregate principal amount of Revolving Loans then outstanding
equals or exceeds the permanent reduction of the Revolving Loan
Commitments that is scheduled to occur on such date;
(viii) there shall be no more than seven (7) Interest Periods
outstanding at any time; and
(ix) in the event Borrower fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Borrower shall be deemed to have
selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); PROVIDED that in the event any Revolving Loans that are Base Rate
Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such
Revolving Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Borrower shall have the option (i) to convert at any time all
or any part of its outstanding Tranche A Term Loans, Tranche B Term Loans or
Revolving Loans equal to $1,000,000 and integral multiples of $500,000 in
excess of that amount from Loans bearing interest at a rate determined by
reference to one basis to Loans bearing interest at a rate determined by
reference to an alternative basis or (ii) upon the expiration of any Interest
Period applicable to a Eurodollar Rate Loan, to continue all or any portion
of such Loan equal to $1,000,000 and integral multiples of $500,000 in excess
of that amount as a Eurodollar Rate Loan; PROVIDED, HOWEVER, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Borrower shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Borrower may give Administrative Agent
39
telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; PROVIDED that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D,
Administrative Agent shall promptly transmit such notice by telefacsimile or
telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Borrower in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Borrower or
for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to any
such telephonic notice Borrower shall have effected a conversion or
continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Borrower shall be
bound to effect a conversion or continuation in accordance therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); PROVIDED that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day, and (ii) in the case
of Eurodollar Rate Loans, on the basis of a 360-day year, in each case for the
actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being convened from a Eurodollar Rate Loan, the date of conversion of
such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the
40
date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
to a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to
such Eurodollar Rate Loan, as the case may be, shall be excluded; PROVIDED
that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.3 FEES.
A. COMMITMENT FEE. Borrower agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans PLUS (ii) the Letter
of Credit Usage MULTIPLIED BY one half of 1% per annum, such commitment fees to
be calculated on the basis of a 360-day year and the actual number of days
elapsed and to be payable quarterly in arrears on the last Business Day of each
Fiscal Quarter, commencing on the first such date to occur after the Closing
Date, and on the Revolving Loan Commitment Termination Date.
B. OTHER FEES. Borrower agrees to pay to Lead Arranger and
Administrative Agent such fees in the amounts and at the times separately agreed
upon between Borrower, Lead Arranger and Administrative Agent.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF COLLATERAL AND
PAYMENTS UNDER SUBSIDIARY GUARANTY.
A. SCHEDULED PAYMENTS OF TERM LOANS AND SCHEDULED REDUCTIONS
OF REVOLVING LOAN COMMITMENTS.
(i) SCHEDULED PAYMENTS OF TRANCHE A TERM LOANS. Borrower shall
make principal payments on the Tranche A Term Loans in installments on
the dates and in the amounts set forth below:
41
Scheduled Repayment
Date of Tranche A Term Loans
------ --------------------------------------
First Fiscal Quarter, 2000 $ 0
Second Fiscal Quarter, 2000 $ 0
Third Fiscal Quarter, 2000 $ 500,000
Fourth Fiscal Quarter, 2000 $ 500,000
First Fiscal Quarter, 2001 $ 750,000
Second Fiscal Quarter, 2001 $ 750,000
Third Fiscal Quarter, 2001 $ 1,000,000
Fourth Fiscal Quarter, 2001 $ 1,000,000
First Fiscal Quarter, 2002 $ 1,375,000
Second Fiscal Quarter, 2002 $ 1,375,000
Third Fiscal Quarter, 2002 $ 1,375,000
Fourth Fiscal Quarter, 2002 $ 1,375,000
First Fiscal Quarter, 2003 $ 1,625,000
Second Fiscal Quarter, 2003 $ 1,625,000
Third Fiscal Quarter, 2003 $ 1,625,000
Fourth Fiscal Quarter, 2003 $ 1,625,000
First Fiscal Quarter, 2004 $ 2,125,000
Second Fiscal Quarter, 2004 $ 2,125,000
Third Fiscal Quarter, 2004 $ 2,125,000
Fourth Fiscal Quarter, 2004 $ 2,125,000
--------------------------------------
TOTAL $ 25,000,000
; PROVIDED that the scheduled installments of principal of the Tranche
A Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche A Term Loans in
accordance with subsection 2.4B(iv); and PROVIDED, FURTHER that the
Tranche A Term Loans and all other amounts owed hereunder with respect
to the Tranche A Term Loans shall be paid in full no later than
December 31, 2004, and the final installment payable by Borrower in
respect of the Tranche A Term Loans on such date shall be in an amount,
if such amount is different from that specified above, sufficient to
repay all amounts owing by Borrower under this Agreement with respect
to the Tranche A Term Loans.
(ii) SCHEDULED PAYMENTS OF TRANCHE B TERM LOANS. Borrower
shall make principal payments on the Tranche B Term Loans in
installments on the dates and in the amounts set forth below:
42
Scheduled Repayment
Date of Tranche B Term Loans
------ ------------------------------------
First Fiscal Quarter, 2000 $ 37,500
Second Fiscal Quarter, 2000 $ 37,500
Third Fiscal Quarter, 2000 $ 37,500
Fourth Fiscal Quarter, 2000 $ 37,500
First Fiscal Quarter, 2001 $ 37,500
Second Fiscal Quarter, 2001 $ 37,500
Third Fiscal Quarter, 2001 $ 37,500
Fourth Fiscal Quarter, 2001 $ 37,500
First Fiscal Quarter, 2002 $ 37,500
Second Fiscal Quarter, 2002 $ 37,500
Third Fiscal Quarter, 2002 $ 37,500
Fourth Fiscal Quarter, 2002 $ 37,500
First Fiscal Quarter, 2003 $ 37,500
Second Fiscal Quarter, 2003 $ 37,500
Third Fiscal Quarter, 2003 $ 37,500
Fourth Fiscal Quarter, 2003 $ 37,500
First Fiscal Quarter, 2004 $ 37,500
Second Fiscal Quarter, 2004 $ 37,500
Third Fiscal Quarter, 2004 $ 37,500
Fourth Fiscal Quarter, 2004 $ 37,500
First Fiscal Quarter, 2005 $ 2,500,000
Second Fiscal Quarter, 2005 $ 2,500,000
Third Fiscal Quarter, 2005 $ 2,500,000
Fourth Fiscal Quarter, 2005 $ 6,750,000
------------------------------------
TOTAL $ 15,000,000
; PROVIDED that the scheduled installments of principal of the Tranche
B Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Term Loans in
accordance with subsection 2.4B(iv); and PROVIDED, FURTHER that the
Tranche B Term Loans and all other amounts owed hereunder with respect
to the Tranche B Term Loans shall be paid in full no later than
December 31, 2005, and the final installment payable by Borrower in
respect of the Tranche B Term Loans on such date shall be in an amount,
if such amount is different from that specified above, sufficient to
repay all amounts owing by Borrower under this Agreement with respect
to the Tranche B Term Loans.
(iii) SCHEDULED REDUCTIONS OF REVOLVING LOAN COMMITMENTS. The
Revolving Loan Commitments shall be permanently reduced upon the
earlier of (i) the termination of or any drawing on the Palo Alto
Letter of Credit or (ii) January 31, 2001 by an amount of $5,000,000.
43
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING LOAN
COMMITMENTS.
(i) VOLUNTARY PREPAYMENTS. Borrower may, upon not less than
one Business Day's prior written or telephonic notice, in the
case of Base Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate
Loans, in each case given to Administrative Agent by 12:00
Noon (New York City time) on the date required and, if given
by telephone, promptly confirmed in writing to Administrative
Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile
or telephone to each Lender), at any time and from time to
time prepay any Tranche A Term Loans, Tranche B Term Loans or
Revolving Loans on any Business Day in whole or in part in an
aggregate minimum amount of $500,000 and integral multiples of
$500,000 in excess of that amount; PROVIDED, HOWEVER, that any
Eurodollar Rate Loan may be prepaid on a day other than the
expiration of the Interest Period applicable thereto, so long
as Borrower pays the amounts due pursuant to Section 2.6D
caused by such prepayment. Notice of prepayment having been
given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary
prepayment shall be applied as specified in subsection
2.4B(iv).
(ii) VOLUNTARY REDUCTIONS OF REVOLVING LOAN COMMITMENTS.
Borrower may, upon not less than three Business Days' prior
written or telephonic notice confirmed in writing to
Administrative Agent (which original written or telephonic
notice Administrative Agent will promptly, transmit by
telefacsimile or telephone to each Lender), at any time and
from time to time terminate in whole or permanently reduce in
part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the
Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed
termination or reduction; PROVIDED that any such partial
reduction of the Revolving Loan Commitments shall be in an
aggregate minimum amount of $500,000 and integral multiples of
$500,000 in excess of that amount. Borrower's notice to
Administrative Agent shall designate the date (which shall be
a Business Day) of such termination or reduction and the
amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be effective
on the date specified in Borrower's notice and shall reduce
the Revolving Loan Commitment of each Lender proportionately
to its Pro Rata Share.
(iii) MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF
REVOLVING LOAN COMMITMENTS. The Loans shall be prepaid and/or the
Revolving Loan Commitments shall be permanently reduced in the amounts
and under the circumstances set forth below, all such prepayments
and/or reductions to be applied as set forth below or as more
specifically provided in subsection 2.4B(iv):
44
(a) PREPAYMENTS AND REDUCTIONS FROM NET ASSET SALE
PROCEEDS. No later than the first Business Day following the
date of receipt by Borrower or any of its Subsidiaries of any
Net Asset Sale Proceeds in respect of any Asset Sale, Borrower
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to
such Net Asset Sale Proceeds; provided that notwithstanding
the foregoing, upon any Asset Sale of the Palo Alto Lease,
Borrower may in lieu of such prepayment reinvest up to
$2,500,000 of the Net Asset Sale Proceeds within 180 days of
such sale (or credit against such amount amounts expended up
to 180 days prior to such sale) in connection with the
relocation of the Borrower's headquarters; provided that any
amount not so reinvested by such date will be applied as an
additional prepayment.
(b) PREPAYMENTS AND REDUCTIONS FROM NET
INSURANCE/CONDEMNATION PROCEEDS. No later than the first
Business Day following the date of receipt by Administrative
Agent or by Borrower or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be
applied to prepay the Loans and/or reduce the Revolving Loan
Commitments pursuant to the provisions of subsection 6.4C,
Borrower shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount equal to the amount of such Net Insurance/Condemnation
Proceeds.
(c) PREPAYMENTS AND REDUCTIONS DUE TO REVERSION OF
SURPLUS ASSETS OF PENSION PLANS. On the date of return to
Borrower or any of its Subsidiaries of any surplus assets of
any pension plan of Borrower or any of its Subsidiaries,
Borrower shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount (such amount being the "NET PENSION PROCEEDS") equal to
100% of such returned surplus assets, net of transaction costs
and expenses incurred in obtaining such return, including
incremental taxes payable as a result thereof.
(d) PREPAYMENTS AND REDUCTIONS DUE TO ISSUANCE OF
DEBT SECURITIES. On the date of receipt by Borrower of the
Cash proceeds (any such proceeds, net of underwriting
discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees
and expenses, being "NET SECURITIES PROCEEDS") from the
issuance of any debt Securities (other than Securities
evidencing Indebtedness (including Capital Leases) permitted
under subsection 7.1) of Borrower after the Closing Date,
Borrower shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount equal to such Net Securities Proceeds.
(e) PREPAYMENTS AND REDUCTIONS FROM CONSOLIDATED
EXCESS CASH FLOW.
(1) Borrower shall, on August 4, 2000, prepay
the Term Loans in
45
an aggregate amount equal to 100% of the
Post-Transaction Cash Flows actually received by
Borrower on or before such date, and Borrower shall,
after August 4, 2000, prepay the Term Loans in an
aggregate amount equal to 100% of the
Post-Transaction Cash Flows actually received by
Borrower since August 4, 2000 within 10 days of
receipt of such Post-Transaction Cash Flows; provided
that in any event Borrower shall prepay the Terms
Loans from the Net Asset Sale Proceeds of any sale of
the SEG Receivables pursuant to subsection 7.10
within 10 days of receipt of such Net Asset Sale
Proceeds. Notwithstanding the foregoing, after the
aggregate amount of prepayments of the Term Loans
pursuant to this clause (1) has exceeded $9,300,000,
Borrower may retain (and not prepay the Term Loans
with) amounts accrued by its independent accountants
for liabilities constituting deductions on Schedule
1.1B attached hereto ("ESTIMATED DEDUCTIONS") up to
the lesser of $1,000,000 and the difference between
$2,600,000 and the actual amount paid by Borrower on
account of Estimated Deductions until such amounts
are retained or such accrual has been terminated.
(2) In the event that there shall be Consolidated
Excess Cash Flow for any Fiscal Year (commencing with
Fiscal Year 2000), Borrower shall, no later than 90
days after the end of such Fiscal Year, prepay the
Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to
75% of such Consolidated Excess Cash Flow.
(f) CALCULATIONS OF NET PROCEEDS AMOUNTS; ADDITIONAL
PREPAYMENTS AND REDUCTIONS BASED ON SUBSEQUENT CALCULATIONS.
Concurrently with any prepayment of the Loans and/or reduction
of the Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(e), Borrower shall deliver to Administrative
Agent an Officers' Certificate demonstrating the calculation
of the amount (the "NET PROCEEDS AMOUNT") of the applicable
Net Asset Sale Proceeds or Net Insurance/Condemnation
Proceeds, the applicable Net Pension Proceeds or Net
Securities Proceeds (as such terms are defined in subsections
2.4B(iii)(c) and (d), or the applicable Consolidated Excess
Cash Flow, as the case may be, that gave rise to such
prepayment and/or reduction. In the event that Borrower shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officers'
Certificate (including if any actual taxes to be paid as a
result of an Asset Sale is less than the estimated taxes to be
paid as a result of such Asset Sale), Borrower shall promptly
make an additional prepayment of the Loans (and/or, if
applicable, the Revolving Loan Commitments shall be
permanently reduced) in an amount equal to the amount of such
excess, and Borrower shall concurrently therewith deliver to
Administrative Agent an Officers' Certificate demonstrating
the derivation of the additional Net Proceeds Amount resulting
in such excess.
46
(g) PREPAYMENTS DUE TO REDUCTIONS OR RESTRICTIONS OF
REVOLVING LOAN COMMITMENTS. Borrower shall from time to time
prepay the Revolving Loans to the extent necessary so that the
Total Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitments or the
Borrowing Base then in effect.
(iv) APPLICATION OF PREPAYMENTS.
(a) APPLICATION OF VOLUNTARY PREPAYMENTS BY TYPE OF
LOANS AND ORDER OF MATURITY. Any voluntary prepayments
pursuant to subsection 2.4B(i) shall be applied as specified
by Borrower in the applicable notice of prepayment; PROVIDED
that in the event Borrower fails to specify the Loans to which
any such prepayment shall be applied, such prepayment shall be
applied FIRST to repay outstanding Term Loans to the full
extent thereof and SECOND to repay outstanding Revolving Loans
to the full extent thereof. Any voluntary prepayments of the
Term Loans pursuant to subsection 2.4B(i) shall be applied to
prepay the Tranche A Term Loans and the Tranche B Term Loans
on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) and to reduce the
scheduled installments of principal of the Tranche A Term
Loans and Tranche B Term Loans set forth in subsections
2.4A(i) and 2.4A(ii) on a pro rata basis (in accordance with
the respective outstanding principal amounts thereof) to each
scheduled installment of principal of the Tranche A Term Loans
or the Tranche B Term Loans, as the case may be, set forth in
subsection 2.4A(i) or 2.4A(ii), respectively, that is unpaid
at the time of such prepayment.
(b) APPLICATION OF MANDATORY PREPAYMENTS BY TYPE OF
LOANS. Any amount (the "APPLIED AMOUNT") required to be
applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(f) shall be applied FIRST to prepay
the Term Loans to the full extent thereof, SECOND, to the
extent of any remaining portion of the Applied Amount, to
prepay the Revolving Loans to the full extent thereof and to
further permanently reduce the Revolving Loan Commitments by
the amount of such prepayment, and THIRD, to the extent of any
remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full
extent thereof.
(c) APPLICATION OF MANDATORY PREPAYMENTS OF TERM
LOANS TO TRANCHE A TERM LOANS AND TRANCHE B TERM LOANS AND THE
SCHEDULED INSTALLMENTS OF PRINCIPAL THEREOF. Any mandatory
prepayments of the Term Loans pursuant to subsection 2.4B(iii)
(other than pursuant to subsection 2.4B(iii)(e)(l)) shall be
applied to prepay the Tranche A Term Loans and the Tranche B
Term Loans on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) and shall be
applied to reduce the scheduled installments of principal of
the Tranche A Term Loans or the Tranche B Term Loans, as the
case may be, set forth in subsection 2.4A(i) or 2.4A(ii),
respectively, on a pro rata basis (in accordance with the
respective
47
outstanding principal amounts thereof) to each
scheduled installment of principal of the Tranche A Term Loans
or the Tranche B Term Loans, as the case may be, set forth in
subsection 2.4A(i) or 2.4A(ii), respectively, that is unpaid
at the time of such prepayment. Any mandatory prepayments of
the Term Loans pursuant to subsection 2.4B(iii)(e)(1) shall be
applied to prepay the Tranche A Term Loans and the Tranche B
Term Loans on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) and shall be
applied to reduce the scheduled installments of principal of
the Tranche A Term Loans or the Tranche B Term Loans, as the
case may be, set forth in subsection 2.4A(i) or 2.4A(ii),
respectively, in inverse order of maturity.
(d) APPLICATION OF PREPAYMENTS TO BASE RATE LOANS AND
EURODOLLAR RATE LOANS. Considering Tranche A Term Loans,
Tranche B Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first to
Base Rate Loans to the full extent thereof before application
to Eurodollar Rate Loans, in each case in a manner which
minimizes the amount of any payments required to be made by
Borrower pursuant to subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) MANNER AND TIME OF PAYMENT. All payments by Borrower of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (New York
City time) on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Borrower on
the next succeeding Business Day. Borrower hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent
in order to cause timely payment to be made to Administrative Agent of
all principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).
(ii) APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST. Except
as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be applied
to the payment of interest before application to principal.
(iii) APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall be
apportioned among all outstanding Loans to which such payments relate,
in each case proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each Lender, at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request, its
Pro
48
Rata Share of all such payments received by Administrative
Agent and the commitment fees of such Lender when received by
Administrative Agent pursuant to subsection 2.3. Notwithstanding the
foregoing provisions of this subsection 2.4C(iii), if, pursuant to the
provisions of subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes
Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate
Loans, Administrative Agent shall give effect thereto in apportioning
payments received thereafter.
(iv) PAYMENTS ON BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) NOTATION OF PAYMENT. Each Lender is authorized to make,
before disposing of any Note held by it, or any part thereof (other
than by granting participations therein), a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid;
PROVIDED that the failure to make (or any error in the making of) a
notation of any Loan made under such Note shall not limit or otherwise
affect the obligations of Borrower hereunder or under such Note with
respect to any Loan or any payments of principal or interest on such
Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
SUBSIDIARY GUARANTY.
(i) APPLICATION OF PROCEEDS OF COLLATERAL. Except as provided
in subsection 2.4B(iii)(a) with respect to prepayments from Net Asset
Sale Proceeds, all proceeds received by Administrative Agent in respect
of any sale of, collection from, or other realization upon all or any
part of the Collateral under any Collateral Document may, in the
discretion of Administrative Agent, be held by Administrative Agent as
Collateral for, and/or (then or at any time thereafter) applied in full
or in part by Administrative Agent against, the applicable Secured
Obligations (as defined in such Collateral Document) in the following
order of priority:
(a) To the payment of all costs and expenses of such
sale, collection or other realization, including reasonable
compensation to Administrative Agent and its agents and
counsel, and all other expenses, liabilities and advances made
or incurred by Administrative Agent in connection therewith,
and all amounts for which Administrative Agent is entitled to
indemnification under such Collateral Document and all
advances made by Administrative Agent thereunder for the
account of the applicable Loan Party, and to the payment of
all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy
under such Collateral Document, all in accordance with the
terms of this Agreement and such Collateral Document;
49
(b) thereafter, to the extent of any excess such
proceeds, to the payment of all other such Secured Obligations
for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
(ii) APPLICATION OF PAYMENTS UNDER SUBSIDIARY GUARANTY. All
payments received by Administrative Agent under the Subsidiary Guaranty
shall be applied promptly from time to time by Administrative Agent in
the following order of priority:
(a) To the payment of the costs and expenses of any
collection or other realization under the Subsidiary Guaranty,
including reasonable compensation to Administrative Agent and
its agents and counsel, and all expenses, liabilities and
advances made or incurred by Administrative Agent in
connection therewith, all in accordance with the terms of this
Agreement and the Subsidiary Guaranty;
(b) thereafter, to the extent of any excess such
payments, to the payment of all other Guarantied Obligations
(as defined in the Subsidiary Guaranty) for the ratable
benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such
payments, to the payment to the applicable Subsidiary
Guarantor or to whosoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. TERM LOANS. The proceeds of the Term Loans and the proceeds of the
equity capitalization of Borrower described in subsection 4.1D(ii), shall be
applied by Borrower first to fund the Recapitalization Financing Requirements
other than the repurchase of stock of Borrower and second to fund the remaining
Recapitalization Financing Requirements. Borrower shall not require any usage of
the Revolving Loan Commitment to fund the Recapitalization Financing
Requirements, except to the extent that the Revolving Loan Commitment is used
through the deemed issuance of the Existing Letters of Credit.
B. REVOLVING LOANS. The proceeds of any Revolving Loans shall be
applied by Borrower for general corporate purposes, which may include the
making of intercompany loans to any of Borrower's wholly-owned Material
Subsidiaries, in accordance with subsection 7.1 (iii), for their own general
corporate purposes.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Borrower or any of its Subsidiaries
in any manner that might cause the borrowing or the application of such
proceeds to violate Regulation T, Regulation
50
U or Regulation X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board or to violate the Exchange Act, in each
case as in effect on the date or dates of such borrowing and such use of
proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 12:00 Noon (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Borrower and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Eurodollar Rate Loans, that by
reason of circumstances affecting the interbank Eurodollar market adequate
and fair means do not exist for ascertaining the interest rate applicable to
such Loans on the basis provided for in the definition of Adjusted Eurodollar
Rate, Administrative Agent shall on such date give notice (by telefacsimile
or by telephone confirmed in writing) to Borrower and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies
Borrower and Lenders that the circumstances giving rise to such notice no
longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Borrower with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded
by Borrower.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrower and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank Eurodollar market
or the position of such Lender in that market, then, and in any such event, such
Lender shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Borrower and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until
51
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Borrower pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as
described above relates to a Eurodollar Rate Loan then being requested by
Borrower pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Borrower shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice
of Conversion/Continuation as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent
of such rescission on the date on which the Affected Lender gives notice of
its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection
2.6C shall affect the obligation of any Lender other than an Affected Lender
to make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans
in accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Borrower shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest
paid by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds)
which that Lender may sustain: (i) if for any reason (other than a default by
that Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or
continuation, (ii) if any prepayment (including any prepayment pursuant to
subsection 2.4B(i)) or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of
its Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Borrower, or (iv) as a consequence of any other default
by Borrower in the repayment of its Eurodollar Rate Loans when required by
the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to
52
clause (i) of the definition of Adjusted Eurodollar Rate in an amount equal
to the amount of such Eurodollar Rate Loan and having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of that Lender to a domestic office of that
Lender in the United States of America; PROVIDED, HOWEVER, that each Lender
may fund each of its Eurodollar Rate Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of
Default, (i) Borrower may not elect to have a Loan be made or maintained as,
or converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by Borrower with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Borrower.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder,
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
53
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar
market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrower shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Borrower (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. WITHHOLDING OF TAXES.
(i) PAYMENTS TO BE FREE AND CLEAR. All sums payable by
Borrower under this Agreement and the other Loan Documents shall
(except to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax (other than
a Tax on the overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States of
America or any other jurisdiction from or to which a payment is made by
or on behalf of Borrower or by any federation or organization of which
the United States of America or any such jurisdiction is a member at
the time of payment.
(ii) GROSSING-UP OF PAYMENTS. If Borrower or any other Person
is required by law to make any deduction or withholding on account of
any such Tax from any sum paid or payable by Borrower to Administrative
Agent or any Lender under any of the Loan Documents:
(a) Borrower shall notify Administrative Agent of any
such requirement or any change in any such requirement as soon
as Borrower becomes aware of it;
(b) Borrower shall pay any such Tax before the date
on which penalties attach thereto, such payment to be made (if
the liability to pay is imposed on Borrower) for its own
account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Borrower in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or
54
payment, Administrative Agent or such Lender, as the case
may be, receives on the due date a net sum equal to what it
would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Borrower shall
deliver to Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing
or other authority;
PROVIDED that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or payment from that in effect at the
date of this Agreement or at the date of such Assignment Agreement, as
the case may be, in respect of payments to such Lender.
(iii) EVIDENCE OF EXEMPTION FROM U.S. WITHHOLDING TAX.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Borrower, on or prior
to the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), and at such other times as may
be necessary in the determination of Borrower or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue
Service Form 1001 or 4224 (or any successor forms), properly
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect
to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents or (2)
if such Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States
55
federal income tax with respect to any payments to such
Lender of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances, renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent
for transmission to Borrower two new original copies of
Internal Revenue Service Form 1001 or 4224, or a Certificate
re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) notify Administrative Agent and Borrower of
its inability to deliver any such forms, certificates or other
evidence.
(c) Borrower shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b)(1)of this
subsection 2.7B(iii); PROVIDED that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the
Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve Borrower of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change in any applicable law,
treaty or governmental role, regulation or order, or any
change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the
56
Letters of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness,
phase-in, applicability, change or compliance (taking into consideration the
policies of such Lender or such controlling corporation with regard to
capital adequacy), then from time to time, within five Business Days after
receipt by Borrower from such Lender of the statement referred to in the next
sentence, Borrower shall pay to such Lender such additional amount or amounts
as will compensate, such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Borrower
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts,
which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
D. NOTICE. Notwithstanding the foregoing, Borrower shall only be
required to make payments under this subsection 2.7, if a Lender requesting such
payment provides notice to Borrower of such request within ninety (90) days of
such Lender's knowledge of its right to such a payment.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; PROVIDED that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Borrower agrees
to pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses payable
by Borrower pursuant to this subsection 2.8 (setting forth in reasonable detail
the basis for requesting such amount) submitted by such Lender or Issuing Lender
to Borrower (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
57
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. LETTERS OF CREDIT. In addition to Borrower requesting that Lenders
make Revolving Loans pursuant to subsection 2.l A(iii), Borrower may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders issue Letters of Credit (including
the Palo Alto Letter of Credit) for the account of Borrower for the purposes
specified in the definition of Letters of Credit. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Borrower herein set forth, any one or more Lenders may, but
(except as provided in subsection 3.1B(ii)) shall not be obligated to, issue
such Letters of Credit in accordance with the provisions of this subsection 3.1;
PROVIDED that Borrower shall not request that any Lender issue (and no Lender
shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the lesser of the Revolving Loan Commitments then in effect and
the Borrowing Base;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $3,500,000; provided
that for the purposes of this subsection 3.1A(ii), the Palo Alto Letter
of Credit will not be included, in the calculation of the Letter of
Credit Usage;
(iii) any Letter of Credit having an expiration date later
than the earlier of (a) the Revolving Loan Commitment Termination Date
and (b) the date which is one year from the date of issuance of such
Letter of Credit; PROVIDED that each Issuing Lender shall agree at the
request of Borrower that a Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each
unless such Issuing Lender elects not to extend for any such additional
period; and PROVIDED, FURTHER that such Issuing Lender shall elect not
to extend such Letter of Credit if it has knowledge that an Event of
Default has occurred and is continuing (and has not been waived in
accordance with subsection 10.6) at the time such Issuing Lender must
elect whether or not to allow such extension;
(iv) the Palo Alto Letter of Credit in excess of $5,000,000;
(v) any Letter of Credit denominated in a currency other than
Dollars.
B. MECHANICS OF ISSUANCE.
(i) NOTICE OF ISSUANCE. Whenever Borrower desires the issuance
of a Letter of Credit, it shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit substantially in the form of
EXHIBIT III annexed hereto no later than 12:00 Noon (New York City
time) at least three Business Days, or in each case such shorter period
as may be agreed to by the Issuing Lender in any particular instance,
in advance of the proposed date of issuance. The Notice of Issuance of
Letter of Credit
58
shall specify (a) the proposed date of issuance (which shall
be a Business Day), (b) the face amount of the Letter of Credit, (c)
the expiration date of the Letter of Credit, (d) the name and address
of the beneficiary, (e) whether the Letter of Credit will be a
Documentary Letter of Credit, and (f) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing
Lender to make payment under the Letter of Credit; PROVIDED that the
Issuing Lender, in its reasonable discretion, may require changes in
the text of the proposed Letter of Credit or any such documents; and
PROVIDED, FURTHER that no Letter of Credit shall require payment
against a conforming draft to be made thereunder on the same business
day (under the laws of the jurisdiction in which the office of the
Issuing Lender to which such draft is required to be presented is
located) that such draft is presented if such presentation is made
after 12:00 Noon (in the time zone of such office of the Issuing
Lender) on such business day.
Borrower shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of Credit in the event that
any of the matters to which Borrower is required to certify in the
applicable Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of Credit,
and upon the issuance of any Letter of Credit Borrower shall be deemed
to have re-certified, as of the date of such issuance, as to the
matters to which Borrower is required to certify in the applicable
Notice of Issuance of Letter of Credit.
(ii) DETERMINATION OF ISSUING LENDER. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Letter of
Credit, in the event Administrative Agent elects to issue such Letter
of Credit, Administrative Agent shall promptly so notify Borrower, and
Administrative Agent shall be the Issuing Lender with respect thereto.
In the event that Administrative Agent, in its sole discretion, elects
not to issue such Letter of Credit, Administrative Agent shall promptly
so notify Borrower, whereupon Administrative Agent shall request any
other Lender to issue such Letter of Credit by delivering to such
Lender a copy of the applicable Notice of Issuance of Letter of Credit.
Any Lender so requested to issue such Letter of Credit shall promptly
notify Borrower and Administrative Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and any such
Lender which so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto. In the event that all other
Lenders shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Administrative Agent not to issue
such Letter of Credit, Administrative Agent shall be obligated to issue
such Letter of Credit (if such Letter of Credit is not a Documentary
Letter of Credit) and shall be the Issuing Lender with respect thereto,
and, if Comerica Bank is a Lender under this Agreement, notwithstanding
any prior election of Comerica Bank not to issue such Letter of Credit,
Comerica Bank shall be obligated to issue such Letter of Credit if it
is a Documentary Letter of Credit and shall be the Issuing Lender with
respect thereto, notwithstanding the fact that the Letter of Credit
Usage with respect to such Letter of
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Credit and with respect to all other Letters of Credit issued
by Administrative Agent or Comerica Bank, as the case may be, when
aggregated with Administrative Agent's or Comerica Bank's outstanding
Revolving Loans, may exceed Administrative Agent's or Comerica Bank's
Revolving Loan Commitment then in effect; PROVIDED that nothing in this
subsection 3.1B(ii) is intended to permit the Total Utilization of
Revolving Loan Commitments to exceed the lesser of the Revolving Loan
Commitments then in effect and the Borrowing Base; and PROVIDED FURTHER
that after giving effect to the participations in such Documentary
Letter of Credit as set forth in subsection 3.1 Comerica
Bank-California's Revolving Loan Exposure shall not exceed Comerica
Bank-California's Revolving Loan Commitment then in effect.
(iii) ISSUANCE OF LETTER OF CREDIT. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set forth
in subsection 4.3, the Issuing Lender shall issue the requested Letter
of Credit in accordance with the Issuing Lender's standard operating
procedures.
(iv) NOTIFICATION TO LENDERS. Upon the issuance of any Letter
of Credit the applicable Issuing Lender shall promptly notify
Administrative Agent and each other Lender of such issuance, which
notice shall be accompanied by a copy of such Letter of Credit.
Promptly after receipt of such notice (or, if Administrative Agent is
the Issuing Lender, together with such notice), Administrative Agent
shall notify each Lender of the amount of such Lender's respective
participation in such Letter of Credit, determined in accordance with
subsection 3.1C.
(v) REPORTS TO ADMINISTRATIVE AGENT. Within 15 days after the
end of each month ending after the Closing Date, so long as any Letter
of Credit shall have been outstanding during such month, each Issuing
Lender shall deliver to the Administrative Agent a report setting forth
for such month the daily aggregate amount available to be drawn under
the Letters of Credit issued by such Issuing Lender that were
outstanding during such month.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder. Upon
satisfaction of the conditions set forth in subsection 4.1, the Existing Letters
of Credit shall, effective as of the Closing Date, become Letters of Credit
under this Agreement to the same extent as if initially issued hereunder and
each Lender shall be deemed to have irrevocably purchased from the Issuing
Lender of such Existing Letters of Credit a participation in such Letters of
Credit and drawings thereunder in an amount equal to such Lender's Pro Rata
Share of the maximum amount which is or at any time may become available to be
drawn thereunder. All such Existing Letters of Credit which become Letters of
Credit under this Agreement shall be fully secured by the Collateral commencing
on the Closing Date to the same extent as if initially issued hereunder on such
date.
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3.2 LETTER OF CREDIT FEES.
Borrower agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Letter of Credit, that is not a
Documentary Letter of Credit, (a) a fronting fee, payable directly to
the applicable Issuing Lender for its own account, equal to 0.25% per
annum of the daily amount available to be drawn under such Letter of
Credit and (b)a letter of credit fee, payable to Administrative Agent
for the account of Lenders, equal to the Applicable Eurodollar Rate
Margin for Revolving Loans multiplied by the daily amount available to
be drawn under such Letter of Credit, each such fronting fee or letter
of credit fee to be payable in arrears on and to (but excluding) the
last Business Day of each March, June, September and December of each
Fiscal Year commencing on the first such date to occur after the
Closing Date, and computed on the basis of a 360-day year for the
actual number of days elapsed;
(ii) with respect to the Palo Alto Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to 0.25% per annum of the daily amount available to
be drawn under such Letter of Credit and (b) a letter of credit fee,
payable to Administrative Agent for the account of Lenders, equal to
the Applicable Base Rate Margin for Revolving Loans multiplied by the
daily amount available to be drawn under such Letter of Credit, each
such fronting fee or letter of credit fee to be payable in arrears on
and to (but excluding) the last Business Day of each March, June,
September and December of each year, and computed on the basis of a
360-day year for the actual number of days elapsed;
(iii) with respect to each Documentary Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to the greater of $600 or 0.25% per annum of the
daily amount available to be drawn under such Documentary Letter of
Credit and (b) a letter of credit fee, payable to Administrative Agent
for the account of Lenders, equal to the Applicable Eurodollar Rate
Margin for Revolving Loans multiplied by the daily amount available to
be drawn under such Letter of Credit, each such fronting fee or letter
of credit fee to be payable in arrears on and to (but excluding) the
last Business Day of each March, June, September and December of each
Fiscal Year commencing on the first such date to occur after the
Closing Date, and computed on the basis of a 360-day year for the
actual number of days elapsed;
(iv) with respect to the issuance, amendment or transfer of
each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii)
above), documentary and processing charges payable directly to the
applicable Issuing Lender for its own account in accordance with such
Issuing Lender's standard schedule for such charges in effect at the
time of such issuance, amendment, transfer or payment, as the case may
be.
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For purposes of calculating any fees payable under clause (i) of this subsection
3.2, the daily amount available to be drawn under any Letter of Credit shall be
determined as of the close of business on any date of determination. Promptly
upon receipt by Administrative Agent of any amount described in clause (i) of
this subsection 3.2, Administrative Agent shall distribute to each Lender its
Pro Rata Share of such amount. With respect to Existing Letters of Credit, the
fees described in clause (i) above shall accrue from and including the Closing
Date.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY BORROWER OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
In the event an Issuing Lender has determined to honor a drawing under a Letter
of Credit issued by it, such Issuing Lender shall promptly notify Borrower and
Administrative Agent (provided that the failure to so notify Borrower and
Administrative Agent shall not limit Borrower's obligation to reimburse such
Issuing Lender at the time and in the manner required under this Agreement), and
Borrower shall reimburse such Issuing Lender on or before the Business Day
immediately following the date on which such drawing is honored (the
"REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal to the
amount of such honored drawing; PROVIDED that, anything contained in this
Agreement to the contrary notwithstanding, (i) unless Borrower shall have
notified Administrative Agent and such Issuing Lender prior to 12:00 Noon (New
York City time) on the date such drawing is honored that Borrower intends to
reimburse such Issuing Lender for the amount of such honored drawing with funds
other than the proceeds of Revolving Loans, Borrower shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders to
make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an
amount in Dollars equal to the amount of such honored drawing and (ii) subject
to satisfaction or waiver of the conditions specified in subsection 4.2B,
Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base
Rate Loans in the amount of such honored drawing, the proceeds of which shall be
applied directly by Administrative Agent to reimburse such Issuing Lender for
the amount of such honored drawing; and PROVIDED, FURTHER that if for any reason
proceeds of Revolving Loans are not received by such Issuing Lender on the
Reimbursement Date in an amount equal to the amount of such honored drawing,
Borrower shall reimburse such Issuing Lender, on demand, in an amount in same
day funds equal to the excess of the amount of such honored drawing over the
aggregate amount of such Revolving Loans, if any, which are so received. Nothing
in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Borrower shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
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C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS
OF CREDIT.
(i) PAYMENT BY LENDERS. In the event that Borrower shall fail
for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any drawing honored
by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall promptly notify each other Lender of the
unreimbursed amount of such honored drawing and of such other Lender's
respective participation therein based on such Lender's Pro Rata Share.
Each Lender shall make available to such Issuing Lender an amount equal
to its respective participation, in Dollars and in same day funds, at
the office of such Issuing Lender specified in such notice, not later
than 12:00 Noon (New York City time) on the first business day (under
the laws of the jurisdiction in which such office of such Issuing
Lender is located) after the date notified by such Issuing Lender. In
the event that any Lender fails to make available to such Issuing
Lender on such business day the amount of such Lender's participation
in such Letter of Credit as provided in this subsection 3.3C, such
Issuing Lender shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the rate customarily used
by such Issuing Lender for the correction of errors among banks for
three Business Days and thereafter at the Base Rate. Nothing in this
subsection 3.3C shall be deemed to prejudice the right of any Lender to
recover from any Issuing Lender any mounts made available by such
Lender to such Issuing Lender pursuant to this subsection 3.3C in the
event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of
Credit by such Issuing Lender in respect of which payment was made by
such Lender constituted gross negligence or willful misconduct on the
part of such Issuing Lender.
(ii) DISTRIBUTION TO LENDERS OF REIMBURSEMENTS RECEIVED FROM
BORROWER. In the event any Issuing Lender shall have been reimbursed by
other Lenders pursuant to subsection 3.3C(i) for all or any portion of
any drawing honored by such Issuing Lender under a Letter of Credit
issued by it, such Issuing Lender shall distribute to each other Lender
which has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro Rata Share of
all payments subsequently received by such Issuing Lender from Borrower
in reimbursement of such honored drawing when such payments are
received. Any such distribution shall be made to a Lender at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) PAYMENT OF INTEREST BY BORROWER. Borrower agrees to pay to
each Issuing Lender, with respect to drawings honored under any Letters
of Credit issued by it, interest on the amount paid by such Issuing
Lender in respect of each such honored drawing from the date such
drawing is honored to but excluding the date such amount is reimbursed
by Borrower (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B) at a rate equal to (a) for
the
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period from the date such drawing is honored to but excluding
the Reimbursement Date, the rate then in effect under this Agreement
with respect to Revolving Loans that are Base Rate Loans and (b)
thereafter, a rate which is 2% per annum in excess of the rate of
interest otherwise payable under this Agreement with respect to
Revolving Loans that are Base Rate Loans. Interest payable pursuant to
this subsection 3.3D(i) shall be computed on the basis of a 365-day or
366-day year, as the case may be, for the actual number of days elapsed
in the period during which it accrues and shall be payable on demand
or, if no demand is made, on the date on which the related drawing
under a Letter of Credit is reimbursed in full.
(ii) DISTRIBUTION OF INTEREST PAYMENTS BY ISSUING LENDER.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under
a Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Lender, out of the interest received by such
Issuing Lender in respect of the period from the date such drawing is
honored to but excluding the date on which such Issuing Lender is
reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Lender would have been
entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such
Letter of Credit, and (b) in the event such Issuing Lender shall have
been reimbursed by other Lenders pursuant to subsection 3.3C(i) for all
or any portion of such honored drawing, such Issuing Lender shall
distribute to each other Lender which has paid all amounts payable by
it under subsection 3.3C(i) with respect to such honored drawing such
other Lender's Pro Rata Share of any interest received by such Issuing
Lender in respect of that portion of such honored drawing so reimbursed
by other Lenders for the period from the date on which such Issuing
Lender was so reimbursed by other Lenders to but excluding the date on
which such portion of such honored drawing is reimbursed by Borrower.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Borrower to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Issuing Lender or
other Lender or any other Person or, in the case of a Lender,
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against Borrower, whether in connection with this. Agreement,
the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Borrower or one of its
Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft 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 in any
respect;
(iv) payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a draft or other document which does
not substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Borrower or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing;
PROVIDED, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, subject to the last paragraph of subsection 3.5B, Borrower
hereby agrees to protect, indemnify, pay and save harmless each Issuing Lender
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which such
Issuing Lender may incur or be subject to as a consequence, direct or indirect,
of (i) the issuance of any Letter of Credit by such Issuing Lender, other than
as a result of(a) the gross negligence or willful misconduct of such Issuing
Lender as determined by a final judgment of a court of competent jurisdiction or
(b) subject to the following clause (ii), the wrongful dishonor by such Issuing
Lender of a proper demand for payment made under any Letter of Credit issued by
it or (ii) the failure of such Issuing Lender to honor a drawing under any such
Letter of Credit as a result of any act or omission, whether rightful or.
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "GOVERNMENTAL
ACTS").
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B. NATURE OF ISSUING LENDERS' DUTIES. As between Borrower and any
Issuing Lender, subject to the last paragraph of this subsection 3.5B, Borrower
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit issued by such Issuing Lender by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing, such
Issuing Lender shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any such Letter
of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate', fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of any
such Letter of Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of such Issuing
Lender, including any Governmental Acts, and none of the above shall affect or
impair, or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Borrower.
Notwithstanding anything to the contrary contained in this subsection
3.5, Borrower shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
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(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than
any Tax on the overall net income of such Issuing Lender or Lender)
with respect to the issuing or maintaining of any Letters of Credit or
the purchasing or maintaining of any participations therein or any
other obligations under this Section 3, whether directly or by such
being imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit `issued by any Issuing
Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section 3
or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Borrower shall promptly pay to such Issuing Lender
or Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Borrower a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 CONDITIONS TO TERM LOANS AND INITIAL REVOLVING LOANS.
The obligations of Lenders to make the Term Loans and any Revolving
Loans to be made on the Closing Date are, in addition to the conditions
precedent specified in subsection 4.2, subject to prior or concurrent
satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date,
Borrower shall, and shall cause each other Loan Party to, deliver to Lenders
(or to Administrative Agent for Lenders with sufficient originally executed
copies, where appropriate, for each Lender and its counsel) the following
with respect to Borrower or such Loan Party, as the case may be, each, unless
otherwise noted, dated the Closing Date:
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(i) Certified copies of the Certificate or Articles of
Incorporation of such Person, together with a good standing certificate
from the Secretary of State of its jurisdiction of incorporation and
each other state in which such Person is qualified as a foreign
corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a. recent date
prior to the Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of
the Loan Documents and Related Agreements to which it is a party,
certified as of the Closing Date by the corporate secretary or an
assistant secretary of such Person as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
such Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such
Person is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Except as disclosed in the
Recapitalization Agreement and the schedules attached thereto, this Agreement
and the schedules attached hereto, the Proxy Statement and the Confidential
Information Memorandum, and for the Recapitalization itself, since September 30,
1999, no Material Adverse Effect (in the good faith opinion of Administrative
Agent) shall have occurred.
C. CORPORATE AND CAPITAL STRUCTURE, OWNERSHIP, MANAGEMENT, ETC.
(i) CORPORATE STRUCTURE. The corporate organizational
structure of Borrower and its Subsidiaries, both before and after
giving effect to the Recapitalization, shall be as set forth on
SCHEDULE 4.1C annexed hereto.
(ii) CAPITAL STRUCTURE AND OWNERSHIP. The capital structure
and ownership of Borrower, both before and after giving effect to the
Recapitalization, shall be as set forth on SCHEDULE 4.1C annexed
hereto.
(iii) MANAGEMENT; EMPLOYMENT CONTRACTS. The management
structure of Borrower after giving effect to the Recapitalization shall
be as set forth on SCHEDULE 4.1C annexed hereto, and Administrative
Agent shall have received copies of, and shall be satisfied with the
form and substance of, any and all employment contracts with senior
management of Borrower.
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D. PROCEEDS OF EQUITY CAPITALIZATION OF XX-XX AND XXXXXXX-
XXXXXXX.
(i) EQUITY CAPITALIZATION OF XX-XX. On or before the Closing
Date, the Fox Xxxxx Investors shall have contributed at least
$50,000,000 in cash to XX-XX (including funds used to purchase shares
directly from the Xxxxxxx Trust).
(ii) USE OF PROCEEDS BY BORROWER. XX-XX shall have provided
evidence satisfactory to Administrative Agent that the proceeds of the
equity capitalization of XX-XX described in the immediately preceding
clause (i) have been irrevocably committed, prior to the application of
the proceeds of the Term Loans, to the payment of a portion of the
Recapitalization Financing Requirements.
(iii) EQUITY CAPITALIZATION OF BORROWER. On or before the
Closing Date, the Xxxxxxx Trust shall have purchased all of the
outstanding WJ Preferred Stock for an aggregate amount of not less than
$4,935,000.
(iv) SUFFICIENCY OF CAPITALIZATION. Borrower shall have
provided evidence satisfactory to Administrative Agent that the
proceeds of the equity capitalization of XX-XX described in the
preceding clause (i) and the equity capitalization of Borrower
described in the preceding clause (iii) are sufficient to insure that
no usage of the Revolving Loan Commitment (other than as a result of
the Existing Letters of Credit being deemed issued under this
Agreement) will be required to effect the Recapitalization.
(v) FOX XXXXX COMMITMENT LETTER. Fox Xxxxx shall have
delivered to Administrative Agent a commitment letter providing for
$5,000,000 of additional equity capital contributions in Borrower, in
the event and to the extent of any draw on the Palo Alto Letter of
Credit.
E. RELATED AGREEMENTS.
(i) APPROVAL OF CERTAIN RELATED AGREEMENTS. The Certificate of
Merger, the Shareholders Agreement, the Certificate of Designation, and
the Recapitalization Agreement shall each be satisfactory in form and
substance to Administrative Agent.
(ii) RELATED AGREEMENTS IN FULL FORCE AND EFFECT.
Administrative Agent shall have received a fully executed or conformed
copy of each Related Agreement and any documents executed in connection
therewith, and each Related Agreement shall be in full force and effect
and no provision thereof shall have been modified or waived in any
respect determined by Administrative Agent to be material, in each case
without the consent of Administrative Agent.
F. MATTERS RELATING TO EXISTING INDEBTEDNESS OF BORROWER AND ITS
SUBSIDIARIES.
(i) TERMINATION OF EXISTING CREDIT AGREEMENTS AND RELATED
LIENS; EXISTING LETTERS OF Credit. On the Closing Date, Borrower and
its Subsidiaries shall have (a) repaid in full all outstanding
Indebtedness of Borrower and its Subsidiaries,
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(b) terminated any commitments to lend or make other extensions of
credit thereunder, (c) delivered to Administrative Agent all
documents or instruments necessary to release all Liens securing
Indebtedness or other obligations of Borrower and its Subsidiaries
thereunder, and (d) other than with respect to Existing Letters of
Credit, made arrangements satisfactory to Administrative Agent with
respect to the cancellation of any letters of credit outstanding
thereunder or the issuance of Letters of Credit to support the
obligations of Borrower and its Subsidiaries with respect thereto.
(ii) EXISTING INDEBTEDNESS TO REMAIN OUTSTANDING.
Administrative Agent shall have received an Officers' Certificate of
Borrower stating that, after giving effect to the transactions
described in this subsection 4.1F, the only Indebtedness of Loan
Parties (other than Indebtedness under the Loan Documents) shall
consist of the obligations of Borrower under the Palo Alto Lease.
G. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Borrower shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Recapitalization, the other
transactions contemplated by the Loan Documents and the Related Agreements, and
the continued operation of the business conducted by Borrower and its
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Recapitalization, and each of the foregoing shall be in full
force and effect, in each case other than those the failure to obtain or
maintain which, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. All applicable waiting periods shall
have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the Recapitalization or the financing thereof. No action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable agency to
take action to set aside its consent on its own motion shall have expired.
H. CONSUMMATION OF RECAPITALIZATION.
(i) All conditions to the Recapitalization set forth in the
Recapitalization Agreement shall have been satisfied or the fulfillment
of any such conditions shall have been waived with the consent of
Administrative Agent and Requisite Lenders;
(ii) the Recapitalization shall have become effective in
accordance with the terms of the Recapitalization Agreement, the
Certificate of Merger and the laws of the State of California;
(iii) The aggregate cash consideration paid to the holders of
equity interests in Borrower in respect of such equity interests in
connection with the Recapitalization shall not exceed $293,000,000;
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(iv) Transaction Costs, other than Transaction Costs payable
in equity of Borrower, shall not exceed the amount set forth on
SCHEDULE 4.1 H, and Administrative Agent shall have received evidence
to its satisfaction to such effect;
(v) Administrative Agent shall have received an Officers'
Certificate of Borrower to the effect set forth in clauses (i)-(iv)
above and stating that Borrower will proceed to consummate the
Recapitalization immediately upon the making of the initial Loans; and
(vi) upon consummation of the Recapitalization, Fox Xxxxx
Capital Fund shall own at least 80% of the outstanding shares of common
stock of Borrower.
I. INTENTIONALLY OMITTED.
J. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the
extent not otherwise satisfied pursuant to subsection 4.1I, Administrative
Agent shall have received evidence satisfactory to it that Borrower and
Subsidiary Guarantors shall have taken or caused to be taken all such
actions, executed and delivered or caused to be executed and delivered all
such agreements, documents and instruments, and made or caused to be made all
such filings and recordings (other than the filing or recording of items
described in clauses (iii), (iv) and (v) below) that may be necessary or, in
the opinion of Administrative Agent, desirable in order to create in favor of
Administrative Agent, for the benefit of Lenders; a valid and (upon such
filing and recording) perfected First Priority security interest in the
entire personal and mixed property Collateral. Such actions shall include the
following:
(i) SCHEDULES TO COLLATERAL DOCUMENTS. Delivery to
Administrative Agent of accurate and complete schedules to all of the
applicable Collateral Documents.
(ii) STOCK CERTIFICATES AND INSTRUMENTS. Delivery to
Administrative Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Administrative
Agent) representing all capital stock pledged pursuant to the Security
Agreement and (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Administrative
Agent) evidencing any Collateral;
(iii) LIEN SEARCHES AND UCC TERMINATION STATEMENTS. Delivery
to Administrative Agent of (a) the results of a recent search, by a
Person satisfactory to Administrative Agent, of all effective UCC
financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed
property of any Loan Party, together with copies of all such filings
disclosed by such search, and (b) UCC termination statements duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC
financing statements or fixture filings disclosed in such search (other
than any such financing statements or fixture filings in respect of
Liens permitted to remain outstanding pursuant to the terms of this
Agreement).
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(iv) UCC FINANCING STATEMENTS AND FUTURE FILINGS. Delivery to
Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable Loan
Party with respect to all personal and mixed property Collateral of
such Loan Party, for filing in all jurisdictions as may be necessary
or, in the opinion of Administrative Agent, desirable to perfect the
security interests created in such Collateral pursuant to the
Collateral Documents;
(v) PTO COVER SHEETS, ETC. Delivery to Administrative Agent of
all cover sheets or other documents or instruments required to be filed
with the PTO in order to create or perfect Liens in respect of any IP
Collateral;
(vi) OPINIONS OF LOCAL COUNSEL. Delivery to Administrative
Agent of an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) under the laws of each
jurisdiction in which any Loan Party or any personal or mixed property
Collateral is located with respect to the creation and perfection of
the security interests in favor of Administrative Agent in such
Collateral and such other matters governed by the laws of such
jurisdiction regarding such security interests as Administrative Agent
may reasonably request, in each case in form and substance reasonably
satisfactory to Administrative Agent.
K. ENVIRONMENTAL REPORTS. Administrative Agent shall have
received reports and other information, in form, scope and substance
satisfactory to Administrative Agent, regarding environmental matters
relating to Borrower and its Subsidiaries and the Facilities, which reports
shall include a Phase I environmental assessment for each of the Facilities
currently owned, leased, operated or used by Borrower or any of its
Subsidiaries (collectively, the "PHASE I REPORT") which (a) conforms to the
ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process, E 1527, (b) was conducted no more than
six months prior to the Closing Date by one or more environmental consulting
firms reasonably satisfactory to Administrative Agent, (c) includes an
assessment of asbestos-containing materials at such Facilities, and (d)
includes an estimate of the reasonable worst-case cost of investigating and
remediating any Hazardous Materials Activity identified in the Phase I Report
as giving rise to an actual or potential material violation of any
Environmental Law or as presenting a material risk of giving rise to a
material Environmental Claim.
L. FINANCIAL STATEMENTS; PRO FORMS BALANCE SHEET. On or before
the Closing Date, Lenders shall have received from XX-XX (i)all regular and
periodic reports and all registration statements (other than on Form S-8 or a
similar form) and prospectuses, if any, filed by Borrower or any of its
Subsidiaries, since January 1, 1997, with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, and (ii)pro forma consolidated balance sheet of Borrower and its
Subsidiaries as at the Closing Date, prepared in accordance with GAAP and
reflecting the consummation of the Recapitalization, the related financings
and the other transactions contemplated by the Loan Documents and the Related
Agreements, which pro forma financial statements shall be in form and
substance satisfactory to Lenders. On or before the Closing Date, Lenders
shall also have received from XX-XX (i) pro forma financial statements of
Xxxxxxx-Xxxxxxx'x Wireless Products Group for Fiscal Years 1997 and 1998,
consisting of
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balance sheets and the related statements of income, stockholders' equity and
cash flows for such Fiscal Years, prepared in accordance with GAAP and
reflecting the consummation of the Recapitalization, the related financings
and the other transactions contemplated by the Loan Documents and the Related
Agreements, which pro forms financial statements shall include a comparison
to the results for the prior Fiscal Year and be in form and substance
satisfactory to Lenders, and (ii) pro forms financial statements of
Xxxxxxx-Xxxxxxx'x Wireless Products Group for Fiscal Quarters ending March 26
1999, June 25, 1999, and September 24, 1999, consisting of balance sheets and
the related statements of income, stockholders' equity and cash flows for
such Fiscal Quarters, prepared in accordance with GAAP and reflecting the
consummation of the Recapitalization, the related financings and the other
transactions contemplated by the Loan Documents and the Related Agreements,
which pro forma financial statements shall include a comparison to the
results for the prior Fiscal Year and be in form and substance satisfactory
to Lenders.
M. SOLVENCY ASSURANCES. On the Closing Date, Administrative
Agent and Lenders shall have received a letter from Xxxxxx Xxxxxx & Co.,
dated the Closing Date and addressed to Agent and Lenders, in form and
substance satisfactory to Agent and with appropriate attachments,
demonstrating that, after giving effect to the consummation of the
Recapitalization, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, Borrower will
be Solvent.
N. EVIDENCE OF INSURANCE. Administrative Agent shall have
received a certificate from Borrower's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect and that Administrative Agent on
behalf of Lenders has been named as additional insured and/or loss payee
thereunder to the extent required under subsection 6.4.
O. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their
respective counsel shall have received (i) originally executed copies of one
or more favorable written opinions of Irell & Xxxxxxx LLP and Wachtell,
Lipton, Xxxxx & Xxxx, counsel for Loan Parties, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated as of
the Closing Date and setting forth substantially the matters in the opinions
designated in EXHIBIT VIII annexed hereto and as to such other matters as
Administrative Agent acting on behalf of Lenders may reasonably request and
(ii)evidence satisfactory to Administrative Agent that Borrower has requested
such counsel to deliver such opinions to Lenders.
P. OPINIONS OF ADMINISTRATIVE AGENT'S COUNSEL. Lenders shall
have received originally executed copies of one or more favorable written
opinions of O'Melveny & Xxxxx LLP, counsel to Administrative Agent, dated as
of the Closing Date, substantially in the form of EXHIBIT IX annexed, hereto
and as to such other matters as Administrative Agent acting on behalf of
Lenders may reasonably request.
Q. OPINIONS OF COUNSEL DELIVERED UNDER RELATED AGREEMENTS.
Administrative Agent and its counsel shall have received copies of each of
the opinions of. counsel delivered to the parties under the Related
Agreements, together with a letter from each such counsel (to the extent not
inconsistent with such counsel's established internal policies) authorizing
Lenders to rely upon such opinion to the same extent as though it were
addressed to Lenders.
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R. FEES. Borrower shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.
S. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Borrower shall have delivered to Administrative Agent an Officers'
Certificate, in form and substance satisfactory to Administrative Agent, to
the effect that the representations and warranties in Section 5 hereof are
true, correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date (or, to the
extent such representations and warranties specifically relate to an earlier
date, that such representations and warranties were true, correct and
complete in all material respects on and as of such earlier date) and that
Borrower shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed
to and agreed to in writing by Administrative Agent and Requisite Lenders.
T. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Administrative Agent
and such counsel, and Administrative Agent and such counsel shall have
received all such counterpart originals or certified copies of such documents
as Administrative Agent may reasonably request.
U. NO DISRUPTION OF FINANCIAL AND CAPITAL MARKETS. There shall
have been no material adverse change after January 28, 2000 in the
syndication markets for credit facilities similar in nature to the credit
facilities provided under this Agreement and the other Loan Documents, and
there shall not have occurred and be continuing a material disruption of or
material adverse change in the financial, banking or capital markets that
would have an adverse effect on such syndication markets, in each case as
determined by Administrative Agent in its sole discretion.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by the chief
executive officer, the chief financial officer or the treasurer of Borrower
or by any executive officer of Borrower designated by any of the
above-described officers on behalf of Borrower in a writing delivered to
Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all
material respects on and as
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of that Funding Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and
complete in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date
shall not violate any law including Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System;
and
(vi) There shall not be pending or, to the knowledge of
Borrower, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Borrower or any of
its Subsidiaries or any property of Borrower or any of its Subsidiaries
that has not been disclosed by Borrower in writing pursuant to
subsection 5.6 or 6.l(x) prior to the making of the last preceding
Loans (or, in the case of the initial Loans, prior to the execution of
this Agreement), and there shall have occurred no development not so
disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either event, in
the opinion of Administrative Agent or of Requisite Lenders, would be
expected to have a Material Adverse Effect; and no injunction or other
restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated
by this Agreement or the making of Loans hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) other
than the Existing Letters of Credit is subject to the following conditions
precedent:
A. On or before the date of issuance of the initial Letter of
Credit (other than the Existing Letters of Credit) pursuant to this
Agreement, the initial Loans shall have been made.
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B. On or before the date of issuance of each Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions
of subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief
financial officer or the treasurer of Borrower or by any executive officer of
Borrower designated by any of the above-described officers on behalf of
Borrower in a writing delivered to Administrative Agent, together with all
other information specified in subsection 3.1B(i) and such other documents or
information as the applicable Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
C. On the date of issuance of each Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the
same extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lenders to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Borrower represents and warrants to
each Lender, on the date of this Agreement, on each Funding Date and on the date
of issuance of each Letter of Credit, that the following statements are true,
correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in SCHEDULE 5.1 annexed hereto.
Each Loan Party has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and Related
Agreements to which it is a party and to carry out the transactions
contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or
in good standing has not had and could not reasonably be expected to have a
Material Adverse Effect.
C. CONDUCT OF BUSINESS. Borrower and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to
subsection 7.13.
D. SUBSIDIARIES. All of the Subsidiaries of Borrower are
identified in SCHEDULE 5.1 annexed hereto, as said SCHEDULE 5.1 may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xv). The capital stock of each of the Subsidiaries of Borrower identified
in SCHEDULE 5.1 annexed hereto (as so supplemented) is duly authorized,
validly issued, fully paid and nonassessable and none of such capital stock
constitutes Margin Stock. Each of the Subsidiaries of Borrower identified in
SCHEDULE 5.1 annexed hereto (as so supplemented) is a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation set forth therein,
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has all requisite corporate power and authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate power and authority
has not had and could not reasonably be expected to have a Material Adverse
Effect. SCHEDULE 5.1 annexed hereto (as so supplemented) correctly sets forth
the ownership interest of Borrower and each of its Subsidiaries in each of the
Subsidiaries of Borrower identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Related Agreements have been duly
authorized by all necessary corporate action on the part of each Loan Party
that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by
Loan Parties of the Loan Documents and the Related Agreements to which they
are parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Borrower or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of Borrower or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on
Borrower or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Borrower or any of its Subsidiaries, (iii) result
in or require the creation or imposition of any Lien upon any of the
properties or assets of Borrower or any of its Subsidiaries (other than any
Liens created under any of the Loan Documents in favor of Administrative
Agent on behalf of Lenders), or (iv) require any approval of stockholders or
any approval or consent of any Person under any Contractual Obligation of
Borrower or any of its Subsidiaries, except for such approvals or consents
which will be obtained on or before the Closing Date and disclosed in writing
to Lenders; except where such violation or conflict or creation or imposition
of a Lien or failure to obtain an approval or consent could not reasonably be
expected to result in a Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by Loan Parties of the Loan Documents and the Related Agreements
to which they are parties and the consummation of the transactions
contemplated by the Loan Documents and such Related Agreements do not and
will not require any registration with, consent or approval of, or notice to,
or other action to, with or by, any federal, state or other governmental
authority or regulatory body.
D. BINDING OBLIGATION. Each of the Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability.
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E. VALID ISSUANCE OF XX-XX COMMON STOCK. The XX-XX Common
Stock to be sold on or before the Closing Date, when issued and delivered,
will be duly and validly issued, fully paid and nonassessable. No stockholder
of Borrower or XX-XX has or will have any preemptive rights to subscribe for
any additional equity Securities of Borrower or XX-XX. The issuance and sale
of such XX-XX Common Stock, upon such issuance and sale, will either (a) have
been registered or qualified under applicable federal and state securities
laws or (b) be exempt therefrom.
5.3 FINANCIAL CONDITION.
Borrower has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) pro forma financial
statements of Xxxxxxx-Xxxxxxx'x Wireless Products Group for Fiscal Years 1997
and 1998, consisting of balance sheets and the related statements of income,
stockholders' equity and cash flows for such Fiscal Years, prepared in
accordance with GAAP and reflecting the consummation of the Recapitalization,
the related financings and the other transactions contemplated by the Loan
Documents and the Related Agreements, and (ii) pro forma financial statements of
Xxxxxxx-Xxxxxxx'x Wireless Products Group for Fiscal Quarters ending March 26,
1999, June 25, 1999, and September 24, 1999, consisting of balance sheets and
the related statements of income, stockholders' equity and cash flows for such
Fiscal Quarters, prepared in accordance with GAAP and reflecting the
consummation of the Recapitalization, the related financings and the other
transactions contemplated by the Loan Documents and the Related Agreements. All
such statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. Borrower does not (and will not
following the funding of the initial Loans, except as otherwise permitted by
this Credit Agreement) have any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements or the notes thereto
and which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Borrower
or any of its Subsidiaries.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Except as disclosed in the Recapitalization Agreement and the schedules
attached thereto, this Agreement and the schedules attached hereto, the Proxy
Statement and the Confidential Information Memorandum, and for the
Recapitalization itself, since September 30, 1999, no event or change has
occurred that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect. Since January 28, 2000, neither Borrower nor any of its
Subsidiaries has directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Junior Payment or agreed to do so
except as permitted by subsection 7.5.
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5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Borrower and its Subsidiaries
have (i) good, sufficient and legal title to (in the case of fee interests in
real property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), or (iii) good title to (in the case
of all other personal property), all of their respective properties and
assets reflected in the financial statements referred to in subsection 5.3 or
in the most recent financial statements delivered pursuant to subsection 6.1,
in each case except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under
subsection 7.7. Except as permitted by this Agreement, all such properties
and assets are free and clear of Liens. Borrower and each of its Subsidiaries
has the right to use all of the Intellectual Property necessary or desirable
to its business as presently conducted or as was necessary, all of which
Intellectual Property for which a patent, registration or copyright has been
obtained or an application therefor has been made is set forth in SCHEDULE
5.5 annexed hereto, and, to the best knowledge of the Borrower, Borrower's
and each of its Subsidiaries' use of the Intellectual Property does not
infringe the rights of any other Person, where such infringement could
reasonably be expected to result in a Material Adverse Effect. Except as set
forth in SCHEDULE 5.5 annexed hereto, Borrower and its Subsidiaries owe no
royalties, honoraria or fees to any Person by reason of their use of the
Intellectual Property.
B. REAL PROPERTY. As of the Closing Date, SCHEDULE 5.5 annexed
hereto contains a true, accurate and complete list of (i) all Fee Properties
and (ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any
thereof) affecting each Real Property Asset of any Loan Party, regardless of
whether such Loan Party is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or assignment.
Except as specified in SCHEDULE 5.5 annexed hereto, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Borrower does not have knowledge of any default that has occurred and is
continuing thereunder, and each such agreement constitutes the legally valid
and binding obligation of each applicable Loan Party, enforceable against
such Loan Party in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable
principles.
5.6 LITIGATION; ADVERSE FACTS.
Other than as set forth on SCHEDULE 5.6, there are no actions, suits,
proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Borrower or any of its Subsidiaries) at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign (including any Environmental Claims) that are pending or, to the
knowledge of Borrower, threatened against or affecting Borrower or any of its
Subsidiaries or any property of Borrower or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Borrower nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to
79
result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax returns and
reports of Borrower and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Borrower
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. Borrower knows of no proposed tax assessment against Borrower or any of
its Subsidiaries which is not being actively contested by Borrower or such
Subsidiary in good faith and by appropriate proceedings; PROVIDED that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Borrower nor any of its Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and
no condition exists that, with the giving of notice or the lapse of time or
both, would constitute such a default, except where the consequences, direct
or indirect, of such default or defaults, if any, could not reasonably be
expected to have a Material Adverse Effect.
B. Neither Borrower nor any of its Subsidiaries is a party to
or is otherwise subject to any agreements or instruments or any charter or
other internal restrictions which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
C. SCHEDULE 5.8 contains a true, correct and complete list of
all the Material Contracts in effect on the Closing Date. Except as described
on SCHEDULE 5.8, all such Material Contracts are in full force and effect and
no material defaults currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
Neither Borrower nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Borrower Act of 1935, the Federal Power Act,
the Interstate Commerce Act or the Investment Borrower Act of 1940 or under any
other federal or state statute or regulation which may limit its ability to
incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.
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5.10 SECURITIES ACTIVITIES.
A. Neither Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Borrower only or of
Borrower and its Subsidiaries on a consolidated basis) subject to the
provisions of subsection 7.2 or 7.7 or subject to any restriction contained
in any agreement or instrument, between Borrower and any Lender or any
Affiliate of any Lender, relating to Indebtedness and within the scope of
subsection 8.2, will be Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Borrower, each of its Subsidiaries and each of their
respective ERISA Affiliates are in compliance with all applicable provisions
and requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan. Each Employee Benefit
Plan which is intended to qualify under Section 401(a) of the Internal
Revenue Code is so qualified, except where the failure to so qualify could
not reasonably be expected to have a Material Adverse Effect.
B. No ERISA Event has occurred or is reasonably expected to
occur.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates, unless Borrower or its Subsidiaries have
expressly reserved the right to terminate such benefits at any time.
D. As of the most recent valuation date for any Pension Plan,
the amount of unfunded benefit liabilities (as defined in Section 4001(a)(18)
of ERISA), individually or in the aggregate for all Pension Plans (excluding
for purposes of such computation any Pension Plans with respect to which
assets exceed benefit liabilities), does not exceed an amount which could not
reasonably be expected to have a Material Adverse Effect.
E. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available, the potential liability of
Borrower, its Subsidiaries and their respective ERISA Affiliates for a
complete withdrawal from such Multiemployer Plan (within the meaning of
Section 4203 of ERISA), when aggregated with such potential liability for a
complete withdrawal from all Multiemployer Plans, based on information
available pursuant to Section 4221(e) of ERISA, does not exceed an amount
which could not reasonably be expected to have a Material Adverse Effect.
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5.12 CERTAIN FEES.
No broker's, finder's or advisor's fee or commission will be payable
with respect to this Agreement or any of the transactions contemplated hereby
(other than a fee payable to Alliant Partners and CIBC which shall be included
in Transaction Costs), and Borrower hereby indemnifies Lenders against, and
agrees that it will hold Lenders harmless from, any claim, demand or liability
for any such broker's or finder's fees alleged to have been incurred in
connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in SCHEDULE 5.13 annexed hereto:
(i) neither Borrower nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with
any Person relating to (a) any Environmental Law, (b) any Environmental
Claim, or (c) any Hazardous Materials Activity that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(ii) neither Borrower nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9604) or any comparable state law liability for
which can reasonably be expected to have a Material Adverse Effect,
liability for which can reasonably be expected to have a Material
Adverse Effect;
(iii) there are and, to Borrower's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim
against Borrower or any of its Subsidiaries that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(iv) any generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270,
or any state equivalent, that has been conducted by Borrower or any of
its Subsidiaries has been conducted in material compliance with all
applicable Environmental Laws.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition has occurred or is occurring with respect to Borrower or any
of its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on SCHEDULE 5.13 annexed hereto, which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect. Borrower
anticipates that all material expenditures relating to the Scotts Valley and
Palo Alto facilities for known environmentally hazardous conditions will be
covered by either the fixed pricing contracts or the insurance described in the
Proxy.
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5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Borrower or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution
and delivery of the Collateral Documents by Loan Parties, together with (i)
the actions taken on or prior to the date hereof pursuant to subsections
4.1I, 4.1J, 6.8 and 6.9 and (ii) the delivery to Administrative Agent of any
Pledged Collateral not delivered to Administrative Agent at the time of
execution and delivery of the applicable Collateral Document (all of which
Pledged Collateral has been so delivered) are effective to create in favor of
Administrative Agent for the benefit of Lenders, as security for the
respective Secured Obligations (as defined in the applicable Collateral
Document in respect of any Collateral), a valid and perfected First Priority
Lien on all of the Collateral, and all filings and other actions necessary or
desirable to perfect and maintain the perfection and First Priority status of
such Liens have been duly made or taken and remain in full force and effect,
other than the filing of any UCC financing statements delivered to
Administrative Agent for filing (but not yet filed) and the periodic filing
of UCC continuation statements in respect of UCC financing statements filed
by or on behalf of Administrative Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for either (i) the pledge or grant by any Loan
Party of the Liens purported to be created in favor of Administrative Agent
pursuant to any of the Collateral Documents or (ii) the exercise by
Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created pursuant to any of the Collateral
Documents or created or provided for by applicable law), except for filings
or recordings contemplated by subsection 5.16A and except as may be required,
in connection with the disposition of any Pledged Collateral, by laws
generally affecting the offering and sale of securities and except where the
failure to obtain such authorization, approval or other action by, or give
such notice to or file with, any governmental authority or regulatory body
could not reasonably be expected to result in a Material Adverse Effect.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have
been filed in favor of Administrative Agent as contemplated by subsection
5.16A, (i) no effective UCC financing statement, fixture filing or other
instrument similar in effect covering all or any part of the Collateral is on
file in any filing or recording office and (ii) no effective filing covering
all or any part of the IP Collateral is on file in the PTO.
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D. MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied
to Administrative Agent by or on behalf of any Loan Party with respect to any
of the Collateral (in each case taken as a whole with respect to any
particular Collateral) is accurate and complete in all material respects.
5.17 RELATED AGREEMENTS.
A. DELIVERY OF RELATED AGREEMENTS. Borrower has delivered to
Lenders complete and correct copies of each Related Agreement and of all
exhibits and schedules thereto.
B. BORROWER'S WARRANTIES. Except to the extent otherwise set
forth herein or in the schedules hereto, each of the representations and
warranties given by Borrower to XX-XX in the Recapitalization Agreement is
true and correct in all material respects as of the date hereof (or as of any
earlier date to which such representation and warranty specifically relates)
and will be true and correct in all material respects as of the Closing Date
(or as of such earlier date, as the case may be), in each case subject to the
qualifications set forth in the schedules to the Recapitalization Agreement.
C. WARRANTIES OF BORROWER. Subject to the qualifications set
forth therein, each of the representations and warranties given by XX-XX to
Borrower in the Recapitalization Agreement is true and correct in all
material respects as of the date hereof and will be true and correct in all
material respects as of the Closing Date.
D. SURVIVAL. Notwithstanding anything in the Recapitalization
Agreement to the contrary, the representations and warranties of Borrower set
forth in subsections 5.17B and 5.17C shall, solely for purposes of this
Agreement, survive the Closing Date for the benefit of Lenders.
5.18 DISCLOSURE.
No representation or warranty of Fox Xxxxx or any Loan Party or any
of its Subsidiaries contained in the Confidential Information Memorandum or
in any Loan Document or Related Agreement or in any other document,
certificate or written statement furnished to Lenders by or on behalf of Fox
Xxxxx or any Loan Party or any of its Subsidiaries for use in connection with
the transactions contemplated by this Agreement or furnished by Fox Xxxxx or
any Loan Party or any of its Subsidiaries to Xxxxxx Xxxxxx & Co. in
connection with the preparation of the solvency assurances referred to in
subsection 4.1M contains any untrue statement of a material fact or omits to
state a material fact (known to Borrower, in the case of any document not
furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same
were made. Any projections and pro forma financial information contained in
such materials are based upon good faith estimates and assumptions believed
by Borrower to be reasonable at the time made, it being recognized by Lenders
that such projections as to future events are
84
not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected
results. There are no facts known (or which should upon the reasonable
exercise of diligence be known) to Borrower (other than matters of a general
economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have not been
disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
5.19 YEAR 2000 COMPLIANCE.
All Information Systems and Equipment are Year 2000 Compliant except
where such noncompliance could not reasonably be expected to have a Material
Adverse Effect. To the extent that any reprogramming/remediation or testing
action is required to remedy any Information Systems or Equipment that is not
Year 2000 Compliant, the cost thereof, as well as the cost of the reasonably
foreseeable consequences of failure to become Year 2000 Compliant, to Borrower
and its Subsidiaries (including without limitation reprogramming errors and the
failure or other systems or equipment) will not result in an Event of Default or
could not reasonably be expected to have a Material Adverse Effect.
SECTION 6. BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrower shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Borrower will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Borrower will deliver to Administrative Agent and Lenders:
(i) MONTHLY FINANCIALS: as soon as available and in any event
within 30 days after the end of each month ending after the Closing
Date, or 45 days, in the case of each month that is the last month of a
Fiscal Quarter, (a) the consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such month and the related consolidated
statements of income, stockholders' equity and cash flows of Borrower
and its Subsidiaries for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month,
setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and
the corresponding figures from the Financial Plan for the current
Fiscal Year, to the extent prepared on a monthly basis, all in
reasonable detail and certified by the chief financial officer of
Borrower that they fairly present, in all material respects, the
financial condition of Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods
85
indicated, subject to changes resulting from audit and normal year-end
adjustments, it being understood that such financial statements as at
the end of any Fiscal Year shall be preliminary, (b) a brief narrative
report describing the operations of Borrower and its Subsidiaries in
the form prepared for presentation to senior management for such month
and for the period from the beginning of the then current Fiscal Year
to the end of such month, and (c) a Borrowing Base certificate;
(ii) QUARTERLY FINANCIALS: as soon as available and in any
event within 45 days after the end of each Fiscal Quarter, or 90
days, in the case of the last Fiscal Quarter of a Fiscal Year, (a)
the consolidated balance sheet of Borrower and its Subsidiaries as
at the end of such Fiscal Quarter and the related consolidated
statements of income, stockholders' equity and cash flows of
Borrower and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end
of such Fiscal Quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the
Financial Plan for the current Fiscal Year, all in reasonable
detail, prepared by Borrower in consultation with its independent
accountants and certified by the chief financial officer of Borrower
that they fairly present, in all material respects, the financial
condition of Borrower and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and
normal year-end adjustments, and (b) a detailed narrative report
describing the operations of Borrower and its Subsidiaries in the
form prepared for presentation to senior management for such Fiscal
Quarter and for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter, containing a
management discussion and analysis of financial results;
(iii) YEAR-END FINANCIALS: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the audited
consolidated balance sheet of Borrower and its Subsidiaries as at the
end of such Fiscal Year and the related audited consolidated statements
of income, stockholders' equity and cash flows of Borrower and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the Financial Plan for the Fiscal
Year covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Borrower that they fairly
present, in all material respects, the financial condition of Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a
narrative report describing the operations of Borrower and its
Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year, containing a management discussion and analysis
of financial results, and (c) in the case of such consolidated
financial statements, a report thereon of independent certified public
accountants of recognized national standing selected by Borrower and
satisfactory to Administrative Agent, which report shall be
unqualified, shall express no doubts about the ability of Borrower and
its Subsidiaries to continue as a going concern, and shall state that
such consolidated financial statements fairly present, in all material
respects, the consolidated financial position of Borrower and its
Subsidiaries as at the dates
86
indicated and the results of their operations and their cash flows for
the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
(iv) OFFICERS' AND COMPLIANCE CERTIFICATES: together with each
delivery of financial statements of Borrower and its Subsidiaries
pursuant to subdivisions (i), (ii) and (iii) above, (a) an Officers'
Certificate of Borrower stating that the signers have reviewed the
terms of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Borrower and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the
date of such Officers' Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if
any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action Borrower has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the restrictions
contained in Section 7, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable
accounting period;
(v) RECONCILIATION STATEMENTS: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of Borrower and
its Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii) or
(xiii) of this subsection 6.1 will differ in any material respect from
the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiii) of this subsection 6.1 following such change,
consolidated financial statements of Borrower and its Subsidiaries for
(y) the current Fiscal Year to the effective date of such change and
(z) the two full Fiscal Years immediately preceding the Fiscal Year in
which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, a written statement of the chief accounting officer or
chief financial officer of Borrower setting forth the differences
(including any differences that would affect any calculations relating
to the financial covenants set forth in subsection 7.6) which would
have resulted if such financial statements had been prepared without
giving effect to such change;
(vi) ACCOUNTANTS' CERTIFICATION: together with each delivery
of consolidated financial statements of Borrower and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit examination has
87
included a review of the terms of this Agreement and the other
Loan Documents as they relate to accounting matters, (b) stating
whether, in connection with their audit examination, any condition or
event that constitutes an Event of Default or Potential Event of
Default has come to their attention and if such a condition or event
has come to their attention, specifying the nature and period of
existence thereof; PROVIDED that such accountants shall not be liable
by reason of any failure to obtain knowledge of any such Event of
Default or Potential Event of Default that would not be disclosed in
the course of their audit examination, and (c) stating that based on
their audit examination nothing has come to their attention that causes
them to believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is
not correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (b) of subdivision
(iv) above for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement;
(vii) ACCOUNTANTS' REPORTS: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Borrower by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Borrower and its Subsidiaries made by such
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
(viii) SEC FILINGS AND PRESS RELEASES: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Borrower to its security holders or by any Subsidiary of Borrower to
its security holders other than Borrower or another Subsidiary of
Borrower, (b) all regular and periodic reports and all registration
statements (other than on Form S-8 or a similar form) and prospectuses,
if any, filed by Borrower or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or
any governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Borrower or
any of its Subsidiaries to the public concerning material developments
in the business of Borrower or any of its Subsidiaries;
(ix) EVENTS OF DEFAULT, ETC.: promptly upon any officer of
Borrower obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Borrower or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Borrower with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Borrower were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case of in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action
88
taken by any such Person and the nature of such claimed Event of
Default, Potential Event of Default, default, event or condition, and
what action Borrower has taken, is taking and proposes to take with
respect thereto;
(x) LITIGATION OR OTHER PROCEEDINGS: (a) promptly upon any
officer of Borrower obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Borrower or any of its Subsidiaries or
any property of Borrower or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Borrower to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Borrower to enable Lenders and their counsel to
evaluate such matters; and (b)within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Borrower or any of its
Subsidiaries equal to or greater than $500,000, and promptly after
request by Administrative Agent such other information as may be
reasonably requested by Administrative Agent to enable Administrative
Agent and its counsel to evaluate any of such Proceedings;
(xi) ERISA EVENTS: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xii) ERISA NOTICES: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (b) all notices received by Borrower, any
of its Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xiii) FINANCIAL PLANS: as soon as practicable and in any
event no later than the first Business Day in January in each Fiscal
Year, commencing on January 1, 2001, a consolidated plan and financial
forecast for such Fiscal Year (the "FINANCIAL
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PLAN" for such Fiscal Year), including (a) a forecasted consolidated
balance sheet and forecasted consolidated statements of income and
cash flows of Borrower and its Subsidiaries for such Fiscal Year,
and for each month of such Fiscal Year, together with an explanation
of the assumptions on which such forecasts are based, and (b) such
other information and projections as any Lender may reasonably
request;
(xiv) INSURANCE: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Borrower and its
Subsidiaries and all material insurance coverage planned to be
maintained by Borrower and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) NEW SUBSIDIARIES: promptly upon any Person becoming a
Subsidiary of Borrower, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of
Borrower and (b) all of the data required to be set forth in SCHEDULE
5.1 annexed hereto with respect to all Subsidiaries of Borrower (it
being understood that such written notice shall be deemed to supplement
SCHEDULE 5.1 annexed hereto for all purposes of this Agreement;
(xvi) MATERIAL CONTRACTS: promptly, and in any event within
ten Business Days after any Material Contract of Borrower or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Borrower or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xvii) UCC SEARCH REPORT: As promptly as practicable after the
date of delivery to Administrative Agent of any UCC financing statement
executed by any Loan Party pursuant to subsection 4.1J(iv) or 6.8A,
copies of completed UCC searches evidencing the proper filing,
recording and indexing of all such UCC financing statements and listing
all other effective financing statements that name such Loan Party as
debtor, together with copies of all such other financing statements not
previously delivered to Administrative Agent by or on behalf of
Borrower or such Loan Party;
(xviii) MARGIN DETERMINATION CERTIFICATE: together with each
delivery of financial statements for each Fiscal Quarter (other than
each fourth Fiscal Quarter) pursuant to subdivision (ii) above (which
Margin Determination Certificate is deemed delivered if the Compliance
Certificate required pursuant to subsection 6.1(iv) delivered at such
time contains the information required below), and within 45 days of
the last day of each fourth Fiscal Quarter, a Margin Determination
Certificate demonstrating in reasonable detail the calculation of the
Consolidated Total Leverage Ratio for the four consecutive Fiscal
Quarters ending on the day of the accounting period covered by such
financial statements;
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(xix) OTHER INFORMATION: with reasonable promptness, such
other information and data with respect to Borrower or any of its
Subsidiaries as from time to time may be reasonably requested by
Administrative Agent.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Borrower will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; PROVIDED, HOWEVER that neither Borrower nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Borrower or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Borrower or
such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Borrower, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Borrower will, and will cause each of its Subsidiaries to,
pay all taxes, assessments and other governmental charges imposed upon it or
any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all claims
(including claims for labor, services, materials and supplies) for sums that
have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED that no such charge or claim
need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as (1) such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such contest proceedings conclusively operate to stay the sale of any portion
of the Collateral to satisfy such charge or claim.
B. Borrower will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Borrower or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET INSURANCE/
CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Borrower will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of Borrower and its
Subsidiaries (including all Intellectual Property) and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof.
B. INSURANCE. Borrower will maintain or cause to be
maintained, with financially sound and reputable insurers, such public
liability insurance, third party property damage insurance, business
interruption insurance and casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of
Borrower
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and its Subsidiaries as may customarily be carried or maintained under
similar circumstances by corporations of established reputation engaged in
similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for corporations similarly
situated in the industry. Without limiting the generality of the foregoing,
Borrower will maintain or cause to be maintained (i) flood insurance with
respect to each Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, in each case in
compliance with any applicable regulations of the Board of Governors of the
Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies,
in such amounts, with such deductibles, and covering such risks as are at all
times satisfactory to Administrative Agent in its commercially reasonable
judgment. Each such policy of insurance shall (a) name Administrative Agent
for the benefit of Lenders as an additional insured thereunder as its
interests may appear and (b) in the case of each business interruption and
casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Administrative Agent, that names
Administrative Agent for the benefit of Lenders as the loss payee thereunder
for any covered loss in excess of $500,000 and provides for at least 30 days
prior written notice to Administrative Agent of any modification or
cancellation of such policy.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) BUSINESS INTERRUPTION INSURANCE. Upon receipt by Borrower
or any of its Subsidiaries of any business interruption insurance
proceeds constituting Net Insurance/Condemnation Proceeds, (a)so long
as no Event of Default or Potential Event of Default shall have
occurred and be continuing, Borrower or such Subsidiary may retain and
apply such Net Insurance/Condemnation Proceeds for working capital
purposes, and (b) if an Event of Default or Potential Event of Default
shall have occurred and be continuing, Borrower shall apply an amount
equal to such Net Insurance/Condemnation Proceeds to prepay the Loans
(and/or the Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4B(iii)(b);
(ii) CASUALTY INSURANCE/CONDEMNATION PROCEEDS. Upon receipt by
Borrower or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than from business interruption insurance, (a) so long
as no Event of Default or Potential Event of Default shall have
occurred and be continuing, Borrower shall, or shall cause one or more
of its Subsidiaries to, promptly and diligently apply such Net
Insurance/Condemnation Proceeds to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which such
Net Insurance/Condemnation Proceeds were received or, to the extent not
so applied, to prepay the Loans (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4B(iii)(b), and (b) if an
Event of Default or Potential Event of Default shall have occurred and
be continuing, Borrower shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in subsection
2.4B(iii)(b).
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(iii) NET INSURANCE/CONDEMNATION PROCEEDS RECEIVED BY
ADMINISTRATIVE AGENT. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, if the aggregate amount
of Net Insurance/Condemnation Proceeds received (and reasonably
expected to be received) by Administrative Agent in respect of any
covered loss exceeds $750,000, or if and to the extent Borrower would
have been required to apply such Net Insurance/Condemnation Proceeds
(if it had received them directly) to prepay the Loans and/or reduce
the Revolving Loan Commitments, Administrative Agent shall, and
Borrower hereby authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in subsection
2.4B(iii)(b), and (b) to the extent the foregoing clause (a) does not
apply and (1) the aggregate amount of such Net Insurance/Condemnation
Proceeds received (and reasonably expected to be received) by
Administrative Agent in respect of any covered loss does not exceed
$750,000, Administrative Agent shall deliver such Net
Insurance/Condemnation Proceeds to Borrower, and Borrower shall, or
shall cause one or more of its Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds to the costs of repairing, restoring,
or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received, and (2) if the aggregate
amount of Net Insurance/Condemnation Proceeds received (and reasonably
expected to be received) by Administrative Agent in respect of any
covered loss exceeds $750,000, Administrative Agent shall hold such Net
Insurance/Condemnation Proceeds pursuant to the terms of the Collateral
Account Agreement and, so long as Borrower or any of its Subsidiaries
proceeds diligently to repair, restore or replace the assets of
Borrower or such Subsidiary in respect of which such Net
Insurance/Condemnation Proceeds were received, Administrative Agent
shall from time to time disburse to Borrower or such Subsidiary from
the Collateral Account, to the extent of any such Net
Insurance/Condemnation Proceeds remaining therein in respect of the
applicable covered loss, amounts necessary to pay the cost of such
repair, restoration or replacement after the receipt by Administrative
Agent of invoices or other documentation reasonably satisfactory to
Administrative Agent relating to the amount of costs so incurred and
the work performed in a manner customarily used by lenders for the
disbursement of construction loan funds (including, if reasonably
required by Administrative Agent, lien releases and architects'
certificates); PROVIDED, HOWEVER that if at any time Administrative
Agent reasonably determines (A) that Borrower or such Subsidiary is not
proceeding diligently with such repair, restoration or replacement or
(B) that such repair, restoration or replacement cannot be completed
with the Net Insurance/Condemnation Proceeds then held by
Administrative Agent for such purpose, together with funds otherwise
available to Borrower for such purpose, or that such repair,
restoration or replacement cannot be completed within 180 days after
the receipt by Administrative Agent of such Net Insurance/Condemnation
Proceeds, Administrative Agent shall, and Borrower hereby authorizes
Administrative Agent to, apply such Net Insurance/ Condemnation
Proceeds to prepay the Loans (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4B(iii)(b).
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6.5 INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE;
LENDER MEETING.
A. INSPECTION RIGHTS. Borrower shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Borrower or of any of
its Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants (provided that Borrower may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably
be requested.
B. AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE AND REAL ESTATE
APPRAISALS. Borrower shall, at its own expense, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by
Administrative Agent to conduct one audit of all Inventory and Accounts of
Loan Parties during each twelve-month period after the Closing Date, all upon
reasonable notice and at such reasonable times during normal business hours
as may reasonably be requested. Borrower shall, at its own expense, and shall
cause each of its Subsidiaries to, deliver to Administrative Agent an
appraisal as of the date of acquisition of each Real Property Asset acquired
by Borrower after the Closing Date.
6.6 COMPLIANCE WITH LAWS, ETC.
Borrower shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; BORROWER'S
ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS AND
VIOLATIONS OF ENVIRONMENTAL LAWS.
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Borrower agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Borrower's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Borrower after the date of this
Agreement and (ii) in the event (a) Administrative Agent reasonably believes
that Borrower has breached any representation, warranty or covenant contained in
subsection 5.6, 5.13, 6.6 or 6.7 or that there has been a material violation of
Environmental Laws at any Facility or by Borrower or any of its Subsidiaries at
any other location or (b) an Event of Default has occurred and is continuing,
conduct its own investigation of any Facility; PROVIDED that, in the case of any
Facility no longer owned, leased, operated or used by Borrower or any of its
Subsidiaries, Borrower shall only be obligated to use its commercially
reasonable efforts to obtain permission for Administrative Agent's professional
consultant to conduct an investigation of such Facility. For purposes of
conducting such a review and/or investigation, Borrower hereby grants to
Administrative
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Agent and its Administrative Agents, employees, consultants and contractors
the right to enter into or onto any Facilities currently owned, leased,
operated or used by Borrower or any of its Subsidiaries and to perform such
tests on such property (including taking samples of soil, groundwater and
suspected asbestos-containing materials) as are reasonably necessary in
connection therewith. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Borrower and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall
be conducted so as not to interfere with the ongoing operations at such
Facility or to cause any damage or loss to any property at such Facility.
Borrower and Administrative Agent hereby acknowledge and agree that any
report of any investigation conducted at the request of Administrative Agent
pursuant to this subsection 6.7A will be obtained and shall be used solely by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Administrative Agent agrees
to deliver a copy of any such report to Borrower with the understanding that
Borrower acknowledges and agrees that (x)it will indemnify and hold harmless
Administrative Agent and each Lender from any costs, losses or liabilities
relating to Borrower's use of or reliance on such report, (y)neither
Administrative Agent nor any Lender makes any representation or warranty with
respect to such report, and (z)by delivering such report to Borrower, neither
Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
B. ENVIRONMENTAL DISCLOSURE. Borrower will deliver to
Administrative Agent and Lenders:
(i) ENVIRONMENTAL AUDITS AND REPORTS. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Borrower or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility
which, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect or with respect to any
Environmental Claims which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;
(ii) NOTICE OF CERTAIN RELEASES, REMEDIAL ACTIONS, ETC.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws which could reasonably be expected to
result in a Material Adverse Effect, (b)any remedial action taken by
Borrower or any other Person in response to (1) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or
in the aggregate, a Material Adverse Effect, or (2) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect, and (c)
Borrower's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could cause
such Facility or any part thereof to be subject
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to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws.
(iii) WRITTEN COMMUNICATIONS REGARDING ENVIRONMENTAL CLAIMS,
RELEASES, ETC. As soon as practicable following the sending or receipt
thereof by Borrower or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect, (b) any Release required
to be reported to any federal, state or local governmental or
regulatory agency which could reasonably be expected to result in a
Material Adverse Effect, and (c) any request for information from any
governmental agency that suggests such agency is investigating whether
Borrower or any of its Subsidiaries may be potentially responsible for
any Hazardous Materials Activity which could reasonably be expected to
result in a Material Adverse Effect.
(iv) NOTICE OF CERTAIN PROPOSED ACTIONS HAVING ENVIRONMENTAL
IMPACT. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Borrower or any
of its Subsidiaries that could reasonably be expected to (1) expose
Borrower or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or (2) affect the ability of
Borrower or any of its Subsidiaries to maintain in full force and
effect in all material respects all material Governmental
Authorizations required under any Environmental Laws for their
respective operations and (b) any proposed action to be taken by
Borrower or any of its Subsidiaries to modify current operations in a
manner that could reasonably be expected to subject Borrower or any of
its Subsidiaries to any additional obligations or requirements under
any Environmental Laws that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(v) OTHER INFORMATION. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters disclosed
pursuant to this subsection 6.7.
C. BORROWER'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) REMEDIAL ACTIONS RELATING TO HAZARDOUS MATERIALS
ACTIVITIES. Borrower shall in a manner reasonably in view of the
circumstances undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response
actions necessary to remove, remediate, clean up or xxxxx any Hazardous
Materials Activity on, under or about any Facility that is in violation
of any Environmental Laws or that presents a material risk of giving
rise to an Environmental Claim. In the event Borrower or any of its
Subsidiaries undertakes any such action with respect to any Hazardous
Materials, Borrower or such Subsidiary shall conduct and complete such
action in compliance with all applicable Environmental Laws and in
accordance
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with the orders and directives of all federal, state and local
governmental authorities with jurisdiction thereover except when, and
only to the extent that, Borrower's or such Subsidiary's liability with
respect to such Hazardous Materials Activity is being contested in good
faith by Borrower or such Subsidiary.
(ii) ACTIONS WITH RESPECT TO ENVIRONMENTAL CLAIMS AND
VIOLATIONS OF ENVIRONMENTAL LAWS. Borrower shall in, a manner
reasonably in view of the circumstances take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Borrower or its
Subsidiaries that could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect and (ii) make an
appropriate response to any Environmental Claim against Borrower or any
of its Subsidiaries and discharge any obligations it may have to any
Person thereunder where failure to do so could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS. If any Person organized under the laws of the United
States or any State thereof or the District of Columbia becomes a Material
Subsidiary of Borrower after the date hereof, Borrower will promptly notify
Administrative Agent of that fact and cause such Material Subsidiary to
execute and deliver to Administrative Agent a counterpart of the Subsidiary
Guaranty and Security Agreement and to take all such further actions and
execute all such further documents and instruments (including actions,
documents and instruments comparable to those described in subsection 4.1,1)
as may be necessary or, in the opinion of Administrative Agent, desirable to
create in favor of Administrative Agent, for the benefit of Lenders, a valid
and perfected First Priority Lien on all of the personal property assets and
fixtures, of such Material Subsidiary described in the applicable forms of
Collateral Documents.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Borrower
shall deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Material Subsidiary's Certificate or Articles of
Incorporation, together with a good standing certificate from the Secretary
of State of the jurisdiction of its incorporation and each other state in
which such Person is qualified as a foreign corporation to do business and,
to the extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such jurisdictions, each to be dated
a recent date prior to their delivery to Administrative Agent, (ii)a copy of
such Material Subsidiary's Bylaws, certified by its corporate secretary or an
assistant secretary as of a recent date prior to their delivery to
Administrative Agent, (iii) a certificate executed by the secretary or an
assistant secretary of such Material Subsidiary as to (a)the fact that the
attached resolutions of the Board of Directors of such Material Subsidiary
approving and authorizing the execution, delivery and performance of such
Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such
Material Subsidiary
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executing such Loan Documents, and (iv)a favorable opinion of counsel to such
Material Subsidiary, in form and substance satisfactory to Administrative
Agent and its counsel, as to (a) the due organization and good standing of
such Material Subsidiary, (b) the due authorization, execution and delivery
by such Material Subsidiary of such Loan Documents, (c) the enforceability of
such Loan Documents against such Material Subsidiary, (d) such other matters
(including matters relating to the creation and perfection of Liens in any
Collateral pursuant to such Loan Documents) as Administrative Agent may
reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL.
A. CONFORMING LEASEHOLD INTERESTS. If Borrower or any of its
Subsidiaries acquires any Leasehold Property, unless Borrower acquires any
Leasehold Property from a Subsidiary which is a Subsidiary Guarantor or a
Subsidiary Guarantor acquires any Leasehold Property from Borrower or any
other Subsidiary Guarantor, Borrower shall, or shall cause such Subsidiary
to, use its best efforts (without requiring Borrower or such Subsidiary to
relinquish any material rights or incur any material obligations or to expend
more than a nominal amount of money over and above the reimbursement, if
required, of the landlord's out-of-pocket costs, including attorneys fees) to
cause such Leasehold Property to be a Conforming Leasehold Interest.
B. ADDITIONAL MORTGAGES, ETC. From and after the Closing Date,
in the event that (i) Borrower or any Subsidiary Guarantor acquires any fee
interest in real property or any Leasehold Property or (ii) at the time any
Person becomes a Subsidiary Guarantor, such Person owns or holds any fee
interest in real property or any Leasehold Property, in either case excluding
any such Real Property Asset the encumbrancing of which requires the consent
of any applicable lessor or (in the case of clause (ii) above) then-existing
senior lienholder, where Borrower and its Subsidiaries are unable to obtain
such lessor's or senior lienholder's consent (any such non-excluded Real
Property Asset described in the foregoing clause (i) or (ii) being an
"ADDITIONAL MORTGAGED PROPERTY"), Borrower or such Subsidiary Guarantor shall
deliver to Administrative Agent, as soon as practicable after such Person
acquires such Additional Mortgaged Property or becomes a Subsidiary
Guarantor, as the case may be, and Borrower shall use commercially reasonable
efforts to obtain with respect to its facility located in Milpitas,
California (Lenders acknowledge that landlord consent is not required for
Borrower to carry out the transactions contemplated hereunder and that
Borrower has heretofore used commercially reasonable efforts to obtain such
items prior to the Closing Date without success, and further Lenders
acknowledge that the landlords at the facility located in Milpitas,
California have no obligation under their respective leases and subleases to
consent to an encumbrance on the leasehold of Borrower or to execute a
Landlord Consent and Estoppel, and that Borrower has no obligation to expend
money in its efforts to obtain any of the items set forth below from any such
landlord), the following:
(i) ADDITIONAL MORTGAGE. A fully executed and notarized
Mortgage (an "ADDITIONAL MORTGAGE"), in proper form for recording in
all appropriate places in all
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applicable jurisdictions, encumbering the interest of such Loan Party
in such Additional Mortgaged Property;
(ii) OPINIONS OF COUNSEL. A favorable opinion of counsel to
such Loan Party, in form and substance satisfactory to Administrative
Agent and its counsel, as to the due authorization, execution and
delivery by such Loan Party of such Additional Mortgage and such other
matters as Administrative Agent may reasonably request;
(iii) LANDLORD CONSENT AND ESTOPPEL; RECORDED LEASEHOLD
INTEREST. In the case of an Additional Mortgaged Property consisting of
a Leasehold Property, (a) a Landlord Consent and Estoppel and (b)
evidence that such Leasehold Property is a Recorded Leasehold Interest;
(iv) TITLE INSURANCE. (a) If required by Administrative Agent,
an ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "ADDITIONAL MORTGAGE POLICY") issued by the Title Company
with respect to such Additional Mortgaged Property, in an amount
satisfactory to Administrative Agent, insuring fee simple title to, or
a valid leasehold interest in, such Additional Mortgaged Property
vested in such Loan Party and assuring Administrative Agent that such
Additional Mortgage creates a valid and enforceable First Priority
mortgage Lien on such Additional Mortgaged Property, subject only to a
standard survey exception, which Additional Mortgage Policy (1) shall
include an endorsement for mechanics' liens, for future advances under
this Agreement and for any other matters reasonably requested by
Administrative Agent and (2) shall provide for affirmative insurance
and such reinsurance as Administrative Agent may reasonably request,
all of the foregoing in form and substance reasonably satisfactory to
Administrative Agent; and (b) evidence satisfactory to Administrative
Agent that such Loan Party has (i) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Additional Mortgage Policy and (ii) paid to
the Title Company or to the appropriate governmental authorities all
expenses and premiums of the Title Company in connection with the
issuance of the Additional Mortgage Policy and all recording and stamp
taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Additional Mortgage in the appropriate
real estate records;
(v) TITLE REPORT. If no Additional Mortgage Policy is required
with respect to such Additional Mortgaged Property, a title report
issued by the Title Company with respect thereto, dated not more than
30 days prior to the date such Additional Mortgage is to be recorded
and satisfactory in form and substance to Administrative Agent;
(vi) COPIES OF DOCUMENTS RELATING TO TITLE EXCEPTIONS. Copies
of all recorded documents listed as exceptions to title or otherwise
referred to in the Additional Mortgage Policy or title report delivered
pursuant to clause (v) or (vi) above;
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(vii) MATTERS RELATING TO FLOOD HAZARD PROPERTIES. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to ( 1 ) whether such Additional Mortgaged
Property is a Flood Hazard Property and (2) if so, whether the
community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if such
Additional Mortgaged Property is a Flood Hazard Property, such Loan
Party's written acknowledgement of receipt of written notification from
Administrative Agent (1) that such Additional Mortgaged Property is a
Flood Hazard Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event such Additional Mortgaged
Property is a Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, evidence that
Borrower has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System; and
(viii) ENVIRONMENTAL AUDIT. If required by Administrative
Agent, reports and other information, in form, scope and substance
satisfactory to Administrative Agent and prepared by environmental
consultants satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Borrower or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property.
6.10 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.
Borrower shall, and shall cause each of its Subsidiaries to, use and
maintain its Deposit Accounts and cash management systems within the state of
California and in a manner reasonably satisfactory to Administrative Agent.
Information regarding these Deposit Accounts, including (a) the name and address
of the financial institutions maintaining the Deposit Accounts, and (b) the
Deposit Account numbers, shall be set forth on SCHEDULE 6.10 annexed hereto.
Borrower shall not permit any of such Deposit Accounts at any time to have a
principal balance in excess of $500,000 unless Borrower or such Subsidiary, as
the case may be, has (i) delivered to Administrative Agent an agreement,
satisfactory in form and substance to Administrative Agent and executed by the
financial institution at which such Deposit Account is maintained, pursuant to
which such financial institution confirms and acknowledges Administrative
Agent's security interest in, and sole dominion and control over, such Deposit
Account and waives its rights to set-off with respect to amounts in such Deposit
Account and (ii) taken all other steps necessary or, in the opinion of
Administrative Agent, desirable to ensure that Administrative Agent has sole
dominion and control over such Deposit Account; PROVIDED that if Borrower or
such Subsidiary is unable to obtain such agreement from such financial
institution Borrower shall, or shall cause such Subsidiary to, within 30 days
after receiving a written request by Administrative Agent to do so, transfer all
amounts in the applicable Deposit Account to a Deposit Account maintained at a
financial institution from which Borrower or such Subsidiary has obtained such
an agreement.
6.11 YEAR 2000 COMPLIANCE.
Borrower will take all reasonable steps to ensure that its Information
Systems and Equipment are at all times are Year 2000 Compliant, except insofar
as the failure to do so
100
could not reasonably be expected to have a Material Adverse Effect, and
Borrower shall notify Administrative Agent and any Lender promptly upon
detecting any failure of the Information Systems and Equipment to be Year
2000 Compliant. In addition, Borrower shall provide Administrative Agent and
any Lender with such information about its year 2000 computer readiness
(including without limitation information as to contingency plans, budgets
and testing results) as Administrative Agent or such Lender shall reasonably
request.
SECTION 7. BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrower shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
7.1 INDEBTEDNESS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Borrower may become and remain liable with respect to
the Obligations;
(ii) Borrower and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4(i), (ii), (iii), (iv) and (v) and, upon any matured obligations
actually arising pursuant thereto, the Indebtedness corresponding to
the Contingent Obligations so extinguished;
(iii) Borrower may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries that are
Subsidiary Guarantors, and any wholly-owned Subsidiaries of Borrower
that are Subsidiary Guarantors may become and remain liable with
respect to Indebtedness to Borrower or any other wholly-owned
Subsidiaries of Borrower that are Subsidiary Guarantors; PROVIDED that
(a) all such intercompany Indebtedness shall be evidenced by promissory
notes, (b) all such intercompany Indebtedness owed by Borrower to any
of its Subsidiary Guarantors shall be subordinated in right of payment
to the payment in full of the Obligations pursuant to the terms of the
applicable promissory notes or an intercompany subordination agreement,
and (c) any payment by any Subsidiary Guarantor under any guaranty of
the Obligations shall result in a PRO TANTO reduction of the amount of
any intercompany Indebtedness owed by such Subsidiary Guarantor to
Borrower or to any of its Subsidiary Guarantors for whose benefit such
payment is made;
(iv) Borrower and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness described in SCHEDULE 7.1 annexed
hereto;.
(v) Borrower and its Subsidiaries may become and remain liable
with respect to (a) Contingent Obligations permitted by subsection
7.4(vi) and, upon any
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matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so
extinguished, (b) other Indebtedness and Capital Leases; provided that
the outstanding aggregate principal amount of such Contingent
Obligations, Capital Leases, and other Indebtedness shall not exceed
$2,500.000 at any time; furthermore, the outstanding aggregate
principal amount of such Contingent Obligations, Capital Leases, and
other Indebtedness that is secured shall not exceed $1,000,000 at any
time; and
(vi) Borrower and its Subsidiaries may become and remain
liable with respect to Indebtedness in an aggregate principal amount
not to exceed $3,000,000 at any time to employees in connection with
the repurchase of capital stock of Borrower permitted pursuant to
subsection 7.5; provided no payments of any kind on such Indebtedness
are made prior to repayment in full of the Obligations and such
Indebtedness is subordinated to the Obligations on terms and conditions
satisfactory to the Administrative Agent.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods
or accounts receivable) of Borrower or any of its Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing o(pound) or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any Such
property, asset, income or profits under the Uniform Commercial Code of any
State or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 7.2 annexed hereto;
(iv) Liens evidenced by financing statements filed as part of
a refinancing of the Loans outstanding under this Agreement; provided
that such financing statements shall not be filed more than five
business days prior to such refinancing; provided further that Borrower
shall have no obligation owing to the secured party under such
financing statement until upon completion of the refinancing; and
(v) Other Liens securing Indebtedness relating to the assets
acquired pursuant to subsection 7.1(v), in an aggregate amount not to
exceed the aggregate purchase price of such assets; provided that such
Liens shall not secure the Real Property Asset that is the subject of
the Palo Alto Lease.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Borrower or any of
its Subsidiaries shall create or assume any Lien upon any of its properties
or assets, whether now owned or hereafter acquired, other than Liens excepted
by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by
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such Lien senior to any and all other Indebtedness secured thereby as long as
any such Indebtedness shall be so secured; PROVIDED that, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien net permitted by the
provisions of subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to
specific property encumbered to secure payment of particular Indebtedness or
to be sold pursuant to an executed agreement with respect to an Asset Sale,
neither Borrower nor any of its Subsidiaries shall enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties
or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO BORROWER OR
OTHER SUBSIDIARIES. Except as provided herein, Borrower will not, and will
not permit any of its Subsidiaries to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to (i) pay dividends or make any
other distributions on any of such Subsidiary's capital stock owned by
Borrower or any other Subsidiary of Borrower, (ii)repay or prepay any
Indebtedness owed by such Subsidiary to Borrower or any other Subsidiary of
Borrower, (iii) make loans or advances to Borrower or any other Subsidiary of
Borrower, or (iv) transfer any of its property or assets to Borrower or any
other Subsidiary of Borrower.
7.3 INVESTMENTS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, except:
(i) Borrower and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Borrower and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Borrower;
(iii) Borrower and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7. l(iii);
(iv) Borrower and its Subsidiaries may make Consolidated
Capital Expenditures permitted by this Agreement;
(v) Borrower and its Subsidiaries may continue to own the
Investments owned by them and described in SCHEDULE 7.3 annexed hereto;
(vi) Borrower and its Subsidiaries may make loans to employees
in connection with their hiring or relocation in an aggregate amount
not to exceed $500,000 in any year (plus, for any year the amount
permitted to be loaned pursuant to this clause (vi) from the prior year
that has not been loaned) or $1,500,000 in the aggregate; and
103
(vii) Borrower and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed not to exceed $500,000
in any year (plus, for any year the amount permitted to be invested
pursuant to this clause (vii) from the prior year that has not been
invested) or S 1,500,000 in the aggregate.
7.4 CONTINGENT OBLIGATIONS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Borrower may become and remain liable
with respect to Contingent Obligations in respect of the Subsidiary
Guaranty;
(ii) Borrower and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of Letters of
Credit issued under this Agreement and in respect of the Hedge
Agreement referred to in subsection 7.16;
(iii) Borrower and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets;
(iv) Borrower and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of any
Indebtedness of Borrower or any of its Material Subsidiaries permitted
by subsection 7.1;
(v) Borrower and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in SCHEDULE 7.4
annexed hereto; and
(vi) Borrower and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; PROVIDED that the
maximum aggregate liability, contingent or otherwise, of Borrower and
its Subsidiaries in respect of all such Contingent Obligations shall be
subject to the limitations set forth in subsection 7.1(v).
7.5 RESTRICTED JUNIOR PAYMENTS
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, except that Borrower may make payments to repurchase
capital stock of Borrower owned by former employees of Borrower in an aggregate
amount not to exceed at $1,000,000 and may incur Indebtedness in connection with
other repurchases of capital stock of Borrower owned by former employees of
Borrower up to the amount permitted pursuant to subsection 7.1 (vi).
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7.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. Borrower shall not permit
the ratio of (i) Consolidated EBITDA to (ii) Consolidated Cash Interest
Expense for any four consecutive Fiscal Quarter period ending during any of
the periods set forth below to be less than the correlative ratio indicated
(provided that for the four consecutive Fiscal Period ending September 29,
2000, the amount of Consolidated Cash Interest Expense shall be deemed to
equal the product of (x) the aggregate amount of Consolidated Cash Interest
Expense for the three consecutive Fiscal Quarter period ending September 29,
2000, and (y) 1.33):
MINIMUM
PERIOD INTEREST COVERAGE RATIO
--------------------------------------- ----------------------------------
Closing - Second Fiscal Quarter 2000 N/A
Third Fiscal Quarter 2000 -
First Fiscal Quarter 2001 2.00x
Second Fiscal Quarter 2001 -
Fourth Fiscal Quarter 2001 2.50x
First Fiscal Quarter 2002 - Maturity 3.00x
B. MINIMUM FIXED CHARGE COVERAGE RATIO. Borrower shall not
permit the ratio of (i) Consolidated EBITDA less Consolidated Capital
Expenditures to (ii) Consolidated Fixed Charges for any four consecutive
Fiscal Quarter period ending during any of the periods set forth below, to be
less than the correlative ratio indicated:
MINIMUM FIXED
PERIOD CHARGE COVERAGE RATIO
--------------------------------------- ----------------------------------
Closing - Second Fiscal Quarter 2000 N/A
Third Fiscal Quarter 2000 -
First Fiscal Quarter 2001 1.00x
First Fiscal Quarter 2002-
Fourth Fiscal Quarter 2003 1.05x
First Fiscal Quarter 2004 - Maturity 1.10x
C. MAXIMUM LEVERAGE RATIO. Borrower shall not permit the
Consolidated Total Leverage Ratio as of the last day of any Fiscal Quarter
ending during any of the periods set forth below to exceed the correlative
ratio indicated:
105
PERIOD MAXIMUM LEVERAGE RATIO
---------------------------------- ----------------------
Closing - Second Fiscal Quarter 2000 4.50x
Third Fiscal Quarter 2000 4.00x
Fourth Fiscal Quarter 2000 -
First Fiscal Quarter 2001 3.25x
Second Fiscal Quarter 2001 -
Fourth Fiscal Quarter 2001 3.00x
First Fiscal Quarter 2002 -
Fourth Fiscal Quarter 2002 2.75x
First Fiscal Quarter 2003 - Maturity 2.50x
D. MINIMUM CONSOLIDATED EBITDA. Borrower shall not permit
Consolidated EBITDA for any four consecutive Fiscal Quarter period ending on
the last day of any of the Fiscal Quarters set forth below to be less than
the correlative amount indicated:
MINIMUM CONSOLIDATED
PERIOD ADJUSTED EBITDA
------------------------------------------- --------------------
Closing - Second Fiscal Quarter 2000 $7,500
Third Fiscal Quarter 2000 $8,500
Fourth Fiscal Quarter 2000 $10,000
First Fiscal Quarter 2001 $11,000
Second Fiscal Quarter 2001 $12,000
Third Fiscal Quarter 2001 $13,000
Fourth Fiscal Quarter 2001 $14,000
First Fiscal Quarter 2002
- Fourth Fiscal Quarter 2002 $16,000
First Fiscal Quarter 2003 - Maturity $18,000
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Borrower or any of its
Subsidiaries, or enter into any transaction
106
of merger or consolidation, or liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, property or
fixed assets of, or stock or other evidence of beneficial ownership of, any
Person or any division or line of business of any Person, except:
(i) any Subsidiary of Borrower may be merged with or into
Borrower or any wholly-owned Subsidiary Guarantor, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to Borrower or any
wholly-owned Subsidiary Guarantor; PROVIDED that, in the case of such a
merger, Borrower or such wholly-owned Subsidiary Guarantor shall be the
continuing or surviving corporation;
(ii) Borrower and its Subsidiaries may make Consolidated
Capital Expenditures to the extent not prohibited by this Agreement;
(iii) Borrower and its Subsidiaries may dispose of obsolete,
worn out or surplus property in the ordinary course of business;
(iv) Borrower and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
PROVIDED that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; and
(v) Borrower and its Subsidiaries may make an Asset Sale of
the Palo Alto Lease and Borrower and its Subsidiaries may make other
Asset Sales of assets having in the aggregate a fair market value not
in excess of $2,500,000; PROVIDED that in each (x) the consideration
received for such assets shall be in an amount at least equal to the
fair market value thereof; (y)the sole consideration received shall be
cash; and (z)the proceeds of such Asset Sales shall be applied as
required by subsection 2.4B(iii)(a).
7.8 RESTRICTION ON LEASES.
Borrower shall not, and shall not permit any of its Subsidiaries to,
become liable in any way, whether directly or by assignment or as a guarantor or
other surety, for the obligations of the lessee under any Operating Lease (other
than intercompany leases between Borrower and Subsidiary Guarantors), unless,
immediately after giving effect to the incurrence of liability with respect to
such lease, the Consolidated Rental Payments at the time in effect during the
four consecutive Fiscal Quarter periods then ended or any future four
consecutive Fiscal Quarter periods shall not exceed $1,000,000; provided,
however, that after any relocation of Borrower from the property leased under
the Palo Alto Lease and the prepayment of Loan required pursuant to subsection
2.4B(iii)(a) and such Consolidated
107
Rental Payments shall not exceed $4,000,000 during the four consecutive
Fiscal Quarter periods then ended or any future four consecutive Fiscal
Quarter periods.
7.9 SALES AND LEASE-BACKS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Borrower or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Borrower
or any of its Subsidiaries) or (ii) which Borrower or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Borrower or any of its Subsidiaries
to any Person (other than Borrower or any of its Subsidiaries) in connection
with such lease, except for the obligations as sublessor of any sublease of the
property subject to the Palo Alto Lease.
7.10 SALE OR DISCOUNT OF RECEIVABLES.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable,
except that Borrower may sell the SEG Receivables with recourse, or discount for
not less than 95% of the face amount thereof; provided that Borrower shall use
the net cash proceeds from such sale to prepay the Loans in the manner set forth
in subsection 2.4B(iii)(a).
7.11 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Borrower or with any Affiliate of Borrower or of any such holder, on terms that
are less favorable to Borrower or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; PROVIDED that the foregoing restriction shall not apply to (i) any
transaction between Borrower and any wholly-owned Subsidiaries that are
Subsidiary Guarantors, or between any wholly-owned Subsidiaries of Borrower that
are Subsidiary Guarantors, (ii)reasonable and customary fees paid to members of
the Boards of Directors of Borrower and its Subsidiaries, or (iii) the Fox Xxxxx
Management Agreement; provided that no payments may be made by Borrower or any
of its Subsidiaries under the Management Agreement if at any time an Event of
Default set forth in subsections 8.5, 8.6, 8.7, or 8.12 shall have occurred and
be continuing.
7.12 DISPOSAL OF SUBSIDIARY STOCK.
Borrower shall not:
108
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other
equity Securities of any of its Subsidiaries, except to
qualify directors if required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any
shares of capital stock or other equity Securities of any of
its Subsidiaries (including such Subsidiary), except to
Borrower, another Subsidiary of Borrower, or to qualify
directors if required by applicable law.
7.13 CONDUCT OF BUSINESS.
From and after the Closing Date, Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Borrower and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders.
7.14 AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS.
Neither Borrower nor any of its Subsidiaries will agree to any material
amendment to, or waive any of its material rights under any Related Agreement,
after the Closing Date without in each case obtaining the prior written consent
of Requisite Lenders to such amendment or waiver.
7.15 FISCAL YEAR AND FISCAL QUARTERS.
Borrower shall not change its Fiscal Year-end from December 31 or
the manner of calculation of its Fiscal Quarters.
7.16 INTEREST RATE HEDGE.
Borrower shall have failed to enter into a Hedge Agreement on terms
reasonably acceptable to the Lead Arranger on or prior to August 4, 2000,
pursuant to which Borrower shall hedge the interest rate on a notional amount of
at least 50% of the aggregate principal amount of the Term Loans as of August 4,
2000 at a rate not to exceed 12% for a period of at least three years after the
Closing Date.
7.17 [NON-MATERIAL SUBSIDIARIES
The Subsidiaries of Borrower, other than Material Subsidiaries, shall
not have (a) assets which account for 3% or more of the total assets of Borrower
and its Subsidiaries, or (b) revenue which is 3% or more of the total revenue of
Borrower and its Subsidiaries on a consolidated basis, in each case determined
based upon the most recent financial statements delivered pursuant to Section
6.1 ][Still under review]]
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
109
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrower to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Borrower to pay any
installment of interest on any Loan within three days of when due, whether at
stated maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment or otherwise; failure by Borrower to pay when due any
amount payable to an Issuing Lender in reimbursement of any drawing under a
Letter of Credit; or failure by Borrower to pay any fee or any other amount due
under this Agreement within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Borrower or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness with an aggregate principal amount of $500,000 (other
than the Palo Alto Lease or Indebtedness referred to in subsection 8.1) or
Contingent Obligations with an aggregate face amount of $500,000 in each case
beyond the end of any grace period provided therefor; or (ii) breach or default
by Borrower or any of its Subsidiaries with respect to any other material term
of (a) one or more items of Indebtedness with an aggregate principal amount of
$500,000 (other than the Palo Alto Lease) or Contingent Obligations with an
aggregate face amount of $500,000 or (b) any loan agreement, mortgage, indenture
or other agreement relating to such item(s) of Indebtedness or Contingent
Obligation(s), if the effect of such breach or default is to cause, or to permit
the holder or holders of that Indebtedness or Contingent Obligation(s) (or a
trustee on behalf of such holder or holders) to cause, that Indebtedness or
Contingent Obligation(s) to become or be declared due and payable prior to its
stated maturity or the stated maturity of any underlying obligation, as the case
may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Borrower to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Borrower or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Borrower or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Borrower or such Loan
110
Party becoming aware of such default or (ii) receipt by Borrower and such
Loan Party of notice from Administrative Agent or any Lender of such default;
or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Borrower or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other Similar relief shall be granted under any
applicable federal or state law; or (ii)an involuntary case shall be commenced
against Borrower or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Borrower or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Borrower or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Borrower or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Borrower or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Borrower or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) Borrower or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the Board of
Directors of Borrower or any of its Subsidiaries (or any committee thereof)
shall adopt any resolution or otherwise authorize any action to approve any of
the actions referred to in clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
(a) Any money judgment, writ or warrant of attachment or similar
process involving in the aggregate at any time an amount in excess of $500,000
(in any case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Borrower or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or
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(b) Any payment by Borrower or any of its Subsidiaries in the
aggregate at any time in excess of $1,000,000 related to any litigation or
threat of litigation; or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Borrower or any
of its Subsidiaries decreeing the dissolution or split up of Borrower or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in
excess of $1,000,000 during the term of this Agreement; or there shall exist an
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $1,000,000; or
8.11 PALO ALTO LEASE
There shall occur a final judgment of a court of competent jurisdiction
holding that Borrower shall be in violation in any material respect of the Palo
Alto Lease or terminating the Palo Alto Lease or permitting the lessee
thereunder to exercise any remedies under the Palo Alto Lease; or
8.12 MATERIAL ADVERSE EFFECT
Any event or change shall occur that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect; or
8.13 CHANGE IN CONTROL.
Fox Xxxxx or any Affiliate of Fox Xxxxx shall cease to beneficially own
and control at least a majority of the issued and outstanding shares of capital
stock of Borrower entitled (without regard to the occurrence of any contingency)
to vote for the election of members of the Board of Directors of Borrower; or
8.14 INVALIDITY OF SUBSIDIARY GUARANTY; FAILURE OF SECURITY.; REPUDIATION
OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or
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Administrative Agent shall not have or shall cease to have a valid and
perfected First Priority Lien in any Collateral purported to be covered
thereby having a fair market value, individually or in the aggregate,
exceeding 5100,000 (other than the Real Property Asset that is the subject of
the Palo Alto Lease in each case for any reason other than the failure of
Administrative Agent or any Lender to take any action within its control, or
(iii) any Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Loan Document
to which it is a party; or
8.15 FAILURE TO CONSUMMATE RECAPITALIZATION.
The Recapitalization shall not be consummated immediately after the
effectiveness of this Agreement in accordance with this Agreement and the
applicable Related Agreements concurrently with the making of the initial Loans,
or the Recapitalization shall be unwound, reversed or otherwise rescinded in
whole or in part for any reason:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7 with respect to the Borrower, each of (a) the unpaid principal amount of
and accrued interest on the Loans, (b)an amount equal to the maximum amount that
may at any time be drawn under all Letters of Credit then outstanding (whether
or not any beneficiary under any such Letter of Credit shall have presented, or
shall be entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letter of Credit), and (c) all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by Borrower, and the obligation of each Lender to make
any Loan, the obligation of Administrative Agent to issue any Letter of Credit
and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate, and (ii) upon the occurrence and during the continuation of
any other Event of Default, Administrative Agent shall, upon the written request
or with the written consent of Requisite Lenders, by written notice to Borrower,
declare all or any portion of the amounts described in clauses (a) through (c)
above to be, and the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan, the obligation of
Administrative Agent to issue any Letter of Credit and the right of any Lender
to issue any Letter of Credit hereunder shall thereupon terminate; PROVIDED that
the foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Borrower shall take commercially reasonable efforts to investigate the
monetizaton of the Palo Alto Lease commencing no later than the sixtieth (60th)
day following the occurrence of an Event of Default for the payment of money or
for the failure to comply with financial covenants set forth in subsection 7.6
hereof or upon an acceleration of the Loans; PROVIDED THAT Borrower shall have
no obligation hereunder if such Event of Default ceases to continue following
the occurrence thereof or such acceleration is rescinded, even if Borrower
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shall have failed to comply with the provisions of this paragraph prior to
the date on which such Event of Default ceases to continue or such
acceleration is rescinded.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph Borrower shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than nonpayment
of the principal of and accrued interest on the Loans, in each case which is due
and payable solely by virtue of acceleration) shall be remedied or waived
pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Borrower, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Borrower, and such provisions shall not at
any time be construed so as to grant Borrower the right to require Lenders to
rescind or annul any acceleration hereunder or to preclude Administrative Agent
or Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met.
SECTION 9. ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
A. APPOINTMENT OF ADMINISTRATIVE AGENT. CIBC is hereby
appointed Administrative Agent hereunder and under the other Loan Documents
and each Lender hereby authorizes Administrative Agent to act as its
Administrative Agent in accordance with the terms of this Agreement and the
other Loan Documents. Administrative Agent agrees to act upon the express
conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Administrative Agent and Lenders and Borrower shall have no rights as a third
party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, Administrative Agent shall act
solely as an Administrative Agent of Lenders and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of
agency or trust with or for Borrower or any of its Subsidiaries.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as Administrative
Agent or trustee in such jurisdiction. It is recognized that in case of
litigation under this Agreement or any of the other Loan Documents, and in
particular in case of the enforcement of any of the Loan Documents, or in
case Administrative Agent deems that by reason of any present or future law
of any jurisdiction it may not exercise any of the rights, powers or remedies
granted herein or in any of the other Loan Documents or take any other action
which may be desirable or necessary in connection therewith, it may be
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necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, Collateral Agent or collateral
co-Administrative Agent (any such additional individual or institution being
referred to herein individually as a "SUPPLEMENTAL COLLATERAL AGENT" and
collectively as "SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Borrower or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Borrower shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
X. XXXXXX; DUTIES SPECIFIED. Each Lender irrevocably
authorizes Administrative Agent to take such action on such Lender's behalf
and to exercise such powers, rights and remedies hereunder and under the
other Loan Documents as are specifically delegated or granted to
Administrative Agent by the terms hereof and thereof, together with such
powers, rights and remedies as are reasonably incidental thereto.
Administrative Agent shall have only those duties and responsibilities that
are expressly specified in this Agreement and the other Loan Documents.
Administrative Agent may exercise such powers, rights and remedies and
perform such duties by or through its Administrative Agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of
the other Loan Documents, a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any of the other Loan Documents, expressed
or implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of
the other Loan Documents except as expressly set forth herein or therein.
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B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Administrative
Agent shall not be responsible to any Lender for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made by or on behalf of Borrower to Administrative Agent or any
Lender in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Borrower or any other Person liable for the payment of any Obligations, nor
shall Administrative Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the
use of the proceeds of the Loans or the use of the Letters of Credit or as to
the existence or possible existence of any Event of Default or Potential
Event of Default. Administrative Agent shall only be responsible to Lenders
for those express written representations and warranties made by
Administrative Agent to Lenders in connection with the Loan Documents and the
transactions contemplated thereby. Anything contained in this Agreement to
the contrary notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding Loans or
the Letter of Credit Usage or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither Administrative Agent nor
any of its officers, directors, employees or Administrative Agents shall be
liable to Lenders for any action taken or omitted by Administrative Agent
under or in connection with any of the Loan Documents except to the extent
caused by Administrative Agent's gross negligence or willful misconduct.
Administrative Agent shall be entitled to refrain from any act or the taking
of any action (including the failure to take an action) in connection with
this Agreement or any of the other Loan Documents or from the exercise of any
power, discretion or authority vested in it hereunder or thereunder unless
and until Administrative Agent shall have received instructions in respect
thereof from Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 10.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may
be), Administrative Agent shall be entitled to act or (where so instructed)
refrain from acting, or to exercise such power, discretion or authority, in
accordance with such instructions. Without prejudice to the generality of the
foregoing, (i) Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by
the proper person or persona, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Borrower and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right
of action whatsoever against Administrative Agent as a result of
Administrative Agent acting or (where so instructed) refraining from acting
under this Agreement or any of the other Loan Documents in accordance with
the instructions of Requisite Lenders (or such other Lenders as may be
required to give such instructions under subsection 10.6).
D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The agency
hereby created shall in no way impair or affect any of the rights and powers
of, or impose any duties
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or obligations upon, Administrative Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans and the
Letters of Credit, Administrative Agent shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of banking, trust, financial advisory or
other business with Borrower or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Borrower for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrower and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Borrower and its Subsidiaries.
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and Administrative Agent
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, to the extent that Administrative Agent shall
not have been reimbursed by Borrower, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents; PROVIDED that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent's gross negligence or willful misconduct.
9.5 SUCCESSOR ADMINISTRATIVE AGENT.
SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at any
time by giving 30 days' prior written notice thereof to Lenders and Borrower,
and Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Borrower and
Administrative Agent and signed by
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Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Borrower, to appoint a successor Administrative Agent. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed
Administrative Agent's resignation or removal hereunder as Administrative
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
9.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the Administrative Agent for and representative of
Lenders under the Subsidiary Guaranty, and each Lender agrees to be bound by the
terms of each Collateral Document and the Subsidiary Guaranty; PROVIDED that
Administrative Agent shall not (i) enter into or consent to any material
amendment, modification, termination or waiver of any provision contained in any
Collateral Document or the Subsidiary Guaranty or (ii) release any Collateral
(except as otherwise expressly permitted or required pursuant to the terms of
this Agreement or the applicable Collateral Document), in each case without the
prior consent of Requisite Lenders (or, if required pursuant to subsection 10.6,
all Lenders); PROVIDED FURTHER, HOWEVER, that, without further written consent
or authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a)release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented or (b)release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the capital
stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of Borrower) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented. Anything
contained in any of the Loan Documents to the contrary notwithstanding,
Borrower, Administrative Agent and each Lender hereby agree that (X) no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document or to enforce the Subsidiary Guaranty, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents and the Subsidiary Guaranty may be exercised solely by Administrative
Agent for the benefit of Lenders in accordance with the terms thereof, and (Y)
in the event of a foreclosure by Administrative Agent on any of the Collateral
pursuant to a public or private sale, Administrative Agent or any Lender may be
the purchaser of any or all of such Collateral at any such sale and
Administrative Agent, as Administrative Agent for and representative of Lenders
(but not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Administrative Agent at such sale.
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9.7 CO-AGENT, CO-ARRANGER AND SYNDICATION AGENT
Any Lender identified on the facing page, the introduction, the
signature pages or in any provision of this Agreement as "co-agent,"
"co-arranger" or "syndication agent" shall have no right, power, obligation,
liability, responsibility or duty under this Agreement or any other Loan
Document other than in its capacity as a Lender hereunder. Without limiting the
foregoing, any Lender so identified as "co-agent," "co-arranger" or "syndication
agent" shall not have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any Lenders so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall
have the right at any time to (i) sell, assign or transfer to any Eligible
Assignee, or (ii) sell participations to any Person in, all or any part of
its Commitments or any Loan or Loans made by it or its Letters of Credit or
participations therein or any other interest herein or in any other
Obligations owed to it; PROVIDED that no such sale, assignment, transfer or
participation shall, without the consent of Borrower, require Borrower to
file a registration statement with the Securities and Exchange Commission or
apply to qualify such sale, assignment, transfer or participation under the
securities laws of any state; PROVIDED, FURTHER that no such sale, assignment
or transfer described in clause (i) above shall be effective unless and until
an Assignment Agreement effecting such sale, assignment or transfer shall
have been accepted by Administrative Agent and recorded in the Register as
provided in subsection 10.1B(ii); PROVIDED, FURTHER that no such sale,
assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Revolving Loan
Commitment and the Revolving Loans of the Lender effecting such sale,
assignment, transfer or participation. Except as otherwise provided in this
subsection 10.1, no Lender shall, as between Borrower and such Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment or transfer of, or any granting of participations in, all or any
part of its Commitments or the Loans, the Letters of Credit or participations
therein, or the other Obligations owed to such Lender, and such Lender shall
remain solely responsible for the performance of such Obligations, and the
Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement.
B. ASSIGNMENTS.
(i) AMOUNTS AND TERMS OF ASSIGNMENTS. Each Commitment, Loan,
Letter of Credit or participation therein, or other Obligation may
(a) be assigned in any amount to another Lender, or to an Affiliate or
Affiliated Fund of the assigning Lender or another Lender, with the
giving of notice to Borrower and Administrative Agent or (b) be
assigned in an aggregate amount of not less than $2,500,000 (or such
lesser amount as shall constitute the aggregate amount of the
Commitments, Loans,
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Letters of Credit and participations therein, and other
Obligations of the assigning Lender) to any other Eligible Assignee
with the giving of notice to Borrower and with the consent of
Administrative Agent and, provided no Event of Default has occurred and
is continuing, Borrower (which consent of Borrower and Administrative
Agent shall not be unreasonably withheld or delayed). To the extent of
any such assignment in accordance with either clause (a) or (b) above,
the assigning Lender shall be relieved of its obligations with respect
to its Commitments, Loans, Letters of Credit or participations therein,
or other Obligations or the portion thereof so assigned. The parties to
each such assignment shall execute and deliver to Administrative Agent,
for its acceptance and recording in the Register, an Assignment
Agreement, together with a processing fee and recordation fee of $3,500
and such forms, certificates or other evidence, if any, with respect to
United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under subsection
10.9B) and be released from its obligations under this Agreement (and,
in the case of an Assignment Agreement coveting all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto; PROVIDED that,
anything contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is the Issuing Lender with respect to
any outstanding Letters of Credit such Lender shall continue to have
all rights and obligations of an Issuing Lender with respect to such
Letters of Credit until the cancellation or expiration of such Letters
of Credit and the reimbursement of any amounts drawn thereunder). The
Commitments hereunder shall be modified to reflect the Commitment of
such assignee and any remaining Commitment of such assigning Lender
and, if any such assignment occurs after the issuance of any Notes
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the assignee and/or the
assigning Lender in accordance with subsection 2.1D, be issued to the
assignee and/or to the assigning Lender, substantially in the form of
Exhibit IV, EXHIBIT V or EXHIBIT VI annexed hereto, as the case may be,
with appropriate insertions, to reflect the new Commitments and/or
outstanding Tranche A Term Loans and/or Tranche B Term Loans, as the
case may be, of the assignee and/or the assigning Lender.
(ii) ACCEPTANCE BY ADMINISTRATIVE AGENT; RECORDATION IN
REGISTER. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 10.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that
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such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a). Administrative Agent shall,
if Administrative Agent (and if necessary, Borrower) has consented to
the assignment evidenced thereby (in each case to the extent such
consent is required pursuant to subsection 10.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided
therein (which acceptance shall evidence any required consent of
Administrative Agent to such assignment), (b) record the information
contained therein in the Register, and (c) give prompt notice thereof
to Borrower. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in
this subsection 10.1B(ii).
C. PARTICIPATIONS. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the participant, agree to any amendment,
modification or waiver which shall (i) increase such participant's Tranche A
Term Loan Exposure, Tranche B Term Loan Exposure, or Revolving Loan Exposure,
as applicable, (ii) reduce the principal amount of any Loan or reduce the
rate of interest thereon, or reduce any fees payable hereunder, (iii)
postpone the scheduled date of payment of the principal amount of any Loan,
or any interest thereon, or any fees payable hereunder, or reduce the amount
of, waive or excuse any such payment, (iv) postpone the scheduled date of
expiration of any Tranche A Term Loan Exposure, Tranche B Term Loan Exposure,
or Revolving Loan Exposure, as applicable or (v) release all or a material
portion of the Collateral or any Guarantor. The Borrower agrees that each
participant shall be entitled to the benefits of subsections 2.6D, 2.7, and
3.6 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to this subsection 10.1C; provided however, that in no
event shall the Borrower be obligated to make any payment with respect to
such Sections which is greater than the amount that the Borrower would have
paid to the Lender had no such participation been sold. To the extent
permitted by law, in the event that any 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 a Lender under the Agreement.
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of
this subsection 10.1, any Lender may assign and pledge all or any portion of
its Loans, the other Obligations owed to such Lender, and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; PROVIDED that (i) no Lender shall, as
between Borrower and such Lender, be relieved of any of its obligations
hereunder as a result of any such assignment and pledge and (ii)in no event
shall such Federal Reserve Bank be considered to be a "Lender" or be entitled
to require the assigning Lender to take or omit to take any action hereunder.
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E. INFORMATION. Each Lender may furnish any information
concerning Borrower and its Subsidiaries in the possession of that Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the
signature pages hereof hereby represents and warrants (i) that it is an
Eligible Assignee described in clause (A) of the definition thereof; (ii)
that it has experience and expertise in the making of loans such as the
Loans; and (iii) that it will make its Loans for its own account in the
ordinary course of its business and without a view to distribution of such
Loans within the meaning of the Securities Act or the Exchange Act or other
federal securities laws (it being understood that, subject to the provisions
of this subsection 10.1, the disposition of such Loans or any interests
therein shall at all times remain within its exclusive control). Each Lender
that becomes a party hereto pursuant to an Assignment Agreement shall be
deemed to agree that the representations and warranties of such Lender
contained in Section 2(c) of such Assignment Agreement are incorporated
herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the actual and
reasonable costs of furnishing all opinions by counsel for Borrower (including
any opinions requested by Administrative Agent as to any legal matters arising
hereunder) and of Borrower's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Administrative Agent in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Borrower; (iv) all the
actual costs and reasonable expenses of creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums, and reasonable fees,
expenses and disbursements of counsel to Administrative Agent and of counsel
providing any opinions that Administrative Agent or Requisite Lenders may
request in respect of the Collateral Documents or the Liens created pursuant
thereto; (v) all the actual costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and
Administrative Agents employed or retained by Administrative Agent or its
counsel) of obtaining and reviewing any appraisals provided for under subsection
4.1L or 6.9C, any environmental audits or reports provided for under subsection
4.1M or 6.9B(viii) and any audits or reports provided for under subsection 4.1K
or 6.5B with respect to Inventory and accounts receivable of Borrower and its
Subsidiaries; (vi) the custody or preservation of any of the Collateral; (vii)
all other actual and reasonable costs and expenses incurred by Administrative
Agent in connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions
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contemplated thereby; and (viii)after the occurrence of an Event of Default,
all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel), costs of advisors, and costs of
settlement, incurred by Administrative Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party
hereunder or under the other Loan Documents by reason of such Event of
Default (including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Subsidiary
Guaranty) or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings.
Notwithstanding any provision contained in this Agreement or any Loan
Document to the contrary, the obligation to make payments of expenses contained
herein or therein shall be limited to expenses that are actual and reasonable.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to defend (subject to Borrower's selection of counsel which
counsel shall be reasonably acceptable to Indemnitees), indemnify, pay and hold
harmless Administrative Agent and Lenders, and the officers, directors,
employees, counsel, agents, representatives, advisors and affiliates of
Administrative Agent and Lenders (collectively called the "INDEMNITEES"), from
and against any and all Indemnified Liabilities (as hereinafter defined);
PROVIDED that Borrower shall not have any obligation to any Indemnitee hereunder
with respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction; and PROVIDED FURTHER, that Borrower shall be obligated to pay the
fees, expenses or disbursements of only one counsel for all Indemnitees
hereunder (other than any special local counsel or counsel for specific purposes
which represents the Indemnitees) unless in any Indemnitee's reasonable judgment
a conflict of interest between such Indemnitee and any other Indemnitee exists,
in which case Borrower shall indemnify such Indemnitee for the fees, expenses or
disbursements of its own separate counsel.
As used herein, "Indemnified Liabilities" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or xxxxx any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
`statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in
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any manner relating to or arising out of (i) this Agreement or the other Loan
Documents or the Related Agreements or the transactions contemplated hereby or
thereby (including Lenders' agreement to make the Loans hereunder or the use or
intended use of the proceeds thereof or the issuance of Letters of Credit
hereunder or the use or intended use of any thereof, or any enforcement of any
of the Loan Documents (including any sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Subsidiary
Guaranty), (ii) the statements contained in the commitment letter delivered by
any Lender to Borrower with respect thereto, or (iii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Borrower or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Borrower at any time or
from time to time, without notice to Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the credit or the account of Borrower against and on account of the
obligations and liabilities of Borrower to that Lender under this Agreement, the
Letters of Credit and participations therein and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement, the Letters of Credit and participations therein or any
other Loan Document, irrespective of whether or not (i) that Lender shall have
made any demand hereunder or (ii) the principal of or the interest on the Loans
or any amounts in respect of the Letters of Credit or any other amounts due
hereunder shall have become due and payable pursuant to Section 8 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured. Borrower hereby further grants to Administrative Agent and each
Lender a security interest in all deposits and accounts maintained with
Administrative Agent or such Lender as security for the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
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respect of Letters of Credit, fees and other amounts then due and owing to
that Lender hereunder or under the other Loan Documents (collectively, the
"AGGREGATE AMOUNTS DUE" to such Lender) which is greater than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify Administrative Agent and each other Lender of the receipt of
such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller
of a participation simultaneously upon the receipt by such seller of its
portion of such payment) in the Aggregate Amounts Due to the other Lenders so
that all such recoveries of Aggregate Amounts Due shall be shared by all
Lenders in proportion to the Aggregate Amounts Due to them; PROVIDED that if
all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Borrower or otherwise, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery,
but without interest. Borrower expressly consents to the foregoing
arrangement and agrees that any holder of a participation so purchased may
exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Borrower
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; PROVIDED that any such amendment, modification, termination,
waiver or consent which:
(a) reduces the principal amount of any of the Loans;
(b) changes in any manner the definition of "Pro Rata Share",
the definition of "Class", the definition of "Requisite Class Lenders"
or the definition of "Requisite Lenders";
(c) changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of
all Lenders;
(d) postpones the date or reduces the amount of any scheduled
payment, including the final payment date, (but not prepayment) of
principal of any of the Loans;
(e) postpones the date on which any interest or any fees are
payable; decreases the interest rate borne by any of the Loans (other
than any waiver of any increase in the interest rate applicable to any
of the Loans pursuant to subsection 2.2E) or the amount of any fees
payable hereunder;
(f) increases the maximum duration of Interest Periods
permitted hereunder;
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(g) reduces the amount or postpones the due date of any amount
payable in respect of, or extends the required expiration date of, any
Letter of Credit;
(h) changes in any manner the obligations of Lenders relating
to the purchase of participations in Letters of Credit;
(i) releases any Lien granted in favor of Administrative
Agent with respect to all or any substantial part of the Collateral;
(j) eliminates the Borrowing Base or changes the advance rates
on Eligible Inventory or Eligible Accounts Receivable contained in the
definition of "Borrowing Base";
(k) releases all or substantially all of the Subsidiary
Guarantors from their obligations under the Subsidiary Guaranty, in
each case other than in accordance with the terms of the Loan
Documents;
(l) increases the Commitment of any Lender; or
(m) changes in any manner the provisions contained in
subsection 8.1 or this subsection 10.6
shall be effective only if evidenced by a writing signed by or on
behalf of all Lenders. In addition, (i) any amendment, modification, termination
or waiver of any of the provisions contained in Section 4 shall be effective
only if evidenced by a writing signed by or on behalf of Administrative Agent
and Requisite Lenders, (ii) no amendment, modification, termination or waiver of
any provision of any Note shall be effective without the written concurrence of
the Lender which is the holder of that Note, (iii) no amendment, modification,
termination or waiver of any provision of Section 9 or of any other provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of Administrative Agent shall be effective without the written
concurrence of Administrative Agent, and (iv) no amendment, modification,
termination or waiver of any provision of subsection 2.4 which has the effect of
changing any interim scheduled payments, voluntary or mandatory prepayments, or
Commitment reductions applicable to any Class (the "AFFECTED CLASS") in a manner
that disproportionately disadvantages such Class relative to any other Class
shall be effective without the written concurrence of Requisite Class Lenders of
the Affected Class (it being understood and agreed that any amendment,
modification, termination or waiver of any such provision which only postpones
or reduces any interim scheduled payments, voluntary or mandatory prepayments,
or Commitment reductions from those set forth in subsection 2.4 with respect to
one Class but not any other Class shall be deemed to disproportionately
disadvantage such one Class but not to disproportionately disadvantage such
other Class for purposes of this clause (iv)). Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on Borrower in
any case shall entitle Borrower to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in
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accordance with this subsection 10.6 shall be binding upon each Lender at the
time outstanding, each future Lender and, if signed by Borrower, on Borrower.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; PROVIDED that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Borrower and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Borrower set forth in subsections
2.6D, 2.7, 3.5A, 3.6, 10.2, 10.3 and 10.4 herein and Section 13 of the
Collateral Account Agreement and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
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10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
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10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrower without the prior written consent of all
Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO BORROWER AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
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10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Borrower in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
lending practices, it being understood and agreed by Borrower that in any event
a Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process;
PROVIDED that, unless specifically prohibited by applicable law or court order,
each Lender shall use reasonable efforts to notify Borrower of any request by
any governmental agency or representative thereof (other than any such request
in connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information; and PROVIDED, FURTHER that in no event
shall any Lender be obligated or required to return any materials furnished by
Borrower or any of its Subsidiaries or liable for any failure to provide such
notice to Borrower; and PROVIDED, FURTHER that this subsection 10.19 shall not
apply to any information from and after the time such information becomes known
to the public, if a breach of this subsection 10.19 by any Lender was not the
cause of such item becoming known to the public; and PROVIDED, FURTHER that this
subsection
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10.19 shall not apply to any information that any Lender may disclose to the
extent reasonably required in connection with any litigation or proceeding to
which the Administrative Agent, any Lender or their respective Affiliates may be
party; to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document, to such Lender's independent
auditors and other professional advisors, or any participant or assignee, actual
or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of the Lenders hereunder.
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER:
XXXXXXX-XXXXXXX COMPANY
By: /s/ XXXXXXX XXXXXXXXX
---------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President and Chief Executive Officer
Notice Address:
XXXXXXX-XXXXXXX COMPANY
STANFORD RESEARCH PARK
0000 XXXXXXXX XXXXXX
XXXX XXXX, XX 00000
S-1
ADMINISTRATIVE AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE, as
Administrative Agent
By: /s/ XXXX XXXXXXX
-----------------------
Xxxx Xxxxxxx
Managing Director
CIBC World Markets Corp., AS AGENT
Notice Address:
CANADIAN IMPERIAL BANK OF COMMERCE
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Agency Services Department
LENDERS:
CIBC INC., as a Lender
By: /s/ XXXX XXXXXXX
-----------------------
Xxxx Xxxxxxx
Managing Director
CIBC World Markets Corp., AS AGENT
Notice Address:
CANADIAN IMPERIAL BANK OF COMMERCE
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Agency Services Department
S-2
BT COMMERCIAL CORPORATION, as
a Lender
By:
-----------------------
S-3
IBM CREDIT CORPORATION, as a Lender
By: /s/ Xxxxxxxxx Xxxxxx
-----------------------
Xxxxxxxxx Xxxxxx
Manager of Commercial Financing
S-4
COMERICA BANK-CALIFORNIA, as a Lender
By: /s/ XXXX X. XXXXX, V.P.
-----------------------
S-5
