$225,000,000
CREDIT AGREEMENT
Dated as of July 1, 1999
Among
INTERNATIONAL RECTIFIER CORPORATION
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN
and
SANWA BANK CALIFORNIA
as Syndication Agent
and
BANQUE NATIONALE DE PARIS
as Sole Arranger, Administrative Agent and Issuing Bank
T A B L E O F C O N T E N T S
Section Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms....................................................1
1.02. Computation of Time Periods; Other Definitional Provisions..............24
1.03. Accounting Terms........................................................24
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCESAND THE LETTERS OF CREDIT
2.01. The Advances and the Letters of Credit.................................24
2.02. Making the Advances....................................................25
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit ....27
2.04. Repayment of Advances..................................................28
2.05. Termination or Reduction of the Commitments............................30
2.06. Prepayments............................................................31
2.07. Interest...............................................................33
2.08. Fees...................................................................34
2.09. Conversion of Advances.................................................35
2.10. Increased Costs, Etc...................................................35
2.11. Payments and Computations..............................................37
2.12. Taxes..................................................................38
2.13. Sharing of Payments, Etc...............................................40
2.14. Use of Proceeds........................................................41
2.15. Evidence of Debt.......................................................41
ARTICLE III CONDITIONS OF LENDING ANDISSUANCES OF LETTERS OF CREDIT
3.01. Conditions Precedent to Initial Extension of Credit....................42
3.02. Conditions Precedent to Each Borrowing and Issuance....................48
3.03. Determinations Under Section 3.01......................................48
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower..........................49
ARTICLE V COVENANTS
5.01. Affirmative Covenants..................................................55
5.02. Negative Covenants.....................................................61
5.03. Reporting Requirements.................................................68
5.04. Financial Covenants....................................................71
ARTICLE VI EVENTS OF DEFAULT
6.01. Events of Default......................................................73
6.02. Actions in Respect of the Letters of Credit upon Default...............76
ARTICLE VII THE AGENTS
7.01. Authorization and Action...............................................77
7.02. Agents' Reliance, Etc..................................................77
7.03. BNP and Affiliates.....................................................78
7.04. Lender Party Credit Decision...........................................78
7.05. Indemnification........................................................78
7.06. Successor Agents.......................................................79
7.07. Additional Agents......................................................80
ARTICLE VIII MISCELLANEOUS
8.01. Amendments, Etc........................................................80
8.02. Notices, Etc...........................................................81
8.03. No Waiver; Remedies....................................................82
8.04. Costs and Expenses.....................................................82
8.05. Right of Set-off.......................................................83
8.06. Binding Effect.........................................................84
8.07. Assignments and Participations.........................................84
8.08. Confidentiality........................................................86
8.09. Execution in Counterparts..............................................86
8.10. No Liability of the Issuing Bank.......................................87
8.11. Jurisdiction, Etc......................................................87
8.12. Governing Law..........................................................88
8.13. Waiver of Jury Trial...................................................88
iii
Section Page
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule 1.01 - Fiscal Year 1999 Adjustment
Schedule 3.01(a)(iii)(A)(2) - Condition subsequent Non-U.S. Subsidiary
Grantors
Schedule 3.01(a)(iii)(H) - Blocked Account Banks
Schedule 3.01(a)(iii)(I) - Landlord Consents
Schedule 3.01(a)(iii)(K) - Non-U.S. Subsidiary Grantors
Schedule 3.01(a)(x) - Secretary of State Certificates
Schedule 3.01(a)(xiv) - Environmental Assessment Reports
Schedule 3.01(g) - Surviving Debt
Schedule 4.01(a) - Inactive Corporation
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and
Filings
Schedule 4.01(h) - Pending Litigation
Schedule 4.01(m)(vi) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(n)(ii) - NPL or CERCLIS
Schedule 4.01(n)(iii) - Environmental Investigations, Assessments and
Remedial Actions
Schedule 4.01(o) - Open Years
Schedule 4.01(q) - Existing Debt
Schedule 4.01(r) - Owned Real Property
Schedule 4.01(s) - Leased Real Property
iv
Schedule 4.01(t) - Investments
Schedule 4.01(u) - Intellectual Property
Schedule 4.01(v) - Existing Liens
Schedule 5.02(e)(iv) - Assets held for Sale
EXHIBITS
Exhibit A-1 - Form of Term A Note
Exhibit A-2 - Form of Term B Note
Exhibit A-3 - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Mortgage
Exhibit F-1 - Form of U.S. Guaranty
Exhibit F-2 - Form of Non-U.S. Guaranty
Exhibit G-1 - Form of Opinion of Loan Parties
Exhibit G-2 - Form of Opinion of L. Xxxxxxx Xxxxxxx
Exhibit H - Form of Solvency Certificate
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of July 1, 1999 among International Rectifier
Corporation, a Delaware corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Lenders (the "Initial Lenders"), Sanwa Bank California, as
syndication agent (the "Syndication Agent"), and Banque Nationale de Paris
("BNP"), as sole arranger, as issuing bank (the "Issuing Bank") and as
administrative agent (together with any successors appointed pursuant to Article
VII, the "Administrative Agent") for the Lender Parties (as hereinafter
defined).
PRELIMINARY STATEMENTS:
(1) The Borrower has requested that the Lender Parties lend to the
Borrower up to $225,000,000 in order to refinance certain existing Debt (as
hereinafter defined), to pay transaction fees and expenses, to provide working
capital for the Borrower and its Subsidiaries and for other general corporate
purposes permitted hereby.
(2) The Lender Parties have indicated their willingness to agree to lend
such amounts on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition Expenditures" means, for any period, all cash expenditures
made, directly or indirectly, by the Borrower or any of its Subsidiaries for
Permitted Acquisitions.
"Administrative Agent" has the meaning specified in the recital of parties
to this Agreement.
"Administrative Agent's Account" means the account of the Administrative
Agent maintained by the Administrative Agent at the Federal Reserve Bank of New
York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA No. 000000000, for
further credit to Account No. 750420-701-03, Reference: International Rectifier
Corporation, or such other account maintained by the Administrative Agent and
designated by the Administrative Agent in a written notice to the Lender Parties
and the Borrower.
"Advance" means a Term A Advance, a Term B Advance, a Revolving Credit
Advance or a Letter of Credit Advance.
2
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Interests of such Person
or to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Interests, by contract or
otherwise.
"Agents" means the Administrative Agent, the Syndication Agent and any
Person appointed by the Administrative Agent pursuant to Section 7.07.
"Agreement Value" means, for each Hedge Agreement, on any date of
determination, an amount determined by the Administrative Agent equal to: (a) in
the case of a Hedge Agreement documented pursuant to the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and Derivatives
Association, Inc. (the "Master Agreement"), the amount, if any, that would be
payable by any Loan Party or any of its Subsidiaries to its counterparty to such
Hedge Agreement, as if (i) such Hedge Agreement was being terminated early on
such date of determination, (ii) such Loan Party or Subsidiary was the sole
"Affected Party", and (iii) the Administrative Agent was the sole party
determining such payment amount (with the Administrative Agent making such
determination pursuant to the provisions of the form of Master Agreement); or
(b) in the case of a Hedge Agreement traded on an exchange, the xxxx-to-market
value of such Hedge Agreement, which will be the unrealized loss on such Hedge
Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge
Agreement determined by the Administrative Agent based on the settlement price
of such Hedge Agreement on such date of determination, or (c) in all other
cases, the xxxx-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a
Loan Party party to such Hedge Agreement determined by the Administrative Agent
as the amount, if any, by which (i) the present value of the future cash flows
to be paid by such Loan Party or Subsidiary exceeds (ii) the present value of
the future cash flows to be received by such Loan Party or Subsidiary pursuant
to such Hedge Agreement; capitalized terms used and not otherwise defined in
this definition shall have the respective meanings set forth in the above
described Master Agreement.
"Applicable Lending Office" means, with respect to each Lender Party, such
Lender Party's Domestic Lending Office in the case of a Base Rate Advance and
such Lender Party's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means, as of any date during the period commencing on
the Initial Extension of Credit and, with respect to the Term A Facility and the
Revolving Credit Facility, ending on December 31, 1999 (the "Interest Adjustment
Date"), a percentage per annum determined as set forth below:
Facility Base Rate Advances Eurodollar Rate Advances
-------- ------------------ ------------------------
Term A Facility 2.00% 3.00%
3
Term B Facility 2.50% 3.50%
Revolving Credit Facility 2.00% 3.00%
provided, however, that the Applicable Margin for the Term B Facility shall, as
at the end of any Rolling Period following the Interest Adjustment Date, be (A)
decreased by 0.25% if the Leverage Ratio is less than 2.00 to 1.00, or (B)
increased by 0.25% if the Leverage Ratio is greater than 3.00 to 1.00, and, with
respect to the Term A Facility and the Revolving Credit Facility as at any date
after the Interest Adjustment Date, a percentage per annum determined by
reference to the Leverage Ratio of the Borrower and its Subsidiaries for the
Rolling Period ended on or most recently prior to such Date as set forth below:
====================================================
Eurodollar
Leverage Base Rate Rate
Ratio Advances Advances
Term A and Term A and
Revolving Revolving
Credit Credit
Facilities Facilities
----------------------------------------------------
Level I
less than 2.00 to 1.00 1.25% 2.25%
----------------------------------------------------
Level II
greater than or equal
to 2.00 to 1.00 but
less than or equal to
2.50 to 1.00 1.75% 2.75%
----------------------------------------------------
Level III
greater than 2.50 to
1.00 but less than or
equal to 3.00 to 1.00 2.00% 3.00%
----------------------------------------------------
Level IV
greater than 3.00 to 1.00 2.25% 3.25%
====================================================
provided, however, that (i) no change in the Applicable Margin based on the
Leverage Ratio shall be effective until three Business Days after the date on
which the Administrative Agent receives the financial information required to be
delivered pursuant to Section 5.03(b) and (ii) the Applicable
4
Margin shall be, for the Term A and Revolving Credit Facilities at Level IV,
and, for the Term B Facility at 3.75%, for so long as the Borrower has not
submitted to the Administrative Agent the information described in clause (i) of
this proviso as and when required under Section 5.03(b).
"Appropriate Lender" means, at any time, with respect to (a) any of the
Term A, Term B or Revolving Credit Facilities, a Lender that has a Commitment
with respect to such Facility at such time, and (b) the Letter of Credit
Facility, (i) the Issuing Bank and (ii) if the other Revolving Credit Lenders
have made Letter of Credit Advances pursuant to Section 2.03(c) that are
outstanding at such time, each such other Revolving Credit Lender.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee and accepted by the
Administrative Agent, in accordance with Section 8.07 and in substantially the
form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by BNP in New York, New
York, from time to time, as its prime rate (and such term shall not be
construed to be its best or most favorable rate); and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided in
Section 2.07(a)(i).
"BNP" has the meaning specified in the recital of parties to this
Agreement.
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrowing" means a Term A Borrowing, a Term B Borrowing or a Revolving
Credit Borrowing.
"Business Day" means a day of the year on which banks are not required or
authorized by law to close in Xxx Xxxx Xxxx xx Xxx Xxxxxxxxx, Xxxxxxxxxx and, if
the applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
5
"Capital Expenditures" means, for any Person for any period, all cash
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or equipment on a Consolidated balance sheet of
such Person; provided, however, that Capital Expenditures shall not include
Acquisition Expenditures.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent owned by the
Borrower or any of its Subsidiaries free and clear of all Liens other than Liens
created under the Collateral Documents and having a maturity of not greater than
180 days from the date of acquisition thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) certificates of
deposit of or time deposits with any commercial bank that is a Lender Party or a
member of the Federal Reserve System, issues (or the parent of which issues)
commercial paper rated as described in clause (c), is organized under the laws
of the United States or any State thereof and has combined capital and surplus
of at least $1 billion, (c) commercial paper in an aggregate amount of no more
than $250,000 per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and rated at least
"Prime-1" (or the then equivalent grade) by Xxxxx'x Investors Service, Inc. or
"A-1" (or the then equivalent grade) by Standard & Poor's Ratings Group, a
division of the McGraw Hill Companies, Inc., or (d) money market or mutual funds
that invest solely in Cash Equivalents of the types described in clauses (a),
(b) and (c) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Change of Control" means the occurrence of any of the following: (a) any
Person or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly,
of Voting Interests of the Borrower (or other securities convertible into such
Voting Interests) representing 25% or more of the combined voting power of all
Voting Interests of the Borrower; or (b) during any period of up to 24
consecutive months, commencing after the date of this Agreement, individuals who
at the beginning of such 24-month period were directors of the Borrower shall
cease for any reason to constitute a majority of the board of directors of the
Borrower; or (c) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
6
acquisition of control over Voting Interests of the Borrower (or other
securities convertible into such Voting Interests) representing 25% or more of
the combined voting power of all Voting Interests of the Borrower.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Collateral Documents" means the Security Agreement, the Mortgages, if
any, and any other agreement that creates or purports to create a Lien in favor
of the Administrative Agent for the benefit of the Secured Parties.
"Commitment" means a Term A Commitment, a Term B Commitment, a Revolving
Credit Commitment or a Letter of Credit Commitment.
"Confidential Information" means information that any Loan Party furnishes
to the Agent or any Lender Party or the Agent or any Lender Party otherwise
obtains on a confidential basis, but does not include any such information that
is or becomes generally available to the public or that is or becomes available
to such Agent or such Lender Party from a source other than the Loan Parties.
"Consolidated" refers, with respect to any Person, to the consolidation of
accounts of such Person and its Subsidiaries in accordance with GAAP.
"Contingent Obligation" means, with respect to any Person, any Obligation
or arrangement of such Person to guarantee or intended to guarantee any Debt,
leases, dividends or other payment Obligations ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other 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 a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof. The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
7
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.09 or
2.10.
"Debt" of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money, (b) all Obligations, contingent or otherwise, of
such Person for the deferred purchase price of property (including, without
limitation, synthetic leases) or services (other than trade payables not overdue
by more than 60 days incurred in the ordinary course of such Person's business),
(c) all Obligations, contingent or otherwise, of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations, contingent
or otherwise, of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Obligations, contingent or otherwise, of such Person as
lessee under Capitalized Leases, (f) all Obligations, contingent or otherwise,
of such Person under acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interests in such Person or any other
Person or any warrants, rights or options to acquire such capital stock, (h) all
Obligations of such Person in respect of Hedge Agreements, (i) all Contingent
Obligations of such Person and (j) all indebtedness and other payment
Obligations referred to in clauses (a) through (i) above of another Person
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness or other payment Obligations.
"Declining Lender" has the meaning specified in Section 2.06(c).
"Default" means any Event of Default or any event that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"Default Termination Notice" has the meaning specified in Section 2.01(e).
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower
and the Administrative Agent.
"EBITDA" means, for any period, the sum, determined on a Consolidated
basis, of (a) net income (or net loss), (b) Interest Expense, (c) income tax
expense, (d) depreciation expense, (e) amortization expense, (f) noncash charges
incurred in connection with stock options granted to employees of the Borrower,
(g) extraordinary, non-recurring, non-cash transactional or unusual losses
deducted in calculating net income less extraordinary, non-recurring, non-cash
transactional or unusual gains added in calculating net income and (h) for each
Fiscal Quarter ending prior to March 31, 2000, the Fiscal Year 1999 Adjustment
(in an amount not to exceed $35,000,000); provided, however, there
8
shall be excluded from EBITDA, to the extent therein included, all non-cash
foreign currency and Hedge Agreement losses and all non-cash foreign currency
and Hedge Agreement gains.
"Eligible Assignee" means (a) with respect to any Facility: (i) a Lender
Party; (ii) an Affiliate of a Lender Party; (iii) a commercial bank organized
under the laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having a combined capital and surplus of at least
$500,000,000; (v) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or a political subdivision of any such country, and
having a combined capital and surplus of at least $500,000,000, so long as such
bank is acting through a branch or agency located in the United States; (vi) a
finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and surplus of at least
$250,000,000; and (vii) any other Person approved by the Administrative Agent
and, unless a Default has occurred and is continuing at the time any assignment
is effected pursuant to Section 8.07, the Borrower and, with respect to any
Eligible Assignee that becomes a Revolving Credit Lender, the Issuing Bank, any
such approval in either case not to be unreasonably withheld or delayed and (b)
with respect to the Letter of Credit Facility, a Person that is an Eligible
Assignee under subclause (iii) or (v) of clause (a) of this definition and is
approved by the Administrative Agent and, unless a Default has occurred and is
continuing at the time any assignment is effected pursuant to Section 8.07, the
Borrower, such approval not to be unreasonably withheld or delayed; provided,
however, that neither any Loan Party nor any Affiliate of a Loan Party shall
qualify as an Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or legally binding judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
9
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of any Loan Party, or under common control
with any Loan Party, within the meaning of Section 414 of the Internal Revenue
Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC; or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan within the following
30 days; (b) the application for a minimum funding waiver with respect to a
Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of any Loan Party or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of security to such
Plan, pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrower and the
Administrative Agent.
10
"Eurodollar Rate" means, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, an interest rate per annum equal
to the rate per annum obtained by dividing (a) the average of the respective
rates per annum (rounded upward to the next whole multiple of 1/16th of 1%)
posted by each of the principal London offices of banks posting rates as
displayed on the Dow Xxxxx Markets screen, page 3750 or such other page as may
replace such page on such service for the purpose of displaying the London
interbank offered rate of major banks for deposits in U.S. Dollars, at
approximately 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period for deposits in an amount substantially equal to BNP's
Eurodollar Rate Advance comprising part of such Borrowing to be outstanding
during such Interest Period (or, if BNP shall not have such a Eurodollar Rate
Advance, $1,000,000) and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing means the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means, for any period,
(a) the sum of:
(i) Consolidated net income (or loss) of the Borrower and its
Subsidiaries for such period; plus
(ii) the aggregate amount of all noncash charges deducted in
arriving at Consolidated net income (or loss) of the Borrower and
its Subsidiaries for each such period; plus
(iii) an amount (whether positive or negative) equal to the
change in Consolidated current liabilities of the Borrower and its
Subsidiaries during such period; less
(b) the sum of:
11
(i) the aggregate amount of all noncash credits included in
arriving at such Consolidated net income (or loss) the Borrower and
its Subsidiaries; plus
(ii) an amount (whether positive or negative) equal to the
change in Consolidated current assets (excluding cash and Cash
Equivalents) of the Borrower and its Subsidiaries during such
period; plus
(iii) an amount equal to the amount of all Capital
Expenditures of the Borrower and its Subsidiaries paid in cash
during such period to the extent permitted by this Agreement; plus
(iv) an amount equal to the aggregate amount of all regularly
scheduled principal payments of Funded Debt made during such period,
together with any optional prepayments of Term Advances made during
such period in accordance with Section 2.06(a).
"Existing Debt" means Debt of the Borrower, each Loan Party and their
respective Subsidiaries outstanding immediately before the consummation of the
Transactions.
"Extraordinary Receipt" means any cash received by or paid to or for the
account of any Person not in the ordinary course of business, including, without
limitation, pension plan reversions, proceeds of insurance (excluding proceeds
of business interruption insurance to the extent such proceeds constitute
compensation for lost earnings), condemnation awards (and payments in lieu
thereof), indemnity payments and any purchase price adjustment received in
connection with any purchase and sale agreement; provided, however, that an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance or indemnity payments to the extent that such proceeds or payments (A)
in respect of loss or damage to equipment, fixed assets or real property are
applied (or in respect of which expenditures were previously incurred) to
replace or repair the equipment, fixed assets or real property in respect of
which such proceeds were received in accordance with the terms of the Loan
Documents, so long as such application is made (or such expenditures were
incurred) within six months after the occurrence of such damage or loss or (B)
are received by a Person in respect of any third party claim against such Person
and applied to pay (or reimburse such Person for its prior payment of) such
claim and the costs and expenses of such Person with respect thereto; provided
further, however, that amounts received in settlement of alleged patent
infringement claims (whether as royalty payments or compromises of claims) shall
not constitute Extraordinary Receipts.
"Facility" means the Term A Facility, the Term B Facility, the Revolving
Credit Facility or the Letter of Credit Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period (i) to the rate published by the
Dow Xxxxx Markets service on page five of its daily report as the "ASK" rate as
of 10:00 A.M. (New York City time) for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) or (ii) if the Dow
Xxxxx Markets service shall cease to publish or otherwise shall not publish such
rates for any day that is a Business Day, 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
12
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 that
is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letters" means each agreement entered into between the any Loan Party
and the Administrative Agent or the Issuing Bank with respect to the payment of
fees or other amounts relating to the Facilities.
"Fiscal Quarter" means a fiscal quarter ending on or about March 31, June
30, September 30 or December 31 of each year.
"Fiscal Year" means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on or about June 30 in any calendar year.
"Fiscal Year 1999 Adjustment" means the adjustment more fully described in
Schedule 1.01.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
Rolling Period, the ratio of (a) the sum of (i) Consolidated EBITDA for such
Person and its Subsidiaries for such Rolling Period and (ii) the aggregate
amount of Net Cash as at the last day of such Rolling Period in excess of
$45,000,000 to (b) the sum of (i) Fixed Charges of such Person and its
Subsidiaries for such Rolling Period, and (ii) Capital Expenditures of such
Person and its Subsidiaries made during such Rolling Period.
"Fixed Charges" means, for the Borrower and its Subsidiaries on a
Consolidated basis, for any period, the sum of Interest Expense, income taxes
that have been paid in cash and all regularly scheduled principal payments of
Funded Debt made during such period.
"Funded Debt" of any Person means Debt of such Person (other than Debt
described in clauses (f), (h), (i) and (j) of the definition thereof except to
the extent any such Debt is outstanding under the Facilities).
"GAAP" has the meaning specified in Section 1.03.
"Guaranteed Obligations" has the meaning specified in Section 7.01.
"Guaranties" means the U.S. Guaranty and the Non U.S. Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
13
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other hedging agreements.
"Hedge Bank" means any Lender Party or any of its Affiliates in its
capacity as a party to a Secured Hedge Agreement.
"Indemnified Costs" has the meaning specified in Section 7.05(a).
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Initial Extension of Credit" means the earlier to occur of the initial
Borrowing hereunder and the initial issuance of a Letter of Credit hereunder.
"Initial Issuing Bank" means BNP, as Issuing Bank..
"Initial Lender Parties" and "Initial Lenders" each has the meaning
specified in the recital of parties to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Intercompany Notes" has the meaning specified in Sections 3.01(a)(iii)(K)
and 5.02(b)(ii)(B) and shall be in form and substance satisfactory to the
Administrative Agent.
"Interest Coverage Ratio" means, with respect to any Person for any
Rolling Period, the ratio of (a) Consolidated EBITDA of such Person and its
Subsidiaries for such Rolling Period to (b) Interest Expense of such Person and
its Subsidiaries for such Rolling Period.
"Interest Expense" means, with respect to any Person for any period,
interest expense (including the interest component on obligations under
Capitalized Leases but excluding capitalized interest), whether paid or accrued,
on all Debt of such Person and its Subsidiaries for such period, including,
without limitation and without duplication, (a) interest expense in respect of
Debt resulting from Advances, (b) commissions, discounts and other fees and
charges payable in connection with letters of credit (including, without
limitation, any Letters of Credit), (c) any net payment payable in connection
with Hedge Agreements less any net credits received in connection with Hedge
Agreements, (d) accretion of original issue discount, and (e) all other noncash
interest but excluding amortization with respect to deferred financing fees.
"Interest Period" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration
14
of each such Interest Period shall be one, two, three or six months, as the
Borrower may, upon notice received by the Administrative Agent not later than
10:00 A.M. (Los Angeles, California time) on the third Business Day prior to the
first day of such Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period with respect to
any Eurodollar Rate Advance under a Facility that ends after any principal
repayment installment date for such Facility unless, after giving effect
to such selection, the aggregate principal amount of Base Rate Advances
and of Eurodollar Rate Advances having Interest Periods that end on or
prior to such principal repayment installment date for such Facility shall
be at least equal to the aggregate principal amount of Advances under such
Facility due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for Eurodollar Rate
Advances comprising part of the same Borrowing shall be of the same
duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided, however, that, if such extension would cause the last day of
such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the immediately preceding
Business Day; and
(d) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of such succeeding
calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Inventory" means all Inventory referred to in Section 1(b) of the
Security Agreement.
"Investment" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation and any arrangement pursuant to
which the investor incurs Debt of the types referred to in clause (i) or (j) of
the definition of "Debt" in respect of such Person.
"Issuing Bank" means the Initial Issuing Bank and each Eligible Assignee
to which a Letter of Credit Commitment hereunder has been assigned pursuant to
Section 8.07, for so long as such Initial Issuing Bank or Eligible Assignee, as
the case may be, shall have a Letter of Credit Commitment.
"L/C Cash Collateral Account" has the meaning specified in the Security
Agreement.
15
"L/C Related Documents" has the meaning specified in Section 2.04(c)(ii).
"Lender Party" means any Lender or the Issuing Bank.
"Lenders" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 8.07 for so long as such Initial Lender or
Person shall be a party to this Agreement.
"Letter of Credit Advance" means an advance made by the Issuing Bank or
any Revolving Credit Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section 2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank at
any time, the amount set forth opposite the Issuing Bank's name on Schedule I
hereto under the caption "Letter of Credit Commitment" or, if the Issuing Bank
has entered into an Assignment and Acceptance, set forth for the Issuing Bank in
the Register maintained by the Administrative Agent pursuant to Section 8.07(d)
as the Issuing Bank's "Letter of Credit Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced at or prior to such time pursuant to Section 2.05.
"Letters of Credit" has the meaning specified in Section 2.01(d).
"Leverage Ratio" means, with respect to any Person for any Rolling Period,
the ratio of (a) the sum, without duplication, of (x) Funded Debt (other than
Revolving Credit Advances, Letter of Credit Advances and Letters of Credit) of
such Person and its Subsidiaries as of the last day of any Rolling Period and
(y) the average outstanding Revolving Credit Advances, Letter of Credit Advances
and Standby Letters of Credit during such Rolling Period to (b) Consolidated
EBITDA of such Person and its Subsidiaries for such Rolling Period.
"Lien" means any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan Documents" means (a) for purposes of this Agreement and the Notes,
if any, and any amendment, supplement or modification hereof or thereof, (i)
this Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) each Letter
of Credit Agreement, (v) the Guaranties, (vi) the Intercompany Notes and (vii)
the Fee Letters, and (b) for purposes of the Collateral Documents and for all
other purposes other than for purposes of this Agreement and the Notes, (i) this
Agreement, (ii) the Notes, if any, (iii) the Collateral Documents, (iv) each
Letter of Credit Agreement, (v) the Guaranties, (vi) the Intercompany Notes,
(vii) the Fee Letters, (viii) each Secured Hedge Agreement and (ix) any other
agreement, document or instrument issued pursuant to or in connection with any
of the foregoing, and
16
in each case as amended, amended and restated, supplemented or otherwise
modified from time to time.
"Loan Parties" means the Borrower and the U.S. Guarantors and the Non-U.S.
Guarantors.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of (i) the Borrower, (ii) the Loan Parties taken as a
whole, or (iii) the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of (i) the Borrower, (ii) the Loan Parties taken as a
whole, or (iii) the Borrower and its Subsidiaries taken as a whole, (b) the
rights and remedies of the Administrative Agent or any Lender Party under any
Transaction Document or (c) the ability of (i) the Borrower, (ii) the Loan
Parties taken as a whole, or (iii) the Borrower and its Subsidiaries taken as a
whole to perform its Obligations under any Transaction Document to which it is
or is to be a party.
"Mortgage Policies" has the meaning specified in Section 3.01(a)(vii).
"Mortgages" has the meaning specified in Section 3.01(a)(vii).
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"Net Cash" means, as at any date of determination, the aggregate amount of
cash and Cash Equivalents owned by the Borrower and its Subsidiaries as at such
date, less the aggregate amount of all outstanding Revolving Credit Advances,
Letter of Credit Advances and Letters of Credit.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or the incurrence or issuance of any Debt or
capital stock or other ownership or profit interest (including, without
limitation, any capital contribution), any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or any
warrants, rights, options or other securities to acquire capital stock or other
ownership or profit interest by any Person, or any Extraordinary Receipt
received by or paid to or for the account of any Person, the aggregate amount of
cash received from time to time (whether as initial consideration or through
payment or disposition of deferred
17
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a) reasonable
and customary brokerage commissions, underwriting fees and discounts, legal
fees, finder's fees and other similar fees and commissions, (b) the amount of
taxes payable in connection with or as a result of such transaction and (c) the
amount of any Debt that, by the terms of such transaction, is required to be
repaid upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are properly attributable to such
transaction or to the asset that is the subject thereof and are, in the case of
clauses (a) and (c), within 10 days of receipt of such cash, actually paid to a
Person that is not an Affiliate of such Person or any Loan Party or any
Affiliate of any Loan Party and, in the case of clause (b), on the earlier of
the dates on which the tax return covering such taxes is filed or required to be
filed, provided, however, that in the case of taxes that are deductible under
clause (b) but for the fact that at the time of receipt of such cash, such taxes
have not been actually paid or are not then payable, such Person may deduct an
amount (the "Reserved Amount") equal to the amount reserved in accordance with
GAAP as a reasonable estimate for such taxes, other than taxes for which such
Loan Party or such Subsidiary is indemnified, provided further, however, that at
the time such taxes are paid, an amount equal to the amount, if any, by which
the Reserved Amount exceeds the amount actually so paid, the amount of such
excess shall constitute "Net Cash Proceeds".
"Non-U.S. Guarantors" means all Non-U.S. Subsidiaries of the Borrower that
are parties to the Non-U.S. Guaranty and each other Subsidiary that shall be
required to execute and deliver a guaranty pursuant to Section 5.01(j) or
Section 5.01(k).
"Non-U.S. Guaranty" means a guaranty made by each Non-U.S. Subsidiary of
the Borrower in favor of the Administrative Agent, in substantially the form of
Exhibit F-2 (together with each other guaranty made by a Non-U.S. Subsidiary of
the Borrower delivered pursuant to Section 5.01(j), in each case as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms).
"Non-U.S. Security Agreement" means a security agreement, in form and
substance acceptable to the Administrative Agent, duly executed by each Non-U.S.
Subsidiary listed on Schedule 3.01(a)(iii)(K) or such other Non-U.S. Subsidiary
as may from time to time be requested by the Administrative Agent.
"Non-U.S. Subsidiary" means any Subsidiary of the Borrower which is not a
U.S. Subsidiary.
"Note" means a Term A Note, a Term B Note or a Revolving Credit Note, in
each case to the extent required to be issued pursuant to Section 2.15.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"NPL" means the National Priorities List under CERCLA.
18
"Obligation" means, with respect to any Person, any payment, performance
or other obligation of such Person of any kind, including, without limitation,
any liability of such Person on any claim, whether or not the right of any
creditor to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by such Loan Party
under any Loan Document and (b) the obligation of such Loan Party to reimburse
any amount in respect of any of the foregoing that any Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and Development.
"Open Year" has the meaning specified in Section 4.01(o).
"Other Taxes" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permitted Acquisition" means the purchase or acquisition of all or
substantially all of the assets, or a business unit or division, of a Permitted
Business by the Borrower.
"Permitted Business" means the businesses conducted by the Borrower and
its Subsidiaries on the date hereof and any business related, ancillary or
complementary thereto (as determined in good faith by the board of directors of
the Borrower).
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Liens" means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(b) hereof; (b) Liens imposed
by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's
Liens and other similar Liens arising in the ordinary course of business
securing obligations that (i) are not overdue for a period of more than 30 days
and (ii) either individually or when aggregated with all other Permitted Liens
outstanding on any date of determination, do not materially affect the use or
value of the property to which they relate; (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or to secure
public or statutory obligations; and (d) easements, rights of way and other
encumbrances on title to real property that do not render title to the property
encumbered thereby unmarketable or materially adversely affect the use of such
property for its present purposes.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
19
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledged Debt" has the meaning specified in Section 1(d)(vii) of the
Security Agreement.
"Pledged Shares" has the meaning specified in Section 1(d)(vi) of the
Security Agreement.
"Preferred Interests" means, with respect to any Person, Equity Interests
issued by such Person that are entitled to a preference or priority over any
other Equity Interests issued by such Person upon any distribution of such
Person's property and assets, whether by dividend or upon liquidation.
"Prepayment Amount" has the meaning specified in Section 5.03(a).
"Prepayment Date" has the meaning specified in Section 5.03(a).
"Prepayment Notice" has the meaning specified in Section 5.03(a).
"Pro Forma Basis" with respect to any determination of EBITDA for any
Rolling Period means the EBITDA of the Borrower and its Subsidiaries determined
as provided in the definition of EBITDA, except that if one or more Permitted
Acquisitions shall have been consummated after the first day of such Rolling
Period or the determination is being made pursuant to Section 5.02(f)(iv)(A),
then the EBITDA for such Rolling Period shall include the EBITDA of all entities
or business units acquired in such Permitted Acquisitions (and, in the case of a
determination pursuant to Section 5.02(f)(iv)(A), the entity or business unit to
be acquired) as if such Permitted Acquisitions or proposed Permitted
Acquisitions were consummated on the first day of such Rolling Period. For the
purpose of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings related thereto and the
amount of Interest Expense associated with any Funded Debt incurred in
connection therewith, or any other calculation under this definition, the pro
forma calculations will be certified by the chief financial officer of the
Borrower and shall, in the reasonable determination of the Borrower, satisfy the
requirements of Rule 11-02(a) of Regulation S-X of the Securities and Exchange
Commission.
"Pro Rata Share" of any amount means, with respect to any Revolving Credit
Lender at any time, the product of such amount times a fraction the numerator of
which is the amount of such Lender's Revolving Credit Commitment at such time
(or, if the Commitments shall have been terminated, the Revolving Credit
Commitment as in effect immediately prior to such termination) and the
denominator of which is the Revolving Credit Facility at such time (or, if the
Commitments shall have been terminated, the Revolving Credit Facility as in
effect immediately prior to such termination).
"Receivables" means all Receivables referred to in Section 1(c) of the
Security Agreement.
"Redeemable" means, with respect to any Equity Interest, any Debt or any
other right or Obligation, any such Equity Interest, Debt, right or Obligation
that (a) the issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise,
20
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"Reduction Amount" has the meaning specified in Section 2.06(b)(v).
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Required Lenders" means, at any time, Lenders owed or holding at least
51% of the sum of (a) the aggregate principal amount of the Advances outstanding
at such time, (b) the aggregate Available Amount of all Letters of Credit
outstanding at such time, (c) the aggregate unused Commitments under the Term A
and Term B Facilities at such time and (d) the aggregate Unused Revolving Credit
Commitments at such time.
"Responsible Officer" means any executive officer of the Borrower.
"Revolving Credit Advance" has the meaning specified in Section 2.01(c).
"Revolving Credit Borrowing" means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.
"Revolving Credit Commitment" means, with respect to any Revolving Credit
Lender at any time, the amount set forth opposite such Lender's name on Schedule
I hereto under the caption "Revolving Credit Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, set forth for such Lender
in the Register maintained by the Administrative Agent pursuant to Section
8.07(d) as such Lender's "Revolving Credit Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
"Revolving Credit Facility" means, at any time, the aggregate amount of
the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means any Lender that has a Revolving Credit
Commitment.
"Revolving Credit Note" means a promissory note of the Borrower payable to
the order of any Revolving Credit Lender, in substantially the form of Exhibit
A-3 hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Credit Advances and Letter of Credit Advances made
by such Lender to the extent required to be issued pursuant to Section 2.15.
"Rolling Period" means, for any Fiscal Quarter, the consecutive four
Fiscal Quarters ending on the last day of such Fiscal Quarter.
"Secured Hedge Agreement" means any Hedge Agreement required or permitted
under Article V that is entered into by and between the Borrower and any Hedge
Bank.
21
"Secured Obligations" has the meaning specified in the Security Agreement.
"Secured Parties" means the Agents, the Lender Parties and the Hedge
Banks.
"Security Agreement" has the meaning specified in Section 3.01(a)(iii).
"Significant Subsidiary" means, at any time, a Subsidiary that is wholly
owned (other than directors qualifying shares), directly or indirectly, by the
Borrower that (i) together with its Subsidiaries if any has total assets greater
than $100,000 (determined as of the last day of the most recent Fiscal Quarter),
(ii) together with its Subsidiaries has EBITDA equal to 10% or more of the
Consolidated EBITDA of the Borrower and its Subsidiaries for most recently ended
Rolling Period or (iii) has become a party to a Guaranty.
"Single Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or
any ERISA Affiliate and no Person other than the Loan Parties and the ERISA
Affiliates or (b) was so maintained and in respect of which any Loan Party or
any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Standby Letter of Credit" means any Letter of Credit issued under the
Letter of Credit Facility, other than a Trade Letter of Credit.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial interest
in such trust or estate, is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
22
"Surviving Debt" means Debt of each Loan Party and its Subsidiaries
outstanding immediately before and after giving effect to the Transaction and
set forth on Schedule 3.01(g).
"Syndication Agent" has the meaning specified in the recital of parties to
this Agreement.
"Tax Certificate" has the meaning specified in Section 5.03(k)
"Taxes" has the meaning specified in Section 2.12(a).
"Term A Advance" has the meaning specified in Section 2.01(a).
"Term A Borrowing" means a borrowing consisting of simultaneous Term A
Advances of the same Type made by the Term A Lenders.
"Term A Commitment" means, with respect to any Term A Lender at any time,
the amount set forth opposite such Lender's name on Schedule I hereto under the
caption "Term A Commitment" or, if such Lender has entered into one or more
Assignment and Acceptances, the aggregate amount set forth for such Lender in
the Register maintained by the Administrative Agent pursuant to Section 8.07(d)
as such Lender's "Term A Commitment".
"Term A Facility" means, at any time, the aggregate amount of the Term A
Lenders' Term A Commitments at such time.
"Term A Lender" means any Lender that has a Term A Commitment.
"Term A Note" means a promissory note of the Borrower payable to the order
of any Term A Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term A Advances made by such Lender to the extent required to be issued pursuant
to Section 2.15.
"Term Advance" means a Term A Advance or a Term B Advance.
"Term B Advance" has the meaning specified in Section 2.01(b).
"Term B Borrowing" means a borrowing consisting of simultaneous Term B
Advances of the same Type made by the Term B Lenders.
"Term B Commitment" means, with respect to any Term B Lender, the amount
set forth opposite such Lender's name on Schedule I hereto under the caption
"Term B Commitment" or, if such Lender has entered into one or more Assignment
and Acceptances, the aggregate amount set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 8.07(d) as such
Lender's "Term B Commitment".
"Term B Facility" means, at any time, the aggregate amount of the Term B
Lenders' Term B Commitments at such time.
23
"Term B Lender" means any Lender that has a Term B Commitment.
"Term B Note" means a promissory note of the Borrower payable to the order
of any Term B Lender, in substantially the form of Exhibit A-2 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term B Advances made by such Lender to the extent required to be issued pursuant
to Section 2.15.
"Term Commitment" means a Term A Commitment or a Term B Commitment.
"Term Lender" means a Term A Lender or a Term B Lender.
"Termination Date" means (a) for purposes of the Revolving Credit Facility
and the Letter of Credit Facility, the earlier of (x) June 30, 2004 and (y) the
date of termination in whole of the Term Commitments, the Letter of Credit
Commitment and the Revolving Credit Commitments pursuant to Section 2.05 or 6.01
(the "Commitment Termination Date"), and (b) for purposes of the Term A
Facility, the earlier of (x) June 30, 2004 and (y) the Commitment Termination
Date, and (c) for purposes of the Term B Facility, the earlier of (x) June 30,
2005 and (y) the Commitment Termination Date.
"Trade Letter of Credit" means any Letter of Credit that is issued under
the Letter of Credit Facility for the benefit of a supplier of Inventory to the
Borrower or any of its Subsidiaries to effect payment for such Inventory.
"Transaction" means the refinancing of certain existing Debt and the other
transactions contemplated by the Transaction Documents.
"Transaction Documents" means, collectively, the Loan Documents and the
Non-U.S. Security Agreements.
"Type" refers to the distinction between Advances bearing interest at the
Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, (a) such Lender's Revolving Credit Commitment at such
time minus (b) the sum of (i) the aggregate principal amount of all Revolving
Credit Advances and Letter of Credit Advances made by such Lender (in its
capacity as a Lender) and outstanding at such time, plus (ii) such Lender's Pro
Rata Share of (A) the aggregate Available Amount of all Letters of Credit
outstanding at such time, and (B) the aggregate principal amount of all Letter
of Credit Advances made by the Issuing Bank pursuant to Section 2.03(c) and
outstanding at such time.
"U.S. Guarantors" means all U.S. Subsidiaries of the Borrower that are
parties to the U.S. Guaranty and each other Subsidiary that shall be required to
execute and deliver a guaranty pursuant to Section 5.01(j) or Section 5.01(k).
24
"U.S. Guaranty" means a guaranty made by each U.S. Subsidiary of the
Borrower in favor of the Administrative Agent, in substantially the form of
Exhibit F-1 (together with each other guaranty made by a U.S. Subsidiary of the
Borrower delivered pursuant to Section 5.01(j), in each case as amended, amended
and restated, supplemented or otherwise modified from time to time in accordance
with its terms).
"U.S. Subsidiary" means any Subsidiary of the Borrower organized under the
laws of the United States or one of the States of the United States.
"Voting Interests" means shares of capital stock issued by a corporation,
or equivalent Equity Interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of ERISA,
that is maintained for employees of any Loan Party or in respect of which any
Loan Party could have a liability.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle E
of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions.
In this Agreement and the other Loan Documents, in the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement or contract "as
amended" shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit. (a) The Term A
Advances. Each Term A Lender severally agrees, on the terms and conditions
hereinafter set forth, to make a single advance (a "Term A Advance") to the
Borrower on any Business Day during the period from the date hereof until July
1, 1999 in an amount not to exceed such Lender's Term A Commitment at such time.
The Term A Borrowing shall consist of Term A Advances made simultaneously by the
Term A Lenders ratably according to their Term A Commitments. Amounts borrowed
under this Section 2.01(a) and repaid or prepaid may not be reborrowed.
(b) The Term B Advances. Each Term B Lender severally agrees, on the terms
and conditions hereinafter set forth, to make a single advance (a "Term B
Advance") to the Borrower on
25
any Business Day that the Term A Advances shall be made in an amount not to
exceed such Lender's Term B Commitment at such time. The Term B Borrowing shall
consist of Term B Advances made simultaneously by the Term B Lenders ratably
according to their Term B Commitments. Amounts borrowed under this Section
2.01(b) and repaid or prepaid may not be reborrowed.
(c) The Revolving Credit Advances. Each Revolving Credit Lender severally
agrees, on the terms and conditions hereinafter set forth, to make advances
(each a "Revolving Credit Advance") to the Borrower from time to time on any
Business Day during the period from the date hereof until the Termination Date
in an amount for each such Advance not to exceed such Lender's Unused Revolving
Credit Commitment at such time. Each Revolving Credit Borrowing shall be in an
aggregate amount of $1,000,000 or an integral multiple of $250,000 in excess
thereof (other than a Borrowing the proceeds of which shall be used solely to
repay or prepay in full outstanding Letter of Credit Advances made by the
Issuing Bank) and shall consist of Revolving Credit Advances made simultaneously
by the Revolving Credit Lenders ratably according to their Revolving Credit
Commitments. Within the limits of each Revolving Credit Lender's Unused
Revolving Credit Commitment in effect from time to time, the Borrower may borrow
under this Section 2.01(c), prepay pursuant to Section 2.06(a) and reborrow
under this Section 2.01(c).
(d) Letters of Credit. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (the "Letters of
Credit") for the account of the Borrower (and, if specified by the Borrower, on
behalf of a Subsidiary of the Borrower) from time to time on any Business Day
during the period from the date hereof until 60 days before the Termination Date
in an aggregate Available Amount (i) for all Letters of Credit not to exceed at
any time the lesser of (x) the Letter of Credit Facility at such time and (y)
the Issuing Bank's Letter of Credit Commitment at such time and (ii) for each
such Letter of Credit not to exceed Unused Revolving Credit Commitments of the
Revolving Credit Lenders at such time. No Letter of Credit shall have an
expiration date (including all rights of the Borrower or the beneficiary to
require renewal) later than the earlier of 60 days before the Termination Date
and (A) in the case of a Standby Letter of Credit, one year after the date of
issuance thereof and (B) in the case of a Trade Letter of Credit, 90 days after
the date of issuance thereof. Each Standby Letter of Credit shall contain a
provision authorizing the Issuing Bank to deliver to the beneficiary of such
Letter of Credit, upon the acceleration of the Facilities, a notice (a "Default
Termination Notice") terminating such Letter of Credit and giving such
beneficiary 15 days to draw such Letter of Credit. Within the limits of the
Letter of Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section
2.01(d), repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.04(c) and request the issuance of additional Letters of
Credit under this Section 2.01(d).
SECTION 2.02. Making the Advances. (a) Except as otherwise provided in
Section 2.02(b) or Section 2.03, each Borrowing shall be made on notice, given
not later than 10:00 A.M. (Los Angeles, California time) on the third Business
Day prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or the first Business Day prior to the
date of the proposed Borrowing in the case of a Borrowing consisting of Base
Rate Advances, by the Borrower to the Administrative Agent, which shall give to
each Appropriate Lender prompt notice thereof by telecopier. Each such notice of
a Borrowing (a "Notice of Borrowing") shall be in writing or telecopier, in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of
26
such Borrowing, (ii) Facility under which such Borrowing is to be made, (iii)
Type of Advances comprising such Borrowing, (iv) aggregate amount of such
Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Appropriate Lender
shall, before 10:00 A.M. (Los Angeles, California time) on the date of such
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Facility of such Lender and the
other Appropriate Lenders. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the Borrower by
crediting the Borrower's account; provided, however, that, in the case of any
Revolving Credit Borrowing, the Administrative Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Letter of Credit
Advances made by the Issuing Bank and by any other Revolving Credit Lender and
outstanding on the date of such Revolving Credit Borrowing, plus interest
accrued and unpaid thereon to and as of such date, available to the Issuing Bank
and such other Revolving Credit Lenders for repayment of such Letter of Credit
Advances.
(b) Anything in subsection (a) above to the contrary notwithstanding, (i)
the Borrower may not select Eurodollar Rate Advances (other than for Interest
Periods of two weeks, subject to the provisions of Section 8.04(c)) for the
initial Borrowing hereunder and for the period from the date of such initial
Borrowing to the earlier of (x) three months from such date and (y) the
completion of primary syndication of the Facilities (as shall be specified by
the Administrative Agent in a written notice to the Borrower) or for any
Borrowing if the aggregate amount of such Borrowing is less than $1,000,000 or
if the obligation of the Appropriate Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.09 or 2.10 and (ii) with respect
to Borrowings consisting of Eurodollar Rate Advances, the Term A Advances, the
Term B Advances and the Revolving Credit Advances may not be outstanding as part
of more than six separate Borrowings in the aggregate.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Appropriate Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) or (b) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent
27
that such Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay or
pay to the Administrative Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such corresponding amount, such amount so
paid in respect of principal shall constitute such Lender's Advance as part of
such Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing (and the Borrower
shall retain any rights the Borrower may have against any such Lender as a
result of any default by such Lender hereunder), but no Lender shall be
responsible for the failure of any other Lender to make the Advance to be made
by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 10:00 A.M. (Los Angeles, California time) on the
fifth Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank, which shall give to the
Administrative Agent prompt notice thereof by telecopier. Each such notice of
issuance of a Letter of Credit (a "Notice of Issuance") shall be by telecopier,
specifying therein the requested (A) date of such issuance (which shall be a
Business Day), (B) Available Amount of such Letter of Credit, (C) expiration
date of such Letter of Credit, (D) name and address of the beneficiary of such
Letter of Credit and (E) form of such Letter of Credit, and shall be accompanied
by such application and agreement for letter of credit as the Issuing Bank may
specify to the Borrower for use in connection with such requested Letter of
Credit (a "Letter of Credit Agreement"). If the requested form of such Letter of
Credit is acceptable to the Issuing Bank in its sole discretion, the Issuing
Bank will, upon fulfillment of the applicable conditions set forth in Article
III, make such Letter of Credit available to the Borrower at its office referred
to in Section 8.02 or as otherwise agreed with the Borrower in connection with
such issuance. In the event and to the extent that the provisions of any Letter
of Credit Agreement shall conflict with this Agreement, the provisions of this
Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (B) to
each Revolving Credit Lender on the first Business Day of each calendar quarter
a written report summarizing issuance and expiration dates of Letters of Credit
issued during the preceding quarter and drawings during such calendar quarter
under all Letters of Credit and (C) to the Administrative Agent and each
Revolving Credit Lender on the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit.
28
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a draft
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft. In the event of any
drawing under a Letter of Credit, the Issuing Bank shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Revolving Credit Lender and each Revolving Credit Lender shall purchase from the
Issuing Bank, and the Issuing Bank shall sell and assign to each such Revolving
Credit Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Administrative Agent for the account of the
Issuing Bank, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. The Borrower hereby agrees to each such sale and assignment. Each
Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which notice of the drawing
under the related Letter of Credit is given by the Issuing Bank, provided such
notice is given not later than 10:00 A.M. (Los Angeles, California time) on such
Business Day or (ii) the first Business Day next succeeding such demand if such
notice is given after such time. Upon any such assignment by the Issuing Bank to
any other Revolving Credit Lender of a portion of a Letter of Credit Advance,
the Issuing Bank represents and warrants to such other Lender that the Issuing
Bank is the legal and beneficial owner of such interest being assigned by it,
free and clear of any liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Revolving Credit
Lender shall not have so made the amount of such Letter of Credit Advance
available to the Administrative Agent, such Revolving Credit Lender agrees to
pay to the Administrative Agent forthwith on demand such amount together with
interest thereon, for each day from the date of demand by the Issuing Bank until
the date such amount is paid to the Administrative Agent, at the Federal Funds
Rate for its account or the account of the Issuing Bank, as applicable. If such
Lender shall pay to the Administrative Agent such amount for the account of the
Issuing Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Letter of Credit Advance made by such Lender on such Business
Day for purposes of this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by the Issuing Bank shall be reduced by such
amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any Lender
to make the Letter of Credit Advance to be made by it on the date specified in
Section 2.03(c) shall not relieve any other Lender of its obligation hereunder
to make its Letter of Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Term Advances. The Borrower shall
repay to the Administrative Agent for the ratable account of the Term A Lenders
and Term B Lenders the aggregate outstanding principal amount of the Term A
Advances and Term B Advances, respectively, on the following dates in the
amounts indicated (which amounts shall be reduced as a result of the application
of prepayments in accordance with the order of priority set forth in Section
2.06):
29
Date Amount
---- ------
Term A Facility Term B Facility
----------------------------------------------------------------
September 30, 1999 $1,250,000 $250,000
December 31, 1999 $1,250,000 $250,000
March 31, 2000 $1,250,000 $250,000
June 30, 2000 $1,250,000 $250,000
----------------------------------------------------------------
September 30, 2000 $1,250,000 $250,000
December 31, 2000 $1,250,000 $250,000
March 31, 2001 $1,250,000 $250,000
June 30, 2001 $1,250,000 $250,000
----------------------------------------------------------------
September 30, 2001 $1,875,000 $250,000
December 31, 2001 $1,875,000 $250,000
March 31, 2002 $1,875,000 $250,000
June 30, 2002 $1,875,000 $250,000
September 30, 2002 $3,125,000 $250,000
December 31, 2002 $3,125,000 $250,000
March 31, 2003 $3,125,000 $250,000
June 30, 2003 $3,125,000 $250,000
September 30, 2003 $3,750,000 $250,000
December 31, 2003 $3,750,000 $250,000
March 31, 2004 $3,750,000 $250,000
June 30, 2004 $3,750,000 $250,000
----------------------------------------------------------------
September 30, 2004 - $250,000
December 31, 2004 - $250,000
March 31, 2005 - $52,250,000
June 30, 2005 - $52,250,000
----------------------------------------------------------------
provided, however, that the final principal installment of the Term A Facility
and the Term B Facility, respectively, shall in any event and in each case be in
an amount equal to the aggregate principal amount of the Term A Advances and
Term B Advances, respectively then outstanding.
(b) Revolving Credit Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Termination Date the aggregate outstanding principal amount of the Revolving
Credit Advances then outstanding.
(c) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the account of the Issuing Bank and each other
Revolving Credit Lender that has made a Letter of Credit Advance on the earlier
of demand by the Administrative Agent and the Termination Date the outstanding
principal amount of each Letter of Credit Advance made by each of them.
30
(ii) The Obligations of the Borrower under this Agreement, any Letter of
Credit Agreement and any other agreement or instrument relating to any Letter of
Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement and
such other agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any
consent to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with the transactions contemplated by
the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a 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;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from the Guaranties or any other guarantee, for all or any of
the Obligations of the Borrower in respect of the L/C Related Documents;
or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a) Optional.
The Borrower may, upon at least five Business Days' notice to the Administrative
Agent, terminate in whole or reduce in part the unused portions of the Term A
Commitments, the Term B Commitments, and the Letter of Credit Facility and the
Unused Revolving Credit Commitments; provided, however, that each partial
reduction of a Facility (i) shall be in an aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and (ii) shall be made ratably
among the Appropriate Lenders in accordance with their Commitments with respect
to such Facility.
31
(b) Mandatory. (i) On the date of the Term A Borrowing, after giving
effect to such Term A Borrowing, and from time to time thereafter upon each
repayment or prepayment of the Term A Advances, the aggregate Term A Commitments
of the Term A Lenders shall be automatically and permanently reduced, on a pro
rata basis, by an amount equal to the amount by which the aggregate Term A
Commitments immediately prior to such reduction exceed the aggregate unpaid
principal amount of the Term A Advances then outstanding.
(ii) On the date of the Term B Borrowing, after giving effect to such Term
B Borrowing, and from time to time thereafter upon each repayment or prepayment
of the Term B Advances, the aggregate Term B Commitments of the Term B Lenders
shall be automatically and permanently reduced, on a pro rata basis, by an
amount equal to the amount by which the aggregate Term B Commitments immediately
prior to such reduction exceed the aggregate unpaid principal amount of the Term
B Advances then outstanding.
(iii) The Revolving Credit Facility shall be automatically and permanently
reduced on each date on which prepayment thereof is required to be made pursuant
to Section 2.06(b)(i) or (ii) in an amount equal to the applicable Reduction
Amount, provided that each such reduction of the Revolving Credit Facility shall
be made ratably among the Revolving Credit Lenders in accordance with their
Revolving Credit Commitments.
(iv) The Letter of Credit Facility shall be automatically and permanently
reduced from time to time on the date of each reduction in the Revolving Credit
Facility by the amount, if any, by which such Facility exceeds the Revolving
Credit Facility after giving effect to such reduction of the Revolving Credit
Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon at least
one Business Day's notice in the case of Base Rate Advances and three Business
Days' notice in the case of Eurodollar Rate Advances, in each case to the
Administrative Agent (received not later than 10:00 A.M. (Los Angeles,
California time) stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances comprising part of the
same Borrowing in whole or ratably in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid unless
such prepayment is with respect to a Revolving Credit Advance which is a Base
Rate Advance; provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount of $1,000,000 or an integral multiple of $250,000 in
excess thereof, (y) if any prepayment of a Eurodollar Rate Advance shall be made
other than on the last day of an Interest Period therefor, the Borrower shall
also pay any amounts owing pursuant to Section 8.04(c) and (z) if any prepayment
of a Term B Advance shall be made (i) on or before December 31, 1999, such
prepayment shall be made at 102% of the aggregate principal amount of the Term B
Advances so prepaid, or (ii) after December 31, 1999 but before June 30, 2000,
such prepayment shall be made at 101% of the aggregate principal amount of the
Term B Advances so prepaid. Each such prepayment which is made with respect to
any Term Advances shall be applied, subject to Section 2.06(c), ratably to the
Term Facilities and ratably to the remaining principal installments thereof.
32
(b) Mandatory. (i) The Borrower shall, no later than the 15th day
following the date on which it delivers the financial statements referred to in
Section 5.03(d) (but in any event within 100 days after the end of each Fiscal
Year), prepay an aggregate principal amount of the Advances comprising part of
the same Borrowings equal to 75% of the amount of Excess Cash Flow for such
Fiscal Year, provided, however, that if the Leverage Ratio at the end of such
fiscal year before giving effect to such payment is less than 2.00 to 1.00, the
Borrower shall prepay an aggregate principal amount of the Advances comprising
part of the same Borrowing equal to 50% of the amount of Excess Cash Flow for
such Fiscal Year. Each such prepayment of any Advances shall be applied as
follows:
first, subject to Section 2.06(c), ratably to the Term Facilities
and ratably to the remaining principal installments thereof, and
second, to the extent that no Term Advances remain outstanding,
permanently to reduce the Revolving Credit Facility as set forth in clause
(v) below.
(ii) The Borrower shall, on the date of receipt of the Net Cash Proceeds
by it or any of its Subsidiaries from (A) the sale, lease, transfer or other
disposition of any assets by it or any of its Subsidiaries (other than any sale,
lease, transfer or other disposition of assets pursuant to Section 5.02(e)(i) to
(v)), (B) the incurrence or issuance by it or any of its Subsidiaries of any
Debt (other than Debt incurred or issued pursuant to Section 5.02(b)), (C) the
sale or issuance by it or any of its Subsidiaries of any capital stock or other
ownership or profit interest (including, without limitation, any capital
contribution), any securities convertible into or exchangeable for capital stock
or other ownership or profit interest or any warrants, rights or options to
acquire capital stock or other ownership or profit interest, (D) any
Extraordinary Receipt received by or paid to or for the account of it or any of
its Subsidiaries and not otherwise included in clause (A), (B) or (C) above,
prepay an aggregate principal amount of the Advances comprising part of the same
Borrowings equal to (x) the amount of the Net Cash Proceeds received under
clauses (B) and (D), (y) the amount of the Net Cash Proceeds received under
clause (A), provided, however, that up to an aggregate of $5,000,000 of such
amount shall not be required so to be prepaid and (z) 50% of the amount of the
Net Cash Proceeds received under clause (C). Each such prepayment of any
Advances shall be applied as follows:
first, subject to Section 2.06(c), ratably to the Term Facilities
and ratably to the remaining principal installments thereof, and
second, to the extent that no Term Advances remain outstanding,
permanently to reduce the Revolving Credit Facility as set forth in clause
(v) below.
(iii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Revolving Credit Advances comprising part of the same
Borrowings and the Letter of Credit Advances equal to the amount by which the
sum of the aggregate principal amount of (x) the Revolving Credit Advances, and
(y) the Letter of Credit Advances then outstanding plus the aggregate Available
Amount of all Letters of Credit then outstanding exceeds the Revolving Credit
Facility.
(iv) The Borrower shall, on each Business Day, pay to the Administrative
Agent for deposit in the L/C Cash Collateral Account an amount sufficient to
cause the aggregate amount on deposit in
33
such Account to equal the amount by which the aggregate Available Amount of all
Letters of Credit then outstanding exceeds the Letter of Credit Facility on such
Business Day.
(v) Prepayments of the Revolving Credit Facility made pursuant to clause
(i), (ii) or (iii) above shall be applied first to prepay Letter of Credit
Advances then outstanding until such Advances are paid in full, and second to
prepay Revolving Credit Advances then outstanding comprising part of the same
Borrowings until such Advances are paid in full and third deposited in the L/C
Cash Collateral Account to cash collateralize 100% of the Available Amount of
the Letters of Credit then outstanding; and, in the case of prepayments of the
Revolving Credit Facility required pursuant to clause (i) or (ii) above, the
amount remaining (if any) after the prepayment in full of the Revolving Credit
Advances then outstanding and the cash collateralization of the aggregate
Available Amount of Letters of Credit then outstanding (the sum of such
prepayment amounts, cash collateralization amounts and remaining amount being
referred to herein as the "Reduction Amount") may be retained by the Borrower
and the Revolving Credit Facility shall be permanently reduced as set forth in
Section 2.05(b)(iii). Upon the drawing of any Letter of Credit for which funds
are on deposit in the L/C Cash Collateral Account, such funds shall be applied
to reimburse the Issuing Bank or Revolving Credit Lenders, as applicable.
(vi) All prepayments under this subsection (b) shall be made together with
accrued interest to the date of such prepayment on the principal amount prepaid,
together with any amounts owing pursuant to Section 8.04(c).
(c) Term B Opt-Out. With respect to any prepayment of the Term Advances,
the Administrative Agent shall ratably pay the Term A Lenders and the Term B
Lenders; provided, however, that any Term B Lender, at its option, to the extent
that any Term A Advances are then outstanding, may elect not to accept such
prepayment (such Lender being a "Declining Lender"), in which event the
provisions of the next sentence shall apply. Any Term B Lender may elect not to
accept its ratable share of the prepayment referred to in any Prepayment Notice
by giving written notice to the Administrative Agent not later than 10:00 A.M.
(Los Angeles time) on the Business Day immediately preceding the scheduled
Prepayment Date. On the Prepayment Date, an amount equal to that portion of the
Prepayment Amount available to prepay Term B Lenders (less any amounts that
would otherwise be payable to Declining Lenders) shall be shall be applied to
prepay Term B Advances owing to Term B Lenders other than Declining Lenders and
any amounts that would otherwise have been applied to prepay Term B Advances
owing to Declining Lenders shall instead be applied ratably to prepay the
remaining Term Advances as provided in Sections 2.06(a) and (b); provided
further that on prepayment in full of Term Advances owing to Term Lenders other
than Declining Lenders, the remainder of any Prepayment Amount shall be applied
ratably to prepay Term B Advances owing to Declining Lenders.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a
Base Rate Advance, a rate per annum equal at all times to the sum of (A)
the Base Rate in effect from
34
time to time plus (B) the Applicable Margin in effect from time to time,
payable in arrears quarterly on March 31, June 30, September 30 and
December 31 during such periods, on the date of any prepayment thereof to
the extent required under Section 2.06 and on the Termination Date,
commencing September 30, 1999.
(ii) Eurodollar Rate Advances. During such periods as such Advance
is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (A) the Eurodollar
Rate for such Interest Period for such Advance plus (B) the Applicable
Margin, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day
that occurs during such Interest Period every three months from the first
day of such Interest Period and on the date such Eurodollar Rate Advance
shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of
any Event of Default the Administrative Agent may, and upon the request of the
Required Lenders shall, require that the Borrower pay interest on (i) the unpaid
principal amount of each Advance then due and payable to each Lender, payable in
arrears on the dates referred to in clause (a)(i) or (a)(ii) above and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance pursuant to clause (a)(i) or
(a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable under the Loan Documents that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid, in the case of interest, on the Type of Advance
on which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above
and, in all other cases, on Base Rate Advances pursuant to clause (a)(i) above;
provided, however, that, following acceleration of the Advances pursuant to
Section 6.01, interest shall accrue and be payable at the rate required by this
Section 2.07(b), whether or not requested by the Administrative Agent or the
Required Lenders. In addition, following a final judgment with respect to any
Obligation of the Loan Parties under the Loan Documents, interest shall accrue
at the higher of the statutory judgment rate or the rate specified in the
preceding sentence, payable on demand.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of the Lenders a commitment fee, from the
date hereof in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date, payable in arrears
quarterly on March 31, June 30, September 30 and December 31, commencing
September 30, 1999, and on the Termination Date, at the rate of 1/2 of 1% per
annum on the average daily Unused Revolving Credit Commitment of such Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commission, payable in arrears quarterly on March 31, June 30, September 30 and
December 31, commencing September 30, 1999, and on the Termination Date, on such
Lender's Pro Rata Share of the average daily aggregate Available Amount during
such quarter of all Letters of Credit outstanding from time to time at the
Applicable Margin for Eurodollar Rate Advances under the Revolving Credit
Facility.
35
(ii) The Borrower shall pay to the Issuing Bank, for its own account, such
commissions, issuance fees, fronting fees, transfer fees and other fees and
charges in connection with the issuance or administration of each Letter of
Credit as the Borrower and the Issuing Bank shall agree.
(c) Agent's Fees. The Borrower shall pay to the Administrative Agent for
its own account such fees as may from time to time be agreed between the
Borrower and the Administrative Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower may on
any Business Day, upon notice given to the Administrative Agent not later than
10:00 A.M. (Los Angeles, California time) on the third Business Day prior to the
date of the proposed Conversion and subject to the provisions of Section 2.10,
Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that if any
Conversion of Eurodollar Rate Advances into Base Rate Advances is made other
than on the last day of an Interest Period for such Eurodollar Rate Advances the
Borrower shall also pay any amounts owing pursuant to Section 8.04(c), (x) any
Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an
amount not less than the minimum amount specified in Section 2.02(b), (y) no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(b) and (z) each Conversion of Advances comprising
part of the same Borrowing under any Facility shall be made ratably among the
Appropriate Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $1,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default and upon notice from the Administrative Agent to the Borrower, (x) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (y) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making,
36
funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of
issuing or maintaining or participating in Letters of Credit or of agreeing to
make or of making or maintaining Letter of Credit Advances (excluding, for
purposes of this Section 2.10, any such increased costs resulting from (x) Taxes
or Other Taxes (as to which Section 2.12 shall govern) and (y) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender Party is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrower shall from time to time, upon demand by
such Lender Party (with a copy of such demand to the Administrative Agent), pay
to the Administrative Agent for the account of such Lender Party additional
amounts sufficient to compensate such Lender Party for such increased cost;
provided, however, that a Lender Party claiming additional amounts under this
Section 2.10(a) agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost that may thereafter
accrue and would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party. A certificate as to the amount
of such increased cost, submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) effective after
the date hereof affects or would affect the amount of capital required or
expected to be maintained by such Lender Party or any corporation controlling
such Lender Party and that the amount of such capital is increased by or based
upon the existence of such Lender Party's commitment to lend or to issue or
participate in Letters of Credit hereunder and other commitments of such type or
the issuance or maintenance of or participation in the Letters of Credit (or
similar contingent obligations), then, upon demand by such Lender Party (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender Party, from time to time as
specified by such Lender Party, additional amounts sufficient to compensate such
Lender Party in the light of such circumstances, to the extent that such Lender
Party reasonably determines such increase in capital to be allocable to the
existence of such Lender Party's commitment to lend or to issue or to
participate in Letters of Credit hereunder or to the issuance or maintenance of
or participation in any Letters of Credit. A certificate as to such amounts
submitted to the Borrower by such Lender Party shall be conclusive and binding
for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any Facility,
Lenders owed at least 50% of the then aggregate unpaid principal amount thereof
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Lenders of
making, funding or maintaining their Eurodollar Rate Advances for such Interest
Period, the Administrative Agent shall forthwith so notify the Borrower and the
Appropriate Lenders, whereupon (i) each such Eurodollar Rate Advance under any
such Facility will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lenders have determined that the circumstances causing such
suspension no longer exist.
37
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower shall make each
payment hereunder irrespective of any right of counterclaim or set-off, not
later than 10:00 A.M. (Los Angeles, California time) on the day when due in U.S.
dollars to the Administrative Agent at the Administrative Agent's Account in
same day funds, with payments being received by the Administrative Agent after
such time being deemed to have been received on the next succeeding Business
Day. The Administrative Agent will promptly thereafter cause like funds to be
distributed (i) if such payment by the Borrower is in respect of principal,
interest, commitment fees or any other Obligation then payable hereunder to more
than one Lender Party, to such Lender Parties for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations then payable to such Lender Parties and (ii) if such
payment by the Borrower is in respect of any Obligation then payable hereunder
to one Lender Party, to such Lender Party for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.07(d),
from and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder in respect of the
interest assigned thereby to the Lender Party assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate adjustments
in such payments for periods prior to such effective date directly between
themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender Party ratably in
accordance with such Lender Party's proportionate share of the principal amount
of all outstanding Advances and the Available Amount of all Letters of Credit
then outstanding, in repayment or prepayment of such of the outstanding Advances
or other Obligations owed to such Lender Party, and for application to such
principal installments, as the Administrative Agent shall direct.
38
(c) The Borrower hereby authorizes each Lender Party and each of its
Affiliates, if and to the extent payment owed to such Lender Party is not made
when due hereunder to charge from time to time, to the fullest extent permitted
by law, against any or all of the Borrower's accounts with such Lender Party or
such Affiliate any amount so due.
(d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(e) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or commitment fee, as the case may be;
provided, however, that, if such extension would cause any payment to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day and such adjustment of time shall in such case be
reflected in the computation of payment of interest or commitment fee, as the
case may be.
(f) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower hereunder or
under the Notes shall be made, in accordance with Section 2.11, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender Party and the Administrative
Agent, taxes that are imposed on its overall net income by the United States and
taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state or foreign jurisdiction under the laws of which such
Lender Party or the Administrative Agent (as the case may be) is organized or
any political subdivision thereof and, in the case of each Lender Party, taxes
that are imposed on its overall net income (and franchise taxes in lieu thereof)
by the state or foreign jurisdiction of such Lender Party's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Lender Party or the Administrative Agent,
(i) the sum payable by the Borrower shall be increased as may be necessary so
that after the Borrower and the Administrative Agent have made all required
deductions (including
39
deductions applicable to additional sums payable under this Section 2.12) such
Lender Party or the Administrative Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make all such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other governmental
authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performance under, or otherwise with respect to
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and the Administrative
Agent for and hold it harmless against the full amount of Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 2.12, imposed on or paid by such Lender Party
or the Administrative Agent (as the case may be) and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from the date
such Lender Party or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section
8.02, the original or a certified copy of a check evidencing such payment. In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or on behalf of
the Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Administrative Agent, at
such address, an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of subsections (d)
and (e) of this Section 2.12, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial Lender or Initial Issuing Bank, as
the case may be, and on the date of the Assignment and Acceptance pursuant to
which it becomes a Lender Party in the case of each other Lender Party, and from
time to time thereafter if requested in writing by the Borrower or the
Administrative Agent (but only so long thereafter as such Lender Party remains
lawfully able to do so), provide the Administrative Agent and the Borrower with
two original duly completed Internal Revenue Service forms 1001 or 4224 or (in
the case of a Lender Party that has certified in writing to the Administrative
Agent that it is not a "bank" as defined in Section 881(c)(3)(A) of the Internal
Revenue Code) a form W-8 or any successor or substitute form prescribed by the
Internal Revenue Service. (If such Lender Party delivers a form W-8, a
certificate representing that such Lender Party is not a "bank" for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Internal Revenue Code)), as
appropriate, certifying that such Lender Party is exempt from or entitled to a
reduced rate of United States
40
withholding tax on payments pursuant to this Agreement or the Notes or, in the
case of a Lender Party providing a form W-8, certifying that such Lender Party
is a foreign corporation, partnership, estate or trust. If the forms provided by
a Lender Party at the time such Lender Party first becomes a party to this
Agreement indicate a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender Party provides the appropriate forms certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such forms;
provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 2.12 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001,
4224 or W-8 (or successor or substitute forms) (and the related certificate
described above), that the applicable Lender Party reasonably considers to be
confidential, such Lender Party shall give notice thereof to the Borrower and
shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form (or successor or substitute
forms) described in subsection (e) above (other than if such failure is due to a
change in law occurring after the date on which a form originally was required
to be provided or if such form otherwise is not required under subsection (e)
above), such Lender Party shall not be entitled to indemnification under
subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by the
United States by reason of such failure; provided, however, that should a Lender
Party become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender Party shall
reasonably request to assist such Lender Party to recover such Taxes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 8.07) (a) on account of Obligations due and payable to such
Lender Party hereunder and under the Notes at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations due and
payable to such Lender Party at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time or (b) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations owing to such Lender Party at such time to (ii) the aggregate
amount of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the Notes at such time obtained by all of the Lender Parties at such time,
such Lender Party shall forthwith purchase from the other Lender Parties such
41
interests or participating interests in the Obligations due and payable or owing
to them, as the case may be, as shall be necessary to cause such purchasing
Lender Party to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender Party, such purchase from each other
Lender Party shall be rescinded and such other Lender Party shall repay to the
purchasing Lender Party the purchase price to the extent of such Lender Party's
ratable share (according to the proportion of (i) the purchase price paid to
such Lender Party to (ii) the aggregate purchase price paid to all Lender
Parties) of such recovery together with an amount equal to such Lender Party's
ratable share (according to the proportion of (i) the amount of such other
Lender Party's required repayment to (ii) the total amount so recovered from the
purchasing Lender Party) of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so recovered. The
Borrower agrees that any Lender Party so purchasing an interest or participating
interest from another Lender Party pursuant to this Section 2.13 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such interest or participating interest,
as the case may be, as fully as if such Lender Party were the direct creditor of
the Borrower in the amount of such interest or participating interest, as the
case may be.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances and issuances
of Letters of Credit shall be available (and the Borrower agrees that it shall
use such proceeds and Letters of Credit) solely to (i) refinance existing Debt
other than Surviving Debt, (ii) pay transaction fees and expenses and (iii) for
general corporate purposes permitted by the Loan Documents.
SECTION 2.15. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder. The Borrower agrees
that upon notice by any Lender Party to the Borrower (with a copy of such notice
to the Administrative Agent) to the effect that a Note is required or
appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such
Lender Party, the Borrower shall promptly execute and deliver to such Lender a
Term A Note, a Term B Note and a Revolving Credit Note, as applicable, payable
to the order of such Lender Party in a principal amount equal to the Term A
Commitment, Term B Commitment or Revolving Credit Commitment, respectively, of
such Lender Party. All references to Notes in the Loan Documents shall mean
Notes, if any, to the extent issued hereunder.
(b) The Register maintained by the Administrative Agent pursuant to
Section 8.07(d) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii)
the terms of each Assignment and Acceptance delivered to and accepted by it,
(iii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender Party hereunder, and (iv) the
amount of any sum received by the Administrative Agent from the Borrower
hereunder and each Lender Party's share thereof.
42
(c) Entries made in good faith by the Administrative Agent in the Register
pursuant to subsection (b) above, and by each Lender Party in its account or
accounts pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender Party and, in the
case of such account or accounts, such Lender Party, under this Agreement,
absent manifest error; provided, however, that the failure of the Administrative
Agent or such Lender Party to make an entry, or any finding that an entry is
incorrect, in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this Agreement.
(d) References herein to Notes shall mean and be references to Term A
Notes, the Term B Notes and the Revolving Credit Notes, unless otherwise
specifically indicated, in each case to the extent issued hereunder.
ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of Credit. The
obligation of each Lender to make an Advance or the Issuing Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent before or
concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or before the day of
the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the Administrative
Agent (unless otherwise specified) and (except for any Notes) in sufficient
copies for each Lender Party:
(i) Notes payable to the order of the Lenders to the extent
requested by any Lender pursuant to Section 2.15.
(ii) A Notice of Borrowing relating to the Initial Extension of
Credit.
(iii) A security agreement in substantially the form of Exhibit D
hereto (together with each other security agreement and security agreement
supplement delivered pursuant to Section 5.01(j), in each case as amended,
amended and restated, supplemented or otherwise modified from time to time
in accordance with its terms, the "Security Agreement"), duly executed by
the Borrower and each U.S. Subsidiary, together with:
(A) (1) certificates representing the Pledged Shares in
respect of each U.S. Guarantor which is a Significant Subsidiary, if
any, (2) certificates representing 65% of the Pledged Shares in
respect of each Non-U.S. Guarantor which is a Significant Subsidiary
(other than those set out on Schedule 3.01(a)(iii)(A)(2)), if any,
and (3) in
43
respect of both (1) and (2), undated stock powers executed in blank
and instruments evidencing the respective Pledged Debt, if any,
indorsed in blank,
(B) executed copies of proper financing statements, duly filed
on or before the day of the Initial Extension of Credit under the
Uniform Commercial Code of the States of all jurisdictions that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the Liens created under the Collateral
Documents, covering the Collateral described in the Security
Agreement,
(C) completed requests for information, dated on or before the
date of the Initial Extension of Credit, listing the financing
statements referred to in clause (B) above and all other effective
financing statements filed in the jurisdictions referred to in
clause (B) above that name any Loan Party and its Subsidiaries as
debtor, together with copies of such other financing statements,
(D) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the Liens created thereby,
(E) evidence of the insurance required by the terms of the
Security Agreement,
(F) copies of the Assigned Agreements, if any, referred to in
the Security Agreement, together with a consent to such assignment,
in substantially the form of Exhibit B to the Security Agreement,
duly executed by each party to such Assigned Agreements other than
the Loan Parties,
(G) executed termination statements (Form UCC-3 or a
comparable form), in proper form to be duly filed on the date of the
Initial Extension of Credit under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem desirable in
order to terminate or amend existing Liens on the Collateral
described in the Security Agreement,
(H) the Blocked Account Letters referred to in the Security
Agreement, duly executed by each Blocked Account Bank listed on
Schedule 3.01(a)(iii)(H) in form and substance satisfactory to the
Administrative Agent,
(I) Landlord consents and bailee letters from the Persons
listed on Schedule 3.01(a)(iii)(I), to the extent and in form and
substance satisfactory to the Administrative Agent,
(J) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the liens and security interests created under the Security
Agreement has been taken, including the registration of the Pledged
Shares of the Non-U.S. Subsidiaries which are Significant
Subsidiaries, and
44
(K) Intercompany Notes duly executed by each Subsidiary
together with the Non-U.S. Security Agreements relating to
Intercompany Notes from such Non-U.S. Subsidiaries as set forth on
Schedule 3.01(a)(iii)(K) or such other Non-U.S. Subsidiaries as the
Administrative Agent shall have requested.
(iv) A termination letter from each existing lender to the Borrower
to the Administrative Agent relating to the satisfaction and termination
of the Existing Debt.
(v) The U.S. Guaranty duly executed by all U.S. Subsidiaries.
(vi) The Non-U.S. Guaranty duly executed by all Non-U.S.
Subsidiaries as requested by the Administrative Agent.
(vii) Deeds of trust, trust deeds and mortgages in substantially the
form of Exhibit E hereto and covering the properties listed on Schedule
4.01(r) (together with each other mortgage delivered pursuant to Section
5.01(j), in each case as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with their terms, the
"Mortgages"), duly executed by the appropriate Loan Party, together with:
(A) fully paid American Land Title Association Lender's
Extended Coverage title insurance policies (the "Mortgage Policies")
in form and substance, with endorsements and in amount acceptable to
the Administrative Agent, issued, coinsured and reinsured by title
insurers acceptable to the Administrative Agent, insuring the
Mortgages as of the time of the Initial Extension of Credit to be
valid first and subsisting Liens on the property described therein,
free and clear of all defects (including, but not limited to,
mechanics' and materialmen's Liens) and encumbrances, excepting only
Permitted Encumbrances, and providing for such other affirmative
insurance (including endorsements for future advances under the Loan
Documents and for mechanics' and materialmen's Liens) and such
coinsurance and direct access reinsurance as the Administrative
Agent may deem necessary or desirable,
(B) an appraisal of each of the properties described in the
Mortgages, if requested by the Administrative Agent, which
appraisals shall be from a Person acceptable to the Administrative
Agent and otherwise in form and substance satisfactory to the
Administrative Agent,
(C) such consents and agreements of lessors and other third
parties, and such estoppel letters and other confirmations, as the
Administrative Agent may deem necessary or desirable,
(D) evidence of the insurance required by the terms of the
Mortgages, and
(E) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to create valid first
and subsisting Liens on the property described in the Mortgages has
been taken.
45
(viii) Certified copies of the resolutions of the Board of Directors
of the Borrower and each Significant Subsidiary approving the Transaction
and each Transaction Document to which it is or is to be a party, and of
all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Transaction and each Transaction
Document to which it is or is to be a party and of the transactions
contemplated hereby.
(ix) A copy of a certificate of the Secretary of State (or such
other similar document in respect of the Non-U.S. Subsidiaries) of the
jurisdiction of incorporation of the Borrower and each Significant
Subsidiary, dated reasonably near the date of the Initial Extension of
Credit, in each case listing the charter of the Borrower and each
Significant Subsidiary and each amendment thereto on file in his office
and certifying that (A) such charter is a true and correct copy thereof,
(B) such amendments are the only amendments to such charter on file in his
office, (C) such Person has paid all franchise taxes to the date of such
certificate and (D) such Person is duly incorporated and in good standing
under the laws of the State of the jurisdiction of its incorporation.
(x) A copy of a certificate of the Secretary of State of the States
listed on Schedule 3.01(a)(x), dated reasonably near the date of the
Initial Extension of Credit, with respect to the Borrower and each
Significant Subsidiary as listed on Schedule 3.01(a)(x), stating that such
Person is duly qualified and in good standing as a foreign corporation in
such States and has filed all annual reports required to be filed to the
date of such certificate.
(xi) A certificate of the Borrower and each Significant Subsidiary,
signed on behalf of each such Person by its Executive Vice President and
its Secretary, dated the date of the Initial Extension of Credit (the
statements made in which certificate shall be true on and as of the date
of the Initial Extension of Credit), certifying as to (A) the absence of
any amendments to the charter of such Person since the date of the
Secretary of State's certificate referred to in Section 3.01(a)(ix), (B) a
true and correct copy of the bylaws of such Person as in effect on the
date on which the resolutions referred to in Section 3.01(a)(ix) were
adopted and on the date of the Initial Extension of Credit, (C) the due
incorporation and good standing or valid existence of such Person as a
corporation organized under the laws of the jurisdiction of its
incorporation and the absence of any proceeding for the dissolution or
liquidation of such Person, (D) the completeness and accuracy of the
representations and warranties contained in the Loan Documents as though
made on and as of the date of the Initial Extension of Credit and (E) the
absence of any event occurring and continuing, or resulting from the
Initial Extension of Credit, that constitutes a Default.
(xii) A certificate of the Secretary of each Loan Party certifying
the names and true signatures of the officers of such Persons authorized
to sign each Transaction Document to which it is or is to be a party and
the other documents to be delivered hereunder and thereunder.
(xiii) Such financial, business and other information regarding each
Loan Party and its Subsidiaries as the Lender Parties shall have
requested, including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters, obligations
46
under Plans, Multiemployer Plans and Welfare Plans, collective bargaining
agreements and other arrangements with employees, audited annual financial
statements dated June 30, 1998, June 30, 1997 and June 30, 1996, interim
financial statements dated March 31, 1999, and forecasts prepared by
management, in form and substance satisfactory to the Lender Parties, of
balance sheets, income statements and cash flow statements on a monthly
basis for the first year following the day of the Initial Extension of
Credit and on an annual basis for each year thereafter until the
Termination Date.
(xiv) Environmental assessment reports, in form and substance
satisfactory to the Lender Parties, as listed on Schedule 3.01(a)(xiv)
hereto, as to hazards, costs or liabilities under Environmental Laws to
which the Borrower or any Loan Party, or any of its Subsidiaries may be
subject, the amount and nature of which and the Borrower's plans with
respect to which shall be acceptable to the Lender Parties, together with
evidence, in form and substance satisfactory to the Lender Parties, that
all applicable Environmental Laws shall have been complied with. To the
extent either the report or any other information that may become
available to the Lender Parties shall disclose any hazards, costs or
liabilities under Environmental Laws or otherwise that the Lender Parties
deem material, the Lender Parties shall be satisfied that such hazards,
costs or liabilities were adequately reflected in the Borrower's financial
reserves shown on the financial statements included in the Information
Memorandum or that, to the extent not so reflected, the Borrower has made
adequate provision for such hazards, costs or liabilities.
(xv) A letter, in form and substance satisfactory to the
Administrative Agent, from the Borrower to Pricewaterhouse Coopers LLP,
its independent certified public accountants, advising such accountants
that the Administrative Agent and the Lender Parties have been authorized
to exercise all rights of the Borrower to require such accountants to
disclose any and all financial statements and any other information of any
kind that they may have with respect to the Borrower and its Subsidiaries
and directing such accountants to comply with any reasonable request of
the Administrative Agent or any Lender Party for such information.
(xvi) Evidence of insurance naming the Administrative Agent as
additional insured and loss payee with such responsible and reputable
insurance companies or associations, and in such amounts and covering such
risks, as is satisfactory to the Lender Parties, including, without
limitation, business interruption insurance, product liability insurance,
and directors and officers insurance.
(xvii) Favorable opinions of O'Melveny & Xxxxx, New York and
California and English counsel for the Loan Parties, and L. Xxxxxxx
Xxxxxxx, Executive Vice President, Secretary and General Counsel of the
Loan Parties, in substantially the form of Exhibit G-1 and G-2 hereto.
(xviii) A favorable opinion of local counsel to the Loan Parties,
acceptable in form and substance to the Administrative Agent.
47
(xix) A certificate, in substantially the from of Exhibit H hereto,
attesting to the Solvency of the Borrower and its Subsidiaries taken as a
whole after giving effect to the Transaction and the other transactions
contemplated hereby from its chief financial officer.
(b) The Lender Parties shall be satisfied with the corporate and legal
structure and capitalization of the Borrower and its Subsidiaries, both before
and after giving effect to the Transaction, including the terms and conditions
of the charter, bylaws and each class of capital stock of the Loan Parties and
their Subsidiaries and of each agreement or instrument relating to such
structure or capitalization.
(c) Before giving effect to the Transaction and the other transactions
contemplated by this Agreement, there shall have occurred no Material Adverse
Change since June 30, 1998.
(d) There shall exist no action, suit, investigation, litigation or
proceeding affecting the Borrower or any Loan Party or any of their Subsidiaries
pending or threatened before any court, governmental agency or arbitrator that
(i) could have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of the Transaction or any Transaction
Document or the consummation of the transactions contemplated by the Transaction
Documents.
(e) All governmental and third party consents and approvals necessary in
connection with the Transaction and the other transactions contemplated by the
Transaction Documents shall have been obtained (without the imposition of any
conditions that are not acceptable to the Lender Parties) and shall remain in
effect; all applicable waiting periods in connection with the Transaction and
the other transactions contemplated by the Transaction Documents shall have
expired without any action having been taken by any competent authority, and no
law or regulation shall be applicable in the judgment of the Lender Parties, in
each case that restrains, prevents or imposes materially adverse conditions upon
the Transaction and the other transactions contemplated by the Transaction
Documents or the rights of the Loan Parties freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
(f) The Lender Parties shall have completed a due diligence investigation
of the Borrower and its Subsidiaries (including, without limitation, a field
examination of the quality of their current assets and of their management
information systems) in scope, and with results, satisfactory to the Lender
Parties and the Lender Parties shall have been given such access to the
management, records, books of account, contracts and properties of the Borrower
and its Subsidiaries as they shall have requested.
(g) The Lender Parties shall be satisfied that all Existing Debt, other
than the Surviving Debt identified on Schedule 3.01(g), has been prepaid,
redeemed or defeased in full or otherwise satisfied and extinguished and that
all such Surviving Debt shall be on terms and conditions satisfactory to the
Lender Parties.
(h) All accrued fees and expenses of the Administrative Agent and the
Lender Parties (including the accrued fees and expenses of counsel to the
Administrative Agent) shall have been paid.
48
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. The
obligation of each Appropriate Lender to make an Advance (other than a Letter of
Credit Advance made by the Issuing Bank or a Revolving Credit Lender pursuant to
Section 2.03(c) on the occasion of each Borrowing (including the Initial
Extension of Credit), and the obligation of the Issuing Bank to issue a Letter
of Credit (including the initial issuance), shall be subject to the further
conditions precedent that on the date of such Borrowing or issuance, (a) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing or Notice of Issuance and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date,
before and after giving effect to such Borrowing or issuance and to the
application of the proceeds therefrom, as though made on and as of such
date other than any such representations or warranties that, by their
terms, refer to a specific date other than the date of such Borrowing or
issuance, in which case as of such specific date; and
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default, and
(b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender Party through the Administrative
Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) Each Loan Party and its Subsidiaries (i) is a corporation duly
organized, validly existing and, except as set forth in Schedule 4.01(a)
hereto, in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the
49
conduct of its business requires it to so qualify or be licensed except
where the failure to so qualify or be licensed could not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite
corporate power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted and
as proposed to be conducted. All of the outstanding Equity Interests in
the Borrower has been validly issued, is fully paid and non-assessable
and, immediately following the consummation of the Transaction, is owned
free and clear of all Liens. All of the outstanding capital stock of the
Borrower has been validly issued, fully paid and non-assessable.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party (designating whether such
Subsidiary is a U.S. Subsidiary or a Non-U.S. Subsidiary), showing as of
the date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of its Equity Interests
authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class of its Equity
Interests owned (directly or indirectly) by such Loan Party or its
Subsidiaries and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding Equity Interests in each Loan Party's
Subsidiaries, to the extent owned by the Borrower and its Subsidiaries,
have been validly issued, are fully paid and non-assessable and are owned
by such Loan Party or one or more of its Subsidiaries free and clear of
all Liens (other than Permitted Liens), except those created under the
Collateral Documents. Each such Subsidiary (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires
it to so qualify or be licensed except where the failure to so qualify or
be licensed could not be reasonably likely to have a Material Adverse
Effect and (iii) has all requisite corporate power and authority
(including, without limitation, all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to carry
on its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party or
its Subsidiaries of each Transaction Document to which it is or is to be a
party, and the consummation of the Transaction and the other transactions
contemplated by the Transaction Documents, are within such Person's
corporate powers, have been duly authorized by all necessary corporate
action, and do not (i) contravene such Person's charter or bylaws, (ii)
violate any law, rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award, (iii)
conflict with or result in the breach of, or constitute a default or
require any payment to be made under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on
or affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created under the Loan Documents,
result in or require the creation or imposition of any Lien upon or with
respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of
50
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument, the violation or breach of which could be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery,
recordation, filing or performance by any Loan Party or its Subsidiaries
of any Transaction Document to which it is or is to be a party, or for the
consummation of the Transaction or the other transactions contemplated by
the Transaction Documents, (ii) the grant by any Loan Party or its
Subsidiaries of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created under
the Collateral Documents (including the first priority nature thereof) or
(iv) the exercise by the Administrative Agent or any Lender Party of its
rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d) hereto. All applicable waiting periods in connection with the
Transaction or the transactions contemplated by the Transaction Documents
have expired without any action having been taken by any competent
authority restraining, preventing or imposing materially adverse
conditions upon the Transaction and the other transactions contemplated by
the Transaction Documents have expired without any action having been
taken by any competent authority restraining, preventing or imposing
materially adverse conditions upon the Transaction or the rights of the
Loan Parties or their Subsidiaries freely to transfer or otherwise dispose
of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
(e) This Agreement has been, and each other Transaction Document
when delivered hereunder will have been, duly executed and delivered by
each Loan Party or its Subsidiaries party thereto. This Agreement is, and
each other Transaction Document when delivered hereunder will be, the
legal, valid and binding obligation of each Loan Party or its Subsidiaries
party thereto, enforceable against such Loan Party or its Subsidiaries in
accordance with its terms.
(f) (i) (x) The Consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as at June 30, 1998, and the related
Consolidated and consolidating statements of income and cash flow of the
Borrower and its Subsidiaries for the fiscal year then ended, accompanied,
as to the Consolidated financial statements, by an unqualified opinion of
Pricewaterhouse Coopers LLP, independent public accountants, and (y) the
Consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at March 31, 1999, and the related Consolidated and
consolidating statements of income and cash flow of the Borrower and its
Subsidiaries for the nine months then ended, in each case duly certified
by the chief financial officer of the Borrower, copies of which have been
furnished to each Lender Party, fairly present, subject, in the case of
the statements referred to in clause (i)(y), to year-end audit
adjustments, the Consolidated and consolidating financial condition of the
Borrower and its Subsidiaries as at such dates and the Consolidated and
consolidating results of the operations of the Borrower and its
Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis,
including any unusual
51
adjustments to its financial statements for the Fiscal Year ending on or
about June 30, 1999 appropriate to reflect those set forth in Schedule
1.01.
(ii) Since June 30, 1998 there has occurred no Material Adverse
Change.
(g) The Consolidated forecasted balance sheet, statements of income
and statements of cash flow of the Borrower and its Subsidiaries delivered
to the Lender Parties pursuant to Section 3.01(a)(iv) or 5.03 were
prepared in good faith on the basis of the assumptions stated therein,
which assumptions were fair in the light of conditions existing at the
time of delivery of such forecasts, and represented, at the time of
delivery and on the date of the Initial Extension of Credit, the
Borrower's best estimate of the future financial performance of the
Borrower and its Subsidiaries.
(h) Except as set forth in Schedule 4.01(h), there is no action,
suit, investigation, litigation or proceeding affecting any Loan Party or
any of its Subsidiaries, including any Environmental Action, pending or,
to the best knowledge of the Borrower, threatened before any court,
governmental agency or arbitrator that (i) could be reasonably likely to
have a Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of any Transaction Document or the consummation
of the transactions contemplated hereby.
(i) No Loan Party or its Subsidiaries is engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock
(other than purchases of the shares of common stock of the Borrower
permitted by Section 5.02(g), all such shares to be retired upon
purchase), and no proceeds of any Advance or drawings under any Letter of
Credit will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin
Stock.
(j) All filings and other actions necessary or desirable to perfect
and protect the security interest in the Collateral created under the
Collateral Documents and to the extent required thereby have been duly
made or taken and are in full force and effect and the Collateral
Documents create for the benefit of the Secured Parties a valid and,
together with such filings and other actions, perfected first priority
security interest in the Collateral securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken by the
Loan Parties to the extent required by this Section 4.01. The Loan Parties
or their Subsidiaries are the legal and beneficial owners of the
Collateral free and clear of any Lien (other than Permitted Liens), except
for the liens and security interests created or permitted under the Loan
Documents.
(k) Neither any Loan Party nor any of its Subsidiaries is (i) an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended or (ii) a
"holding company," or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company," or of a "subsidiary company" of a
"holding company" as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended. Neither the making of any Advances, nor
the issuance of any Letters of Credit, nor the
52
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated hereby, will violate
any provision of any such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(l) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(m) (i) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.
(ii) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA, of
each Plan exceeds 90% and there has been no material adverse change in the
funding status of any such Plan since such date.
(iii) Neither any Loan Party nor any ERISA Affiliate has incurred or
is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan.
(iv) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, within the meaning of Title
IV of ERISA.
(v) Except as set forth in the financial statements referred to in
this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(vi) Set forth on Schedule 4.01(m)(vi) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans.
(vii) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been filed
with the Internal Revenue Service and furnished to the Lender Parties, is
complete and accurate and fairly presents the funding status of such Plan,
and since the date of such Schedule B there has been no material adverse
change in such funding status.
(n) (i) The operations and properties of each Loan Party and each of
its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits except for such
non-compliance that could not reasonably be expected to result in material
liability, all past written claims of non-compliance with such
Environmental Laws and Environmental Permits have been resolved without
ongoing material obligations or material costs, and no circumstances exist
that could be reasonably likely to (x) form the basis of an Environmental
Action against any Loan Party or any of its Subsidiaries or any of its
properties that could have a Material Adverse Effect or (y) cause any such
property to be
53
subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(ii) Except as set forth on Schedule 4.01(n)(iii), none of the
properties currently or formerly owned or operated by any Loan Party or
any of its Subsidiaries is listed or proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list; there are no
and, to the knowledge of each Loan Party never have been, any underground
or aboveground storage tanks or any surface impoundments, septic tanks,
pits, sumps or lagoons in which Hazardous Materials are being or have been
treated, stored or disposed on any property currently owned or operated by
any Loan Party or any of its Subsidiaries or, to the best of its
knowledge, on any property formerly owned or operated by any Loan Party or
any of its Subsidiaries, in each case that could reasonably be expected to
result in material liability; there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan Party or
any of its Subsidiaries that could reasonably be expected to result in
material liability; and Hazardous Materials have not been released,
discharged or disposed of on any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries except for such
releases, discharges or disposals that could not reasonably be expected to
result in material liability.
(iii) Except as set forth on Schedule 4.01(n)(iii), neither any Loan
Party nor any of its Subsidiaries is currently undertaking, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials
at any site, location or operation, either voluntarily or pursuant to the
order of any governmental or regulatory authority or the requirements of
any Environmental Law which could reasonably be expected to result in
material liability; and all waste Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries have been disposed of in a manner not reasonably expected to
result in material liability to any Loan Party or any of its Subsidiaries.
(o) (i) Each Loan Party and each of its Subsidiaries and Affiliates
has filed, has caused to be filed or has been included in all tax returns
(Federal, state, local and foreign) required to be filed and has paid all
taxes shown thereon to be due, together with applicable interest and
penalties.
(ii) Set forth on Schedule 4.01(o) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of each Loan Party and
each of its Subsidiaries and Affiliates for which Federal income tax
returns have been filed and for which the expiration of the applicable
statute of limitations for assessment or collection has not occurred by
reason of extension or otherwise (an "Open Year").
(iii) There is no unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability of each Loan Party and
each of its Subsidiaries and Affiliates proposed by the Internal Revenue
Service with respect to Open Years. No issues have been raised by the
54
Internal Revenue Service in respect of Open Years that, in the aggregate,
could have a Material Adverse Effect.
(iv) There is no unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each Loan
Party and its Subsidiaries and Affiliates proposed by all state, local and
foreign taxing authorities (other than amounts arising from adjustments to
Federal income tax returns, if any). No issues have been raised by such
taxing authorities that, in the aggregate, could have a Material Adverse
Effect.
(v) Neither any Loan Party nor any of its Subsidiaries is party to
any tax sharing agreement.
(p) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries have been affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or
not covered by insurance) that could be reasonably likely to have a
Material Adverse Effect.
(q) Set forth on Schedule 4.01(q) hereto is a complete and accurate
list of all Existing Debt (other than Surviving Debt), showing as of the
date hereof the principal amount outstanding thereunder, the maturity date
thereof and the amortization schedule therefor.
(r) Set forth on Schedule 4.01(r) hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, county or
other relevant jurisdiction, state, record owner and fair value thereof.
Each Loan Party or such Subsidiary has good, marketable and insurable fee
simple title to such real property, free and clear of all Liens, other
than Liens created or permitted by the Loan Documents. To the best of the
Borrower's knowledge, all of the improvements located on the properties
listed on Schedule 4.01(r) lie entirely within the boundaries of such
properties and none of such improvements violate any minimum set-back
requirements, other dimensional regulations or restrictions of record.
(s) Set forth on Schedule 4.01(s) hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any of
its Subsidiaries is the lessee, showing as of the date hereof the street
address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.
(t) Set forth on Schedule 4.01(t) hereto is a complete and accurate
list of all Investments held by any Loan Party or any of its Subsidiaries,
showing as of the date hereof the amount, obligor or issuer and maturity,
if any, thereof.
(u) Set forth on Schedule 4.01(u) hereto is a complete and accurate
list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of each
Loan Party or any of its Subsidiaries, showing as of the date
55
hereof the jurisdiction in which registered, the registration number, the
date of registration and the expiration date.
(v) Set forth on Schedule 4.01(v) hereto is a complete and accurate
list of all Liens on the property or assets of any Loan Party or any of
its Subsidiaries, showing as of the date hereof the lienholder thereof,
the principal amount of the obligations secured thereby and the property
or assets of such Loan Party or such Subsidiary subject thereto.
(w) Each Loan Party has reviewed the areas within its business and
operations which could be adversely affected by, and has developed or is
in the process of developing a program to address on a timely basis, "Year
2000 Issues" (i.e., the risk that computer applications used by such Loan
Party may be unable to recognize or perform properly date sensitive
functions involving certain dates prior to, and any date after, December
31, 1999) and, based on such review, such Loan Party reasonably believes
that the "Year 2000 Issues" (and the cost of remedying the same) will not
have a Material Adverse Effect.
ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants. So long as any Advance or any other
Obligation of any Loan Party or its Subsidiaries under or in respect of any Loan
Document shall remain unpaid, any Letter of Credit shall be outstanding, any
Secured Hedge Agreement shall be in effect or any Lender Party shall have any
Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
or levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property which is not
otherwise permitted hereunder; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to pay or discharge
any such tax, assessment, charge or claim that is being contested in good
faith and by proper proceedings and as to which appropriate reserves are
being maintained, unless and until any Lien resulting therefrom attaches
to its property and becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying
its properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental
56
Permits necessary for its operations and properties; and conduct, and
cause each of its Subsidiaries to conduct, any investigation, study,
sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from
any of its properties, in accordance with the requirements of all
Environmental Laws; provided, however, that neither the Borrower nor any
of its Subsidiaries shall be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do
so is being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such
circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Significant Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises; provided, however, that
the Borrower may consummate any merger or consolidation permitted under
Section 5.02(d) and provided further that neither the Borrower nor any of
its Subsidiaries shall be required to preserve any right, permit, license,
approval, privilege or franchise if the Board of Directors of the Borrower
or such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Borrower, such Subsidiary
or the Lender Parties.
(f) Visitation Rights. At any reasonable time and from time to time,
upon reasonable prior notice, permit the Administrative Agent or any of
the Lender Parties or any agents or representatives thereof, to examine
and make copies of and abstracts from the records and books of account of,
and visit the properties of, the Borrower and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Borrower and any of
its Subsidiaries with any of their officers or directors and with their
independent certified public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Significant Subsidiaries to maintain and preserve, all of its
properties that are reasonably required in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(i) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their
57
Affiliates on terms that are fair and reasonable and no less favorable to
the Borrower or such Subsidiary than it would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
(j) Covenant to Guarantee Obligations and Give Security. Upon (x)
the request of the Administrative Agent, (y) the formation or acquisition
of any new direct or indirect Subsidiary of any Loan Party (other than a
Non-U.S. Subsidiary if the effect of such undertaking would have material
adverse tax consequences to the Loan Parties taken as a whole) or (z) the
acquisition of any property by any Loan Party, and such property, in the
judgment of the Administrative Agent, shall not already be subject to a
perfected first priority security interest in favor of the Administrative
Agent for the benefit of the Secured Parties, then the Borrower shall, in
each case at the Borrower's expense:
(i) within 10 days after such request, formation or
acquisition, cause each such (A) U.S. Subsidiary to duly execute and
deliver to the Administrative Agent a guaranty or guaranty
supplement to the U.S. Guaranty, in form and substance satisfactory
to the Administrative Agent, guaranteeing all of the Loan Parties'
Obligations under the Loan Documents, and (B) Non-U.S. Subsidiary to
duly execute and deliver to the Administrative Agent a guaranty or
guaranty supplement to the Non-U.S. Guaranty, in form and substance
satisfactory to the Administrative Agent; provided that no guaranty
or guaranty supplement may be required (if acceptable to the
Administrative Agent) from a Non-U.S. Subsidiary if the execution
and delivery thereof would result in material adverse tax
consequences to the Loan Parties taken as a whole;
(ii) within 10 days after such request, formation or
acquisition, furnish to the Administrative Agent a description of
the real and personal properties of the Borrower and its
Subsidiaries in detail satisfactory to the Administrative Agent;
(iii) within 15 days after such request, formation or
acquisition, duly execute and deliver, and cause each such
Subsidiary to duly execute and deliver to the Administrative Agent
mortgages, pledges, assignments, security agreement supplements and
other security agreements, as specified by and in form and substance
satisfactory to the Administrative Agent, securing payment of all
the Obligations of the Loan Parties under the Loan Documents and
constituting Liens on all such properties; provided that no
mortgage, pledge, assignment, security agreement supplement or other
security agreement may be required (if acceptable to the
Administrative Agent) from a Subsidiary organized or located outside
of the United States if the execution and delivery thereof would
result in adverse tax consequences to the Loan Parties;
(iv) within 30 days after such request, formation or
acquisition, duly execute and deliver, and cause each such
Subsidiary (other than any Subsidiary organized or located outside
of the United States) to take whatever action (including, without
limitation, the recording of mortgages, the filing of Uniform
Commercial Code financing statements, the giving of notices and the
endorsement of notices on title
58
documents) may be necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid
and subsisting Liens on the properties purported to be subject to
the mortgages, pledges, assignments, security agreement supplements
and other security agreements delivered pursuant to this Section
5.01(j), enforceable against all third parties in accordance with
their terms;
(v) within 60 days after such request, formation or
acquisition, deliver to the Administrative Agent, upon the request
of the Administrative Agent in its sole discretion, a signed copy of
a favorable opinion, addressed to the Administrative Agent and the
other Secured Parties, of counsel for the Loan Parties acceptable to
the Administrative Agent as to the matters contained in clauses (i),
(iii) and (iv) above, as to such mortgages, pledges, assignments,
security agreement supplements and other security agreements being
legal, valid and binding obligations of each such Loan Party
enforceable in accordance with their terms and as to such other
matters as the Administrative Agent may reasonably request;
(vi) as promptly as practicable after such request, formation
or acquisition, deliver, upon the request of the Administrative
Agent in its sole discretion, to the Administrative Agent with
respect to each parcel of real property owned or held by the entity
that is the subject of such request, formation or acquisition title
reports, surveys and engineering, soils and other reports, and
environmental assessment reports, each of scope, form and substance
satisfactory to the Administrative Agent, provided, however, that to
the extent that any Loan Party or any of its Subsidiaries shall have
otherwise received any of the foregoing items with respect to such
real property, such items shall promptly after the receipt thereof
be delivered to the Administrative Agent;
(vii) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all
such other action as the Administrative Agent may deem necessary or
desirable in obtaining the full benefits of, or in perfecting and
preserving the Liens of, such guaranties, mortgages, pledges,
assignments, security agreements and security agreement supplements;
and
(viii) promptly upon such request, formation or acquisition
related to any Subsidiary that is a Non-U.S. Subsidiary pledge or
cause its Subsidiaries to pledge to the Administrative Agent, on
behalf of the Secured Parties, 65% of the total outstanding shares
or other ownership interests of such Person owned by the Borrower or
its Subsidiary.
(k) Further Assurances. (i) Promptly upon request by the
Administrative Agent, or any Lender Party through the Administrative
Agent, correct any material defect or error that may be discovered in any
Loan Document or in the execution, acknowledgment, filing or recordation
thereof,
59
(ii) promptly upon request by the Administrative Agent, or any
Lender Party through the Administrative Agent, do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any
and all such further acts, deeds, conveyances, pledge agreements,
mortgages, deeds of trust, trust deeds, assignments, consents of
landlords, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and
other instruments as the Administrative Agent, or any Lender Party through
the Administrative Agent, may reasonably require from time to time in
order to (A) carry out more effectively the purposes of the Loan
Documents, (B) to the fullest extent permitted by applicable law, subject
any Loan Party's or any of its Subsidiaries' properties, assets, rights or
interests to the Liens now or hereafter intended to be covered by any of
the Collateral Documents, (C) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any of
the Liens intended to be created thereunder and (D) assure, convey, grant,
assign, transfer, preserve, protect and confirm more effectively unto the
Administrative Agent and the Lender parties the rights granted or now or
hereafter intended to be granted to the Administrative Agent and the
Lender Parties under any Loan Document or under any other instrument
executed in connection with any Loan Document to which any Loan Party or
any of its Subsidiaries is or is to be a party, and cause each of its
Subsidiaries to do so, and
(iii) to the extent requested by the Administrative Agent, use its
best efforts to obtain the certificates representing 65% of the Pledged
Shares in respect of the Non-U.S. Guarantors set out on Schedule
3.01(a)(iii)(A)(2) (and to take such other action to perfect the security
interest in those Pledged Shares) together with undated stock power
executed in blank and instruments evidencing the respective Pledged Debt,
if any, endorsed in blank.
(l) Performance of Non-U.S. Security Agreements. Perform and
observe, and cause each of its Subsidiaries to perform and observe, all of
the terms and provisions of each Non-U.S. Security Agreement to be
performed or observed by it, maintain each such Non-U.S. Security
Agreement in full force and effect, enforce such Non-U.S. Security
Agreement in accordance with its terms, take all such action to such end
as may be from time to time requested by the Administrative Agent and,
upon request of the Administrative Agent, make to each other party to each
such Related Document such demands and requests for information and
reports or for action as such Loan Party or any of its Subsidiaries is
entitled to make under such Non-U.S. Security Agreement.
(m) Preparation of Environmental Reports. At the reasonable request
of the Administrative Agent, provide to the Lender Parties within 60 days
after such request, at the expense of the Borrower, a Phase I
environmental site assessment report for any of its or its Subsidiaries'
properties described in such request, prepared by an environmental
consulting firm acceptable to the Administrative Agent (and, if based upon
the reasonable recommendation of such environmental consulting firm, a
Phase II environmental site assessment report within a commercially
reasonable time period) indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial
action in connection with any Hazardous Materials on such properties;
without limiting the generality of the foregoing, if the Administrative
Agent reasonably determines at any time that a material risk
60
exists that any such report will not be provided within the time referred
to above and the Administrative Agent reasonably believes that the Lender
Parties have breached any representation, warranty or covenant in Section
4.01(n), the Administrative Agent may retain an environmental consulting
firm to prepare such report at the expense of the Borrower, and the Parent
Guarantor hereby grants and agrees to cause any Subsidiary that owns any
property described in such request to grant at the time of such request,
to an environmental consultant retained by Administrative Agent, the
Lender Parties, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants and to
the reasonable conditions of the respective Subsidiaries, to enter onto
their respective properties to undertake such an assessment.
(n) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party, keep
such leases in full force and effect and not allow such leases to lapse or
be terminated or any rights to renew such leases to be forfeited or
canceled, notify the Administrative Agent of any material default by any
party with respect to such leases and cooperate with the Administrative
Agent in all respects to cure any such default, and cause each of its
Subsidiaries to do so except, in any case, where the failure to do so,
either individually or in the aggregate, could not be reasonably likely to
have a Material Adverse Effect.
(o) Interest Rate Hedging. Enter into prior to September 30, 1999,
and maintain for a period of at least two years following entry, interest
rate Hedge Agreements with Persons acceptable to the Administrative Agent,
covering a notional amount of not less than 50% of the Commitments under
the Term Facilities and providing for such Persons to make payments
thereunder for a period of no less than two years, such Hedge Agreements
to be in form and substance satisfactory to the Administrative Agent.
(p) Syndication. Take all actions which the Administrative Agent or
the Syndication Agent may reasonably request to assist it in forming a
syndicate acceptable to it including, but not be limited to: (i) making
senior management of the Loan Parties and representatives of the Loan
Parties available to participate in informational meetings with potential
lenders at such times and places as such Agents may reasonably request;
and (ii) timely providing such Agents with all information reasonably
deemed necessary by it to successfully complete the syndication,
including, without limitation, a summary of the operating prospects
(including financial projections) of the Borrower and its Subsidiaries.
SECTION 5.02. Negative Covenants. So long as any as any Advance or any
other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding, any Secured
Hedge Agreement shall be in effect or any Lender Party shall have any Commitment
hereunder, the Borrower will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or
61
file or suffer to exist, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Borrower or any of its
Subsidiaries as debtor, or sign or suffer to exist, or permit any of its
Subsidiaries to sign or suffer to exist, any security agreement
authorizing any secured party thereunder to file such financing statement,
or assign, or permit any of its Subsidiaries to assign any accounts or
other right to receive income, excluding, however, from the operation of
the foregoing restrictions, the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 4.01(v) hereto;
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(ii)(C); provided that no such Lien
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases;
(v) purchase money Liens upon or in real property, equipment
and other fixed assets acquired or held by the Borrower or any of
its Subsidiaries in the ordinary course of business to secure the
purchase price of such property, equipment and other fixed assets or
to secure Debt incurred solely for the purpose of financing the
acquisition of any such property or equipment to be subject to such
Liens, or Liens existing on any such property or equipment at the
time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase
price), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided, however, that
no such Lien shall extend to or cover any property other than the
property, equipment and other fixed assets being acquired, and no
such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed
or replaced; and provided further that the aggregate principal
amount of the Debt secured by Liens permitted by this clause (v)
shall not exceed the amount permitted under Section 5.02(b)(ii)(C)
at any time outstanding and that any such Debt shall not otherwise
be prohibited by the terms of the Loan Documents;
(vi) the filing of financing statements solely as a
precautionary measure in connection with operating leases;
(vii) other Liens securing Debt outstanding in an aggregate
principal amount not to exceed $1,000,000;
(viii) the replacement, extension or renewal of any Lien
permitted by clause (iii) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby; and
62
(ix) Liens on current assets arising in connection with the
Debt in respect of working capital provided to the Non-U.S.
Subsidiaries and permitted under Section 5.02(b)(ii)(D); provided
that such Liens are granted on assets owned solely by the obligor of
such Debt.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than:
(i) in the case of the Borrower, Debt not to exceed $3,000,000
at any time outstanding; and
(ii) in the case of the Loan Parties or any of their
Subsidiaries,
(A) Debt under the Loan Documents,
(B) Debt to the Borrower, provided, however, that all
such Debt shall be evidenced by an Intercompany Note and with
respect to the Non-U.S. Subsidiaries and if requested by the
Administrative Agent, shall be secured by a Non-U.S. Security
Agreement in form and substance satisfactory to the
Administrative Agent securing the obligations under the
Intercompany Note of such Non-U.S. Subsidiary, but not to
exceed:
(1) more than $1,000,000 in the aggregate at
any time outstanding from U.S. Subsidiaries, and
(2) for so long as the Leverage Ratio shall be
equal to or greater than 2.00 to 1.00, more than
$60,000,000 in the aggregate at any time outstanding
from Non-U.S. Subsidiaries; provided, that not more than
$30,000,000 of such Debt is outstanding from Non-U.S.
Subsidiaries that have not provided perfected security
interests in substantially all of their respective
collateral under local applicable law and on a basis
satisfactory to the Administrative Agent, and
(3) so long as the Leverage Ratio shall be less
than 2.00 to 1.00, more than $70,000,000 in the
aggregate at any time outstanding from Non-U.S.
Subsidiaries,
(C) (1) Capitalized Leases and (2) Debt secured by Liens
permitted under Section 5.02(a)(v), in an aggregate principal
amount not to exceed $35,000,000 at any time outstanding;
provided that the aggregate principal amount of Debt of the
Borrower and its U.S. Subsidiaries permissible under this
clause (C) shall not exceed $10,000,000 at any time
outstanding, and
(D) Debt in respect of working capital provided to
Non-U.S. Subsidiaries in an aggregate principal amount not to
exceed $30,000,000 at any
63
time outstanding, including (without duplication) any guaranty
of such Debt by the Borrower; provided, however, that for so
long as the Leverage Ratio shall be less than 2.00 to 1.00,
the aggregate principal amount of Debt incurred under this
Section 5.02(b)(ii)(D) shall not exceed $40,000,000 at any
time outstanding;
(E) Debt (1) of the Borrower in respect of Hedge
Agreements designed to hedge against fluctuations in interest
rates or (2) of any Loan Party in respect of Hedge Agreements
designed to hedge against fluctuations in foreign exchange
rates, in each case incurred in the ordinary course of
business and consistent with prudent business practice in an
aggregate notional amount not to exceed $125,000,000 for
interest rate Hedge Agreements and $70,000,000 for foreign
exchange Hedge Agreements at any time outstanding, and
(iii) in the case of the Borrower and any of its Subsidiaries,
indorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business.
(c) Change in Nature of Business. Engage, or permit any of its
Subsidiaries to engage in any significant business other than the
manufacture, sale and distribution of semiconductors or products related
to semiconductors or any business that is a reasonable extension thereof.
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to
do so, except that (i) any Subsidiary of the Borrower may merge into or
consolidate with the Borrower so long as the surviving Person is the
Borrower, (ii) any Subsidiary of the Borrower may merge into or
consolidate with a U.S. Subsidiary, so long as the surviving Person is a
wholly-owned U.S. Subsidiary of the Borrower or (iii) any Non-U.S.
Subsidiary may merge into or consolidate with any other Non-U.S.
Subsidiary provided that if any Non-U.S. Guarantor is a party to such
merger or consolidation, the surviving Person shall be a Non-U.S.
Guarantor; provided, however, that in each case, immediately after giving
effect thereto, no event shall occur and be continuing that constitutes a
Default.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets, or grant any option or other right to
purchase, lease or otherwise acquire any assets, except:
(i) sales of Inventory (including, without limitation, sales
of obsolete Inventory) in the ordinary course of its business,
(ii) in a transaction permitted by Section 5.02(d) or for
transfers of assets between the Borrower and it Subsidiaries
permitted by Section 5.02(f),
64
(iii) sales, trade-ins or dispositions of used equipment for
fair value in the ordinary course of business consistent with past
practices in an aggregate amount not to exceed $5,000,000 in any
Fiscal Year,
(iv) sales of assets listed on Schedule 5.02(e)(iv),
(v) licenses of technology in the ordinary course of business
so long as the net receipts are included in net income,
(vi) sales of assets (other than current assets) not exceeding
$10,000,000 in the aggregate in any Fiscal Year and $30,000,000 in
the aggregate after the Initial Extension of Credit; provided that
(x) such sales are for fair market value (as determined in good
faith by the Board of Directors by the seller), (y) not less than
85% of the consideration received from any such sale consists of
cash or Debt assumed by the purchaser and (z) the Net Cash Proceeds
of such sale are applied as required by Section 2.06(b)(ii).
(f) Investments. Make or hold, or permit any of its Subsidiaries to
make or hold, any Investment other than:
(i) equity Investments by the Borrower and its wholly-owned
Subsidiaries in wholly-owned Subsidiaries outstanding on the date
hereof;
(ii) additional equity investments by the Borrower in (1) U.S.
Guarantors in an aggregate amount invested from the date hereof not
to exceed $1,000,000, or (2) wholly-owned U.S. Subsidiaries other
than U.S. Guarantors in an aggregate amount invested from the date
hereof not to exceed $250,000, or (3) wholly-owned Non-U.S.
Subsidiaries of the Borrower in an aggregate amount invested from
the date hereof not to exceed $15,000,000; provided, however, that
at any time, Investments made under this Section 5.02(f)(ii)(3) and
then outstanding, plus Investments made under Section 5.02(f)(x) and
then outstanding, plus the payments made in accordance with Section
5.02(g)(i)(x) shall not in aggregate exceed $20,000,000;
(xi) Investments consisting of Debt to the Borrower permitted
by Section 5.02(b)(ii)(B);
(iv) Investments by the Borrower and its Subsidiaries in
demand deposit accounts maintained in the ordinary course of
business with any Person of the type referred to in clause (i),
(ii), (iii), (iv) or (v) of the definition of "Eligible Assignee"
and in Cash Equivalents, provided that, any such Investments not on
deposit in Blocked Accounts shall not exceed (A) $250,000 in respect
of the U.S. Subsidiaries taken as a whole or (B) $1,000,000 in
respect of the Non-U.S. Subsidiaries taken as a whole;
(v) Investments by the Borrower in Hedge Agreements permitted
under Section 5.02(b)(ii)(E);
65
(vi) Investments by the Borrower in Permitted Acquisitions in
the United States in an amount not to exceed $50,000,000; provided
that:
(A) before and after giving effect to any such Permitted
Acquisition, on a Pro Forma Basis for the Rolling Period ended
as at the end of the most recent period for which financial
statements were required to be furnished to the Administrative
Agent pursuant to Sections 5.03(b) and (c), the Leverage Ratio
shall be less than 2.00 to 1.00,
(B) the Borrower shall have furnished the Administrative
Agent with (1) a schedule in form satisfactory to the
Administrative Agent of the computations used by the Borrower
in determining compliance with such requirements and (2) a
certificate, in substantially the form of Exhibit H hereto,
attesting to the Solvency of the Borrower and its Subsidiaries
taken as a whole, after giving effect to the Investment and
the other transactions contemplated thereby, from its chief
financial officer and as to compliance with the conditions set
forth in clauses (C) and (D) below,
(C) the amount of Net Cash available to the Borrower
shall, on the date of such Investment, be at least
$75,000,000, and
(D) immediately before and after giving effect thereto,
no Default shall have occurred and be continuing or would
result therefrom;
(vii) Investments described on Schedule 4.01(t) hereto;
(viii) equity Investments received in consideration for the
licensing of technology owned or licensed by the Borrower in the
ordinary course of business on a basis consistent with past practice
or consistent with evolving industry practice;
(ix) loans and advances to employees in the ordinary course of
the business of the Borrower and its Subsidiaries as presently
conducted in an aggregate principal amount not to exceed $2,000,000
at any time outstanding; and
(x) other Investments not exceeding $5,000,000 at any time
outstanding; provided that the Borrower shall retain control of the
entity in which the Investments are made; provided, however, that at
any time, Investments made under this Section 5.02(f)(x) and then
outstanding, plus Investments made under Section 5.02(f)(ii)(3) and
then outstanding, plus the payments made in accordance with Section
5.02(g)(i)(x) shall not in aggregate exceed $20,000,000.
(g) Restricted Payments. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its Equity
Interests now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof)
66
stockholders, partners or members (or the equivalent Persons thereof) as
such or issue or sell any Equity Interests or accept any capital
contributions, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value Equity Interests of the
Borrower or to issue or sell any Equity Interests therein, except that, so
long as no Default shall have occurred and be continuing at the time of
any action described in clause (i) or (ii) below or would result
therefrom:
(i) the Borrower may (A) declare and pay dividends and
distributions payable only in common stock of the Borrower, and (B)
purchase, redeem, retire, defease or otherwise acquire shares of its
capital stock for cash in an aggregate amount not to exceed the sum
of (x) $10,000,000 (provided that, at any time, such amount utilized
pursuant to this Section 5.02(g)(i), together with Investments made
under Section 5.02(f)(ii)(3) and then outstanding, plus Investments
made under Section 5.02(f)(x) and then outstanding, shall not in the
aggregate exceed $20,000,000), plus (y) 25% of Excess Cash Flow
(which percentage shall increase to 50% of Excess Cash Flow to the
extent the amount of Excess Cash Flow required to be prepaid
pursuant to Section 2.06(b)(i) is reduced to 50%) for the prior
Fiscal Year as set forth in a compliance certificate delivered
pursuant to Section 5.03(d), and
(ii) any Subsidiary of the Borrower may (A) declare and pay
cash dividends to the Borrower, (B) declare and pay cash dividends
to any other wholly owned U.S. Subsidiary of the Borrower of which
it is a Subsidiary and (C) accept capital contributions from its
parent to the extent permitted under Section 5.01(f).
(h) Amendment of Constitutive Documents. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation, bylaws (where
such modification would be materially adverse to the Lenders) or other
constitutive documents.
(i) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices for Consolidated financial statements, except as
required by generally accepted accounting principles or (ii) Fiscal Year.
(j) Prepayments, Etc., of Debt. (i) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in
any manner, or make any payment in violation of any subordination terms
of, any Funded Debt, other than (x) the prepayment of the Advances in
accordance with the terms of this Agreement, and (y) if before and after
giving effect to any such prepayment, redemption, purchase, defeasance or
other satisfaction, no Default has occurred or would result therefrom,
regularly scheduled or required repayments or redemptions of Surviving
Debt (unless such Debt could be prepaid pursuant to the foregoing except
to the extent the Borrower is permitted pursuant to the foregoing clause
(i) and clause (y)), or (ii) amend, modify or change in any manner any
term or condition of any Surviving Debt, or permit any of its Subsidiaries
to do any of the foregoing except to the extent the Borrower is permitted
pursuant to the foregoing clause (i) and other than to prepay any Debt
payable to the Borrower.
67
(k) Amendment, Etc., of Non-U.S. Security Agreements. Cancel or
terminate any Non-U.S. Security Agreement or consent to or accept any
cancellation or termination thereof, amend, modify or change in any manner
any term or condition of any Non-U.S. Security Agreement or give any
consent, waiver or approval thereunder, waive any default under or any
breach of any term or condition of any Non-U.S. Security Agreement, agree
in any manner to any other amendment, modification or change of any term
or condition of any Non-U.S. Security Agreement or take any other action
in connection with any Non-U.S. Security Agreement that would impair the
value of the interest or rights of any Loan Party thereunder or that would
impair the rights or interests of the Administrative Agent or any Lender
Party, or permit any of its Subsidiaries to do any of the foregoing.
(l) Negative Pledge. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Secured
Parties or (ii) in connection with (A) any Surviving Debt, (B) any Debt
secured by purchase money Liens and Capitalized Leases, in each case, to
the extent permitted under Sections 5.02(b)(i)(C) and (D), respectively,
and solely to the extent such agreement is limited to the property covered
by such Liens.
(m) Partnerships. Become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do so
other than any Subsidiary the sole assets of which consist of its interest
in such partnership or joint venture and to the extent permitted by
Section 5.02(f)(i).
(n) Formation of Subsidiaries. Organize or invest, or permit any
Subsidiary to organize or invest, in any new Subsidiary except as
permitted under Section 5.02(f)(i) or (ii).
(o) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement or
arrangement limiting the ability of any of its Subsidiaries to declare or
pay dividends or other distributions in respect of its Equity Interests or
repay or prepay any Debt owed to, make loans or advances to, or otherwise
transfer assets to or invest in, the Borrower or any Subsidiary of the
Borrower (whether through a covenant restricting dividends, loans, asset
transfers or investments, a financial covenant or otherwise), except the
Loan Documents and other than restrictions in agreements in Debt on
Non-U.S. Subsidiaries permitted by Section 5.02(f)(i).
(p) Other Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options or futures
contracts or any similar speculative transactions (including, without
limitation, take-or-pay contracts).
SECTION 5.03. Reporting Requirements. So long as any Obligation of any
Loan Party under or in respect of any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding, any
68
Secured Hedge Agreement shall be in effect, or any Lender Party shall have any
Commitment hereunder, the Borrower will furnish to the Administrative Agent and
the Lender Parties:
(a) Default and Prepayment Notices. (i) As soon as possible and in
any event within two Business Days after knowledge of an executive officer
of the Borrower of the occurrence of a Default and, in any event within 15
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the chief financial officer
of the Borrower setting forth details of such Default, event, development
or occurrence and the action that the Borrower has taken and proposes to
take with respect thereto, and (ii) as soon as possible and in any event
no later than 10:00 A.M. (Los Angeles, California time) at least three
Business Days before any prepayment of Term Advances is to be made by the
Borrower pursuant to Section 2.06 (the "Prepayment Date"), written notice
of the principal amount of such prepayment (the "Prepayment Amount") and
the applicable Prepayment Date. Each such notice (a "Prepayment Notice")
shall be by telecopier or otherwise as provided in Section 8.02.
(b) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each Fiscal Quarter, commencing with the
quarter ending on or about September 30, 1999, a Consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries, in each
case as of the end of such quarter and Consolidated and consolidating
statements of income and, in the case of the first three Fiscal Quarters
of each Fiscal Year, cash flow of the Borrower and its Subsidiaries, in
each case for the period commencing at the end of the previous quarter and
ending with the end of such quarter and Consolidated and consolidating
statements of income and cash flow of the Borrower and its Subsidiaries
for the period commencing at the end of the previous Fiscal Year and
ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding month and
Fiscal Year-to-date period of the preceding Fiscal Year and the
corresponding figures for the corresponding quarter and Fiscal
Year-to-date period of the annual forecast previously delivered pursuant
to Section 5.03(e), all in reasonable detail and duly certified by the
chief financial officer of the Borrower, together with (i) a certificate
of said officer stating that no Default has occurred and is continuing or,
if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take
with respect thereto.
(c) Compliance Certificates. Together with the quarterly financial
statements referred to in Section 5.03(b) for the quarters ending March,
June, September and December in each Fiscal Year and the annual financial
statements referred to in Section 5.03(d), a schedule in form satisfactory
to the Administrative Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Sections 5.04(a)
through (f).
(d) Annual Financials. As soon as available and in any event within
90 days after the end of each Fiscal Year, a copy of the annual audit
report for such year for the Borrower and its Subsidiaries, including
therein Consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries, in each case as of the end of such Fiscal Year, and
Consolidated and consolidating statements of income and cash flow of the
Borrower and its Subsidiaries, in each case for the period commencing at
the end of the previous Fiscal Year and ending with the
69
end of such Fiscal Year, accompanied as to such Consolidated statements,
by an unqualified opinion of Pricewaterhouse Coopers LLP or other
independent public accountants of recognized standing acceptable to the
Required Lenders, together with (i) a copy of any management letter
prepared by such accounting firm with respect to such Fiscal Year and
distributed to the Borrower, (ii) a certificate of the chief financial
officer of the Borrower stating that no Default has occurred and is
continuing or, if a default has occurred and is continuing, a statement as
to the nature thereof and the action that the Borrower has taken and
proposes to take with respect thereto, (iii) in the event of any change
from GAAP in the generally accepted accounting principles used in the
preparation of such financial statements, a statement of reconciliation
conforming such financial statements to GAAP and (iv) a schedule in form
satisfactory to the Administrative Agent of the computations used by the
Borrower in determining compliance with the covenants contained in
Sections 5.04(a) through (f).
(e) Annual Forecasts. As soon as available and in any event no later
than 30 days prior to the end of each Fiscal Year, forecasts prepared by
management of the Borrower, in form satisfactory to the Administrative
Agent, of Consolidated balance sheets, income statements and cash flow
statements on a quarterly basis for the Fiscal Year following such Fiscal
Year then ended.
(f) ERISA. (i) ERISA Events and ERISA Reports. (A) Promptly and in
any event within 10 days after any Loan Party or any ERISA Affiliate knows
or has reason to know that any ERISA Event has occurred, a statement of
the Chief Financial Officer of the Borrower describing such ERISA Event
and the action, if any, that such Loan Party or such ERISA Affiliate has
taken and proposes to take with respect thereto and (B) on the date any
records, documents or other information must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information.
(ii) Plan Terminations. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any Plan.
(iii) Plan Annual Reports. Promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Plan.
(iv) Multiemployer Plan Notices. Promptly and in any event within
five Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (A) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (B) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the
amount of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in clause
(A) or (B).
70
(g) Litigation. Promptly after the commencement thereof and service
or other notification to the Borrower, notice of all actions, suits,
investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(h).
(h) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports
that any Loan Party or any of its Subsidiaries sends to its stockholders,
and copies of all regular, periodic and special reports, and all
registration statements (other than on Form S-8), that any Loan Party or
any of its Subsidiaries files with the Securities and Exchange Commission
or any governmental authority that may be substituted therefor, or with
any national securities exchange.
(i) Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of
its Subsidiaries under or pursuant to any Non-U.S. Security Agreement or
indenture, loan or credit or similar agreement regarding or related to any
breach or default by any party thereto or any other event that could
materially impair the value of the interests or the rights of any Loan
Party or any of its Subsidiaries or otherwise have a Material Adverse
Effect and copies of any amendment, modification or waiver of any
provision of any Related Agreement or indenture, loan or credit or similar
agreement and, from time to time upon request by the Administrative Agent,
such information and reports regarding the Non-U.S. Security Agreements as
the Administrative Agent may reasonably request.
(j) Revenue Agent Reports. Within 10 days after receipt, copies of
all Revenue Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the Internal Revenue Service, that propose, determine
or otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which the Borrower is a member
aggregating $250,000 or more.
(k) Tax Certificates. Promptly, and in any event within five
Business Days after the due date (with extensions) for filing the final
Federal income tax return in respect of each taxable year, a certificate
(a "Tax Certificate"), signed by the chief executive officer or the chief
financial officer of the Borrower, stating that the common parent of the
affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Borrower is a member has paid to the Internal
Revenue Service or other taxing authority, or to the Borrower, the full
amount that such affiliated group is required to pay in respect of Federal
income tax for such year and that the Borrower and its Subsidiaries have
received any amounts payable to them, and have not paid amounts in respect
of taxes (Federal, state, local or foreign) in excess of the amount they
are required to pay, under the Tax Agreements in respect of such taxable
year.
(l) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could
71
(i) reasonably be expected to have a Material Adverse Effect or (ii) cause
any property described in the Mortgages to be subject to any material
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(m) Real Property. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report supplementing Schedules
4.01(r) and 4.01(s) hereto, including an identification of all real and
leased property disposed of by the Borrower or any of its Subsidiaries
during such Fiscal Year, a list and description (including the street
address, county or other relevant jurisdiction, state, record owner, book
value thereof, and in the case of leases of property, lessor, lessee,
expiration date and annual rental cost thereof) of all real property
acquired or leased during such Fiscal Year and a description of such other
changes in the information included in such Schedules as may be necessary
for such Schedules to be accurate and complete.
(n) Insurance. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for the Borrower
and its Subsidiaries and containing such additional information as any
Lender Party (through the Administrative Agent) may reasonably specify.
(o) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
any Lender Party (through the Administrative Agent) may from time to time
reasonably request.
SECTION 5.04. Financial Covenants. So long as any as any Advance or any
other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding, any Secured
Hedge Agreement shall be in effect or any Lender Party shall have any Commitment
hereunder, the Borrower will:
(a) Leverage Ratio. Maintain on a Consolidated basis for itself and
its Subsidiaries a Leverage Ratio for each Rolling Period set forth below
of not more than the amount set forth below for such Rolling Period:
------------------------------------------------------
Rolling Period Ending In Ratio
------------------------------------------------------
September 30, 1999 3.50 to 1.00
December 31, 1999 3.25 to 1.00
------------------------------------------------------
March 31, 2000 3.00 to 1.00
June 30, 2000 2.75 to 1.00
September 30, 2000 2.50 to 1.00
to June 30, 2001
------------------------------------------------------
September 30, 2001 2.25 to 1.00
to June 30, 2002
------------------------------------------------------
72
------------------------------------------------------
Rolling Period Ending In Ratio
------------------------------------------------------
September 30, 2002 2.00 to 1.00
and thereafter
------------------------------------------------------
(b) Interest Coverage Ratio. Maintain on a Consolidated basis for
itself and its Subsidiaries an Interest Coverage Ratio for each Rolling
Period set forth below of not less than the amount set forth below for
such Rolling Period:
------------------------------------------------------
Rolling Period Ending In Ratio
------------------------------------------------------
September 30, 1999 3.00 to 1.00
December 31, 1999 3.00 to 1.00
March 31, 2000 3.00 to 1.00
June 30, 2000 3.00 to 1.00
------------------------------------------------------
September 30, 2000 4.00 to 1.00
December 31, 2000 4.00 to 1.00
March 31, 2001 4.00 to 1.00
June 30, 2001 4.00 to 1.00
------------------------------------------------------
September 30, 2001 5.00 to 1.00
December 31, 2001 5.00 to 1.00
March 30, 2002 5.00 to 1.00
June 30, 2002 5.00 to 1.00
------------------------------------------------------
September 30, 2002 6.00 to 1.00
and thereafter
------------------------------------------------------
(c) Fixed Charge Coverage Ratio. Maintain on a Consolidated basis
for itself and its Subsidiaries a Fixed Charge Coverage Ratio for each
Rolling Period set forth below of not less than the amount set forth below
for such Rolling Period:
------------------------------------------------------
Rolling Period Ending In Ratio
------------------------------------------------------
June 30, 2000 to 1.05 to 1.00
March 31, 2001
------------------------------------------------------
June 30, 2001 1.10 to 1.00
and thereafter
------------------------------------------------------
(d) Maximum Capital Expenditure. Make any Capital Expenditure in any
period set forth below which, in addition to the amount expended in the
previous period, exceeds the amount set forth below for such period:
73
------------------------------------------------------
Fiscal Quarter Ending In Amount
------------------------------------------------------
December 31, 1999 $30,000,000
------------------------------------------------------
March 31, 2000 $45,000,000
------------------------------------------------------
(e) Minimum EBITDA. Maintain at all times for itself and its
Subsidiaries from the date hereof EBITDA of not less than the amount set
forth below for the Rolling Period set forth below:
------------------------------------------------------
Rolling Period Ending On or About Amount
------------------------------------------------------
September 30, 1999 $68,000,000
December 31, 1999 $74,000,000
March 31, 2000 $80,000,000
June 30, 2000 $88,000,000
------------------------------------------------------
September 30, 2000 $ 93,000,000
December 31, 2000 $ 98,000,000
March 31, 2001 $103,000,000
June 30, 2001 $109,000,000
------------------------------------------------------
(f) Limitation on Losses. Not have (i) commencing with the Fiscal
Quarter ending on or about September 30, 1999, an operating loss for a
Fiscal Quarter which exceeds 3% of stockholders' equity as at the last day
of such Fiscal Quarter, or (ii) commencing with the Fiscal Quarter ending
on or about December 31, 1999, operating losses for two consecutive Fiscal
Quarters which, in aggregate, exceed 3% of stockholders' equity.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events
of Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any Advance
when the same becomes due and payable, or (ii) the Borrower shall fail to
pay any interest on any Advance or any Loan Party shall fail or make any
other payment under any Loan Document within two Business Days of when the
same becomes due and payable; or
(b) any representation or warranty made by any Loan Party or any of
its Subsidiaries (or any of its officers) under or in connection with any
Loan Document shall prove to have been incorrect in any material respect
when made; or
74
(c) any Loan Party or any of its Subsidiaries shall fail to perform
or observe any term, covenant or agreement contained in Xxxxxxx 0.00,
0.00(x), (x), (x), (x), (x) or (o), 5.02, 5.03 or 5.04; or
(d) any Loan Party or any of its Subsidiaries shall fail to perform
or observe any other term, covenant or agreement contained in any Loan
Document on its part to be performed or observed if such failure shall
remain unremedied for 30 days after the earlier of the date on which (A) a
Responsible Officer of the Borrower becomes aware of such failure or (B)
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in
respect of any Debt of such Loan Party or such Subsidiary (as the case may
be) that is outstanding in a principal amount (or, in the case of any
Hedge Agreement, an Agreement Value) of at least $3,000,000 either
individually or in the aggregate (but excluding Debt outstanding
hereunder) of such Loan Party or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be declared
to be due and payable or required to be prepaid or redeemed (other than by
a regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(f) the Borrower, any Loan Party which is a Significant Subsidiary
or any of its Significant Subsidiaries shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Borrower, any Loan Party which is a Significant Subsidiary or any of its
Significant Subsidiaries seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of
a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the actions
sought in such proceeding (including, without limitation, the entry of an
order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or the Borrower, any Loan Party which is a
75
Significant Subsidiary or any of its Significant Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in
this subsection (f); or
(g) any judgments or orders, either individually or in the
aggregate, for the payment of money in excess of $1,000,000 (to the extent
not fully paid or discharged) shall be rendered against any Loan Party or
any of its Subsidiaries and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could reasonably be likely to
have a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(j) or (k) shall for any reason cease to
be valid and binding on or enforceable against any Loan Party to it, or
any such Loan Party shall so state in writing; or
(j) any Collateral Document or financing statement, after delivery
thereof pursuant to Section 3.01 or 5.01(j) or (k), shall for any reason
(other than pursuant to the terms thereof) cease to create a valid and
perfected first priority lien on and security interest in the Collateral
purported to be covered thereby; or
(k) a Change of Control shall occur; or
(l) any ERISA Event shall have occurred with respect to a Plan and
the sum (determined as of the date of occurrence of such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other
Plans with respect to which an ERISA Event shall have occurred and then
exist (or the liability of the Loan Parties and the ERISA Affiliates
related to such ERISA Event) exceeds $1,000,000; or
(m) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated
with all other amounts required to be paid to Multiemployer Plans by the
Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined
as of the date of such notification), exceeds $1,000,000 or requires
payments exceeding $200,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of
76
such Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $200,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each Lender Party and the obligation of each Lender
to make Advances (other than Letter of Credit Advances by the Issuing Bank or a
Revolving Credit Lender pursuant to Section 2.03(c) and of the Issuing Bank to
issue Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, (A) by notice to the Borrower, declare the Advances, all
interest thereon and all other amounts payable under this Agreement, the Notes,
if any, and the other Loan Documents to be forthwith due and payable, whereupon
the Advances, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower,
(B) by notice to each party required under the terms of any agreement in support
of which a Standby Letter of Credit is issued, request that all Obligations
under such agreement be declared to be due and payable and (C) by notice to the
Issuing Bank, direct the Issuing Bank to deliver a Default Termination Notice to
the beneficiary of each Standby Letter of Credit issued by it, and the Issuing
Bank shall deliver such Default Termination Notices; provided, however, that, in
the event of an actual or deemed entry of an order for relief with respect to
any Loan Party or any of its Subsidiaries under the Federal Bankruptcy Code, (x)
the Commitments of each Lender Party and the obligation of each Lender to make
Advances (other than Letter of Credit Advances by the Issuing Bank or a
Revolving Credit Lender pursuant to Section 2.03(c) and of the Issuing Bank to
issue Letters of Credit shall automatically be terminated and (y) the Advances,
all such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default. If
any Event of Default shall have occurred and be continuing, the Administrative
Agent may, and upon the request of the Required Lenders shall, irrespective of
whether it is taking any of the actions described in Section 6.01 or otherwise,
make demand upon the Borrower to, and forthwith upon such demand the Borrower
will, pay to the Administrative Agent on behalf of the Lender Parties in same
day funds at the Administrative Agent's office designated in such demand, for
deposit in the L/C Cash Collateral Account, an amount equal to the aggregate
Available Amount of all Letters of Credit then outstanding. If at any time the
Administrative Agent determines that any funds held in the L/C Cash Collateral
Account are subject to any right or claim of any Person other than the
Administrative Agent and the Lender Parties or that the total amount of such
funds is less than the aggregate Available Amount of all Letters of Credit, the
Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim. Upon the drawing of any Letter of Credit
for which funds are on deposit in the L/C Cash Collateral Account, such funds
shall be applied to reimburse the Issuing Bank or Revolving Credit Lenders, as
applicable, to the extent permitted by applicable law.
77
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender Party (in its
capacities as a Lender and the Issuing Bank (if applicable) and a potential
Hedge Bank) hereby appoints and authorizes the Administrative Agent to execute
and deliver the Collateral Documents (subject to Section 8.01) for the purpose
of creating a security interest for the benefit of each Lender Party and to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Debt resulting from the Advances), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; provided, however, that the Administrative
Agent shall not be required to take any action that exposes the Administrative
Agent to personal liability or that is contrary to this Agreement or applicable
law. The Administrative Agent agrees to give to each Lender Party prompt notice
of each notice given to it by the Borrower pursuant to the terms of this
Agreement.
SECTION 7.02. Agents' Reliance, Etc. No Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with the Loan Documents, except
for its or their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, the Agents: (a) may treat the Lender that
made any Advance as the holder of the Debt resulting therefrom until such Agent
receives and accepts an Assignment and Acceptance entered into by such Lender,
as assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender Party and shall not be responsible to
any Lender Party for any statements, warranties or representations (whether
written or oral) made in or in connection with the Loan Documents; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records) of
any Loan Party; (e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopy)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. BNP and Affiliates. With respect to its Commitments, the
Advances made by it and any Notes issued to it, BNP shall have the same rights
and powers under the Loan Documents as
78
any other Lender Party and may exercise the same as though it were not an Agent;
and the term "Lender Party" or "Lenders Parties" shall, unless otherwise
expressly indicated, include BNP in its individual capacity. BNP and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries and any
Person who may do business with or own securities of any Loan Party or any such
Subsidiary, all as if BNP were not an Agent and without any duty to account
therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender Party and based on the financial statements referred to in Section 4.01
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender Party
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender Party and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees to
indemnify each Agent (to the extent not promptly reimbursed by the Borrower)
from and against such Lender Party's ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without limitation, reasonable fees and expenses
of counsel) that may be imposed on, incurred by, or asserted against such Agent
in any way relating to or arising out of the Loan Documents or any action taken
or omitted by such Agent under the Loan Documents (collectively, the
"Indemnified Costs"); provided, however, that no Lender Party shall be liable
for any portion of such Indemnified Costs resulting from such Agent's gross
negligence or willful misconduct as found in a final, non-appealable judgment by
a court of competent jurisdiction. Without limitation of the foregoing, each
Lender Party agrees to reimburse such Agent promptly upon demand for its ratable
share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrower under Section 8.04, to the extent
that such Agent is not promptly reimbursed for such costs and expenses by the
Borrower. For purposes of this Section 7.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of (a) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lender Parties, (b) their respective Pro Rata
Shares of the aggregate Available Amount of all Letters of Credit outstanding at
such time, (c) the aggregate unused portions of their respective Term
Commitments at such time and (d) their respective Unused Revolving Credit
Commitments at such time. In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Costs, the Section 7.05 applies
whether any such investigation, litigation or proceeding is brought by any
Agent, any Lender, any other Lender Party or a third party. The failure of any
Lender Party to reimburse any Agent promptly upon demand for its ratable share
of any amount required to be paid by the Lender Party to such Agent as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse such Agent for its ratable share of such amount, but no Lender Party
shall be responsible for the failure of any other Lender Party to reimburse such
Agent for such other Lender Party's ratable share of such amount.
79
(b) Each Lender severally agrees to indemnify the Issuing Bank (to the
extent not promptly reimbursed by the Borrower) from and against such Lender's
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Issuing Bank in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the Issuing
Bank under the Loan Documents; provided, however, 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 the
Issuing Bank's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without limitation
of the foregoing, each Lender agrees to reimburse the Issuing Bank promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section
8.04, to the extent that the Issuing Bank is not promptly reimbursed for such
costs and expenses by the Borrower.
(c) For purposes of this Section 7.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of (i) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lender Parties, (ii) their respective Pro Rata
Shares of the aggregate Available Amount of all Letters of Credit outstanding at
such time, (iii) the aggregate unused portions of their respective Term
Commitments at such time and (iv) their respective Unused Revolving Credit
Commitments at such time; provided that the aggregate principal amount of Letter
of Credit Advances owing to the Issuing Bank shall be considered to be owed to
the Revolving Credit Lenders ratably in accordance with their respective
Revolving Credit Commitments at such time. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 8.05
applies whether any such investigation, litigation or proceeding is brought by
any Agent, any Lender, any other Lender Party or a third party. The failure of
any Lender Party to reimburse any Agent or the Issuing Bank, as the case may be,
promptly upon demand for its ratable share of any amount required to be paid by
the Lender Parties to any Agent or the Issuing Bank, as the case may be, as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse any Agent or the Issuing Bank, as the case may be, for
its ratable share of such amount, but no Lender Party shall be responsible for
the failure of any other Lender Party to reimburse any Agent or the Issuing
Bank, as the case may be, for such other Lender Party's ratable share of such
amount. Without prejudice to the survival of any other agreement of any Lender
Party hereunder, the agreement and obligations of each Lender Party contained in
this Section 7.05 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the other Loan Documents.
SECTION 7.06. Successor Agents. Any Agent may resign at any time by giving
written notice thereof to the Lender Parties and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal by the Administrative Agent, the Required Lenders shall
have the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lender Parties, appoint a successor Administrative
Agent, which shall be a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at
least $250,000,000. Upon the acceptance of any
80
appointment as Administrative Agent hereunder by a successor Administrative
Agent and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to the
Mortgages, if any, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents. If within
45 days after written notice is given of the retiring Administrative Agent's
resignation or removal under this Section 7.06 no successor Administrative Agent
shall have been appointed and shall have accepted such appointment, then on such
45th day (i) the retiring Administrative Agent's resignation or removal shall
become effective, (ii) the retiring Administrative Agent shall thereupon be
discharged from its duties and obligations under the Loan Documents and (iii)
the Required Lenders shall thereafter perform all duties of the retiring
Administrative Agent under the Loan Documents until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent shall become effective, the provisions of this Article VIII
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 and the other Loan
Documents.
SECTION 7.07. Additional Agents. The Administrative Agent, in its sole
discretion, may appoint a Documentation Agent, Syndication Agent or other Agent
under this Agreement; provided, however, that no such Agent shall have any
duties under this Agreement and the other Loan Documents.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. (a) No amendment or waiver of any provision
of this Agreement or any Notes or any other Loan Document, nor consent to any
departure by the Borrower or any other Loan Party therefrom, shall in any event
be effective unless the same shall be in writing and signed (or, in the case of
the Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders, do
any of the following at any time: (i) waive any of the conditions specified in
Section 3.01 or, in the case of the Initial Extension of Credit, Section 3.02,
(ii) change the percentage of (x) the Commitments, (y) the aggregate unpaid
principal amount of the Advances or (z) the aggregate Available Amount of
outstanding Letters of Credit that, in each case, shall be required for the
Lenders or any of them to take any action hereunder, (iii) release all or
substantially all of the Collateral in any transaction or series of related
transactions or permit the creation, incurrence, assumption or existence of any
Lien on all or substantially all of the Collateral in any transaction or series
of related transactions to secure any Obligations other than Obligations owing
to the Secured Parties under the Loan Documents or (iv) amend this Section 8.01
and (b) no
81
amendment, waiver or consent shall, unless in writing and signed by the Required
Lenders and each Lender that has a Commitment under the Term A Facility, Term B
Facility or Revolving Credit Facility and that is directly affected by such
amendment, waiver or consent, (i) increase the Commitments of such Lender or
amend Section 2.13 so as to subject such Lender to additional Obligations, (ii)
reduce the principal of, or interest on, the Advances payable to such Lender or
any fees or other amounts payable to such Lender, (iii) postpone any date
scheduled for any payment of principal of, or interest on, the Advances payable
to such Lender pursuant to Section 2.04 or Section 2.07 or any date fixed for
payment of fees or other amounts payable to such Lender or (v) change the order
of application of any prepayment set forth in Section 2.06 in any manner that
materially adversely affects such Lender; provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Issuing Bank, in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Issuing Bank under this Agreement; and provided further that
no amendment, waiver or consent shall, unless in writing and signed by each
affected Agent in addition to the Lenders required above to take such action,
affect the rights or duties of such Agent under this Agreement or the other Loan
Documents.
(b) Each Lender Party grants (x) to the Administrative Agent the right to
purchase all (but not less than all) of such Lender Party's Commitments and
Advances owing to it and all of its rights and obligations hereunder and under
the other Loan Documents at a price equal to the aggregate amount of outstanding
Advances owed to such lender Party (together with all accrued and unpaid
interest and fees owed to such Lender), and (y) so long as no Default has
occurred and is continuing, to the Borrower the right to cause an assignment of
all (but not less than all) of such Lender Party's Commitments and Advances
owing to it and all of its rights and obligations hereunder and under the other
Loan Documents, which right may be exercised by the Administrative Agent or the
Borrower, as the case may be, if such Lender Party refuses to execute any
amendment, waiver or consent which requires the written consent of all the
Lenders and to which the Required Lenders, the Administrative Agent and the
Borrower have agreed. Each Lender Party agrees that if the Administrative Agent
or the Borrower, as the case may be, exercises its option hereunder, it shall
promptly execute and deliver all agreements and documentation necessary to
effectuate such assignment as set forth in Section 8.07.
SECTION 8.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telecopier) and mailed, telecopied
or delivered by an overnight courier of nationally recognized standing, if to
the Borrower or any other Loan Party, at the address of the Borrower at 000
Xxxxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Treasury Department,
telecopier number (000) 000-0000; if to any Initial Lender or any Initial
Issuing Bank, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender Party, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender
Party; and if to the Administrative Agent, at its address at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx Xxxxxxxx, telecopier number (212)
415-9805; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telecopied or sent by courier, be effective
when deposited in the mails, transmitted by telecopier or delivered to the
overnight courier, respectively, except that notices and communications to any
Agent pursuant to Article II, III or VIII shall not be effective until received
by such Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be
82
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender
Party or any Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on demand
(i) all costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto, with respect to advising the
Administrative Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of the Agents and
the Lender Parties in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally (including, without
limitation, the reasonable fees and expenses of counsel for the Administrative
Agent and each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify, defend and save and hold harmless
each Agent, each Lender Party and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against, and shall pay on demand, any and all Indemnified Costs that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the Facilities, the actual
or proposed use of the proceeds of the Advances or the Letters of Credit, the
Loan Documents or any of the transactions contemplated thereby, including,
without limitation, or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of its Subsidiaries or any
Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such Indemnified Costs are found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 8.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by any Loan Party,
its directors, shareholders or creditors or an Indemnified Party, whether or not
any Indemnified Party is otherwise a party thereto and whether or not the
Transaction is consummated. In no event shall any Indemnified Party be liable
for any special, indirect, consequential or punitive damages arising out of or
otherwise relating to the
83
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby.
(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender Party other
than on the last day of the Interest Period for such Advance, as a result of an
assignment in connection with a syndication contemplated by Section 2.02(c), a
payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or 2.10(d),
acceleration of the maturity of the Advances pursuant to Section 6.01 or for any
other reason or by an Eligible Assignee to a Lender Party other than on the last
day of the Interest Period for such Advance upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07 as a result of a
demand by the Borrower pursuant to Section 8.07(a), the Borrower shall, upon
demand by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party any
amounts required to compensate such Lender Party for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Administrative Agent or any Lender Party, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and obligations
of the Borrower contained in Sections 2.10 and 2.12 and this Section 8.04 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Advances due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such Obligations may be unmatured. Each Agent
and each Lender Party agrees promptly to notify the Borrower after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender Party and its respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender Party and its respective Affiliates may
have.
84
SECTION 8.06. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have been notified by each Initial Lender
and the Initial Issuing Bank that such Initial Lender and the Initial Issuing
Bank has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent and each Lender Party and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender may and, so
long as no Default shall have occurred and be continuing, if demanded by the
Borrower (following a demand by such Lender pursuant to Section 2.10 or 2.12)
upon at least five Business Days' notice to such Lender and the Administrative
Agent, will assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment or Commitments, the Advances owing to it and any
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of one or more Facilities, (ii) except in the
case of an assignment to a Person that, immediately prior to such assignment,
was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an
assignment of all of a Lender's rights and obligations under this Agreement, the
aggregate amount of the Commitments being assigned to such Eligible Assignee
pursuant to such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$5,000,000 (or such lesser amount as shall be approved by the Borrower and the
Administrative Agent) and shall be in an integral multiple of $500,000, (iii)
each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Borrower pursuant to this Section 8.07(a)
shall be arranged by the Borrower after consultation with the Administrative
Agent and shall be either an assignment of a portion of the rights and
obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such
assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (v) no Lender shall be
obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 8.07(a) unless and until such Lender shall have
received one or more payments from either the Borrower or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other
amounts payable to such Lender under this Agreement, (vi) no such assignments
shall be permitted without the consent of the Administrative Agent until the
Administrative Agent shall have notified the Lender Parties that syndication of
the Commitments hereunder has been completed, and (vii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) 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 and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (y) the Lender or Issuing Bank assignor thereunder
shall, to the extent that
85
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's or
Issuing Bank's rights and obligations under this Agreement, such Lender or
Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each Lender
Party assignor thereunder and each assignee thereunder confirm to and agree with
each other and the other parties thereto and hereto as follows: (i) other than
as provided in such Assignment and Acceptance, such assigning Lender Party makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain (including as the Borrower's
agent solely for the purpose of Sections 2.12(e) and (f)) at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lender Parties and the Commitment under each Facility of, and
principal amount of the Advances owing under each Facility to, each Lender Party
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lender Parties may treat each Person
whose name is recorded in the Register as a Lender Party hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes
requested by the Assignee subject to such
86
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit C hereto, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
(f) Each Lender Party may sell participations in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitments, the Advances owing to it and any Note or
Notes held by it) to any Person other than any Loan Party or any of its
Subsidiaries or Affiliates; provided, however, that (i) such Lender Party's
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of such Advances and any such
Note for all purposes of this Agreement, (iv) the Borrower, each Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Advances or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, postpone any date fixed
for any payment of principal of, or interest on, the Advances or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.
(g) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower.
(h) Notwithstanding any other provision set forth in this Agreement, any
Lender Party may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and any Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Confidentiality. Neither the Agent nor any Lender Party
shall disclose any Confidential Information to any Person without the consent of
the Borrower, other than (a) to such Agent's or such Lender Party's Affiliates
and their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and Participants (who shall be bound by this
provision as though a Lender Party), and then only on a confidential basis, (b)
as required by any law, rule or regulation or judicial process, (c) as requested
or required by any state, Federal or foreign authority or examiner regulating
such Lender Party and (d) to any rating agency when required by it, provided
that, prior to such disclosure, such rating agency shall undertake to preserve
the confidentiality of any Confidential Information relating to the Loan Parties
received by it from such Lender Party.
87
SECTION 8.09. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.
SECTION 8.10. No Liability of the Issuing Bank. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither the Issuing
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use that may be made of any Letter of Credit or any acts or omissions of
any beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by the Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrower shall have
a claim against the Issuing Bank, and the Issuing Bank shall be liable to the
Borrower, to the extent of any direct, but not consequential, damages suffered
by the Borrower that the Borrower proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence as determined in a final, non-appealable
judgment by a court of competent jurisdiction in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such California
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or federal court. Each of
the parties
88
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
SECTION 8.12. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.13. Waiver of Jury Trial. Each of the Loan Parties, each Agent
and the Lender Parties irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the
Advances, the Letters of Credit or the actions of any Agent or any Lender Party
in the negotiation, administration, performance or enforcement thereof.
89
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
Borrower
INTERNATIONAL RECTIFIER CORPORATION
By______________________________________
Title:
Lenders
BANQUE NATIONALE DE PARIS,
as Administrative Agent, Issuing Bank
and Lender
By______________________________________
Title:
By______________________________________
Title:
SANWA BANK CALIFORNIA,
as Syndication Agent
By______________________________________
Title:
EXHIBIT A-1 TO THE CREDIT AGREEMENT
FORM OF TERM A NOTE
$_______________ Dated: ____ __, ____
FOR VALUE RECEIVED, the undersigned, International Rectifier
Corporation, a Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to
the order of __________________ (the "LENDER") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to below)
the principal amount of the Term A Advance (as defined below) owing to the
Lender by the Borrower pursuant to the Credit Agreement dated as of July 1, 1999
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"; terms defined therein, unless otherwise defined
herein, being used herein as therein defined) among the Borrower, the Lender and
certain other Lender Parties party thereto and Banque Nationale de Paris, as
Administrative Agent for the Lender and such other Lender Parties on the dates
and in the amounts specified in the Credit Agreement.
The Borrower promises to pay to the Lender or its registered assigns
interest on the unpaid principal amount of the Term A Advance from the date of
such Term A Advance, until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the Credit
Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Banque Nationale de Paris, as Administrative Agent, at
the Agent's Account, in same day funds. The Term A Advance owing to the Lender
by the Borrower and the maturity thereof, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto, which is part of this Promissory
Note; PROVIDED, HOWEVER, that the failure of the Lender to make any such
recordation or endorsement shall not affect the Obligations of the Borrower
under this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of an advance (the "TERM A ADVANCE")
by the Lender to the Borrower in an amount not to exceed the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from such Term
A Advance being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified. The
obligations of the Borrower under this Promissory Note and the other Loan
Documents, and the obligations of the other Loan Parties under the Loan
Documents, are secured by the Collateral as provided in the Loan Documents.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
INTERNATIONAL RECTIFIER CORPORATION
By ________________________________
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
DATE TERM A FACILITY
EXHIBIT A-2 TO THE CREDIT AGREEMENT
FORM OF TERM B NOTE
$_______________ Dated: ____ __, ____
FOR VALUE RECEIVED, the undersigned, International Rectifier
Corporation, a Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to
the order of __________________ (the "LENDER") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to below)
the principal amount of the Term B Advance (as defined below) owing to the
Lender by the Borrower pursuant to the Credit Agreement dated as of July 1, 1999
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"; terms defined therein, unless otherwise defined
herein, being used herein as therein defined) among the Borrower, the Lender and
certain other Lender Parties party thereto and Banque Nationale de Paris, as
Administrative Agent for the Lender and such other Lender Parties on the dates
and in the amounts specified in the Credit Agreement.
The Borrower promises to pay to the Lender or its registered assigns
interest on the unpaid principal amount of the Term B Advance from the date of
such Term A Advance, until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the Credit
Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Banque Nationale de Paris, as Administrative Agent, at
the Agent's Account, in same day funds. The Term B Advance owing to the Lender
by the Borrower and the maturity thereof, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto, which is part of this Promissory
Note; PROVIDED, HOWEVER, that the failure of the Lender to make any such
recordation or endorsement shall not affect the Obligations of the Borrower
under this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of an advance (the "TERM B ADVANCE")
by the Lender to the Borrower in an amount not to exceed the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from such Term
B Advance being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified. The
obligations of the Borrower under this Promissory Note
and the other Loan Documents, and the obligations of the other Loan Parties
under the Loan Documents, are secured by the Collateral as provided in the
Loan Documents.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
INTERNATIONAL RECTIFIER CORPORATION
By _________________________________
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
DATE TERM B FACILITY
EXHIBIT A-3 TO THE CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$_______________ Dated: ____ __, ____
FOR VALUE RECEIVED, the undersigned, International Rectifier
Corporation, a Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to
the order of __________________ (the "LENDER") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to below)
the principal amount of the Revolving Credit Advance (as defined below) owing to
the Lender by the Borrower pursuant to the Credit Agreement dated as of July 1,
1999 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"; terms defined therein, unless otherwise
defined herein, being used herein as therein defined) among the Borrower, the
Lender and certain other Lender Parties party thereto and Banque Nationale de
Paris, as Administrative Agent for the Lender and such other Lender Parties on
the dates and in the amounts specified in the Credit Agreement.
The Borrower promises to pay to the Lender or its registered assigns
interest on the unpaid principal amount of each Revolving Credit Advance from
the date of such Revolving Credit Advance, until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Banque Nationale de Paris, as Administrative Agent, at
the Agent's Account, in same day funds. Each Revolving Credit Advance owing to
the Lender by the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto, which is part of this
Promissory Note; PROVIDED, HOWEVER, that the failure of the Lender to make any
such recordation or endorsement shall not affect the Obligations of the Borrower
under this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of advances (the "REVOLVING CREDIT
ADVANCES") by the Lender to the Borrower in an amount not to exceed the U.S.
dollar amount first above mentioned, the indebtedness of the Borrower resulting
from each such Revolving Credit Advance being evidenced by this Promissory Note,
and (ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior
to the maturity hereof upon the terms and conditions therein specified. The
obligations of the Borrower under this Promissory Note and the other Loan
Documents, and the obligations of the other Loan Parties under the Loan
Documents, are secured by the Collateral as provided in the Loan Documents.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
INTERNATIONAL RECTIFIER CORPORATION
By ________________________________
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
DATE REVOLVING CREDIT FACILITY
EXHIBIT B TO THE CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
Banque Nationale de Paris,
as Administrative Agent
under the Credit Agreement
referred to below
____________________
____________________ Dated: _____, ____
Attention: _______________
Ladies and Gentlemen:
The undersigned, International Rectifier Corporation, refers to the
Credit Agreement dated as of July 1, 1999 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT";
the terms defined therein being used herein as therein defined), among the
undersigned, the Lender Parties party thereto, Banque Nationale de Paris, as
Administrative Agent for the Lender Parties, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"PROPOSED BORROWING") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ___________,
[199_][200_].
(ii) The Facility under which the Proposed Borrowing is requested
is the _______________ Facility.
(iii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is
$_____________.
[(v) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is __________ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) The representations and warranties contained in each Loan
Document are correct in all material respects on and as of the date of the
Proposed Borrowing, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date, other than any such representations or warranties
that, by their terms, refer to a specific date other than the date of the
Proposed Borrowing, in which case, as of such specific date.
(B) No Default has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds
therefrom.
Delivery of an executed counterpart of this Notice of Borrowing by
telecopier shall be effective as delivery of an original executed counterpart of
this Notice of Borrowing.
Very truly yours,
INTERNATIONAL RECTIFIER CORPORATION
By
---------------------------------
Title:
EXHIBIT C TO THE CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of July 1, 1999 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"; the terms defined therein, unless otherwise
defined herein, being used herein as therein defined) among International
Rectifier Corporation, a Delaware corporation (the "BORROWER"), the Lender
Parties party thereto and Banque Nationale de Paris, as Administrative Agent for
the Lender Parties.
Each "Assignor" referred to on Schedule 1 hereto (each, an "ASSIGNOR")
and each "Assignee" referred to on Schedule 1 hereto (each, an "ASSIGNEE")
agrees severally with respect to all information relating to it and its
assignment hereunder and on Schedule 1 hereto as follows:
1. Such Assignor hereby sells and assigns, without recourse
except as to the representations and warranties made by it herein, to such
Assignee, and such Assignee hereby purchases and assumes from such Assignor, an
interest in and to such Assignor's rights and obligations under the Credit
Agreement as of the date hereof equal to the percentage interest specified on
Schedule 1 hereto of all outstanding rights and obligations under the Credit
Agreement Facility or Facilities specified on Schedule 1 hereto. After giving
effect to such sale and assignment, such Assignee's Commitments and the amount
of the Advances owing to such Assignee will be as set forth on Schedule 1
hereto.
2. Such Assignor (i) represents and warrants that its name set
forth on Schedule 1 hereto is its legal name, that it is the legal and
beneficial owner of the interest or interests being assigned by it hereunder and
that such interest or interests are free and clear of any adverse claim;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with any Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Loan Party or the performance or observance by any Loan Party of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Note or Notes held by such
Assignor and requests that the Administrative Agent exchange such Note or Notes
for a new Note or Notes payable to the order of such Assignee in an amount equal
to the Commitments assumed by such Assignee pursuant hereto or new Notes payable
to the order of such Assignee in an amount equal to the Commitments assumed by
such Assignee pursuant hereto and such Assignor in an amount equal to the
Commitments retained by such Assignor under the Credit Agreement, respectively,
as specified on Schedule 1 hereto.
3. Such Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon any Agent, any Assignor or any other Lender Party and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) represents and warrants that its name set
forth on Schedule 1 hereto is its legal name; (iv) confirms that it is an
Eligible Assignee; (v) appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to such Agent by the terms thereof, together with
such powers and discretion as are reasonably incidental thereto; (vi) agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of the Credit Agreement are required to be performed by it as a
Lender Party; and (vii) attaches any U.S. Internal Revenue Service forms
required under Section 2.12 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Administrative Agent for acceptance and recording by
the Administrative Agent. The effective date for this Assignment and Acceptance
(the "EFFECTIVE DATE") shall be the date of acceptance hereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) such Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender Party thereunder and (ii) such
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement (other than its rights and obligations under the Loan Documents that
are specified under the terms of such Loan Documents to survive the payment in
full of the Obligations of the Loan Parties under the Loan Documents to the
extent any claim thereunder relates to an event arising prior to the Effective
Date of this Assignment and Acceptance) and, if this Assignment and Acceptance
covers all of the remaining portion of the rights and obligations of such
Assignor under the Credit Agreement, such Assignor shall cease to be a party
thereto.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall make
all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to such Assignee. Such
Assignor and such Assignee shall make all appropriate adjustments in payments
under the Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of an original executed counterpart of
this Assignment and Acceptance.
IN WITNESS WHEREOF, each Assignor and each Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
ASSIGNORS:
REVOLVING CREDIT FACILITY
Percentage interest assigned % % % % %
Revolving Credit Commitment assigned $ $ $ $ $
Aggregate outstanding principal amount of
Revolving Credit Advances assigned $ $ $ $ $
Principal amount of Revolving Credit Note
payable to ASSIGNOR $ $ $ $ $
TERM A FACILITY
Percentage interest assigned % % % % %
Term A Commitment assigned $ $ $ $ $
Outstanding principal amount of
Term A Advance assigned $ $ $ $ $
Principal amount of Term A Note
payable to ASSIGNOR $ $ $ $ $
TERM B FACILITY
Percentage interest assigned % % % % %
Term B Commitment assigned $ $ $ $ $
Outstanding principal amount of
Term B Advance assigned $ $ $ $ $
Principal amount of Term B Note
payable to ASSIGNOR $ $ $ $ $
LETTER OF CREDIT FACILITY
Letter of Credit Commitment assigned $ $ $ $ $
Letter of Credit Commitment retained $ $ $ $ $
ASSIGNEES:
REVOLVING CREDIT FACILITY
Percentage interest assumed % % % % %
Revolving Credit Commitment assumed $ $ $ $ $
Aggregate outstanding principal amount of
Revolving Credit Advances assumed $ $ $ $ $
Principal amount of Revolving Credit Note
payable to ASSIGNEE $ $ $ $ $
TERM A FACILITY
Percentage interest assumed % % % % %
Term A Commitment assumed $ $ $ $ $
Outstanding principal amount of
Term A Advance assumed $ $ $ $ $
Principal amount of Term A Note
payable to ASSIGNEE $ $ $ $ $
TEM, B FACILITY
Percentage interest assumed % % % % %
Term B Commitment assumed $ $ $ $ $
Outstanding principal amount of
Term B Advance assumed $ $ $ $ $
Principal amount of Term B Note
payable to ASSIGNEE $ $ $ $ $
LETTER OF CREDIT FACILITY
Letter of Credit Commitment assumed $ $ $ $ $
Effective Date (if other than date of acceptance by Administrative Agent):
___________, ____
ASSIGNORS
, as Assignor
By
-------------------------------
Title:
Dated: _____ __, ____
, as Assignor
By
-------------------------------
Title:
Dated: _____ __, ____
ASSIGNEES
, as Assignee
By
-------------------------------
Title:
Dated: _____ __, ____
Domestic Lending Office:
, as Assignee
By
-------------------------------
Title:
Dated: _____ __, ____
Domestic Lending Office:
Accepted and Approved this ____
day of ___________, ____
BANQUE NATIONALE DE PARIS,
as Administrative Agent
By
-------------------------------
Title:
Approved this ____ day
of _____________, ____
INTERNATIONAL RECTIFIER CORPORATION
By
-------------------------------
Title:
EXHIBIT F-1 TO THE CREDIT AGREEMENT
FORM OF U.S. GUARANTY
U.S. GUARANTY dated as of July 1, 1999, (the "GUARANTY") made by the
Persons listed on the signature pages hereof under the caption "Guarantors" and
the Additional Guarantors (as defined in Section 8(b)) (such Persons so listed
and the Additional Guarantors being, collectively, the "GUARANTORS" and,
individually, each a "GUARANTOR") in favor of the Secured Parties (as defined in
the Credit Agreement referred to below).
PRELIMINARY STATEMENT. International Rectifier Corporation, a
Delaware corporation (the "BORROWER"), is party to a Credit Agreement dated as
of July 1, 1999 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"; the capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined) with certain Lender Parties party thereto, Sanwa Bank California, as
Syndication Agent and Banque Nationale de Paris, as Sole Arranger, Issuing Bank
and Administrative Agent (the "AGENT"). Each Guarantor will derive substantial
direct and indirect benefits from the transactions contemplated by the Credit
Agreement. It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry by the Hedge Banks into Secured Hedge Agreements from time to time
that each Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters of Credit under
the Credit Agreement and the Hedge Banks to enter into Secured Hedge Agreements
from time to time, each Guarantor, jointly and severally with each other
Guarantor, hereby agrees as follows:
Section 1. GUARANTY; LIMITATION OF LIABILITY. (a) Each Guarantor
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Loan Party now or hereafter existing under or in respect of the Loan
Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "GUARANTEED
OBLIGATIONS"), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or any other Secured Party in enforcing any rights under this Guaranty or any
other Loan Document. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any other Loan Party to any Secured
Party under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
(b) Each Guarantor, and by its acceptance of this Guaranty, the
Administrative
Agent and each other Secured Party, hereby confirms that it is the intention
of all such Persons that this Guaranty and the Obligations of each Guarantor
hereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or
state law to the extent applicable to this Guaranty and the Obligations of
each Guarantor hereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the Guarantors hereby
irrevocably agree that the Obligations of each Guarantor under this Guaranty
at any time shall be limited to the maximum amount as will result in the
Obligations of such Guarantor under this Guaranty not constituting a
fraudulent transfer or conveyance. For purposes hereof, "BANKRUPTCY LAW"
means any proceeding of the type referred to in Section 6.01(f) of the Credit
Agreement or Title 11, U.S. Code, or any similar foreign, federal or state
law for the relief of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to any Secured Party
under this Guaranty or any other guaranty, such Guarantor will contribute, to
the maximum extent permitted by law, such amounts to each other Guarantor and
each other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.
Section 2. GUARANTY ABSOLUTE. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The Obligations of each Guarantor under or
in respect of this Guaranty are independent of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrower or any other Loan Party or whether the
Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of, or consent to departure from, any other guaranty, for all or any
of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other
collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Collateral
or any other collateral for all or any of the Guaranteed Obligations or any
other Obligations of any Loan Party under the Loan Documents or any other
assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan Party
any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other
Loan Party now or hereafter known to such Secured Party (each Guarantor
waiving any duty on the part of the Secured Parties to disclose such
information);
(g) the failure of any other Person to execute or deliver this
Guaranty, any Guaranty Supplement (as hereinafter defined) or any other
guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other
guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.
Section 3. WAIVERS AND ACKNOWLEDGMENTS. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that any
Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives
any right to revoke this Guaranty and acknowledges that this Guaranty is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives
(i) any defense arising by reason of any claim or defense based upon an election
of remedies by any
Secured Party that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution
or indemnification rights of such Guarantor or other rights of such Guarantor
to proceed against any of the other Loan Parties, any other guarantor or any
other Person or any Collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Obligations of such
Guarantor hereunder.
(d) Each Guarantor acknowledges that the Agent may, without notice
to or demand upon such Guarantor and without affecting the liability of such
Guarantor under this Guaranty, foreclose under any mortgage by nonjudicial sale,
and each Guarantor hereby waives any defense to the recovery by the Agent and
the other Secured Parties against such Guarantor of any deficiency after such
nonjudicial sale and any defense or benefits that may be afforded by applicable
law.
(e) Each Guarantor hereby unconditionally and irrevocably waives
any duty on the part of any Secured Party to disclose to such Guarantor any
matter, fact or thing relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other Loan
Party or any of its Subsidiaries now or hereafter known by such Secured Party.
(f) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in Section 2 and this Section 3
are knowingly made in contemplation of such benefits.
Section 4. SUBROGATION. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's Obligations under or in respect of this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Letters of Credit and all
Secured Hedge Agreements shall have expired or been terminated and the
Commitments shall have expired or been terminated. If any amount shall be paid
to any Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of (a) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (b) the
Termination Date and (c) the latest date of expiration or termination of all
Letters of Credit and all Secured Hedge Agreements, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Guarantor and shall forthwith
be paid or delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed
Obligations and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or
to be held as Collateral for any Guaranteed Obligations or other amounts
payable under this Guaranty thereafter arising. If (i) any Guarantor shall
make payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit and all
Secured Hedge Agreements shall have expired or been terminated, the Secured
Parties will, at such Guarantor's request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to such Guarantor of an interest in the Guranteed Obligations resulting from
such payment made by such Guarantor pursuant to this Guaranty.
Section 5. PAYMENTS FREE AND CLEAR OF TAXES, ETC. (a) Any and all
payments made by any Guarantor under or in respect of this Guaranty or any other
Loan Document shall be made, in accordance with Section 2.11 of the Credit
Agreement, free and clear of and without deduction for any and all present or
future Taxes. If any Guarantor shall be required by law to deduct any Taxes
from or in respect of any sum payable under or in respect of this Guaranty or
any other Loan Document to any Secured Party, (i) the sum payable by such
Guarantor shall be increased as may be necessary so that after such Guarantor
and the Administrative Agent have made all required deductions (including
deductions applicable to additional sums payable under this Section 5), such
Secured Party receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Guarantor shall make all such deductions
and (iii) such Guarantor shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, each Guarantor agrees to pay any present or
future Other Taxes that arise from any payment made by or on behalf of such
Guarantor under or in respect of this Guaranty or any other Loan Document or
from the execution, delivery or registration of, performance under, or otherwise
with respect to, this Guaranty and the other Loan Documents.
(c) Each Guarantor will indemnify each Secured Party for and hold
it harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 5, imposed on or paid by such Secured Party and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Secured Party makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes by or on
behalf of any Guarantor, such Guarantor shall furnish to the Administrative
Agent, at its address referred to in Section 9, the original or a certified copy
of a check or receipt evidencing such payment. In the case of any payment
hereunder by or on behalf of any Guarantor through an account or branch outside
the United States or by or on behalf of such Guarantor by a payor that is not a
United States person, if such Guarantor determines that no Taxes are payable in
respect thereof, such Guarantor shall furnish, or shall cause such payor to
furnish, to the Administrative Agent, at
such address, an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of subsections
(d) and (e) of this Section 5, the terms "UNITED STATES" and "UNITED STATES
PERSON" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Upon the reasonable request in writing of any Guarantor,
each Secured Party organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
the Credit Agreement in the case of each Initial Lender or Initial Issuing
Bank, as the case may be, and on or prior to the date of the Assignment and
Acceptance or Secured Hedge Agreement pursuant to which it becomes a Secured
Party in the case of each other Secured Party, and from time to time
thereafter upon the reasonable request in writing by any Guarantor (but only
so long thereafter as such Secured Party remains lawfully able to do so),
provide each of the Administrative Agent and such Guarantor with two original
Internal Revenue Service forms 1001 or 4224 or (in the case of a Secured
Party that has certified in writing to the Administrative Agent that it is
not a "bank" as defined in Section 881(c)(3)(A) of the Internal Revenue Code)
form W-8 (and, if such Secured Party delivers a form W-8, a certificate
representing that such Secured Party is not a "bank" for purposes of Section
881(c) of the Internal Revenue Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Internal Revenue Code)), as
appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that such Secured Party is exempt from or
entitled to a reduced rate of United States withholding tax on payments under
the Credit Agreement or the Notes or, in the case of a Secured Party
providing a form W-8, certifying that such Secured Party is a foreign
corporation, partnership, estate or trust. If the forms provided by a
Secured Party at the time such Secured Party first becomes a party to the
Credit Agreement or the applicable Secured Hedge Agreement indicate a United
States interest withholding tax rate in excess of zero, withholding tax at
such rate shall be considered excluded from Taxes unless and until such
Secured Party provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms; PROVIDED,
HOWEVER, that if, in the case of a Secured Party becoming a party to the
Credit Agreement, at the date of the Assignment and Acceptance pursuant to
which a Secured Party becomes a party to the Credit Agreement, the Secured
Party assignor was entitled to payments under subsection (a) of this Section
5 in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in addition
to withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Secured Party assignee on such date. If any
form or document referred to in this subsection (e) and requested by any
Guarantor pursuant to this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form
1001, 4224 or W-8 (or the related certificate described above), that the
applicable Secured Party reasonably considers to be confidential, such
Secured Party shall give notice thereof to the applicable Guarantor and shall
not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Secured Party has
failed to provide any Guarantor following such Guarantor's request therefor
pursuant to subsection (e) above with the appropriate form described in
subsection (e) above (OTHER THAN if such failure is due to a change in law
occurring after the date on which a form originally was required to be provided
or if such form otherwise is not required under subsection (e) above), such
Secured Party shall not be entitled to indemnification under subsection (a) or
(c) of this Section 5 with respect to Taxes imposed by the United States by
reason of such failure; PROVIDED, HOWEVER, that should a Secured Party become
subject to Taxes because of its failure to deliver a form required hereunder,
such Guarantor shall take such steps as such Secured Party shall reasonably
request to assist such Secured Party to recover such Taxes.
Section 6. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby
makes each representation and warranty made in the Loan Documents by the
Borrower with respect to such Guarantor and each Guarantor hereby further
represents and warrants as follows:
(a) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(b) Such Guarantor has, independently and without reliance upon
any Secured Party and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Guaranty and each other Loan Document to which it is or is to be a
party, and such Guarantor has established adequate means of obtaining from
each other Loan Party on a continuing basis information pertaining to, and
is now and on a continuing basis will be completely familiar with, the
business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Loan Party.
Section 7. COVENANTS. Each Guarantor covenants and agrees that, so
long as any part of the Guaranteed Obligations shall remain unpaid, any Letter
of Credit shall be outstanding, any Lender Party shall have any Commitment or
any Secured Hedge Agreement shall be in effect, such Guarantor will perform and
observe, and cause each of its Subsidiaries to perform and observe, all of the
terms, covenants and agreements set forth in the Loan Documents on its or their
part to be performed or observed or that the Borrower has agreed to cause such
Guarantor or such Subsidiaries to perform or observe.
Section 8. AMENDMENTS, GUARANTY SUPPLEMENTS, ETC. (a) No amendment
or waiver of any provision of this Guaranty and no consent to any departure by
any Guarantor therefrom shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent and the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; PROVIDED, HOWEVER, that no amendment,
waiver or consent shall, unless in writing and signed by all of the Secured
Parties (a) reduce or limit the obligations of any Guarantor hereunder, release
any Guarantor hereunder or otherwise limit any Guarantor's liability with
respect to the Obligations owing to the Secured Parties under or in respect of
the Loan Documents except as provided in the next succeeding sentence, (b)
postpone any date fixed for payment hereunder or (c) change
the number of Secured Parties or the percentage of (x) the Commitments, (y)
the aggregate unpaid principal amount of the Advances or (z) the aggregate
Available Amount of outstanding Letters of Credit that, in each case, shall
be required for the Secured Parties or any of them to take any action
hereunder. Upon the sale of a Guarantor to the extent permitted in accordance
with the terms of the Loan Documents, such Guarantor shall be automatically
released from this Guaranty.
(b) Upon the execution and delivery by any Person of a guaranty
supplement in substantially the form of Exhibit A hereto (each, a "GUARANTY
SUPPLEMENT"), (i) such Person shall be referred to as an "ADDITIONAL GUARANTOR"
and shall become and be a Guarantor hereunder, and each reference in this
Guaranty to a "GUARANTOR" shall also mean and be a reference to such Additional
Guarantor, and each reference in any other Loan Document to a "GUARANTOR" or a
"U.S. GUARANTOR" shall also mean and be a reference to such Additional
Guarantor, and (ii) each reference herein to "THIS GUARANTY", "HEREUNDER",
"HEREOF" or words of like import referring to this Guaranty, and each reference
in any other Loan Document to the "GUARANTY", "U.S. GUARANTY", "THEREUNDER",
"THEREOF" or words of like import referring to this Guaranty, shall mean and be
a reference to this Guaranty as supplemented by such Guaranty Supplement.
Section 9. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to it, if to any Guarantor, addressed to it in care of the Borrower at the
Borrower's address specified in Section 8.02 of the Credit Agreement, if to any
Agent or any Lender Party, at its address specified in Section 8.02 of the
Credit Agreement, if to any Hedge Bank, at its address specified in the Secured
Hedge Agreement to which it is a party, or, as to any party, at such other
address as shall be designated by such party in a written notice to each other
party. All such notices and other communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively. Delivery by telecopier of an executed
counterpart of a signature page to any amendment or waiver of any provision of
this Guaranty or of any Guaranty Supplement to be executed and delivered
hereunder shall be effective as delivery of an original executed counterpart
thereof.
Section 10. NO WAIVER; REMEDIES. No failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 11. RIGHT OF SET-OFF. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Agent and each Lender Party and
each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness
at any time owing by such Agent, such Lender Party or such Affiliate to or
for the credit or the account of any Guarantor against any and all of the
Obligations of such Guarantor now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Lender Party shall have
made any demand under this Guaranty or any other Loan Document and although
such Obligations may be unmatured. Each Agent and each Lender Party agrees
promptly to notify such Guarantor after any such set-off and application;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Agent and each
Lender Party and their respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Agent, such Lender Party and their respective
Affiliates may have.
Section 12. INDEMNIFICATION. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Secured Parties under this
Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party in
connection with or as a result of any failure of any Guaranteed Obligations to
be the legal, valid and binding obligations of any Loan Party enforceable
against such Loan Party in accordance with their terms.
(b) In no event shall any of the Indemnified Parties have any
liability (whether direct or indirect, in contract, tort or otherwise) to any of
the Guarantors or any of their respective Affiliates or any of their respective
officers, directors, employees, agents and advisors, for any special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Transaction Documents or any of the transactions
contemplated by the Transaction Documents.
(c) Without prejudice to the survival of any of the other
agreements of any Guarantor under this Guaranty or any of the other Loan
Documents, the agreements and obligations of each Guarantor contained in Section
1(a) (with respect to enforcement expenses), the last sentence of Section 2,
Section 5 and this Section 12 shall survive the payment in full of the
Guaranteed Obligations and all of the other amounts payable under this Guaranty.
Section 13. SUBORDINATION. Each Guarantor hereby subordinates any
and all debts, liabilities and other Obligations owed to such Guarantor by each
other Loan Party (the "SUBORDINATED OBLIGATIONS") to the Guaranteed Obligations
to the extent and in the manner hereinafter set forth in this Section 13:
(a) PROHIBITED PAYMENTS, ETC. Except during the continuance of a
Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
may receive regularly scheduled payments from any other Loan Party on
account of the Subordinated Obligations. After the occurrence and during
the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
other Loan
Party), however, unless the Administrative Agent otherwise agrees,
no Guarantor shall demand, accept or take any action to collect any
payment on account of the Subordinated Obligations.
(b) PRIOR PAYMENT OF GUARANTEED OBLIGATIONS. In any proceeding
under any Bankruptcy Law relating to any other Loan Party, each Guarantor
agrees that the Secured Parties shall be entitled to receive payment in
full in cash of all Guaranteed Obligations (including all interest and
expenses accruing after the commencement of a proceeding under any
Bankruptcy Law, whether or not constituting an allowed claim in such
proceeding ("POST PETITION INTEREST")) before such Guarantor receives
payment of any Subordinated Obligations.
(c) TURN-OVER. After the occurrence and during the continuance of
any Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
shall, if the Administrative Agent so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for
the Secured Parties and deliver such payments to the Administrative Agent
on account of the Guaranteed Obligations (including all Post Petition
Interest), together with any necessary endorsements or other instruments of
transfer, but without reducing or affecting in any manner the liability of
such Guarantor under the other provisions of this Guaranty.
(d) ADMINISTRATIVE AGENT AUTHORIZATION. After the occurrence and
during the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
other Loan Party), the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name
of each Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to
the Guaranteed Obligations (including any and all Post Petition Interest),
and (ii) to require each Guarantor (A) to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and (B) to pay any
amounts received on such obligations to the Administrative Agent for
application to the Guaranteed Obligations (including any and all Post
Petition Interest).
Section 14. CONTINUING GUARANTY; ASSIGNMENTS UNDER THE CREDIT
AGREEMENT. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty, (ii)
the Termination Date and (iii) the latest date of expiration or termination of
all Letters of Credit and all Secured Hedge Agreements, (b) be binding upon the
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors, transferees and
assigns. Without limiting the generality of clause (c) of the immediately
preceding sentence, any Secured Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in
respect thereof granted to such Secured Party herein or otherwise, in each
case as and to the extent provided in Section 8.07 of the Credit Agreement.
No Guarantor shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Secured Parties.
Section 15. EXECUTION IN COUNTERPARTS. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.
Section 16. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC.
(a) This Guaranty shall be governed by, and construed in accordance with, the
laws of the State of New York.
(b) Each Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty or any of the other Loan Documents
to which it is or is to be a party, or for recognition or enforcement of any
judgment, and each Guarantor hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty or any other Loan Document shall affect any right that
any party may otherwise have to bring any action or proceeding relating to this
Guaranty or any other Loan Document in the courts of any jurisdiction.
(c) Each Guarantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty or any of the other Loan Documents
to which it is or is to be a party in any New York State or federal court. Each
Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court.
(d) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
INTERNATIONAL RECTIFIER CORPORATION, FLORIDA
By ________________________________
Title:
EXHIBIT A
TO THE
U.S. GUARANTY
FORM OF GUARANTY SUPPLEMENT
,
--------- -- ----
Banque Nationale de Paris, as Administrative Agent
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx00000
Attention: Xxxxxxxx Xxxxxxxx
Credit Agreement dated as of July 1, 1999 among International Rectifier
Corporation, a Delaware corporation (the "BORROWER"), the Lender Parties party
to the Credit Agreement, Sanwa Bank California, as Syndication Agent and Banque
Nationale de Paris, as Sole Arranger, Issuing Bank and Administrative Agent.
Ladies and Gentlemen:
Reference is made to the above-captioned Credit Agreement and to the
U.S. Guaranty referred to therein (such U.S. Guaranty, as in effect on the date
hereof and as it may hereafter be amended, supplemented or otherwise modified
from time to time, together with this Guaranty Supplement, being the
"GUARANTY"). The capitalized terms defined in the Guaranty or in the Credit
Agreement and not otherwise defined herein are used herein as therein defined.
Section 1. GUARANTY; LIMITATION OF LIABILITY. (a) The undersigned
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Loan Party now or hereafter existing under or in respect of the Loan
Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premium, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "GUARANTEED
OBLIGATIONS"), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or any other Secured Party in enforcing any rights under this Guaranty
Supplement, the Guaranty or any other Loan Document. Without limiting the
generality of the foregoing, the undersigned's liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan
Party to any Secured Party under or in respect of the Loan Documents but for
the fact that they are unenforceable or not allowable due to the existence of
a bankruptcy, reorganization or similar proceeding involving such other Loan
Party.
(b) The undersigned, and by its acceptance of this Guaranty
Supplement, the Administrative Agent and each other Secured Party, hereby
confirms that it is the intention of all such Persons that this Guaranty
Supplement, the Guaranty and the Obligations of the undersigned hereunder and
thereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to
this Guaranty Supplement, the Guaranty and the Obligations of the undersigned
hereunder and thereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the undersigned hereby
irrevocably agree that the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty at any time shall be limited to the maximum amount
as will result in the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty not constituting a fraudulent transfer or
conveyance.
(c) The undersigned hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to any Secured Party
under this Guaranty Supplement, the Guaranty or any other guaranty, the
undersigned will contribute, to the maximum extent permitted by applicable law,
such amounts to each other Guarantor and each other guarantor so as to maximize
the aggregate amount paid to the Secured Parties under or in respect of the Loan
Documents.
Section 2. OBLIGATIONS UNDER THE GUARANTY. The undersigned hereby
agrees, as of the date first above written, to be bound as a Guarantor by all of
the terms and conditions of the Guaranty to the same extent as each of the other
Guarantors thereunder. The undersigned further agrees, as of the date first
above written, that each reference in the Guaranty to an "ADDITIONAL GUARANTOR"
or a "GUARANTOR" shall also mean and be a reference to the undersigned, and each
reference in any other Loan Document to a "GUARANTOR" , a "U.S. GUARANTOR" or a
"LOAN PARTY" shall also mean and be a reference to the undersigned.
Section 3. REPRESENTATIONS AND WARRANTIES. The undersigned hereby
makes each representation and warranty set forth in Section 6 of the Guaranty to
the same extent as each other Guarantor.
Section 4. DELIVERY BY TELECOPIER. Delivery of an executed
counterpart of a signature page to this Guaranty Supplement by telecopier shall
be effective as delivery of an original executed counterpart of this Guaranty
Supplement.
Section 5. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC.
(a) This Guaranty Supplement shall be governed by, and construed in accordance
with, the laws of the State of New York.
(b) The undersigned hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or any federal
court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of
or relating to this Guaranty Supplement, the Guaranty or any of the other
Loan Documents to which it is or is to be a party, or for recognition or
enforcement of any judgment, and the undersigned hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or,
to the extent permitted by law, in such federal court. The undersigned
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Guaranty Supplement
or the Guaranty or any other Loan Document shall affect any right that any
party may otherwise have to bring any action or proceeding relating to this
Guaranty Supplement, the Guaranty or any of the other Loan Documents to which
it is or is to be a party in the courts of any other jurisdiction.
(c) The undersigned irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty Supplement, the Guaranty or any of
the other Loan Documents to which it is or is to be a party in any New York
State or federal court. The undersigned hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.
(d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL GUARANTOR]
By
------------------
Title:
EXHIBIT F-1
FORM OF
U.S. GUARANTY
Dated as of July 1, 1999
From
THE GUARANTORS NAMED HEREIN
and
THE ADDITIONAL GUARANTORS REFERRED TO HEREIN
AS GUARANTORS
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
T A B L E O F C O N T E N T S
SECTION PAGE
1. Guaranty; Limitation of Liability 1
2. Guaranty Absolute 2
3. Waivers and Acknowledgments 3
4. Subrogation 4
5. Payments Free and Clear of Taxes, Etc. 5
6. Representations and Warranties 7
7. Covenants 8
8. Amendments, Guaranty Supplements, Etc. 8
9. Notices, Etc. 9
10. No Waiver; Remedies 9
11. Right of Set-off 9
12. Indemnification 9
13. Xxxxxxxxxxxxx 00
00. Continuing Guaranty; Assignments under the Credit Agreement 11
15. Execution in Counterparts 12
16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. 12
Exhibit A - Form of Guaranty Supplement
EXHIBIT F-2 TO THE CREDIT AGREEMENT
FORM OF NON-U.S. GUARANTY
NON-U.S. GUARANTY
NON-U.S. GUARANTY dated as of July 1, 1999, (this "GUARANTY") made
by the Persons listed on the signature pages hereof under the caption
"Guarantors" and the Additional Guarantors (as defined in Section 8(b)) (such
Persons so listed and the Additional Guarantors being, collectively, the
"GUARANTORS" and, individually, each a "GUARANTOR") in favor of International
Rectifiers Corporation.
PRELIMINARY STATEMENT. International Rectifier Corporation, a
Delaware corporation (the "BORROWER"), is party to a Credit Agreement dated
as of July 1, 1999 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"; the capitalized
terms defined therein and not otherwise defined herein being used herein as
therein defined) with certain Lender Parties party thereto, Sanwa Bank
California, as Syndication Agent and Banque Nationale de Paris, as Sole
Arranger, Issuing Bank and Administrative Agent (the "AGENT"). The Borrower
may from time to time lend proceeds of the Advances to each Guarantor, which
loans from the Borrower will be evidenced by an Intercompany Note payable to
the Borrower made by such Guarantor. The Borrower intends to assign its
rights under this Guaranty to the Agent for the benefit of the Secured
Parties. Each Guarantor will derive substantial direct and indirect benefits
from the transactions contemplated by the Credit Agreement and the Loan
Documents. It is a condition precedent to the making of loans to be
evidenced by the Intercompany Notes that each Guarantor shall have executed
and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Borrower to make loans to be evidenced by the Intercompany Notes
from time to time, each Guarantor, jointly and severally with each other
Guarantor, hereby agrees as follows:
Section 1. GUARANTY; LIMITATION OF LIABILITY. (a) Each Guarantor
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of
each other Loan Party that is organized under the laws of a jurisdiction
outside of the United States, now or hereafter existing under or in respect
of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent,
and whether for principal, interest, premiums, fees, indemnities, contract
causes of action, costs, expenses or otherwise (such Obligations being the
"GUARANTEED OBLIGATIONS"), and agrees to pay any and all expenses (including,
without limitation, fees and expenses of counsel) incurred by the Borrower or
its assignees in enforcing any rights under this Guaranty or any other Loan
Document. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any other Guarantor to the
Borrower under or in respect of the Loan Documents but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Guarantor.
(b) Each Guarantor, and by its acceptance of this Guaranty, the
Borrower and each of its assignees, hereby confirms that it is the
intention of all such Persons that this Guaranty and the Obligations of
each Guarantor hereunder not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law (as hereinafter defined), the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar foreign, federal or state law to the extent applicable to this
Guaranty and the Obligations of each Guarantor hereunder. To effectuate
the foregoing intention, the Borrower (on behalf of itself and each of its
assignees) and the Guarantors hereby irrevocably agree that the Obligations
of each Guarantor under this Guaranty at any time shall be limited to the
maximum amount as will result in the Obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance. For
purposes hereof, "BANKRUPTCY LAW" means any proceeding of the type referred
to in Section 6.01(f) of the Credit Agreement or Title 11, U.S. Code, or
any similar foreign, federal or state law for the relief of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to the Borrower
or its assignees under this Guaranty or any other guaranty, such Guarantor
will contribute, to the maximum extent permitted by law, such amounts to
each other Guarantor and each other guarantor so as to maximize the
aggregate amount paid to the Borrower or its assignees under or in respect
of the Loan Documents.
(d) Notwithstanding the foregoing, (x) the obligation of any
Guarantor organized under the laws of Germany (each a "German Guarantor")
shall terminate in the event that such Guarantor no longer has any
obligation outstanding under the Intercompany Note or has any other payment
obligation to the Borrower, and (y) each German Guarantor and by its
acceptance of this Guaranty, the Borrower and each of its assignees, hereby
agrees that the obligations of any German Guarantor hereunder shall be
limited to such amount that would not result in a violation of GMBH-Gesetz
Section 30 or any other laws of Germany that pertain to the protection of
capital of such German Guarantor.
Section 2. GUARANTY ABSOLUTE. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Borrower or its assignees with respect thereto. The Obligations of each
Guarantor under or in respect of this Guaranty are independent of the Guaranteed
Obligations or any other Obligations of any other Loan Party under or in respect
of the Loan Documents, and a separate action or actions may be brought and
prosecuted against each Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against any other
Loan Party or whether any other Loan Party is joined in any such action or
actions. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire
in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of, or consent to departure from, any other guaranty, for all or any
of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other
collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Collateral
or any other collateral for all or any of the Guaranteed Obligations or any
other Obligations of any Loan Party under the Loan Documents or any other
assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of the Borrower or its assignees to disclose to
any Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects
of any other Loan Party now or hereafter known to such Secured Party (each
Guarantor waiving any duty on the part of the Borrower or its assignees to
disclose such information);
(g) the failure of any other Person to execute or deliver this
Guaranty, any Guaranty Supplement (as hereinafter defined) or any other
guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other
guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must
otherwise be returned by the Borrower or its assignees or any other Person
upon the insolvency, bankruptcy or reorganization of any Guarantor or any
other Loan Party or otherwise, all as though such payment had not been made.
Section 3. WAIVERS AND ACKNOWLEDGMENTS. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Borrower or its assignees protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against any
Loan Party or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives
any right to revoke this Guaranty and acknowledges that this Guaranty is
continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives
(i) any defense arising by reason of any claim or defense based upon an
election of remedies by the Borrower or its assignees that in any manner
impairs, reduces, releases or otherwise adversely affects the subrogation,
reimbursement, exoneration, contribution or indemnification rights of such
Guarantor or other rights of such Guarantor to proceed against any of the
other Loan Parties, any other guarantor or any other Person or any
Collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the Obligations of such Guarantor
hereunder.
(d) Each Guarantor acknowledges that the Borrower or its assignees
may, without notice to or demand upon such Guarantor and without affecting
the liability of such Guarantor under this Guaranty, foreclose under any
mortgage by nonjudicial sale, and each Guarantor hereby waives any defense
to the recovery by the Borrower or its assignees against such Guarantor of
any deficiency after such nonjudicial sale and any defense or benefits that
may be afforded by applicable law.
(e) Each Guarantor hereby unconditionally and irrevocably waives
any duty on the part of the Borrower or its assignees to disclose to such
Guarantor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects
of any other Loan Party or any of its Subsidiaries now or hereafter known
by the Borrower or its assignees.
(f) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated
by the Loan Documents and that the waivers set forth in Section 2 and this
Section 3 are knowingly made in contemplation of such benefits.
Section 4. SUBROGATION. Each Guarantor hereby unconditionally and
irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire
against any other Loan Party or any other insider guarantor that arise from
the existence, payment, performance or enforcement of such Guarantor's
Obligations under or in respect of this Guaranty or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in
any claim or remedy of the Borrower or its assignees against any other Loan
Party or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or its assignees, any other Loan Party or any other insider
guarantor, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such claim, remedy or
right, unless and until all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall have been paid in full in cash, all
Letters of Credit and all Secured Hedge Agreements shall have expired or been
terminated and the Commitments shall have expired or been terminated. If any
amount shall be paid to any Guarantor in violation of the immediately
preceding sentence at any time prior to the latest of (a) the payment in full
in cash of the Guaranteed Obligations and all other amounts payable under
this Guaranty, (b) the Termination Date and (c) the latest date of expiration
or termination of all Letters of Credit and all Secured Hedge Agreements,
such amount shall be received and held in trust for the benefit of the
Borrower and its assignees, shall be segregated from other property and funds
of such Guarantor and shall forthwith be paid or delivered to the Borrower or
its assignees in the same form as so received (with any necessary endorsement
or assignment) to be credited and applied to the Guaranteed Obligations and
all other amounts payable under this Guaranty, whether matured or unmatured,
in accordance with the terms of the Loan Documents, or to be held as
Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) any Guarantor shall make payment to the
Borrower or its assignees of all or any part of the Guaranteed Obligations,
(ii) all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been paid in full in cash, (iii) the Termination
Date shall have occurred and (iv) all Letters of Credit and all Secured Hedge
Agreements shall have expired or been terminated, the Borrower or its
assignees will, at such Guarantor's request and expense, execute and deliver
to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to sch Guarantor of an interest in the Guaranteed Obligations resulting from
such payment made by such Guarantor pursuant to this Guaranty.
Section 5. PAYMENTS FREE AND CLEAR OF TAXES, ETC. (a) Any and all
payments made by any Guarantor under or in respect of this Guaranty or any other
Loan Document shall be made, in accordance with Section 2.11 of the Credit
Agreement, free and clear of and without deduction for any and all present or
future Taxes. If any Guarantor shall be required by law to deduct any Taxes
from or in respect of any sum payable under or in respect of this Guaranty or
any other Loan Document to the Borrower or any of its assignees, (i) the sum
payable by such Guarantor shall be increased as may be necessary so that after
such Guarantor and the Borrower or its assignees have made all required
deductions (including deductions applicable to additional sums payable under
this Section 5), the Borrower and each of its assignees receives an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Guarantor shall make all such deductions and (iii) such Guarantor shall pay the
full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, each Guarantor agrees to pay any present or
future Other Taxes that arise from any payment made by or on behalf of such
Guarantor under or in respect of this Guaranty or any other Loan Document
or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Guaranty and the other Loan Documents.
(c) Each Guarantor will indemnify the Borrower and each of its
assignees for and hold it harmless against the full amount of Taxes and
Other Taxes, and for the full amount of taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 5, imposed on or paid by
the Borrower or any of its assignees and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be made within 30 days
from the date the Borrower or any of its assignees makes written demand
therefor.
(d) The obligations of each Guarantor under this Section are
subject in all respects to the limitations, qualifications and satisfaction
of conditions set forth in Section 2.12 of the Credit Agreement. Without
limitation of the foregoing, the assignees of the Borrower are subject to
the obligations of the Lenders set forth in Section 2.12 of the Credit
Agreement to the same extent as if set forth herein.
Section 6. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby
makes each representation and warranty made in the Loan Documents by the
Borrower with respect to such Guarantor and each Guarantor hereby further
represents and warrants as follows:
(a) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(b) Such Guarantor has, independently and without reliance upon
the Borrower or any of its assignees and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty and each other Loan Document to which
it is or is to be a party, and such Guarantor has established adequate
means of obtaining from each other Loan Party on a continuing basis
information pertaining to, and is now and on a continuing basis will be
completely familiar with, the business, condition (financial or otherwise),
operations, performance, properties and prospects of such other Loan Party.
Section 7. COVENANTS. Each Guarantor covenants and agrees that,
so long as any part of the Guaranteed Obligations shall remain unpaid, any
Letter of Credit shall be outstanding, any Lender Party shall have any
Commitment or any Secured Hedge Agreement shall be in effect, such Guarantor
will perform and observe, and cause each of its Subsidiaries to perform and
observe, all of the terms, covenants and agreements set forth in the Loan
Documents on its or their part to be performed or observed or that the
Borrower has agreed to cause such Guarantor or such Subsidiaries to perform
or observe.
Section 8. AMENDMENTS, GUARANTY SUPPLEMENTS, ETC. (a) No
amendment or waiver of any provision of this Guaranty and no consent to any
departure by any Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by the Borrower or its assignees (or
such of them as shall be required under the Credit Agreement) and the
Required Lenders, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. Upon the
sale of a Guarantor to the extent permitted in accordance with the terms of
the Loan Documents, such Guarantor shall be automatically released from this
Guaranty.
(b) Upon the execution and delivery by any Person of a guaranty
supplement in substantially the form of Exhibit A hereto (each, a "GUARANTY
SUPPLEMENT"), (i) such Person shall be referred to as an "ADDITIONAL
GUARANTOR" and shall become and be a Guarantor hereunder, and each
reference in this Guaranty to a "GUARANTOR" shall also mean and be a
reference to such Additional Guarantor, and each reference in any other
Loan Document to a "GUARANTOR" or a "NON-U.S. GUARANTOR" shall also mean
and be a reference to such Additional Guarantor, and (ii) each reference
herein to "THIS GUARANTY", "HEREUNDER", "HEREOF" or words of like import
referring to this Guaranty, and each reference in any other Loan Document
to the "GUARANTY", "NON-U.S. GUARANTY", "THEREUNDER", "THEREOF" or words of
like import referring to this Guaranty, shall mean and be a reference to
this Guaranty as supplemented by such Guaranty Supplement.
Section 9. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy
or telex communication) and mailed, telegraphed, telecopied, telexed or
delivered to it, if to any Guarantor, addressed to it in care of the Borrower
at the Borrower's address specified in Section 8.02 of the Credit Agreement,
if to any assignee of the Borrower, at its address specified in Section 8.02
of the Credit Agreement or, as to any party, at such other address as shall
be designated by such party in a written notice to each other party. All
such notices and other communications shall, when mailed, telegraphed,
telecopied or telexed, be effective when deposited in the mails, delivered to
the telegraph company, transmitted by telecopier or confirmed by telex
answerback, respectively. Delivery by telecopier of an executed counterpart
of a signature page to any amendment or waiver of any provision of this
Guaranty or of any Guaranty Supplement to be executed and delivered hereunder
shall be effective as delivery of an original executed counterpart thereof.
Section 10. NO WAIVER; REMEDIES. No failure on the part of the
Borrower or any of its assignees to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 11. INDEMNIFICATION. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Borrower and its assignees
under this Guaranty, each Guarantor shall, to the fullest extent permitted by
law, indemnify, defend and save and hold harmless each assignee of the
Borrower and each of their Affiliates and their respective officers,
directors,
employees, agents and advisors (each, an "INDEMNIFIED PARTY") from and
against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party in connection with or as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of any
Loan Party enforceable against such Loan Party in accordance with their terms.
(b) In no event shall any of the Indemnified Parties have any
liability (whether direct or indirect, in contract, tort or otherwise) to
any of the Guarantors or any of their respective Affiliates or any of their
respective officers, directors, employees, agents and advisors, for any
special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Facilities, the actual or proposed use of the
proceeds of the Advances or the Letters of Credit, the Transaction
Documents or any of the transactions contemplated by the Transaction
Documents.
(c) Without prejudice to the survival of any of the other
agreements of any Guarantor under this Guaranty or any of the other Loan
Documents, the agreements and obligations of each Guarantor contained in
Section 1(a) (with respect to enforcement expenses), the last sentence of
Section 2, Section 5 and this Section 11 shall survive the payment in full
of the Guaranteed Obligations and all of the other amounts payable under
this Guaranty.
Section 12. SUBORDINATION. Each Guarantor hereby subordinates any
and all debts, liabilities and other Obligations owed to such Guarantor by
each other Loan Party (the "SUBORDINATED OBLIGATIONS") to the Guaranteed
Obligations to the extent and in the manner hereinafter set forth in this
Section 12:
(a) PROHIBITED PAYMENTS, ETC. Except during the continuance of a
Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
may receive regularly scheduled payments from any other Loan Party on
account of the Subordinated Obligations. After the occurrence and during
the continuance of any Default (including the commencement and continuation
of any proceeding under any Bankruptcy Law relating to any other Loan
Party), however, unless the Borrower or its assignees otherwise agree, no
Guarantor shall demand, accept or take any action to collect any payment on
account of the Subordinated Obligations.
(b) PRIOR PAYMENT OF GUARANTEED OBLIGATIONS. In any proceeding
under any Bankruptcy Law relating to any other Loan Party, each Guarantor
agrees that the Borrower or its assignees shall be entitled to receive
payment in full in cash of all Guaranteed Obligations (including all
interest and expenses accruing after the commencement of a proceeding under
any Bankruptcy Law, whether or not constituting an allowed claim in such
proceeding ("POST PETITION INTEREST")) before such Guarantor receives
payment of any Subordinated Obligations.
(c) TURN-OVER. After the occurrence and during the continuance of
any Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
shall, if the Borrower or its assignees so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for
the Borrower or its assignees and deliver such payments to the Borrower or
its assignees on account of the Guaranteed Obligations (including all Post
Petition Interest), together with any necessary endorsements or other
instruments of transfer, but without reducing or affecting in any manner
the liability of such Guarantor under the other provisions of this
Guaranty.
(d) AUTHORIZATION. After the occurrence and during the
continuance of any Default (including the commencement and continuation of
any proceeding under any Bankruptcy Law relating to any other Loan Party),
the Borrower or its assignees are authorized and empowered (but without any
obligation to so do), in their discretion, (i) in the name of each
Guarantor, to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and to apply any amounts received thereon to the
Guaranteed Obligations (including any and all Post Petition Interest), and
(ii) to require each Guarantor (A) to collect and enforce, and to submit
claims in respect of, Subordinated Obligations and (B) to pay any amounts
received on such obligations to the Borrower or its assignees for
application to the Guaranteed Obligations (including any and all Post
Petition Interest).
Section 13. CONTINUING GUARANTY; ASSIGNMENTS UNDER THE CREDIT
AGREEMENT. This Guaranty is a continuing guaranty and shall (a) remain in
full force and effect until the latest of (i) the payment in full in cash of
the Guaranteed Obligations and all other amounts payable under this Guaranty,
(ii) the Termination Date and (iii) the latest date of expiration or
termination of all Letters of Credit and all Secured Hedge Agreements, (b) be
binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Borrower and its successors, transferees
and assigns PROVIDED that at all times that the Borrower shall have
effectively assigned its rights under this Guaranty to the Agent for the
benefit of the Secured Parties, all rights and remedies of the Borrower under
this Guaranty shall be exercised only by the Agent. No Guarantor shall have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Secured Parties.
Section 14. EXECUTION IN COUNTERPARTS. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any
number of counterparts and by different parties thereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Guaranty by telecopier shall be effective as delivery of an original executed
counterpart of this Guaranty.
Section 15. JUDGMENT. (a) If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due hereunder in Dollars into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase Dollars
with such other currency at the Agent's office in San Francisco, California
10:00 A.M. (San Francisco time) on the Business Day preceding that on which
final judgment is given.
(b) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in a foreign currency into
Dollars, the parties agree to the fullest extent that they may effectively
do so, that the rate of exchange used shall be that at which in accordance
with normal banking procedures the Agent could purchase such foreign
currency with Dollars at the Agent's office in San Francisco, California
10:00 A.M. (San Francisco time) on the Business Day preceding that on which
final judgment is given.
(c) The obligations of each Guarantor in respect of any sum due
from it in any currency (the "PRIMARY CURRENCY") to the Borrower or its
assignees hereunder and under the Loan Documents shall, notwithstanding any
judgment in any other currency, be discharged only to the extent that on
the Business Day following receipt by the Borrower or its assignees (as the
case may be), of any sum adjudged to be so due in such other currency, the
Borrower or its assignees (as the case may be) may in accordance with
normal banking procedures purchase the applicable Primary Currency with
such other currency; if the amount of the applicable Primary Currency so
purchased is less than such sum due to the Borrower or its assignees (as
the case may be) in the applicable Primary Currency, each Guarantor agrees,
as a separate obligation and notwithstanding any such judgment, to
indemnify the Borrower or its assignees (as the case may be) against such
loss, and if the amount of the applicable Primary Currency so purchased
exceeds such sum due to any Borrower or its assignees (as the case may be)
in the applicable Primary Currency, the Borrower or its assignees (as the
case may be) agrees to remit to such Guarantor such excess.
Section 16. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL,
ETC. (a) This Guaranty shall be governed by, and construed in accordance
with, the laws of the State of New York.
(b) Each Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New
York State court or federal court of the United States of America sitting
in New York City, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party, or for recognition
or enforcement of any judgment, and each Guarantor hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or,
to the extent permitted by law, in such federal court. Each Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Guaranty
or any other Loan Document shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Guaranty
or any other Loan Document in the courts of any jurisdiction.
(c) Each Guarantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other
Loan Documents to which it is or is to be a party in any New York State or
federal court. Each Guarantor hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.
(d) Each Guarantor hereby agrees that service of process in any
such action or proceeding brought in the any such New York State court or
in such federal court may be made upon International Rectifier Corporation
at its offices at 000 Xxxxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Executive Vice President (the "PROCESS AGENT") and each
Guarantor hereby irrevocably appoints the Process Agent its authorized
agent to accept such service of process, and agrees that the failure of the
Process Agent to give any notice of any such service shall not impair or
affect the validity of such service or of any judgment rendered in any
action or proceeding based thereon. Each Guarantor hereby further
irrevocably consents to the service of process in any action or proceeding
in such courts by the mailing thereof by any parties hereto by registered
or certified mail, postage prepaid, to the Borrower at its address
specified pursuant to Section 8.02. Each Guarantor party hereto agrees
that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Nothing in this Guaranty shall affect
any right that any party may otherwise have to bring any action or
proceeding relating to this Guaranty or the Loan Documents in the courts of
any jurisdiction. To the extent that each Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to
itself or its property, each Guarantor hereby irrevocably waives such
immunity in respect of its obligations under this Guaranty.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT IN BLANK]
(e) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS,
THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
INTERNATIONAL RECTIFIER CANADA
LIMITED
By_________________________
Name:
Title:
INTERNATIONAL RECTIFIER ELECTRONIC
MOTION SYSTEMS LTD.
By_________________________
Name:
Title:
INTERNATIONAL RECTIFIER CORPORATION
ITALIANA S.p.A
By_________________________
Name:
Title:
RECTIFICADORES INTERNACIONALES, S.A.
By_________________________
Name:
Title:
INTERNATIONAL RECTIFIER SOUTHEAST
ASIA PTE. LTD.
By_________________________
Name:
Title:
INTERNATIONAL RECTIFIER COMPANY
(GREAT BRITAIN) LTD.
By_________________________
Name:
Title:
SHANGHAI-INTERNATIONAL RECTIFIER
TRADING LTD.
By_________________________
Name:
Title:
INTERNATIONAL RECTIFIER HONG KONG
By_________________________
Name:
Title:
INTERNATIONAL RECTIFIER GmbH
By_________________________
Name:
Title:
INTERNATIONAL RECTIFIER JAPAN CO.
By_________________________
Name:
Title:
SEMICONDUCTOR ELECTRONICS LTD.
By
-------------------------
Name:
Title:
INTERNATIONAL RECTIFIER FOREIGN SALES CORPORATION
By
-------------------------
Name:
Title:
INTERNATIONAL RECTIFIER MAURITIUS, INC.
By
-------------------------
Name:
Title:
IR INFOTECH PRIVATE LTD.
By
-------------------------
Name:
Title:
EXHIBIT TO THE
NON-U.S. GUARANTY
FORM OF GUARANTY SUPPLEMENT
,
--------- -- ----
[Borrower or its assignee]
[address]
Attention:
-------------
Credit Agreement dated as of July 1, 1999 among International Rectifier
Corporation, a Delaware corporation (the "BORROWER"), the Lender Parties party
to the Credit Agreement, Sanwa Bank California, as Syndication Agent and Banque
Nationale de Paris, as Sole Arranger, Issuing Bank and Administrative Agent.
Ladies and Gentlemen:
Reference is made to the above-captioned Credit Agreement and to the
U.S. Guaranty referred to therein (such U.S. Guaranty, as in effect on the date
hereof and as it may hereafter be amended, supplemented or otherwise modified
from time to time, together with this Guaranty Supplement, being the
"GUARANTY"). The capitalized terms defined in the Guaranty or in the Credit
Agreement and not otherwise defined herein are used herein as therein defined.
Section 1. GUARANTY; LIMITATION OF LIABILITY. (a) The undersigned
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Guarantors that is organized under the laws of a jurisdiction outside of
the United States, now or hereafter existing under or in respect of the Loan
Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premium, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "GUARANTEED
OBLIGATIONS"), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Borrower or its
assignees in enforcing any rights under this Guaranty Supplement, the Guaranty
or any other Loan Document. Without limiting the generality of the foregoing,
the undersigned's liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by any other Guarantor
that is organized under the laws of a jurisdiction outside of the United
States to the Borrower under or in respect of the Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such other
Guarantor.
(b) The undersigned, and by its acceptance of this Guaranty
Supplement, the Borrower and each of its assignees, hereby confirms that it is
the intention of all such Persons that this Guaranty Supplement, the Guaranty
and the Obligations of the undersigned hereunder and thereunder not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to this Guaranty Supplement, the
Guaranty and the Obligations of the undersigned hereunder and thereunder. To
effectuate the foregoing intention, the Borrower, its assignees and the
undersigned hereby irrevocably agree that the Obligations of the undersigned
under this Guaranty Supplement and the Guaranty at any time shall be limited to
the maximum amount as will result in the Obligations of the undersigned under
this Guaranty Supplement and the Guaranty not constituting a fraudulent transfer
or conveyance.
(c) The undersigned hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to the Borrower or
its assignees under this Guaranty Supplement, the Guaranty or any other
guaranty, the undersigned will contribute, to the maximum extent permitted by
applicable law, such amounts to each other Guarantor and each other guarantor so
as to maximize the aggregate amount paid to the Borrower or its assignees under
or in respect of the Loan Documents.
Section 2. OBLIGATIONS UNDER THE GUARANTY. The undersigned hereby
agrees, as of the date first above written, to be bound as a Guarantor by all of
the terms and conditions of the Guaranty to the same extent as each of the other
Guarantors thereunder. The undersigned further agrees, as of the date first
above written, that each reference in the Guaranty to an "ADDITIONAL GUARANTOR"
or a "GUARANTOR" shall also mean and be a reference to the undersigned, and each
reference in any other Loan Document to a "GUARANTOR" , a "U.S. GUARANTOR" or a
"LOAN PARTY" shall also mean and be a reference to the undersigned.
Section 3. REPRESENTATIONS AND WARRANTIES. The undersigned hereby
makes each representation and warranty set forth in Section 6 of the Guaranty to
the same extent as each other Guarantor.
Section 4. DELIVERY BY TELECOPIER. Delivery of an executed
counterpart of a signature page to this Guaranty Supplement by telecopier shall
be effective as delivery of an original executed counterpart of this Guaranty
Supplement.
Section 5. JUDGMENT. (a) If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due hereunder in Dollars into
another currency, the undersigned agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Dollars with such other currency at the Administrative Agent's office
in [Los Angeles,
California 10:00 A.M. (Los Angeles time)] on the Business Day preceding that
on which final judgment is given.
(b) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in a foreign currency into Dollars, the
undersigned agrees to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase such foreign currency with
Dollars at the Administrative Agent's office in [Los Angeles, California 10:00
A.M. (Los Angeles time)] on the Business Day preceding that on which final
judgment is given.
(c) The obligations of the undersigned in respect of any sum due
from it in any currency (the "PRIMARY CURRENCY") to the Borrower or its
assignees hereunder and under the Loan Documents shall, notwithstanding any
judgment in any other currency, be discharged only to the extent that on the
Business Day following receipt by such Lender or the Administrative Agent (as
the case may be), of any sum adjudged to be so due in such other currency, the
Borrower or such assignee (as the case may be) may in accordance with normal
banking procedures purchase the applicable Primary Currency with such other
currency; if the amount of the applicable Primary Currency so purchased is less
than such sum due to the Borrower or such assignee (as the case may be) in the
applicable Primary Currency, the undersigned agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify the Borrower or such
assignee (as the case may be) against such loss, and if the amount of the
applicable Primary Currency so purchased exceeds such sum due to the Borrower or
its assignees (as the case may be) in the applicable Primary Currency, the
Borrower or such assignee (as the case may be) agrees to remit to the
undersigned such excess.
Section 6. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC.
(a) This Guaranty Supplement shall be governed by, and construed in accordance
with, the laws of the State of New York.
(b) The undersigned hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or any federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Guaranty Supplement, the
Guaranty or any of the other Loan Documents to which it is or is to be a party,
or for recognition or enforcement of any judgment, and the undersigned hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. The
undersigned agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Guaranty Supplement or
the Guaranty or any other Loan Document shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Guaranty
Supplement, the Guaranty or any of the other Loan Documents to which it is or is
to be a party in the courts of any other jurisdiction.
(c) The undersigned irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty Supplement, the Guaranty or any of
the other Loan Documents to which it is or is to be a party in any New York
State or federal court. The undersigned hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.
(d) The undersigned hereby agrees that service of process in any
such action or proceeding brought in the any such New York State court or in
such federal court may be made upon International Rectifier Corporation at its
offices at 000 Xxxxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000 Attention: Executive
Vice President (the "PROCESS AGENT") and the undersigned hereby irrevocably
appoints the Process Agent its authorized agent to accept such service of
process, and agrees that the failure of the Process Agent to give any notice of
any such service shall not impair or affect the validity of such service or of
any judgment rendered in any action or proceeding based thereon. The
undersigned hereby further irrevocably consents to the service of process in any
action or proceeding in such courts by the mailing thereof by any parties hereto
by registered or certified mail, postage prepaid, to the Borrower at its address
specified pursuant to Section 8.02. The undersigned agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Guaranty shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Guaranty
or the Loan Documents in the courts of any jurisdiction. To the extent that the
undersigned has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, the undersigned hereby irrevocably waives
such immunity in respect of its obligations under this Guaranty.
(e) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL GUARANTOR]
By
------------------------------
Title:
FORM OF
NON-U.S. GUARANTY
Dated as of July 1, 1999
From
THE GUARANTORS NAMED HEREIN
and
THE ADDITIONAL GUARANTORS REFERRED TO HEREIN
AS GUARANTORS
in favor of
INTERNATIONAL RECTIFIER CORPORATION
T A B L E O F C O N T E N T S
SECTION PAGE
1. Guaranty; Limitation of Liability 1
2. Guaranty Absolute 2
3. Waivers and Acknowledgments 4
4. Subrogation 4
5. Payments Free and Clear of Taxes, Etc. 5
6. Representations and Warranties 6
7. Covenants 7
8. Amendments, Guaranty Supplements, Etc. 7
9. Notices, Etc. 7
10. No Waiver; Remedies 8
11. Indemnification 8
12. Subordination 8
13. Continuing Guaranty; Assignments under the Credit Agreement 9
14. Execution in Counterparts 10
15. Judgment 10
16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. 11
Exhibit A - Form of Guaranty Supplement
EXHIBIT G-1 TO THE CREDIT AGREEMENT
FORM OF OPINION OF LOAN PARTIES
[FORM TO BE DELIVERED]
EXHIBIT G-2 TO THE CREDIT AGREEMENT
FORM OF OPINION OF L. XXXXXXX XXXXXXX
[FORM TO BE DELIVERED]
EXHIBIT H TO THE CREDIT AGREEMENT
FORM OF BORROWER SOLVENCY CERTIFICATE
INTERNATIONAL RECTIFIER CORPORATION, a Delaware corporation (the
"COMPANY"), hereby certifies that the person executing this Solvency
Certificate, [name], is the [position] of the Company and that such officer is
duly authorized to execute this Solvency Certificate, which is hereby delivered
on behalf of the Company pursuant to Section 3.01(a)(xx) of the Credit Agreement
dated as of July 1, 1999 (as amended, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"), among the Company, certain Lender Parties
party thereto and Banque Nationale de Paris, as Administrative Agent. Unless
otherwise defined herein, terms defined in the Credit Agreement are used herein
as therein defined.
The Company further certifies that such officer is generally familiar
with the properties, businesses and assets of the Company and its Subsidiaries
and has carefully reviewed the Loan Documents, the Non-U.S. Subsidiary
Agreements and the contents of this Solvency Certificate and, in connection
herewith, has reviewed such other documentation and information and has made
such investigation and inquiries as the Company and such officer deem necessary
and prudent therefor. The Company further certifies that the financial
information and assumptions that underlie and form the basis for the
representations made in this Solvency Certificate were reasonable when made and
were made in good faith and continue to be reasonable as of the date hereof.
On the date hereof, the Company intends to borrow up to $250,000,000
under the Credit Agreement, the proceeds of which will be applied to (i)
refinance certain existing Debt of the Borrower other than Surviving Debt, (ii)
pay transaction fees and expenses, (iii) finance Permitted Acquisitions, and
other transactions permitted by the terms of the Credit Agreement, (iv) provide
working capital and (v) for general corporate purposes permitted by the terms of
the Credit Agreement and that, from time to time, the Lender Parties lend to the
Borrower and issue Letters of Credit for the benefit of the Borrower to (i)
provide working capital for the Borrower and its Subsidiaries, and (ii) finance
Permitted Acquisition.
To secure the payment of the Obligations of the Company and the other
Loan Parties under the Loan Documents: (i) the Company and the other Loan
Parties are pledging all of the issued and outstanding capital stock of their
respective Subsidiaries (other than Non U.S. Subsidiaries) and 65% of the
outstanding capital stock of the Non U.S. Subsidiaries, (iii) the Company, the
other Loan Parties and certain Non U.S. Subsidiaries are granting a lien and
security interest in the Collateral, whether now owned or hereafter acquired,
pursuant to the Collateral Documents, and (iv) the U.S. Subsidiaries of the
Company are issuing their respective guaranties, guaranteeing the Obligations of
the other Loan Parties and Non U.S. Subsidiaries under the Loan Documents.
The Company understands that the Administrative Agent and the Lender
Parties are relying on the truth and accuracy of this Solvency Certificate in
connection with the transactions contemplated by the Loan Documents.
The Company hereby further certifies that:
1. The Company has reviewed the projected Consolidated income statement
and statement of cash flows of its Subsidiaries prepared by its management,
including projected income statements and statements of cash flows of its
Subsidiaries on an annual basis for each of its Fiscal Years through [date]
(collectively, the "PROJECTED FINANCIAL STATEMENTS"), which were prepared on the
basis of the estimates and assumptions stated therein, a copy of which Projected
Financial Statements were furnished to the Lender Parties. The Company believes
that the Projected Financial Statements were prepared in good faith and
represent its reasonable estimate of its future financial performance and are
reasonable in light of the business conditions existing on the date hereof. On
the date hereof, before and after giving effect to the consummation of the
Transaction and the other transactions contemplated by the Credit Agreement, the
other Loan Documents and the Non-U.S. Subsidiary Agreements, the fair value of
the property of the Company, individually, and of the Company and its
Subsidiaries, taken as a whole, is greater than the total amount of liabilities
(including contingent, subordinated, absolute, fixed, matured or unmatured and
liquidated or unliquidated liabilities) of the Company, individually, and of the
Company and its Subsidiaries, taken as a whole.
2. On the date hereof, before and after giving effect to the consummation
of the Transaction and the other transactions contemplated by the Credit
Agreement, the other Loan Documents and the Non-U.S. Subsidiary Agreements, the
present fair saleable value of the assets of the Company, individually, and of
the assets of the Company and its Subsidiaries, taken as a whole, exceeds the
amount that will be required to pay the probable liabilities of the Company,
individually, and of the Company and its Subsidiaries, taken as a whole, on its
or their debts as they become absolute and matured.
3. On the date hereof, before and after giving effect to the consummation
of the Transaction and the other transactions contemplated by the Credit
Agreement, the other Loan Documents and the Non-U.S. Subsidiary Agreements,
neither the Company, individually, nor the Company and its Subsidiaries, taken
as a whole, is engaged in business or in a transaction, or is about to engage in
business or in a transaction, for which its or their property would constitute
unreasonably small capital.
4. The Company does not intend or believe that it, individually or
together with its Subsidiaries, taken as a whole, will incur debts and
liabilities that will be beyond its or their ability to pay as such debts or
liabilities mature.
5. The Company does not intend, in consummating the transactions
contemplated by the Credit Agreement, the other Loan Documents and the Non-U.S.
Subsidiary Agreements, to hinder, delay or defraud either present or future
creditors or any other Person to which the Company is or will become on or after
the date hereof, indebted.
6. In reaching the conclusions set forth in this Solvency Certificate,
the Company has considered, among other things:
(a) the cash and other current assets of the Company and its
Subsidiaries reflected in the unaudited pro forma Consolidated balance
sheet of the Parent Guarantor and its Subsidiaries as of [date];
(b) all of the unliquidated and contingent liabilities of the
Company and its Subsidiaries, including, without limitation, any claims
arising out of pending or, to the best knowledge of the undersigned,
threatened litigation against the Company or any of its Subsidiaries or any
of their respective property and assets and, in so doing, the Company has
computed the amount of each such unliquidated or contingent liability as
the amount that, in light of all of the facts and circumstances existing on
the date of this Certificate, represents the amount that can reasonably be
expected to become an actual or matured liability;
(c) all of the obligations and liabilities of the Company and its
Subsidiaries, whether matured or unmatured, liquidated or unliquidated,
disputed or undisputed, secured or unsecured, subordinated, absolute, fixed
or contingent, including, without limitation, any claims arising out of
pending or, to the best knowledge of the undersigned, threatened litigation
against the Company or any of its Subsidiaries or any of their respective
property and assets;
(d) historical and anticipated growth in the sales volume of the
Company and its Subsidiaries and in the income stream generated by the
Company and its Subsidiaries as reflected in, among other things, the cash
flow statements comprising part of the Projected Financial Statements;
(e) the customary sales terms and the trade payables and other
accounts payable of the Company and its Subsidiaries;
(f) the amount of the credit extended by and to customers of the
Company and its Subsidiaries;
(g) the amortization and mandatory commitment reduction
requirements set forth in Section 2.04 and 2.05(b) of the Credit Agreement
and the anticipated interest payable on the Advances made from time to time
under the Credit Agreement;
(h) the level of capital customarily maintained by the Company and
its Subsidiaries and, to the extent that the Company has knowledge thereof,
other entities engaged in the same or a similar business as the businesses
of the Company and its Subsidiaries; and
(i) the Projected Financial Statements.
Delivery of an executed counterpart of a signature page to this
Solvency Certificate by telecopier shall be effective as delivery of a manually
executed counterpart of this Solvency Certificate.
IN WITNESS WHEREOF, the [position], of the Company has executed this
Solvency Certificate in his corporate capacity and on behalf of the Company this
___ day of July, 1999.
By
-----------------------------------------
Name:
Title:
-------------------------------
