EXHIBIT (10)(h)
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EXECUTION COPY
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
Originally dated as of June 16, 1997
Amendment and Restatement dated as of February 26, 1999
Second Amendment and Restatement dated as of February 1, 2000
Third Amendment and Restatement dated as of December 20, 2001
among
CTS CORPORATION,
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS,
BANK ONE, NA
as Agent
and
BANC ONE CAPITAL MARKETS, INC.
as Lead Arranger
TABLE OF CONTENTS
ARTICLE I: DEFINITIONS...........................................................................................1
1.1 Certain Defined Terms...............................................................................1
1.2 References.........................................................................................21
1.3 Supplemental Disclosure............................................................................22
1.4 Amendment and Restatement of Original Credit Agreement.............................................22
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES.........................................................22
2.1 Term Loans.........................................................................................22
2.2 Revolving Loans....................................................................................24
2.3 Swing Line Loans...................................................................................25
2.4 Rate Options for All Advances......................................................................27
2.5 Optional Payments; Mandatory Prepayments...........................................................27
(A) Optional Payments.........................................................................27
(B) Mandatory Prepayments.....................................................................27
2.6 Reduction of Commitments...........................................................................29
2.7 Method of Borrowing................................................................................29
2.8 Method of Selecting Types and Interest Periods for Advances........................................29
2.9 Minimum Amount of Each Advance.....................................................................30
2.10 Method of Selecting Types and Interest Periods for Conversion and Continuation of Advances........30
(A) Right to Convert..........................................................................30
(B) Automatic Conversion and Continuation.....................................................30
(C) No Conversion Post-Default or Post-Unmatured Default......................................30
(D) Conversion/Continuation Notice............................................................30
2.11 Default Rate......................................................................................31
2.12 Notes.............................................................................................31
2.13 Method of Payment.................................................................................31
2.14 Telephonic Notices................................................................................31
2.15 Promise to Pay; Interest and Facility Fees; Interest Payment Dates; Interest and Fee Basis; Taxes;
Loan and Control Accounts.........................................................................31
(A) Promise to Pay............................................................................31
(B) Interest Payment Dates....................................................................31
(C) Facility Fees.............................................................................32
(D) Interest and Fee Basis; Applicable Eurodollar Margin and Applicable
Facility Fee Percentage...................................................................32
(E) Taxes.....................................................................................33
2.16 Notification of Advances, Interest Rates, Prepayments and Aggregate
Revolving Loan Commitment Reductions..............................................................36
2.17 Lending Installations.............................................................................36
2.18 Non-Receipt of Funds by the Agent.................................................................36
2.19 Termination Date..................................................................................37
2.20 Replacement of Certain Lenders....................................................................37
ARTICLE III: THE LETTER OF CREDIT FACILITY......................................................................38
3.1 Obligation to Issue................................................................................38
3.2 [Intentionally Omitted]............................................................................38
3.3 Types and Amounts..................................................................................38
3.4 Conditions.........................................................................................38
3.5 Procedure for Issuance of Letters of Credit........................................................39
3.6 Letter of Credit Participation.....................................................................39
3.7 Reimbursement Obligation...........................................................................39
3.8 Letter of Credit Fees..............................................................................40
3.9 Indemnification; Exoneration.......................................................................40
ARTICLE IV: CHANGE IN CIRCUMSTANCES.............................................................................41
4.1 Yield Protection...................................................................................41
4.2 Changes in Capital Adequacy Regulations............................................................42
4.3 Availability of Types of Advances..................................................................43
4.4 Funding Indemnification............................................................................43
4.5 Lender Statements; Survival of Indemnity...........................................................43
ARTICLE V: CONDITIONS PRECEDENT.................................................................................43
5.1 Initial Advances and Letters of Credit.............................................................43
5.2 Each Advance and Letter of Credit..................................................................45
ARTICLE VI: REPRESENTATIONS AND WARRANTIES......................................................................45
6.1 Organization; Corporate Powers.....................................................................45
6.2 Authority..........................................................................................46
6.3 No Conflict; Governmental Consents.................................................................46
6.4 Financial Statements...............................................................................47
6.5 No Material Adverse Change.........................................................................47
6.6 Taxes..............................................................................................47
(A) Tax Examinations..........................................................................47
(B) Payment of Taxes..........................................................................47
6.7 Litigation; Loss Contingencies and Violations......................................................48
6.8 Subsidiaries.......................................................................................48
6.9 ERISA..............................................................................................48
6.10 Accuracy of Information...........................................................................49
6.11 Material Agreements...............................................................................49
6.12 Compliance with Laws; Securities Activities.......................................................49
6.13 Assets and Properties.............................................................................50
6.14 Statutory Indebtedness Restrictions...............................................................50
6.15 Labor Matters.....................................................................................50
6.16 Environmental Matters.............................................................................50
ARTICLE VII: COVENANTS..........................................................................................51
7.1 Affirmative Covenants..............................................................................51
(A) Preservation of Corporate Existence, Etc..................................................51
(B) Compliance with Laws, Etc.................................................................51
(C) Maintenance of Properties; Insurance......................................................52
(D) Reporting Requirements....................................................................52
(E) Accounting; Access to Records, Books, Etc.................................................54
(F) Additional Subsidiary Documentation.......................................................54
(G) Pledge Agreements; Security Agreements and Mortgages......................................54
7.2 Negative Covenants.................................................................................56
(A) Indebtedness..............................................................................56
(B) Liens.....................................................................................56
(C) Merger; Acquisitions: Etc.................................................................57
(D) Disposition of Assets Etc.................................................................58
(E) Nature of Business........................................................................58
(F) Investments, Loans and Advances...........................................................58
(G) Guarantees, Etc...........................................................................59
(H) Transactions with Affiliates..............................................................59
(I) Leases....................................................................................59
(J) Restricted Payments.......................................................................59
(K) Hedging Obligations.......................................................................59
(L) Margin Regulations........................................................................59
7.3 Financial Covenants................................................................................60
(A) Fixed Charge Coverage Ratio...............................................................60
(B) Leverage Ratios...........................................................................60
(C) Consolidated Net Worth....................................................................61
(D) Capital Expenditures......................................................................62
7.4 Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities............................62
7.5 Issuance of Securities.............................................................................62
ARTICLE VIII: DEFAULTS..........................................................................................62
8.1 Defaults...........................................................................................62
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES..................................65
9.1 Termination of Commitments; Acceleration...........................................................65
9.2 Amendments.........................................................................................65
9.3 Preservation of Rights.............................................................................66
ARTICLE X: GENERAL PROVISIONS...................................................................................66
10.1 Survival of Representations.......................................................................66
10.2 Governmental Regulation...........................................................................67
10.3 Performance of Obligations........................................................................67
10.4 Headings..........................................................................................67
10.5 Entire Agreement..................................................................................67
10.6 Several Obligations; Benefits of this Agreement...................................................68
10.7 Expenses; Indemnification.........................................................................68
(A) Expenses..................................................................................68
(B) Indemnity.................................................................................68
(C) Waiver of Certain Claims; Settlement of Claims............................................69
(D) Survival of Agreements....................................................................70
10.8 Numbers of Documents..............................................................................70
10.9 Accounting........................................................................................70
10.10 Severability of Provisions.......................................................................70
10.11 Nonliability of Lenders..........................................................................70
10.12 GOVERNING LAW....................................................................................70
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL..........................................71
(A) JURISDICTION..............................................................................71
(B) WAIVER OF JURY TRIAL......................................................................71
ARTICLE XI: THE AGENT...........................................................................................71
11.1 Appointment; Nature of Relationship...............................................................71
11.2 Powers............................................................................................72
11.3 General Immunity..................................................................................72
11.4 No Responsibility for Loans, Creditworthiness, Collateral, Recitals, Etc..........................72
11.5 Action on Instructions of Lenders.................................................................72
11.6 Employment of Agents and Counsel..................................................................73
11.7 Reliance on Documents; Counsel....................................................................73
11.8 The Agent's Reimbursement and Indemnification.....................................................73
11.9 Rights as a Lender................................................................................73
11.10 Lender Credit Decision...........................................................................73
11.11 Successor Agent..................................................................................74
11.12 Collateral Documents.............................................................................74
ARTICLE XII: SETOFF; RATABLE PAYMENTS...........................................................................75
12.1 Setoff............................................................................................75
12.2 Ratable Payments..................................................................................75
12.3 Application of Payments...........................................................................75
12.4 Relations Among Lenders...........................................................................76
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.................................................77
13.1 Successors and Assigns............................................................................77
13.2 Participations....................................................................................77
(A) Permitted Participants; Effect............................................................77
(B) Voting Rights.............................................................................77
(C) Benefit of Setoff.........................................................................78
13.3 Assignments.......................................................................................78
(A) Permitted Assignments.....................................................................78
(B) Effect; Effective Date....................................................................78
13.4 Confidentiality...................................................................................79
13.5 Dissemination of Information......................................................................79
ARTICLE XIV: NOTICES............................................................................................79
14.1 Giving Notice.....................................................................................79
14.2 Change of Address.................................................................................79
ARTICLE XV: COUNTERPARTS........................................................................................79
EXHIBITS AND SCHEDULES
Exhibits
EXHIBIT A -- Commitments
(Definitions)
EXHIBIT B-1 -- Form of Revolving Note
(Definitions)
EXHIBIT B-2 -- Form of Swing Line Note
(Definitions)
EXHIBIT B-3 -- Form of Term Note
(Definitions)
EXHIBIT B-4 -- Form of Supplemental Syndicated Note
(Definitions)
EXHIBIT C -- Form of Borrowing Notice
(Section 2.8)
EXHIBIT D -- Form of Request for Letter of Credit
(Section 3.4)
EXHIBIT E -- Form of Assignment and Acceptance Agreement
(Sections 2.20 and 13.3)
EXHIBIT F -- Form of Borrower's and Subsidiary Guarantors'
Counsels' Opinion
(Section 5.1)
EXHIBIT G -- List of Closing Documents
(Section 5.1)
EXHIBIT H -- Form of Officer's Certificate
(Sections 5.1, 5.2 and 7.1(D)(ii))
EXHIBIT I -- Form of Compliance Certificate
(Sections 5.2 and 7.1(D)(ii))
EXHIBIT J -- Form of Subsidiary Guaranty
(Section 7.3(F))
EXHIBIT K -- Form of Security Agreement
(Section 5.1)
EXHIBIT L -- Form of Pledge Agreement (Borrower)
(Section 7.1G)
EXHIBIT M -- Form of Pledge Agreement (Subsidiaries)
(Section 7.1G)
Schedules
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Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.4 -- Pro Forma Financial Statements (Section 6.4(A))
Schedule 6.7 -- Litigation; Loss Contingencies (Section 6.7)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.9 -- ERISA (Section 6.9)
Schedule 6.16 -- Environmental Matters (Section 6.16)
Schedule 7.2(A) -- Existing Indebtedness (Section 7.2(A))
Schedule 7.2(B) -- Existing Liens (Section 7.2(B))
Schedule 7.2(D) -- Permitted Sales
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
This Third Amended and Restated Credit Agreement dated as of December
20, 2001 is entered into among CTS Corporation, an Indiana corporation, the
institutions from time to time parties hereto as Lenders, whether by execution
of this Agreement or an assignment and acceptance pursuant to Section 13.3, Bank
One, NA, in its capacity as contractual representative for itself and the other
Lenders, ABN AMRO Bank N.V., as documentation agent, Xxxxxx Trust and Savings
Bank, as syndication agent, and Banc One Capital Markets, Inc., as lead arranger
for the transaction. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
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1.1 Certain Defined Terms. In addition to the terms defined above, the following
terms used in this Agreement shall have the following meanings, applicable both
to the singular and the plural forms of the terms defined.
As used in this Agreement:
"Accommodation Obligations" is defined in the definition "Contingent
Obligation" below.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding partnership interests of a partnership.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower of the same Type
and, in the case of Eurodollar Rate Advances, for the same Interest Period.
"Affected Lender" is defined in Section 2.20 hereof.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"Agent" means Bank One, in its capacity as contractual representative
for itself and the Lenders pursuant to Article XI hereof and any successor Agent
appointed pursuant to Article XI hereof.
"Aggregate Revolving Loan Commitment" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is
One Hundred Twenty-Five Million and 00/100 Dollars ($125,000,000.00).
"Aggregate Supplemental Syndicated Loan Commitment" means the aggregate
of the Supplemental Syndicated Loan Commitments of all the Lenders, as reduced
from time to time pursuant to the terms hereof.
"Aggregate Term Loan Commitment" means the aggregate of the Term Loan
Commitments of all the Lenders.
"Agreement" means this Third Amended and Restated Credit Agreement, as
it may be further amended, restated, supplemented or otherwise modified and in
effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect as of the date of this Agreement, applied in a manner
consistent with those used in preparing the financial statements referred to in
Section 6.4(B)(1) hereof.
"Applicable Facility Fee Percentage" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under Section 2.15(C)(i) or (ii) hereof determined in accordance
with the provisions of Section 2.15(D)(ii) hereof.
"Applicable Eurodollar Margin" means, as at any date of determination,
the rate per annum then applicable to Eurodollar Rate Loans determined in
accordance with the provisions of Section 2.15(D)(ii) hereof.
"Applicable Floating Rate Margin" means, as at any date of
determination, the rate per annum then applicable to Floating Rate Loans
determined in accordance with Section 2.15(D)(ii) hereof.
"Applicable L/C Fee Percentage" means, as at any date of determination,
a rate per annum equal to the Applicable Eurodollar Margin in effect for
Revolving Loans on such date.
"Arranger" means Banc One Capital Markets, Inc. (formerly known as
First Chicago Capital Markets, Inc.), together with its successors.
"Asset Sale Agreement" is defined in the definition of "Motorola CPD
Acquisition".
"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person)
other than (i) the sale of inventory in the ordinary course of business and (ii)
the sale or other disposition of any obsolete manufacturing equipment disposed
of in the ordinary course of business.
"Authorized Officer" means any of the Chief Executive Officer,
President, Vice President-Finance or Treasurer of the Borrower, acting singly.
"Bank One" means Bank One, NA, together with its successors.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) in respect of which the Borrower or
any other member of the Controlled Group is, or within the immediately preceding
six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" means CTS, together with its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8 hereof.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Chicago, Illinois
and on which dealings in Dollars are carried on in the London interbank market
and (ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in Chicago, Illinois.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and purchase money Indebtedness to the extent permitted
hereunder) by the Borrower and its consolidated Subsidiaries during that period
that, in conformity with Agreement Accounting Principles, are required to be
included in or reflected by the property, plant, Equipment or similar fixed
asset accounts reflected in the consolidated balance sheet of the Borrower and
its Subsidiaries.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Capitalized Lease" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ten (10)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are limited to investment
grade securities (i.e., securities rated at least Baa by Xxxxx'x Investors
Service, Inc. or at least BBB by Standard & Poor's Ratings Group); and (iv)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial
industrial or utility companies which, at the time of acquisition, are rated A-1
(or better) by Standard & Poor's Ratings Group or P-1 (or better) by Xxxxx'x
Investors Service, Inc.; provided that the maturities of such Cash Equivalents
shall not exceed 365 days.
"Change in Capital Adequacy" is defined in Section 4.2 hereof.
"Change of Control" means an event or series of events by which:
(a) any Person together with Affiliates of such Person is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of twenty
percent (20%) of the combined voting power of the Borrower's
outstanding Capital Stock ordinarily having the right to vote at an
election of directors; or
(b) during any period of twelve (12) consecutive calendar
months, individuals:
(i) who were directors of the Borrower on the first
day of such period, or
(ii) whose election or nomination for election to the
board of directors of the Borrower was recommended or approved
by at least a majority of the directors then still in office
who were directors of the Borrower on the first day of such
period, or whose election or nomination for election was so
approved, shall cease to constitute a majority of the board of
directors of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means all real and personal property and interests in real
and personal property now owned or hereafter acquired by the Borrower or any of
the Borrower's Domestic Subsidiaries in or upon which a security interest or
lien is granted to the Agent, for the benefit of the Holders of Secured
Obligations, or to the Agent, for the benefit of the Lenders, whether under the
Security Agreement, under any of the other Collateral Documents or under any of
the other Loan Documents.
"Collateral Documents" means the Security Agreement, the Pledge
Agreements, the Mortgages, intellectual property security agreements and all
other security agreements, loan agreements, notes, guarantees, subordination
agreements, pledges, powers of attorney, consents, assignments, contracts, fee
letters, notices, leases, financing statements and all other instruments and
documents delivered to the Agent or any of the Lenders pursuant to Section
7.1(G) hereof, together with all agreements, instruments and documents referred
to therein or contemplated thereby.
"Commission" means the Securities and Exchange Commission and any
Person succeeding to the functions thereof.
"Commitment" means, for each Lender, collectively, such Lender's
Revolving Loan Commitment, Supplemental Syndicated Loan Commitment and/or Term
Loan Commitment.
"Consolidated Assets" means the total assets of the Borrower and its
Subsidiaries on a consolidated basis, but excluding therefrom all items that are
treated as intangibles under Agreement Accounting Principles.
"Consolidated Net Worth" of any Person shall mean, as of any date, the
amount of any capital stock, paid in capital and similar equity accounts plus
(or minus in the case of a deficit) the capital surplus and retained earnings of
such Person and the amount of any foreign currency translation adjustment
account shown as a capital account of such Person.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"Contingent Obligation", as applied to any Person, means (i) any
Contractual Obligation, contingent or otherwise, of that Person with respect to
any Indebtedness of another or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability of
another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including Contractual Obligations
(contingent or otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such Indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other financial
condition, or to make payment other than for value received (such obligations
under this clause (i) being sometimes referred to as "Accommodation
Obligations") and (ii) any other contingent obligation or liability of such
Person, whether or not reflected in financial statements of such Person as a
liability.
"Contingent Purchase Price Obligation", as applied to any Person, means
any Contractual Obligation of such Person incurred in connection with an
Acquisition pursuant to which such Person is obligated to pay additional
consideration to the applicable seller in the form of an earnout, milestone
payment, contingent purchase price payment, or other similar performance based
compensation relating to post-Acquisition financial or operating performance of
the business acquired.
"Contractual Obligation", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject.
"Controlled Group" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Borrower, any corporation described in clause
(i) above or any partnership or trade or business described in clause (ii)
above.
"Conversion/Continuation Notice" is defined in Section 2.10(D) hereof.
"CTS" means CTS Corporation, an Indiana corporation.
"CTS IRB" means the industrial revenue bond of the Borrower in the
aggregate original principal amount of $42,000,000.
"CTS Wireless" means CTS Wireless Components, Inc., a Delaware
corporation and a wholly-owned, direct Subsidiary of the Borrower.
"Default" means an event described in Article VIII hereof.
"Designated Prepayment" is defined in Section 2.5(B)(i)(e) hereof.
"Designated Restructuring Charges" means the restructuring charges, the
cash portion of which are not in excess of $8,500,000.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the Revolving Loan Termination Date.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"Domestic Subsidiary" means a Subsidiary organized under the laws of a
jurisdiction located in the United States of America.
"EBITDA" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period of (i) Net
Income, plus (ii) Interest Expense, plus (iii) tax expense plus (iv)
depreciation expense, plus (v) amortization expense, including, without
limitation, amortization of goodwill and other intangible assets, Transaction
Costs, and other fees, costs and expenses in connection with the Motorola CPD
Acquisition, plus (vi) to the extent deducted in computing Net Income, other
non-cash charges, including, without limitation, any restructuring charges,
charge-offs for in-process research and development costs attributable to the
Motorola CPD Acquisition, writeoff of any amounts associated with the
acquisition of treasury stock and writeoff of goodwill and licensing agreements,
plus (vii) to the extent deducted in computing Net Income, the Designated
Restructuring Charges plus (viii) extraordinary losses minus (ix) extraordinary
gains minus (x) to the extent included in computing Net Income, non-cash income
including without limitation non-cash income that would constitute "prepaid
pension expense" on the financial statements of the Borrower in accordance with
Agreement Accounting Principles.
"Effective Date" means December 20, 2001.
"Environmental, Health or Safety Requirements of Law" means all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq., the Occupational Safety and Health Act of 1970,
29 U.S.C. ss. 651 et seq., and the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss. 6901 et seq., in each case including any amendments thereto,
any successor statutes, and any regulations or guidance promulgated thereunder,
and any state or local equivalent thereof.
"Environmental Lien" means a lien in favor of any Governmental
Authority for (a) any liability under Environmental, Health or Safety
Requirements of Law, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Environmental Property Transfer Act" means any applicable requirement
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"Equipment" means all of the Borrower's and the Subsidiaries' present
and future (i) equipment, including, without limitation, machinery,
manufacturing, distribution, selling, data processing and office equipment,
assembly systems, tools, molds, dies, fixtures, appliances, furniture,
furnishings, vehicles, vessels, aircraft, aircraft engines, and trade fixtures,
(ii) other tangible personal property (other than the Borrower's and the
Subsidiaries' inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection therewith,
and any substitutions therefor and replacements, products and proceeds thereof.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar Rate Loan
for the relevant Interest Period, the rate offered by the Agent for deposits in
Dollars in the London interbank market at approximately 11 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period, in the
approximate amount of the relevant Eurodollar Rate Loan of the Agent and having
a maturity approximately equal to such Interest Period, as adjusted for
Reserves.
"Eurodollar Rate" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period plus the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such a
multiple.
"Eurodollar Rate Advance" means an Advance which bears interest at the
Eurodollar Rate.
"Eurodollar Rate Loan" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"Event of Loss" means, with respect to any property any of the
following: (i) any loss, destruction or damage of such property or (ii) any
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such property, or confiscation of such property or the requisition
of the use of such property by any Governmental Authority.
"Excess Cash Flow" means, without duplication, for any fiscal year, an
amount equal to:
(i) EBITDA for such period;
minus(plus) (ii) the net increase (decrease), if any, in Working
Capital during such period;
minus (iii) Capital Expenditures, paid in cash during such period;
minus (iv) Interest Expense for such period;
minus (v) tax paid by the Borrower and its Subsidiaries in cash
during such period;
minus (vi) aggregate amount expended in Investments by the
Borrower and its Subsidiaries permitted under Section
7.2(F) hereof;
minus (vii) payments of principal on the Term Loans and payments
of principal on all other Indebtedness (including
payments of principal on the Revolving Loans but only
to the extent such payments reduce the Revolving Loan
Commitments) of the Borrower and its Subsidiaries
during such period;
minus (viii) Restricted Payments made during such period.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financing" means, with respect to any Person, the issuance or sale by
such Person of any Equity Interests of such Person or any Indebtedness of such
Person (including without limitation debt securities which may convert into
securities representing Equity Interests of such Person) pursuant to a
registered offering or private placement but in any case excluding any
individual issuance pursuant to the Borrower's direct stock purchase plan that
generates proceeds of less than $10,000.
"First Tier Foreign Subsidiary" means each Foreign Subsidiary with
respect to which any one or more of the Borrower or its Domestic Subsidiaries
directly owns or controls more than 50% of such Foreign Subsidiary's Capital
Stock.
"Fixed Charge Coverage Ratio" is defined in Section 7.3(A) hereof.
"Floating Rate" means, for any day, a fluctuating rate of interest per
annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
(a) the Federal Funds Effective Rate for such day and (b) one-half of one
percent (0.5%) per annum.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan, or a portion thereof, which bears
interest at the Floating Rate.
"Foreign Subsidiary" means a Subsidiary of the Borrower which is not a
Domestic Subsidiary.
"Governmental Acts" is defined in Section 3.9(a) hereof.
"Governmental Authority" means any nation or government, any foreign,
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Holders of Secured Obligations" means the holders of the Secured
Obligations from time to time and shall include their respective successors,
transferees and assigns.
"Indebtedness" of any Person means such Person's (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
Contingent Obligations, (g) obligations with respect to letters of credit (other
than obligations in respect of undrawn letters of credit securing current trade
payables or performance obligations incurred in the ordinary course of
business), (h) net payment obligations under Hedging Obligations, (i)
Off-Balance Sheet Liabilities and (j) redeemable preferred stock. The amount of
Indebtedness of any Person at any date shall be without duplication (i) the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability of any such Contingent Obligations at such date
and (ii) in the case of Indebtedness of others secured by a Lien to which the
property or assets owned or held by such Person is subject, the lesser of the
fair market value at such date of any asset subject to a Lien securing the
Indebtedness of others and the amount of the Indebtedness secured.
"Indemnified Matters" is defined in Section 10.7(B) hereof.
"Indemnitees" is defined in Section 10.7(B) hereof.
"Interest Expense" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases and any implied interest
components of any Off-Balance Sheet Liabilities), including interest expense not
payable in cash (including amortization or writeoff of debt discount and debt
issuance costs and commissions and discounts and other fees and charges
associated with Indebtedness (including the Obligations)), all as determined in
conformity with Agreement Accounting Principles.
"Interest Period" means, with respect to a Eurodollar Rate Loan, a
period of seven (7) or fourteen (14) days or one (1), two (2), three (3) or six
(6) months commencing on a Business Day selected by the Borrower pursuant to
this Agreement. Such Interest Period shall end on (but exclude) the day which is
seven (7) or fourteen (14) days thereafter or which corresponds numerically to
the day which is one, two, three or six months thereafter; provided, however,
that (a) there shall be no more than two (2) Interest Periods of seven (7) days
in effect with respect to all of the Loans at any time, and (b) if there is no
such numerically corresponding day in such next, second, third or sixth
succeeding month, such Interest Period shall end on the last Business Day of
such next, second, third or sixth succeeding month. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next succeeding Business Day, provided, however, that if the next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"Interest Rate Agreements" is defined in Section 7.2(K) hereof.
"Investment" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Issuing Bank" means Bank One in its capacity as issuer of the Letters
of Credit.
"L/C Documents" is defined in Section 3.4 hereof.
"L/C Draft" means a draft drawn on the Issuing Bank pursuant to a
Letter of Credit.
"L/C Interest" is defined in Section 3.6 hereof.
"L/C Obligations" means, without duplication, an amount equal to the
sum of (i) the aggregate of the amount then available for drawing under each of
the Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the Issuing Bank, (iii) the aggregate outstanding amount of all Reimbursement
Obligations at such time and (iv) the aggregate face amount of all Letters of
Credit requested by the Borrower but not yet issued (unless the request for an
unissued Letter of Credit has been denied).
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" means the letters of credit (a) to be issued by the
Issuing Bank pursuant to Section 3.1 hereof or (b) issued by the Issuing Bank
under the Original Credit Agreement.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan(s)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to Section 2.1, Section 2.2 or Section 2.2A hereof, as
applicable, and in the case of the Swing Line Bank, any Swing Line Loan made
pursuant to Section 2.3 hereof, and collectively all Term Loans, Revolving
Loans, Supplemental Syndicated Loans and Swing Line Loans, whether made or
continued as or converted to Floating Rate Loans or Eurodollar Rate Loans.
"Loan Documents" means this Agreement, the Notes, the L/C Documents,
the Subsidiary Guaranty, the Collateral Documents and all other documents,
instruments and agreements executed in connection therewith or contemplated
thereby, as the same may be amended, restated or otherwise modified and in
effect from time to time.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, financial condition, operations, performance or prospects of the
Borrower and its Subsidiaries, taken as a whole, (b) the ability of the Borrower
or any of its Subsidiaries to perform their respective obligations under the
Loan Documents in any material respect or (c) the ability of the Lenders or the
Agent to enforce in any material respect their rights with respect to the
Obligations or their rights with respect to the Collateral.
"Mortgages" means the mortgages and deeds of trust from time to time
executed pursuant to the terms of Section 7.1(G) in favor of the Agent for the
benefit of the Holders of Secured Obligations, as amended, restated,
supplemented or otherwise modified from time to time.
"Motorola" means Motorola, Inc., a Delaware corporation.
"Motorola CPD" means the Component Products Division of Motorola.
"Motorola CPD Acquisition" means the acquisition by CTS Wireless of
certain assets and liabilities from Motorola comprising the Motorola CPD on the
terms and conditions set forth in that certain Asset Sale Agreement (the "Asset
Sale Agreement") dated as of December 22, 1998, as amended through the Original
Credit Agreement Effective Date, by and among Motorola, the Borrower and CTS
Wireless.
"Multiemployer Plan" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"Net Cash Proceeds" means, (1) with respect to any Asset Sale or
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person or any Subsidiary of such Person from such Asset Sale (including
cash received as consideration for the assumption or incurrence of liabilities
incurred in connection with or in anticipation of such Asset Sale) or Financing,
after (i) provision for all income or other taxes measured by or resulting from
such Asset Sale, (ii) payment of all brokerage commissions, investment banking
fees, accounting fees, underwriting commissions, attorneys' fees and other fees
and expenses related to such Asset Sale or Financing, (iii) the aggregate amount
of reserves required in the reasonable judgment of the Borrower to pay
contingent liabilities with respect to such Asset Sale and (iv) all amounts used
to repay Indebtedness secured by a Lien on any asset disposed of in such Asset
Sale which is required (by the express terms of the instrument governing such
Indebtedness) to be repaid in connection with such Asset Sale (including
payments made to obtain or avoid the need for the consent of any holder of such
Indebtedness); and (b) cash payments in respect of any Indebtedness, Equity
Interest or other consideration received by such Person or any Subsidiary of
such Person from such Asset Sale upon receipt of such cash payments by such
Person or such Subsidiary and (2) with respect to an Event of Loss of a Person,
cash and Cash Equivalents received by or for such Person's account, net of (i)
reasonable direct costs incurred in connection with such Event of Loss and
reasonable reserves associated therewith in accordance with Agreement Accounting
Principles and (ii) amounts required to repay principal of, premium if any, and
interest on any Indebtedness or statutory or other obligations secured by any
Lien on the property (or portion thereof) so damaged or taken (other than the
Obligations) which is required to be and is repaid in connection with such Event
of Loss.
"Net Income" means, for any period, the net earnings (or loss) after
taxes of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
Agreement Accounting Principles; provided, that when calculating Net Income the
following items shall be excluded from such calculation: (i) the earnings (but
not loss) of any Person that is not a Subsidiary or that is accounted for by the
equity method of accounting, except to the extent of the amount of dividends or
distributions paid in cash to the Borrower or a consolidated Subsidiary; (ii)
the earnings of a Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary to the Borrower with
respect to such earnings is not, at the date of determination, permitted without
the prior approval of a Governmental Authority (and such approval has not been
obtained), or is prohibited, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to such Subsidiary or the holders of
its Capital Stock; (iii) the cumulative effect of a change in accounting
principles; and (iv) nonrecurring items, such as gains or losses on the sale of
assets; but when calculating Net Income such calculation shall include
historical audited Net Income (as calculated above) for such period of any
Person (or division of such Person) that became a Subsidiary of the Borrower
during such period or was merged into or was consolidated with the Borrower or
any of its Subsidiaries during such period, or where the assets of such Person
(or division of such Person) were acquired by the Borrower or any of its
Subsidiaries during such period, whether accrued prior or subsequent to the date
of such acquisition, merger or consolidation.
"Notes" means the Revolving Notes, Supplemental Syndicated Notes, Swing
Line Note and Term Notes.
"Notice of Assignment" is defined in Section 13.3(B) hereof.
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower or any Subsidiary
Guarantor to the Agent, the Arranger, any Lender, any affiliate of the Agent,
the Arranger or any Lender, the Swing Line Bank, the Issuing Bank, or any
Indemnitee, of any kind or nature, present or future, arising under this
Agreement, the Notes, the L/C Documents, the Subsidiary Guaranty or any other
Loan Document, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising by reason
of an extension of credit, loan, guaranty, indemnification, or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired. The term includes, without limitation, all interest,
charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees (in
each case whether or not allowed), and any other sum chargeable to the Borrower
or any Subsidiary Guarantor under this Agreement or any other Loan Document.
"Off-Balance Sheet Liabilities" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
(b) any liability of such Person or any of its Subsidiaries under any sale and
leaseback transactions which do not create a liability on the consolidated
balance sheet of such Person, (c) any liability of such person or any of its
Subsidiaries under any so-called "synthetic" lease transaction, or (d) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the consolidated balance sheets of such Person and its
Subsidiaries.
"Original Agent" means Bank One, Indiana, N.A.
"Original Credit Agreement" means the Credit Agreement dated as of June
16, 1997 among the Borrower, the financial institutions parties thereto and the
Original Agent, as amended by Amendment No. 1 thereto dated as of April 3, 1998,
and as amended and restated by (i) the Amended and Restated Credit Agreement
dated as of February 26, 1999 among the Borrower, the financial institutions
parties thereto and the Original Agent and (ii) the Second Amended and Restated
Credit Agreement dated as of February 1, 2000 among the Borrower, the financial
institutions party thereto and the Original Agent.
"Original Credit Agreement Effective Date" means the date on or about
February 26, 1999 and specified by the Original Agent under the Original Credit
Agreement by written notice to the Borrower and the "Lenders" thereunder as the
date on which the Term Loans and the initial Revolving Loans were to be advanced
thereunder.
"Other Taxes" is defined in Section 2.15(E)(ii) hereof.
"Participants" is defined in Section 13.2(A) hereof.
"Payment Date" means the last Business Day of each fiscal quarter of
the Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Sales" means the sale, transfer or disposition by the
Borrower and its Subsidiaries of the assets and properties described on Schedule
7.2(D) hereto so long as the Net Cash Proceeds arising from such sale, transfer
or disposition are used to prepay the Obligations in accordance with Section
2.5(B)(i)(a) hereof.
"Person" means any individual, corporation, firm, enterprise,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company or other entity of any kind, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
in respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreements" means the pledge agreements from time to time
executed pursuant to the terms of clause (a) and clause (b) of Section 7.1(G) in
favor of the Agent for the benefit of the Holders of Secured Obligations as
amended, restated, supplemented or otherwise modified from time to time.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Pro Rata Share" means, at any particular time and with respect to any
Lender, the percentage obtained by dividing (A) the sum of such Lender's Term
Loans, Revolving Loan Commitment and the outstanding principal balance of all
Supplemental Syndicated Loans at such time (in each case, as adjusted from time
to time in accordance with the provisions of this Agreement) by (B) the sum of
the aggregate amount of all of the Term Loans, the Aggregate Revolving Loan
Commitment and the outstanding principal balance of all Supplemental Syndicated
Loans at such time; provided, however, if all of the Commitments are terminated
pursuant to the terms of this Agreement, then "Pro Rata Share" means the
percentage obtained by dividing (x) the sum of (A) such Lender's Term Loans,
Revolving Loans and Supplemental Syndicated Loans, plus (B) such Lender's share
of the obligations to purchase participations in Swing Line Loans and Letters of
Credit, by (y) the sum of (A) the aggregate outstanding amount of all Term
Loans, Revolving Loans and Supplemental Syndicated Loans, plus (B) the aggregate
outstanding amount of all Swing Line Loans and all Letters of Credit.
"Purchasers" is defined in Section 13.3(A) hereof.
"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Register" is defined in Section 13.3(C) hereof.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks and nonbank, nonbroker lenders for the purpose of
purchasing or carrying Margin Stock.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"Reimbursement Obligation" is defined in Section 3.7 hereof.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Contaminants
through or in the air, soil, surface water or groundwater.
"Replacement Lender" is defined in Section 2.20 hereof.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, provided, however, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Required Lenders" means Lenders with aggregate ratable shares (stated
as a percentage) greater than fifty percent (50%) of the sum of: (i) the
aggregate outstanding principal balance of all Term Loans plus (ii) the
aggregate outstanding principal balance of the Supplemental Syndicated Loans
plus (iii) the Aggregate Revolving Loan Commitment in effect as of the date of
determination, or, if the Revolving Loan Commitments have been terminated
pursuant to the terms of this Agreement, the aggregate outstanding principal
balance of the Revolving Loans, the Swing Line Loans and the L/C Obligations.
"Requirements of Law" means, as to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act of 1933, the Securities
Exchange Act of 1934, Regulations T, U and X, ERISA, the Fair Labor Standards
Act, the Worker Adjustment and Retraining Notification Act, Americans with
Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance,
building, environmental or land use requirement or permit or environmental,
labor, employment, occupational safety or health law, rule or regulation,
including Environmental, Health or Safety Requirements of Law.
"Reserves" shall mean the maximum reserve requirement, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any Equity Interests of the Borrower now or
hereafter outstanding, except a dividend payable solely in the Borrower's
Capital Stock (other than Disqualified Stock) or in options, warrants or other
rights to purchase such Capital Stock, (ii) any redemption, retirement, purchase
or other acquisition for value, direct or indirect, of any Equity Interests of
the Borrower or any of its Subsidiaries now or hereafter outstanding, other than
in exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Borrower) of other Equity Interests of the
Borrower (other than Disqualified Stock), (iii) any redemption, purchase,
retirement, defeasance, prepayment or other acquisition for value, direct or
indirect, of any Indebtedness prior to the stated maturity thereof, other than
the Obligations and (iv) any payment of a claim for the rescission of the
purchase or sale of, or for material damages arising from the purchase or sale
of, any Indebtedness (other than the Obligations) or any Equity Interests of the
Borrower or any of the Borrower's Subsidiaries, or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission.
"Revolving Credit Availability" means, at any particular time, the
amount by which the Aggregate Revolving Loan Commitment at such time exceeds the
Revolving Credit Obligations at such time.
"Revolving Credit Obligations" means, at any particular time, the sum
of (i) the outstanding principal amount of the Revolving Loans at such time,
plus (ii) the outstanding principal amount of the Swing Line Loans at such time,
plus (iii) the L/C Obligations at such time.
"Revolving Lender" means any Lender with a Revolving Loan Commitment.
"Revolving Loan" is defined in Section 2.2 hereof.
"Revolving Loan Commitment" means, for each Lender, the obligation of
such Lender to make Revolving Loans and to purchase participations in Letters of
Credit and Swing Line Loans not exceeding the amount set forth on Exhibit A to
this Agreement opposite its name thereon under the heading "Revolving Loan
Commitment" or the signature page of the assignment and acceptance by which it
became a Lender, as such amount may be modified from time to time pursuant to
the terms of this Agreement (including pursuant to Section 2.6(b)) or to give
effect to any applicable assignment and acceptance.
"Revolving Loan Pro Rata Share" means, at any particular time and with
respect to any Lender, the percentage obtained by dividing (A) the then
aggregate amount of such Lender's Revolving Loan Commitment (as adjusted from
time to time in accordance with the provisions in this Agreement) by (B) the
Aggregate Revolving Loan Commitment at such time; provided, however, if all of
the Commitments are terminated pursuant to the terms of this Agreement, then
"Revolving Loan Pro Rata Share" means the percentage obtained by dividing (x)
the sum of (A) such Lender's Revolving Loans, plus (B) such Lender's share of
the obligations to purchase participations in the Swing Line Loans and Letters
of Credit by (y) the sum of (A) the aggregate outstanding amount of all
Revolving Loans, plus (B) the aggregate outstanding amount of all Swing Line
Loans and all Letters of Credit.
"Revolving Loan Termination Date" means December 31, 2003.
"Revolving Note" means a promissory note, in substantially the form of
Exhibit B-1 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Revolving Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Revolving Note.
"Risk-Based Capital Guidelines" is defined in Section 4.2 hereof.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Hedging Obligations owing under Interest Rate Agreements to any Lender or
any Affiliate of any Lender.
"Security Agreement" means that certain Security Agreement dated as of
the Effective Date executed by the Borrower and the Subsidiary Guarantors in
favor of the Agent for the benefit of the Holders of Secured Obligations, as
amended, restated, supplemented or otherwise modified from time to time.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Senior Debt" means Total Debt minus Subordinated Debt.
"Senior Leverage Ratio" is defined in Section 7.3(B)(ii) hereof.
"Subordinated Debt" means, for any period, on a consolidated basis for
the Borrower and its Subsidiaries, the sum of Indebtedness of such Persons the
payment of which is subordinated to the payment of the Secured Obligations to
the written satisfaction of the Required Lenders.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries and
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a direct
or indirect Subsidiary of the Borrower.
"Subsidiary Guarantors" means each Domestic Subsidiary, and their
respective successors and assigns to the extent such Domestic Subsidiary's (i)
total assets constitute at least 5% of the total assets of the Borrower and its
Subsidiaries on a consolidated basis or (ii) gross revenues constitute at least
5% of the total gross revenues of the Borrower and its Subsidiaries on a
consolidated basis; provided that, if at any time (x) the aggregate amount of
the total assets of all Domestic Subsidiaries that are not Subsidiary Guarantors
exceeds 15% of the total assets of the Borrower and its Subsidiaries on a
consolidated basis or (y) the aggregate amount of gross revenues of all Domestic
Subsidiaries that are not Subsidiary Guarantors exceeds 15% of the total gross
revenues of the Borrower and its Subsidiaries on a consolidated basis, the
Borrower (or, in the event the Borrower has failed to do so within ten days, the
Administrative Agent) shall designate sufficient Domestic Subsidiaries as
"Subsidiary Guarantors" to eliminate such excess, and such designated Domestic
Subsidiaries shall for all purposes of this Agreement constitute Subsidiary
Guarantors.
"Subsidiary Guaranty" means that certain Amended and Restated Guaranty
in the form of Exhibit J hereto, dated as of the Effective Date, executed by the
Subsidiary Guarantors in favor of the Agent, for the ratable benefit of the
Lenders and the Holders of Secured Obligations, as it may be amended, modified,
supplemented and/or restated (including to add new Subsidiary Guarantors
pursuant to a supplement), and as in effect from time to time.
"Supplemental Syndicated Credit Obligations" means, at any particular
time, the aggregate outstanding principal amount of the Supplemental Syndicated
Loans at such time.
"Supplemental Syndicated Lender" means any Lender with a Supplemental
Syndicated Loan Commitment.
"Supplemental Syndicated Loan" is defined in Section 2.2A hereof.
"Supplemental Syndicated Loan Commitment" means, for each Lender, the
obligation of such Lender to make Supplemental Syndicated Loans not exceeding
the amount set forth on Exhibit A to this Agreement opposite its name thereon
under the heading "Supplemental Syndicated Loan Commitment" or the signature
page of the assignment and acceptance by which it became a Lender, as such
amount may be modified from time to time pursuant to the terms of this Agreement
(including pursuant to Section 2.6(b)) or to give effect to any applicable
assignment and acceptance.
"Supplemental Syndicated Loan Pro Rata Share" means, at any particular
time and with respect to any Lender, the percentage obtained by dividing (A) the
outstanding principal balance of such Lender's Supplemental Syndicated Loans by
(B) the aggregate outstanding principal balance of the Supplemental Syndicated
Loans.
"Supplemental Syndicated Note" means a promissory note, in
substantially the form of Exhibit B-4 hereto, duly executed by the Borrower and
payable to the order of a Lender in the amount of its Supplemental Syndicated
Loan, including any amendment, restatement, modification, renewal or replacement
of such Supplemental Syndicated Note.
"Supplemental Syndicated Loan Termination Date" means December 31,2004.
"Swing Line Bank" means Bank One or any other Lender as a successor
Swing Line Bank.
"Swing Line Commitment" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum principal amount of $10,000,000 at any one
time outstanding.
"Swing Line Loan" means a Loan made available to the Borrower by the
Swing Line Bank pursuant to Section 2.3 hereof.
"Swing Line Note" means a promissory note, in substantially the form of
Exhibit B-2 hereto, duly executed by the Borrower and payable to the order of
the Swing Line Bank in the amount of its Swing Line Commitment, including any
amendment, restatement, modification, renewal or replacement of such Swing Line
Note.
"Taxes" is defined in Section 2.15(E)(i) hereof.
"Term Loan" is defined in Section 2.1(a) hereof.
"Term Loan Commitment" means, for each Lender, the obligation of such
Lender to make its Term Loan pursuant to the terms and conditions of the
Original Credit Agreement (which obligation is reevidenced by this Agreement),
and which shall not exceed the principal amount set forth on Exhibit A to this
Agreement opposite its name thereon under the heading "Term Loan Commitment", as
such amount may be modified from time to time pursuant to the terms hereof
(including pursuant to Section 2.6(b)).
"Term Loan Conversion Date" means December 20, 2001.
"Term Loan Lender" means any Lender with a Term Loan Commitment.
"Term Loan Pro Rata Share" means, at any particular time and with
respect to any Lender, the percentage obtained by dividing (A) the sum of such
Lender's Term Loans at such time by (B) the sum of the aggregate amount of all
of the Term Loans at such time.
"Term Loan Termination Date" means December 31, 2004.
"Term Note" means a promissory note, in substantially the form of
Exhibit B-3 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Term Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Term Note.
"Termination Date" means the earlier of (a) the Revolving Loan
Termination Date and (b) the date of termination of the Aggregate Revolving Loan
Commitment pursuant to Section 2.6 hereof or the Commitments pursuant to Section
9.1 hereof.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"Total Debt" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of Indebtedness of the Borrower and its
Subsidiaries, without duplication, other than the sum of the amounts then owed
by the Borrower and its Subsidiaries in respect of Hedging Obligations.
"Total Leverage Ratio" is defined in Section 7.3(B)(i) hereof.
"Transaction Costs" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the Loan
Documents and the documents executed and delivered by the Borrower or any of its
Subsidiaries in connection with the Motorola CPD Acquisition under the Original
Credit Agreement, and the extinguishment of any Indebtedness existing
immediately prior to the Original Credit Agreement Effective Date and required
to be terminated under the Original Credit Agreement and the consummation of the
Motorola CPD Acquisition, provided, that such fees, costs and expenses shall not
exceed $7,500,000 in the aggregate.
"Transferee" is defined in Section 13.5 hereof.
"Type" means, with respect to any Loan, its nature as a Floating Rate
Loan or a Eurodollar Rate Loan.
"Unfunded Liabilities" means (i) in the case of Single Employer Plans,
the amount (if any) by which the present value of all vested nonforfeitable
benefits under all Single Employer Plans exceeds the fair market value of all
such Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plans and (ii) in the case of Multiemployer
Plans, the withdrawal liability that would be incurred by the Controlled Group
if all members of the Controlled Group completely withdrew from all
Multiemployer Plans.
"Unmatured Default" means an event which, but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Working Capital" means, as at any date of determination, the excess,
if any, of (i) the Borrower's consolidated current assets, except cash and Cash
Equivalents, over (ii) the Borrower's consolidated current liabilities, except
current maturities of long-term debt and Revolving Credit Obligations as of such
date and all accrued interest as of such date.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Any accounting terms used in
this Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with generally accepted accounting
principles in existence as of the date hereof.
1.2 References. The existence throughout this Agreement of references to
the Borrower's Subsidiaries is for convenience only. Any references to
Subsidiaries of the Borrower set forth herein shall not in any way be construed
as consent by the Agent or any Lender to the establishment, maintenance or
acquisition of any Subsidiary, except as may otherwise be permitted hereunder.
1.3 Supplemental Disclosure. At any time at the request of the Agent (but
not more frequently than one time in each calendar quarter unless the Agent
reasonably deems it necessary) and at such additional times as the Borrower
determines, the Borrower shall supplement each schedule or representation herein
or in the other Loan Documents with respect to any matter hereafter arising
which, if existing or occurring at the date of this Agreement, would have been
required to be set forth or described in such schedule or as an exception to
such representation or which is necessary to correct any information in such
schedule or representation which has been rendered inaccurate thereby. Unless
any such supplement to such schedule or representation discloses the existence
or occurrence of events, facts or circumstances which are not prohibited by the
terms of this Agreement or any other Loan Documents, such supplement to such
schedule or representation shall not be deemed an amendment thereof unless
expressly consented to in writing by the Agent and the Required Lenders, and no
such amendments, except as the same may be consented to in a writing which
expressly includes a waiver, shall be or be deemed a waiver by the Agent or any
Lender of any Default disclosed therein.
1.4 Amendment and Restatement of Original Credit Agreement. The Borrower,
the Lenders, the Agent, the Swing Line Bank and the Issuing Bank agree that,
upon (i) the execution and delivery of this Agreement by the Borrower, the Agent
and the Required Lenders and (ii) satisfaction (or waiver by the Agent in its
sole discretion) of the conditions precedent set forth in Section 5.1, the terms
and provisions of the Original Credit Agreement shall be and hereby are amended,
superseded and restated in their entirety by the terms and provisions of this
Agreement. This Agreement is not intended to and shall not constitute a novation
of the Original Credit Agreement or the indebtedness created thereunder,
including, without limitation, all "Obligations" and the "Hedging Obligations"
under and as defined therein. All outstanding "Loans" and "Letters of Credit"
(under and as defined in the Original Credit Agreement) shall continue as Loans
and Letters of Credit under (and shall be governed by the terms of) this
Agreement. The commitments of each Lender that is a party to the Original Credit
Agreement shall, on the Effective Date, automatically be deemed amended and the
only Commitments shall be those hereunder.
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES
----------- -------------------------------------------
2.1 Term Loans. (a) Amount of Term Loans. Subject to the terms and
conditions set forth in the Original Credit Agreement, each Term Loan Lender
party thereto on the Original Credit Agreement Effective Date severally and not
jointly made a term loan, in Dollars, to the Borrower in an amount equal to such
Term Loan Lender's Term Loan Commitment (each individually, a "Term Loan" and,
collectively, the "Term Loans"). All Term Loans were made by the Term Loan
Lenders on the Original Credit Agreement Effective Date simultaneously and
proportionately to their respective Term Loan Pro Rata Shares and such Term
Loans remain outstanding subject to the terms of this Agreement notwithstanding
the amendment and restatement of the Original Credit Agreement.
(b) Repayment of the Term Loans. (i) The unpaid principal balance of the
Term Loans shall be repaid in twenty (20) consecutive quarterly principal
installments, payable on the last Business Day of each fiscal quarter of the
Borrower, commencing on March 31, 2000, and continuing thereafter until the Term
Loan Termination Date, and the Term Loans shall be permanently reduced by the
amount of each installment on the date payment thereof is made hereunder. The
installments shall be in the aggregate amounts set forth below:
Installment Date Installment Amount
March 31, 2000 $1,250,000
June 30, 2000 $1,250,000
September 30, 2000 $1,250,000
December 31, 2000 $1,250,000
March 31, 2001 $2,500,000
June 30, 2001 $2,500,000
September 30, 2001 $2,500,000
December 31, 2001 $2,500,000
March 31, 2002 $3,750,000
June 30, 2002 $3,750,000
September 30, 2002 $3,750,000
December 31, 2002 $3,750,000
March 31, 2003 $3,750,000
June 30, 2003 $3,750,000
September 30, 2003 $3,750,000
December 31, 2003 $3,750,000
March 31, 2004 $5,250,000
June 30, 2004 $5,250,000
September 30, 2004 $5,250,000
December 31, 2004 $5,250,000
Notwithstanding the foregoing, the final installment shall be in the amount of
the then outstanding principal balance of the Term Loans. In addition,
notwithstanding the immediately preceding sentence, the then outstanding
principal balance of the Term Loans, if any, shall be due and payable on the
Term Loan Termination Date. No installment of any Term Loan shall be reborrowed
once repaid.
(ii) In addition to the scheduled payments on the Term Loans, the
Borrower (a) may make the voluntary prepayments described in Section 2.5(A) for
credit against the scheduled payments on the Term Loans pursuant to Section
2.5(A) and (b) shall make the mandatory prepayments prescribed in Section 2.5(B)
for credit against the scheduled payments on the Term Loans pursuant to Section
2.5(B).
2.2 Revolving Loans. (a) Upon the satisfaction of the conditions
precedent set forth in Sections 5.1 and 5.2, as applicable, from and including
the date of this Agreement and prior to the Termination Date, each Revolving
Lender severally and not jointly agrees, on the terms and conditions set forth
in this Agreement, to make revolving loans to the Borrower from time to time, in
Dollars, in an amount not to exceed the lesser of (i) such Revolving Lender's
Revolving Loan Pro Rata Share of the Revolving Credit Availability at such time
and (ii) such Revolving Lender's Revolving Loan Commitment (each individually, a
"Revolving Loan" and, collectively, the "Revolving Loans"); provided, however,
at no time shall the Revolving Credit Obligations exceed the Aggregate Revolving
Loan Commitment. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow Revolving Loans at any time prior to the Termination
Date. On the Termination Date, the Borrower shall repay in full the outstanding
principal balance of the Revolving Loans. Each Advance under this Section 2.2
shall consist of Revolving Loans made by each Revolving Lender ratably in
proportion to such Revolving Lender's respective Revolving Loan Pro Rata Share.
(b) Borrowing Notice. The Borrower shall request Revolving Loans by delivering
to the Agent a Borrowing Notice, signed by it, in accordance with the terms of
Section 2.8. The Agent shall promptly notify each Revolving Lender of such
request.
(c) Making of Revolving Loans. Promptly after receipt of the Borrowing Notice
under Section 2.8 in respect of Revolving Loans, the Agent shall notify each
Revolving Lender by telex or telecopy, or other similar form of transmission, of
the requested Revolving Loan. Each Revolving Lender shall make available its
Revolving Loan in accordance with the terms of Section 2.7. The Agent will
promptly make the funds so received from the Revolving Lenders available to the
Borrower at the Agent's office in Chicago, Illinois on the applicable Borrowing
Date and shall disburse such proceeds in accordance with the Borrower's
disbursement instructions set forth in such Borrowing Notice. The failure of any
Revolving Lender to deposit the amount described above with the Agent on the
applicable Borrowing Date shall not relieve any other Revolving Lender of its
obligations hereunder to make its Revolving Loan on such Borrowing Date.
2.2A Supplemental Syndicated Loans. (a) Generally. Prior to the Term
Loan Conversion Date, each Supplemental Syndicated Lender severally and not
jointly agreed to make revolving loans to the Borrower from time to time, in
Dollars, in an amount not to exceed such Supplemental Syndicated Lender's
Supplemental Syndicated Loan Pro Rata Share of the Supplemental Syndicated
Credit Availability at such time (each individually, a "Supplemental Syndicated
Loan" and, collectively, the "Supplemental Syndicated Loans"). The Supplemental
Syndicated Loans may be continued as Floating Rate Loans or Eurodollar Rate
Loans in the manner provided in Section 2.10 and subject to the other conditions
and limitations therein set forth and set forth in this Article II.
(b) Conversion to Term Loans. The Borrower's option to borrow
Supplemental Syndicated Loans has been terminated and the Aggregate Supplemental
Syndicated Loan Commitment has been reduced to zero and the outstanding
principal balance of the Supplemental Syndicated Loans have been as of the
Effective Date converted into amortizing term loans to be repaid in twelve (12)
consecutive quarterly installments of principal, payable on the last Business
Day of each calendar quarter, commencing March 31, 2002 and continuing
thereafter until the Supplemental Syndicated Loan Termination Date, and the
Supplemental Syndicated Loans shall be permanently reduced by the amount of each
installment on the date payment thereof is made hereunder. It is understood and
agreed that the Term Loan Conversion Date has occurred and the outstanding
principal balance of the Supplemental Syndicated Loans has been converted into
the amortizing term loans described hereinabove. Except as otherwise set forth
herein, the amounts to be repaid on each such quarterly payment date shall be an
amount equal to the installment percentage set forth below opposite such
installment date of the outstanding principal balance of the Supplemental
Syndicated Loans on the Term Loan Conversion Date:
Installment Date Percentage Payable
March 31, 2002 6.25%
June 30, 2002 6.25%
September 30, 2002 6.25%
December 31, 2002 6.25%
March 31, 2003 6.25%
June 30, 2003 6.25%
September 30, 2003 6.25%
December 31, 2003 6.25%
March 31, 2004 12.5%
June 30, 2004 12.5%
September 30, 2004 12.5%
December 31, 2004 12.5%
Notwithstanding anything herein to the contrary, the final installment of the
Supplemental Syndicated Loans shall be in the amount of the then outstanding
principal balance of the Supplemental Syndicated Loans, which amount shall be
due and payable on the Supplemental Syndicated Loan Termination Date. From and
after the Term Loan Conversion Date, no installment of any Supplemental
Syndicated Loan shall be reborrowed once repaid.
2.3 Swing Line Loans. (a) Amount of Swing Line Loans. Upon the
satisfaction of the conditions precedent set forth in Section 5.1 and 5.2, as
applicable, from and including the date of this Agreement and prior to the
Termination Date, the Swing Line Bank agrees, on the terms and conditions set
forth in this Agreement, to make swing line loans to the Borrower from time to
time, in Dollars, in an amount not to exceed the Swing Line Commitment (each,
individually, a "Swing Line Loan" and collectively, the "Swing Line Loans");
provided, however, at no time shall the Revolving Credit Obligations exceed the
Aggregate Revolving Loan Commitment; and provided, further, that at no time
shall the sum of (a) the outstanding amount of the Swing Line Loans, plus (b)
the outstanding amount of Revolving Loans made by the Swing Line Bank pursuant
to Section 2.2 (after giving effect to any concurrent repayment of Loans),
exceed the Swing Line Bank's Revolving Loan Commitment at such time. Subject to
the terms of this Agreement, the Borrower may borrow, repay and reborrow Swing
Line Loans at any time prior to the Termination Date.
(b) Borrowing Notice. The Borrower shall deliver to the Swing Line Bank
a Borrowing Notice, signed by it, not later than 12:00 noon (Chicago time) on
the Borrowing Date of each Swing Line Loan, specifying (i) the applicable
Borrowing Date (which shall be a Business Day), and (ii) the aggregate amount of
the requested Swing Line Loan. The Swing Line Loans shall at all times be
Floating Rate Loans, which shall be an amount not less than $500,000. The Agent
shall promptly notify each Lender of such request.
(c) Making of Swing Line Loans. Promptly after receipt of the Borrowing
Notice under Section 2.3(b) in respect of Swing Line Loans, the Agent shall
notify each Lender by telex or telecopy, or other similar form of transmission,
of the requested Swing Line Loan. Not later than 3:00 p.m. (Chicago time) on the
applicable Borrowing Date, the Swing Line Bank shall make available its Swing
Line Loan to the Borrower at the Agent's aforesaid address.
(d) Repayment of Swing Line Loans. The Swing Line Loans shall be
evidenced by the Swing Line Note, and each Swing Line Loan shall be paid in full
by the Borrower on or before the fifth Business Day after the Borrowing Date for
such Swing Line Loan. The Borrower may at any time pay, without penalty or
premium, all outstanding Swing Line Loans or, in a minimum amount of $500,000,
any portion of the outstanding Swing Line Loans, upon notice to the Agent and
the Swing Line Bank. In addition, the Agent (i) may at any time in its sole
discretion with respect to any outstanding Swing Line Loan, or (ii) shall on the
fifth Business Day after the Borrowing Date of any Swing Line Loan, require each
Revolving Lender (including the Swing Line Bank) to make a Revolving Loan in the
amount of such Revolving Lender's Revolving Loan Pro Rata Share of such Swing
Line Loan, for the purpose of repaying such Swing Line Loan. Not later than 1:00
p.m. (Chicago time) on the date of any notice received pursuant to this Section
2.3(d), each Revolving Lender shall make available its required Revolving Loan
or Revolving Loans, in funds immediately available in Chicago to the Agent at
its address specified pursuant to Article XIV. Revolving Loans made pursuant to
this Section 2.3(d) shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in Section 2.10 and subject to the other conditions and
limitations therein set forth and set forth in this Article II. Unless a Lender
shall have notified the Swing Line Bank, prior to its making any Swing Line
Loan, that any applicable condition precedent set forth in Sections 5.1 and 5.2
had not then been satisfied, such Revolving Lender's obligation to make
Revolving Loans pursuant to this Section 2.3(d) to repay Swing Line Loans shall
be unconditional, continuing, irrevocable and absolute and shall not be affected
by any circumstances, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Lender may
have against the Agent, the Swing Line Bank or any other Person, (B) the
occurrence of continuance of a Default or Unmatured Default, (C) any adverse
change in the condition (financial or otherwise) of the Borrower, or (D) any
other circumstances, happening or event whatsoever. In the event that any
Revolving Lender fails to make payment to the Agent of any amount due under this
Section 2.3(d), the Agent shall be entitled to receive, retain and apply against
such obligation the principal and interest otherwise payable to such Revolving
Lender hereunder until the Agent receives such payment from such Revolving
Lender or such obligation is otherwise fully satisfied. In addition to the
foregoing, if for any reason any Revolving Lender fails to make payment to the
Agent of any amount due under this Section 2.3(d), such Revolving Lender shall
be deemed, at the option of the Agent, to have unconditionally and irrevocably
purchased from the Swing Line Bank, without recourse or warranty, an undivided
interest and participation in the applicable Swing Line Loan in the amount of
such Revolving Loan, and such interest and participation may be recovered from
such Revolving Lender together with interest thereon at the Federal Funds
Effective Rate for each day during the period commencing on the date of demand
and ending on the date such amount is received. On the Termination Date, the
Borrower shall repay in full the outstanding principal balance of the Swing Line
Loans.
2.4 Rate Options for All Advances. The Advances (other than with respect
to Swing Line Loans) may be Floating Rate Advances or Eurodollar Rate Advances,
or a combination thereof, selected by the Borrower in accordance with Section
2.10. The Swing Line Loans shall at all times be Floating Rate Loans. The
Borrower may select, in accordance with Section 2.10, Rate Options and Interest
Periods applicable to portions of the Revolving Loans, the Supplemental
Syndicated Loans and the Term Loans; provided, that there shall be no more than
fourteen (14) Interest Periods in effect with respect to all of the Loans at any
time.
2.5 Optional Payments; Mandatory Prepayments.
(A) Optional Payments. The Borrower may from time to time repay or prepay,
without penalty or premium all or any part of outstanding Floating Rate
Advances; provided, that (i) the Borrower may not so prepay Floating Rate
Advances consisting of Term Loans or Supplemental Syndicated Loans, unless it
shall have provided at least one (1) Business Day's written notice to the Agent
of such prepayment and (ii) any intended prepayment of the Term Loans shall be
applied ratably between the Term Loans and the Supplemental Syndicated Loans and
any intended prepayment of the Supplemental Syndicated Loans shall be applied
ratably between the Supplemental Syndicated Loans and the Term Loans. Eurodollar
Rate Advances may be voluntarily repaid or prepaid prior to the last day of the
applicable Interest Period, subject to the indemnification provisions contained
in Section 4.4, provided, that the Borrower may not so prepay Eurodollar Rate
Advances unless it shall have provided at least two (2) Business Days' written
notice to the Agent of such prepayment. Unless the aggregate outstanding
principal balance of the Term Loans or the Supplemental Syndicated Loans is to
be prepaid in full, voluntary prepayments of the Term Loans and the Supplemental
Syndicated Loans shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount, and shall be applied
to each of the then remaining installments payable thereunder in the inverse
order of maturity.
(B) Mandatory Prepayments.
(i) Mandatory Prepayments of Term Loans.
(a) Upon (1) the consummation of any Asset Sale (other than sales of inventory
or worn-out or obsolete property in the ordinary course of business) by the
Borrower or any Subsidiary of the Borrower or (2) the Borrower or any
Subsidiary suffering an Event of Loss, except to the extent that the Net
Cash Proceeds of such Asset Sale or Event of Loss, when combined with the
Net Cash Proceeds of all such Asset Sales and Events of Loss during the
immediately preceding 12-month period, do not exceed $3,000,000, within
three (3) Business Days after the Borrower's or any of its Subsidiaries'
(i) receipt of any Net Cash Proceeds from any such Asset Sale or Event of
Loss, or (ii) conversion to cash or Cash Equivalents of non-cash proceeds
(whether principal or interest and including securities, release of escrow
arrangements or lease payments) received from any Asset Sale or Event of
Loss, the Borrower shall make a mandatory prepayment of the Obligations in
an amount equal to one hundred percent (100%) of such Net Cash Proceeds or
such proceeds converted from non-cash to cash or Cash Equivalents. Net Cash
Proceeds of Events of Loss, with respect to which the Borrower shall have
given the Agent written notice of its intention to repair or replace the
property subject to any such Event of Loss within one year following such
Event of Loss, shall not be subject to the provisions of the first sentence
of this Section 2.5(B)(i)(a) unless and to the extent that such applicable
period shall have expired without such repair or replacement having been
made.
(b) Upon the consummation of any Financing by the Borrower or any
Subsidiary of the Borrower, within three (3) Business Days after the Borrower's
or any of its Subsidiaries' receipt of any Net Cash Proceeds from any Financing
(other than any Financing involving the issuance or incurrence of Indebtedness
permitted under Section 7.2(A)(iii), (v) or (vi), the Borrower shall make a
mandatory prepayment of the Obligations in an amount equal to one hundred
percent (100%) of such Net Cash Proceeds.
(c) On or before March 31 of each year (beginning with March 31, 2003) for
the most recently ended fiscal year, commencing with the fiscal year ending
December 31, 2002, the Borrower shall make a mandatory prepayment in an amount
equal to 90% of the Excess Cash Flow, if positive, for such prior fiscal year.
(d) Nothing in this Section 2.5(B)(i) shall be construed to constitute the
Lenders' consent to any transaction referred to in clauses (a), (b) and (c)
above which is not expressly permitted by the terms of this Agreement.
(e) Each mandatory prepayment required by this Section 2.5(B)(i) shall be
referred to herein as a "Designated Prepayment." Designated Prepayments shall be
allocated and applied to the Obligations as follows:
(I) the first $50,000,000 of the aggregate amount of
all Designated Prepayments made on or after November 30, 2001
shall be applied ratably between the Term Loans and the
Supplemental Syndicated Loans and allocated to each of the
then remaining installments payable under the Term Loans and
the Supplemental Syndicated Loans in the inverse order of
maturity;
(II) following the prepayments specified in
subsection (I) above, the amount of each Designated Prepayment
shall be applied ratably between the Term Loans and the
Supplemental Syndicated Loans and allocated to each of the
then remaining installments payable under the Term Loans and
the Supplemental Syndicated Loans ratably; and
(III) following the payment in full of the Term Loans
and the Supplemental Syndicated Loans, the amount of each
Designated Prepayment shall be applied to repay Revolving
Loans (and shall reduce Revolving Loan Commitments) and
following the payment in full of the Revolving Loans, the
amount of each such Designated Prepayment shall be applied
first to interest on the Reimbursement Obligations, then to
principal on the Reimbursement Obligations, then to fees on
account of Letters of Credit and then, to the extent any L/C
Obligations are contingent, deposited with the Agent as cash
collateral in respect of such L/C Obligations.
(f) On the date any Designated Prepayment is received by the Agent, such
prepayment shall be applied first to Floating Rate Loans and to any
Eurodollar Rate Loans maturing on such date and then to subsequently
maturing Eurodollar Rate Loans.
(ii) Mandatory Prepayments of Revolving Loans. In addition to repayments
under Section 2.5(B)(i), if at any time and for any reason the Revolving Credit
Obligations are greater than the Aggregate Revolving Loan Commitment, the
Borrower shall immediately make a mandatory prepayment of the Obligations in an
amount equal to such excess.
(iii) Subject to the preceding provisions of this Section 2.5(B), all of
the mandatory prepayments made under this Section 2.5(B) shall be applied first
to Floating Rate Loans and to any Eurodollar Rate Loans maturing on such date
and then to subsequently maturing Eurodollar Rate Loans.
2.6 Reduction of Commitments. The Borrower may permanently reduce the
Aggregate Revolving Loan Commitment in whole, or in part ratably among the
Lenders, in an aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount (unless the Aggregate Revolving Loan
Commitment is reduced in whole), upon at least five (5) Business Days' written
notice to the Agent, which notice shall specify the amount of any such
reduction; provided, however, that the amount of the Aggregate Revolving Loan
Commitment may not be reduced below the aggregate principal amount of the
outstanding Revolving Credit Obligations. All accrued facility fees shall be
payable on the effective date of any termination of the obligations of the
Revolving Lenders to make Revolving Loans hereunder.
2.7 Method of Borrowing. For all Revolving Loans, not later than 1:00
p.m. (Chicago time) on each Borrowing Date, each Lender shall make available its
Revolving Loans in funds immediately available in Chicago to the Agent at its
address specified pursuant to Article XIV. The Agent will promptly make the
funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.8 Method of Selecting Types and Interest Periods for Advances. (A) For
all Revolving Loans, the Borrower shall select the Type of Advance and, in the
case of each Eurodollar Rate Advance, the Interest Period applicable to each
Advance from time to time. The Borrower shall give the Agent irrevocable notice
in substantially the form of Exhibit C hereto (a "Borrowing Notice") not later
than 10:00 a.m. (Chicago time) (a) on the Borrowing Date of each Floating Rate
Advance and (b) three (3) Business Days before the Borrowing Date for each
Eurodollar Rate Advance, specifying: (i) the Borrowing Date (which shall be a
Business Day) of such Advance; (ii) the aggregate amount of such Advance; (iii)
the Type of Advance selected; and (iv) in the case of each Eurodollar Rate
Advance, the Interest Period applicable thereto.
(B) For all Loans, the Borrower shall select Interest Periods so that,
to the best of the Borrower's knowledge, it will not be necessary to prepay all
or any portion of any Eurodollar Rate Advance prior to the last day of the
applicable Interest Period in order to make mandatory prepayments as required
pursuant to the terms hereof. Each Floating Rate Advance and all Obligations
other than Loans shall bear interest from and including the date of the making
of such Advance to (but not including) the date of repayment thereof at the
Floating Rate, changing when and as such Floating Rate changes. Changes in the
rate of interest on that portion of any Advance maintained as a Floating Rate
Loan will take effect simultaneously with each change in the Floating Rate. Each
Eurodollar Rate Advance shall bear interest from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Eurodollar Rate Advance.
2.9 Minimum Amount of Each Advance. Each Advance (other than an Advance
to repay Swing Line Loans pursuant to Section 2.3(d) or a Reimbursement
Obligation pursuant to Section 3.7) shall be in the minimum amount of $5,000,000
(and in multiples of $1,000,000 if in excess thereof), provided, however, that
any Floating Rate Advance may be in the amount of the unused Aggregate Revolving
Loan Commitment or, if applicable, the unused Aggregate Supplemental Syndicated
Loan Commitment.
2.10 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances.
(A) Right to Convert. The Borrower may elect from time to time, subject
to the provisions of Section 2.4 and this Section 2.10, to convert all or any
part of a Loan of any Type into any other Type or Types of Loans; provided, that
any conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) Automatic Conversion and Continuation. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent notice in accordance with Section 2.10(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.
(C) No Conversion Post-Default or Post-Unmatured Default. Notwithstanding
anything to the contrary contained in Section 2.10(A) or Section 2.10(B), no
Loan may be converted into or continued as a Eurodollar Rate Loan (except with
the consent of the Required Lenders) when any Default or Unmatured Default has
occurred and is continuing.
(D) Conversion/Continuation Notice. The Borrower shall give the Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 10:00 a.m. (Chicago time) three (3) Business Days prior
to the date of the requested conversion or continuation, specifying: (1) the
requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or continued;
and (3) the amount of Eurodollar Rate Loan(s) into which such Loan is to be
converted or continued and the duration of the Interest Period applicable
thereto.
2.11 Default Rate. After the occurrence and during the continuance of a
Default, the interest rate(s) applicable to the Obligations and the fees payable
under Section 3.9 with respect to Letters of Credit shall be equal to the rate
set forth in Section 2.15(D)(ii) for Senior Leverage Ratios greater than or
equal to 4.0 to 1.0 plus two percent (2.0%) per annum above the Floating Rate or
Eurodollar Rate, as applicable.
2.12 Notes. Each Lender is authorized to record the principal amount of
each of its Loans and each repayment with respect to its Loans on the schedule
attached to its respective Notes; provided, however, that the failure to so
record shall not affect the Borrower's obligations under any such Note.
2.13 Method of Payment. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIV, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 12:00 noon (Chicago time)
on the date when due and shall be made ratably among the Lenders (unless such
amount is not to be shared ratably in accordance with the terms hereof). Each
payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds which the Agent
received at its address specified pursuant to Article XIV or at any Lending
Installation specified in a notice received by the Agent from such Lender. The
Borrower authorizes the Agent to charge the account of the Borrower maintained
with the Agent for each payment of principal, interest and fees as it becomes
due hereunder.
2.14 Telephonic Notices. The Borrower authorizes the Lenders and the Agent
to extend Advances and Swing Line Loans, issue Letters of Credit, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be an Authorized Officer of the Borrower. The Borrower agrees to
deliver promptly to the Agent a written confirmation, signed by an Authorized
Officer, if such confirmation is requested by the Agent or any Lender, of each
telephonic notice. If the written confirmation differs in any material respect
from the action taken by the Agent and the Lenders, (i) the telephonic notice
shall govern absent manifest error and (ii) the Agent or the Lender, as
applicable, shall promptly notify the Authorized Officer who provided such
confirmation of such difference.
2.15 Promise to Pay; Interest and Facility Fees; Interest Payment Dates;
Interest and Fee Basis; Taxes; Loan and Control Accounts.
(A) Promise to Pay. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the Notes.
(B) Interest Payment Dates. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, on any date on which the Floating Rate Loan is
prepaid, whether due to acceleration or otherwise, and at maturity (whether by
acceleration or otherwise). Interest accrued on each Eurodollar Rate Loan shall
be payable on the last day of its applicable Interest Period, on any date on
which the Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise,
and at maturity. Interest accrued on each Eurodollar Rate Loan having an
Interest Period longer than three months shall also be payable on the last day
of each three-month interval during such Interest Period. Interest accrued on
the principal balance of all other Obligations shall be payable in arrears (i)
on the last day of each calendar month, commencing on the first such day
following the incurrence of such Obligation, (ii) upon repayment thereof in full
or in part and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
(C) Facility Fees. (i) The Borrower shall pay to the Agent, for the account
of the Revolving Lenders in accordance with their Revolving Loan Pro Rata
Shares, from and after the Effective Date until the Revolving Loan Termination
Date, a facility fee accruing at the rate of the then Applicable Facility Fee
Percentage, on the amount of the Aggregate Revolving Loan Commitment in effect
from time to time. All such facility fees payable under this clause (C) shall be
payable quarterly in arrears on the last day of each fiscal quarter of the
Borrower occurring after the Effective Date (with the first such payment being
calculated for the period from the Effective Date and ending on March 31, 2000),
and, in addition, on the Revolving Loan Termination Date.
(ii) The Borrower agrees to pay to the Agent and the Arranger for their
respective sole accounts (unless otherwise agreed between the Agent or Arranger,
as the case may be, and any Lender) the fees set forth in the letter agreements
among the Agent, the Arranger and the Borrower dated January 7, 2000 and
November 28, 2001, payable at the times and in the amounts set forth therein.
(D) Interest and Fee Basis; Applicable Eurodollar Margin and Applicable
Facility Fee Percentage.
(i) Interest and fees shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest shall be payable for the day an Obligation is
incurred but not for the day of any payment on the amount paid if payment is
received prior to 2:00 p.m. (Chicago time) at the place of payment. If any
payment of principal of or interest on a Loan or any payment of any other
Obligations shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
(ii) The Applicable Eurodollar Margin, Applicable Floating Rate Margin and
Applicable Facility Fee Percentage shall be determined from time to time by
reference to the table set forth below, on the basis of the then applicable
Senior Leverage Ratio as described in this Section 2.15(D)(ii):
Applicable
Applicable Floating Applicable Eurodollar Facility
Rate Margins Margins Fee Percentage
------------ ------- --------------
Senior Term Loans and Term Loans and
Leverage Revolving Supplemental Revolving Supplemental
Ratio Loans Syndicated Loans Loans Syndicated Loans
----- --------- ---------------- ----- ----------------
Greater than or
equal to 4.0 to 1.0 1.50% 2.25% 2.75% 3.50% 0.75%
Greater than or
equal to 3.0 to 1.0
and less than 4.0 to 1.0 1.25% 1.75% 2.50% 3.00% 0.50%
Greater than or
equal to 2.0 to 1.0
and less than 3.0 to 1.0 1.00% 1.50% 2.25% 2.75% 0.50%
Less than 2.0 to 1.0 0.75% 1.25% 2.00% 2.50% 0.50%
For purposes of this Section 2.15(D)(ii), the Senior Leverage Ratio shall be
determined as prescribed in Section 7.3(B). Upon receipt of the financial
statements delivered pursuant to Sections 7.1(D)(ii) and (iii), as applicable,
the Applicable Eurodollar Margin, Applicable Floating Rate Margin and Applicable
Facility Fee Percentage shall be adjusted, such adjustment being effective five
(5) Business Days following the Agent's receipt of such financial statements and
the compliance certificate required to be delivered in connection therewith
pursuant to Section 7.1(D)(ii); provided, that if the Borrower shall not have
timely delivered its financial statements in accordance with Section 7.1(D)(ii)
or (iii), as applicable, then commencing on the date upon which such financial
statements should have been delivered and continuing until such financial
statements are actually delivered, it shall be assumed for purposes of
determining the Applicable Eurodollar Margin, Applicable Floating Rate Margin
and Applicable Facility Fee Percentage that the Senior Leverage Ratio was
greater than or equal to 4.0 to 1.0.
(E) Taxes.
(i) Any and all payments by the Borrower hereunder shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings or any liabilities with respect
thereto including those arising after the date hereof as a result of the
adoption of or any change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority but excluding, in the case of
each Lender and the Agent, such taxes (including income taxes, franchise taxes
and branch profit taxes) as are imposed on or measured by such Lender's or
Agent's, as the case may be, net income by the United States of America or any
Governmental Authority of the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or Agent, as the case may be, is
organized, carries on a business (other than as a result of a connection arising
solely from the execution, delivery or performance of obligations under this
Agreement), or maintains a Lending Installation (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities which the
Agent or a Lender determines to be applicable to this Agreement, the other Loan
Documents, the Revolving Loan Commitments, the Loans or the Letters of Credit
being hereinafter referred to as "Taxes"). Notwithstanding the foregoing
sentence, the Borrower shall not be obligated to make any deductions, charges or
withholdings from any and all payments to a Lender that is both a Purchaser and
is organized or incorporated outside the United States of America (or a
political subdivision thereof), unless either (v) the Borrower consents to the
assignment of such Purchaser's interest or (w) the Purchaser delivers IRS form
X-0XXX, X-0XXX or other applicable form in the manner and by the procedures
described in Section 2.15(E)(vi) and continues to comply with Section
2.15(E)(vi). If the Borrower or the Agent shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under the other Loan
Documents to any Lender or the Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.15(E))
such Lender or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions, and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law. If any Taxes, including, without limitation, any
withholding tax of the United States of America or any other Governmental
Authority shall be or become applicable (y) after the date of this Agreement, to
such payments by the Borrower made to the Lending Installation or any other
office that a Lender may claim as its Lending Installation, or (z) after such
Lender's selection and designation of any other Lending Installation, to such
payments made to such other Lending Installation, such Lender shall use
reasonable efforts to make, fund and maintain its Loans through another Lending
Installation of such Lender in another jurisdiction so as to reduce the
Borrower's liability hereunder, if the making, funding or maintenance of such
Loans through such other Lending Installation of such Lender does not, in the
reasonable judgment of such Lender, otherwise adversely affect such Loans, the
obligations under the Commitments or such Lender.
(ii) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies which arise from any payment made hereunder, from the issuance of Letters
of Credit hereunder, or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, the other Loan Documents, the
Commitments, the Loans or the Letters of Credit (hereinafter referred to as
"Other Taxes").
(iii) The Borrower indemnifies each Lender and the Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any Governmental Authority on amounts payable under this
Section 2.15(E)) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30) days
after the date such Lender or the Agent (as the case may be) makes written
demand therefor. A certificate as to any additional amount payable to any Lender
or the Agent under this Section 2.15(E) submitted to the Borrower and the Agent
(if a Lender is so submitting) by such Lender or the Agent shall show in
reasonable detail the amount payable and the calculations used to determine such
amount and shall, absent manifest error, be final, conclusive and binding upon
all parties hereto. With respect to such deduction or withholding for or on
account of any Taxes and to confirm that all such Taxes have been paid to the
appropriate Governmental Authorities, the Borrower shall promptly (and in any
event not later than thirty (30) days after receipt) furnish to each Lender and
the Agent such certificates, receipts and other documents as may be required (in
the judgment of such Lender or the Agent) to establish any tax credit to which
such Lender or the Agent may be entitled. Notwithstanding the foregoing, the
Borrower shall not be required to indemnify any Lender or the Agent under this
Section 2.15(E)(iii) if such Lender or the Agent, as applicable, fails to comply
with Section 2.15(E)(vi).
(iv) Within thirty (30) days after the date of any payment of Taxes or Other
Taxes by the Borrower, the Borrower shall furnish to the Agent the original
or a certified copy of a receipt evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.15(E) shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of
this Agreement.
(vi) Each Lender that is not created or organized under the laws of the United
States of America or a political subdivision thereof shall deliver to the
Borrower and the Agent on or before the Effective Date, or, if later, the
date on which such Lender becomes a Lender pursuant to Section 13.3 and
from time to time when requested by the Borrower, a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Lender, in a form satisfactory to the Borrower and the Agent, to the effect
that (A) such Lender is capable of receiving payments of interest hereunder
without deduction or withholding of United States federal income tax and
accompanied by two executed copies of Form W-8BEN or Form W-8ECI of the
IRS, or applicable successor forms or, (B) such Lender is not (1) a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, (2) a "10 percent
shareholder" of the Borrower or any Subsidiary within the meaning of
Section 881(c)(3)(B) of the Code, or (3) a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code and accompanied by two executed copies of Form
W-8BEN or applicable successor form. Each such Lender further agrees to
deliver to the Borrower and the Agent from time to time a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Lender substantially in a form satisfactory to the Borrower and the Agent,
before or promptly upon the occurrence of any event requiring a change in
the most recent certificate previously delivered by it to the Borrower and
the Agent pursuant to this Section 2.15(E)(vi). Further, each Lender which
delivers a certificate pursuant to this Section 2.15(E)(vi) covenants and
agrees to deliver to the Borrower and the Agent within fifteen (15) days
prior to the expiration of such form, another such certificate and/or two
accurate and complete original signed copies of the applicable form (or any
successor form or forms required under the Code or the applicable
regulations promulgated thereunder). Each such certificate shall certify as
to one of the following:
(a) that such Lender is capable of receiving payments of interest hereunder
without deduction or withholding of United States of America federal income tax;
(b) that such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of United States of America federal
income tax as specified therein but is capable of recovering the full amount of
any such deduction or withholding from a source other than the Borrower and will
not seek any such recovery from the Borrower; or
(c) that, as a result of the adoption of or any change in any law, treaty,
rule, regulation, guideline or determination of a Governmental Authority or any
change in the interpretation or application thereof by a Governmental Authority
after the date such Lender became a party hereto, such Lender is not capable of
receiving payments of interest hereunder without deduction or withholding of
United States of America federal income tax as specified therein and that it is
not capable of recovering the full amount of the same from a source other than
the Borrower.
Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or
the Agent to establish any exemption from or reduction of any Taxes or
Other Taxes required to be deducted or withheld and which may be
obtained without undue expense to such Lender.
2.16 Notification of Advances, Interest Rates, Prepayments and Aggregate
Revolving Loan Commitment Reductions. Promptly after receipt thereof, the Agent
will notify each Lender of the contents of each Aggregate Revolving Loan
Commitment reduction notice, Aggregate Supplemental Syndicated Loan Commitment
reduction notice, Borrowing Notice, Continuation/Conversion Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender of
the interest rate applicable to each Eurodollar Rate Loan promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Prime Rate.
2.17 Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written or facsimile notice to
the Agent and the Borrower, designate a Lending Installation through which Loans
will be made by it and for whose account Loan payments are to be made.
2.18 Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender, as the
case may be, notifies the Agent prior to the date on which it is scheduled to
make payment to the Agent of (i) in the case of a Lender, the proceeds of a Loan
or (ii) in the case of the Borrower, a payment of principal, interest or fees to
the Agent for the account of the Lenders, that it does not intend to make such
payment, the Agent may assume that such payment has been made. The Agent may,
but shall not be obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such Lender or the
Borrower, as the case may be, has not in fact made such payment to the Agent,
the recipient of such payment shall, on demand by the Agent, repay to the Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (i) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day or (ii) in the case of payment by the Borrower, the interest
rate applicable to the relevant Loan.
2.19 Termination Date. This Agreement shall be effective until the Term Loan
Termination Date. Notwithstanding the termination of this Agreement on the Term
Loan Termination Date, until all of the Obligations (other than contingent
indemnity obligations) shall have been fully and indefeasibly paid and
satisfied, all financing arrangements among the Borrower and the Lenders shall
have been terminated (other than under Interest Rate Agreements or other
agreements with respect to Hedging Obligations) and all of the Letters of Credit
shall have expired, been canceled or terminated, all of the rights and remedies
under this Agreement and the other Loan Documents shall survive and the Agent
shall be entitled to retain its security interest in and to all existing and
future Collateral for the benefit of itself and the Holders of Secured
Obligations.
2.20 Replacement of Certain Lenders. In the event any Lender (an "Affected
Lender") shall have: (i) failed to fund its Revolving Loan Pro Rata Share,
Supplemental Syndicated Loan Pro Rata Share or Term Loan Pro Rata Share, as
applicable, of any Advance requested by the Borrower, or to fund a Revolving
Loan (including to repay Swing Line Loans pursuant to Section 2.3(d) or L/C
Obligations) or a Supplemental Syndicated Loan, which such Lender is obligated
to fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrower under Sections 2.15(E), 4.1 or 4.2
to recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to Section 4.3 claiming that such Lender is unable to extend
Eurodollar Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (iv) has invoked Section 10.2, then, in any such case, the
Borrower or the Agent may make written demand on such Affected Lender (with a
copy to the Agent in the case of a demand by the Borrower and a copy to the
Borrower in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use its best efforts to assign pursuant
to one or more duly executed assignments and acceptances in substantially the
form of Exhibit E within five (5) Business Days after the date of such demand,
to one or more financial institutions that comply with the provisions of Section
13.3(A) which the Borrower or the Agent, as the case may be, shall have engaged
for such purpose (a "Replacement Lender"), all of such Affected Lender's rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, its Revolving Loan Commitment, Supplemental Syndicated Loan
Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit and Swing Line Loans, and its obligation to
participate in additional Letters of Credit and Swing Line Loans hereunder) in
accordance with Section 13.3. The Agent agrees, upon the occurrence of such
events with respect to an Affected Lender and upon the written request of the
Borrower, to use its reasonable efforts to obtain the commitments from one or
more financial institutions to act as a Replacement Lender. The Agent is
authorized to execute one or more of such assignment agreements as
attorney-in-fact for any Affected Lender failing to execute and deliver the same
within five (5) Business Days after the date of such demand. Further, with
respect to such assignment the Affected Lender shall have concurrently received,
in cash, all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
Sections 2.15(E), 4.1, and 4.2 with respect to such Affected Lender and
compensation payable under Section 2.15(C) in the event of any replacement of
any Affected Lender under clause (ii) or clause (iii) of this Section 2.20;
provided that upon such Affected Lenders replacement, such Affected Lender shall
cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15(E), 4.1, 4.2, 4.4, and 10.7, as well as to any fees accrued for
its account hereunder and not yet paid, and shall continue to be obligated under
Section 11.8.
ARTICLE III: THE LETTER OF CREDIT FACILITY
------------ -----------------------------
3.1 Obligation to Issue. Subject to the terms and conditions of this Agreement
and in reliance upon the representations, warranties and covenants of the
Borrower herein set forth, the Issuing Bank hereby agrees to issue for the
account of the Borrower through the Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit in accordance with
this Article III, from time to time during the period commencing on the date
hereof and ending on the Business Day six (6) Business Days prior to the
Termination Date.
3.2 [Intentionally Omitted].
3.3 Types and Amounts. The Issuing Bank shall not have any obligation to
and shall not:
(i) issue any Letter of Credit if on the date of issuance,
before or after giving effect to the Letter of Credit requested
hereunder, (a) the Revolving Credit Obligations at such time would
exceed the Aggregate Revolving Loan Commitment at such time, or (b) the
aggregate outstanding amount of the L/C Obligations would exceed
$85,000,000; or
(ii) issue any Letter of Credit which has an expiration date
later than the date which is the earlier of one (1) year after the date
of issuance thereof or five (5) Business Days immediately preceding the
Termination Date.
3.4 Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, the obligation of the Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the Issuing Bank at
such times and in such manner as the Issuing Bank may reasonably
prescribe, a request for issuance of such Letter of Credit in
substantially the form of Exhibit D hereto, duly executed applications
for such Letter of Credit, and such other documents, instructions and
agreements as may be required pursuant to the terms thereof (all such
applications, documents, instructions, and agreements being referred to
herein as the "L/C Documents"), and the proposed Letter of Credit shall
be reasonably satisfactory to the Issuing Bank as to form and content;
and
(ii) as of the date of issuance no order, judgment or decree
of any court, arbitrator or Governmental Authority shall purport by its
terms to enjoin or restrain the Issuing Bank from issuing such Letter
of Credit and no law, rule or regulation applicable to the Issuing Bank
and no request or directive (whether or not having the force of law)
from a Governmental Authority with jurisdiction over the Issuing Bank
shall prohibit or request that the Issuing Bank refrain from the
issuance of Letters of Credit generally or the issuance of that Letter
of Credit.
3.5 Procedure for Issuance of Letters of Credit. (a) Subject to the terms and
conditions of this Article III and provided that the applicable conditions set
forth in Sections 5.1 and 5.2 hereof have been satisfied, as applicable, the
Issuing Bank shall, on the requested date, issue a Letter of Credit on behalf of
the Borrower in accordance with the Issuing Bank's usual and customary business
practices and, in this connection, the Issuing Bank may assume that the
applicable conditions set forth in Section 5.2 hereof have been satisfied unless
it shall have received notice to the contrary from a Lender or has knowledge
that the applicable conditions have not been met.
(b) The Issuing Bank shall not extend or amend any Letter of Credit unless the
requirements of this Section 3.5 are met as though a new Letter of Credit was
being requested and issued.
3.6 Letter of Credit Participation. Immediately upon the issuance of each Letter
of Credit hereunder, each Revolving Lender shall be deemed to have
automatically, irrevocably and unconditionally purchased and received from the
Issuing Bank an undivided interest and participation in and to such Letter of
Credit, the obligations of the Borrower in respect thereof, and the liability of
the Issuing Bank thereunder (collectively, an "L/C Interest") in an amount equal
to the amount available for drawing under such Letter of Credit multiplied by
such Revolving Lender's Revolving Loan Pro Rata Share. The Issuing Bank will
notify each Revolving Lender promptly upon presentation to it of an L/C Draft or
upon any other draw under a Letter of Credit. On or before the Business Day on
which the Issuing Bank makes payment of each such L/C Draft or, in the case of
any other draw on a Letter of Credit, on demand by the Agent, each Revolving
Lender shall make payment to the Agent, for the account of the Issuing Bank, in
immediately available funds in an amount equal to such Revolving Lender's
Revolving Loan Pro Rata Share of the amount of such payment or draw. The
obligation of each Revolving Lender to reimburse the Issuing Bank under this
Section 3.6 shall be unconditional, continuing, irrevocable and absolute. In the
event that any Revolving Lender fails to make payment to the Agent of any amount
due under this Section 3.6, the Agent shall be entitled to receive, retain and
apply against such obligation the principal and interest otherwise payable to
such Revolving Lender hereunder until the Agent receives such payment from such
Revolving Lender or such obligation is otherwise fully satisfied; provided,
however, that nothing contained in this sentence shall relieve such Revolving
Lender of its obligation to reimburse the Issuing Bank for such amount in
accordance with this Section 3.6.
3.7 Reimbursement Obligation. The Borrower agrees unconditionally, irrevocably
and absolutely to pay immediately to the Agent, for the account of the Lenders,
the amount of each advance which may be drawn under or pursuant to a Letter of
Credit or an L/C Draft related thereto (such obligation of the Borrower to
reimburse the Agent for an advance made under a Letter of Credit or L/C Draft
being hereinafter referred to as a "Reimbursement Obligation" with respect to
such Letter of Credit or L/C Draft). If the Borrower at any time
fails to repay a Reimbursement Obligation pursuant to this Section 3.7, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of Revolving Loans. Such Revolving Loans shall constitute a
Floating Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises and,
for any reason, the Lenders are unable to make or have no obligation to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from and
after such day, until paid in full, at the interest rate applicable to a
Floating Rate Advance.
3.8 Letter of Credit Fees. The Borrower agrees to pay (i) on each Payment Date
and on the Termination Date, in arrears, to the Agent for the ratable benefit of
the Lenders, except as set forth in Section 9.2, a letter of credit fee at a
rate per annum equal to the Applicable L/C Fee Percentage on the average daily
outstanding face amount available for drawing under all Letters of Credit, (ii)
on each Payment Date and on the Termination Date, in arrears, to the Agent for
the sole account of the Issuing Bank, a letter of credit fee of one-quarter of
one percent (0.25%) per annum on the average daily outstanding face amount
available for drawing under all Letters of Credit issued by the Issuing Bank,
and (iii) to the Agent for the benefit of the Issuing Bank, all customary fees
and other issuance, amendment, document examination, negotiation and presentment
expenses and related charges in connection with the issuance, amendment,
presentation of L/C Drafts, and the like customarily charged by the Issuing Bank
with respect to standby and commercial Letters of Credit, including, without
limitation, standard commissions with respect to commercial Letters of Credit,
payable at the time of invoice of such amounts.
3.9 Indemnification; Exoneration. (a) In addition to amounts payable as
elsewhere provided in this Article III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Agent, the Issuing Bank and each Lender
from and against any and all liabilities and costs which the Agent, the Issuing
Bank or such Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the case of
the Issuing Bank, as a result of its gross negligence or willful misconduct, as
determined by the final judgment of a court of competent jurisdiction, or (ii)
the failure of the Issuing Bank to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority (all such acts or omissions
herein called "Governmental Acts").
(b) As among the Borrower, the Lenders and the Issuing Bank, the Borrower
assumes all risks of the acts and omissions of, or misuse of such Letter of
Credit by, the beneficiary of any Letters of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the Letter of Credit
applications and Letter of Credit reimbursement agreements executed by the
Borrower at the time of request for any Letter of Credit, neither the Issuing
Bank nor any Lender shall be responsible (in the absence of gross negligence or
willful misconduct in connection therewith, as determined by the final judgment
of a court of competent jurisdiction): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Letters of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise; (v) for errors in interpretation of technical
trade terms; (vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (vii) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the
Issuing Bank and the Lenders, including, without limitation, any Governmental
Acts. None of the above shall affect, impair, or prevent the vesting of the
Issuing Bank's rights or powers under this Section 3.9.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of gross negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the Issuing Bank or any Lender under any resulting liability
to the Borrower or relieve the Borrower of any of its obligations hereunder to
any such Person.
(d) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 3.9 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
ARTICLE IV: CHANGE IN CIRCUMSTANCES
-----------------------------------
4.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which such Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
Governmental Authority charged with the interpretation or application thereof,
or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any tax,
duty, charge or withholding on or from payments due from the Borrower (excluding
federal taxation of the overall net income of any Lender or applicable Lending
Installation), or changes the basis of taxation of payments to any Lender in
respect of its Loans, its L/C Interests, the Letters of Credit or other amounts
due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar Rate Loans)
with respect to its Loans, L/C Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making, funding or
maintaining the Loans, the L/C Interests or the Letters of Credit or reduces any
amount received by any Lender or any applicable Lending Installation in
connection with Loans or Letters of Credit, or requires any Lender or any
applicable Lending Installation to make any payment calculated by reference to
the amount of Loans or L/C Interests held or interest received by it or by
reference to the Letters of Credit, by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within 15 days after
receipt by the Borrower of written demand by such Lender pursuant to Section
4.5, the Borrower shall pay such Lender that portion of such increased expense
incurred or reduction in an amount received which such Lender determines is
attributable to making, funding and maintaining its Loans, L/C Interests,
Letters of Credit and its Revolving Loan Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines (i) the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change in Capital Adequacy" (as defined below),
and (ii) such increase in capital will result in an increase in the cost to such
Lender of maintaining its Loans, L/C Interests, the Letters of Credit or its
obligation to make Loans hereunder, then, within 15 days after receipt by the
Borrower of written demand by such Lender pursuant to Section 4.5, the Borrower
shall pay such Lender the amount necessary to compensate for any shortfall in
the rate of return on the portion of such increased capital which such Lender
determines is attributable to this Agreement, its Loans, its L/C Interests, the
Letters of Credit or its obligation to make Loans hereunder (after taking into
account such Lender's policies as to capital adequacy). "Change in Capital
Adequacy" means (i) any change after the date of this Agreement in the
"Risk-Based Capital Guidelines" (as defined below) excluding, for the avoidance
of doubt, the effect of any phasing in of such Risk-Based Capital Guidelines or
any other capital requirements passed prior to the date hereof, or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement and having general
applicability to all banks and financial institutions within the jurisdiction in
which such Lender operates which affects the amount of capital required or
expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. "Risk-Based Capital Guidelines" means (i)
the risk-based capital guidelines in effect in the United States on the date of
this Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
4.3 Availability of Types of Advances. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Agent shall suspend the availability of the affected Type of
Advance and, in the case of any occurrence set forth in clause (i) require any
Advances of the affected Type to be repaid.
4.4 Funding Indemnification. If any payment of a Eurodollar Rate Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment, or otherwise, or a Eurodollar Rate Advance
is not made on the date specified by the Borrower for any reason other than
default by the Lenders, the Borrower agrees to indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain the Eurodollar Rate Advance.
4.5 Lender Statements; Survival of Indemnity. If reasonably possible, each
Lender shall designate an alternate Lending Installation with respect to its
Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under Sections 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under Section 4.3, so long as such designation is not disadvantageous to such
Lender. Each Lender requiring compensation pursuant to Section 2.15(E) or this
Article IV shall use its best efforts to notify the Borrower and the Agent in
writing of any Change in Capital Adequacy, law, policy, rule, guideline or
directive giving rise to such demand for compensation not later than ninety (90)
days following the date upon which the responsible account officer of such
Lender knows or should have known of such Change in Capital Adequacy, law,
policy, rule, guideline or directive. Any demand for compensation pursuant to
this Article IV shall be in writing and shall state the amount due, if any,
under Section 4.1, 4.2 or 4.4 and shall set forth in reasonable detail the
calculations upon which such Lender determined such amount. Such written demand
shall be rebuttably presumed correct for all purposes. Determination of amounts
payable under such Sections in connection with a Eurodollar Rate Loan shall be
calculated as though each Lender funded its Eurodollar Rate Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. The obligations of the Borrower under
Sections 4.1, 4.2 and 4.4 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
-------------------------------
5.1 Initial Advances and Letters of Credit. The Revolving Lenders shall not be
required to make the initial Revolving Loans hereunder and the Issuing Bank
shall not be required to issue any new Letters of Credit unless the Borrower has
furnished to the Agent each of the following, with sufficient copies for the
Lenders, all in form and substance satisfactory to the Agent and the Lenders:
(1) Copies of (a) the Articles of Incorporation of the
Borrower, together with all amendments, certified by the Secretary or
Assistant Secretary of the Borrower, provided, that the Borrower shall
deliver a copy of such Articles of Incorporation, together with all
amendments, certified by the appropriate governmental officer in its
jurisdiction of incorporation within ten (10) days after the Effective
Date, and (b) a certificate of good standing of the Borrower, certified
by the appropriate governmental officer in its jurisdiction of
incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary
of the Borrower, of its respective By-Laws and of its Board of
Directors' resolutions (and resolutions of other bodies, if any are
deemed necessary by counsel for any Lender) authorizing the execution
of the Loan Documents;
(3) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by name and
title and bear the signature of the officers of the Borrower,
authorized to sign the Loan Documents and to make borrowings hereunder,
upon which certificate the Lenders shall be entitled to rely until
informed of any change in writing by the Borrower;
(4) Certificates, in substantially the form of Exhibit H
hereto, signed by the chief financial officer of the Borrower, stating
that on the Effective Date all the representations in this Agreement
are true and correct and no Default or Unmatured Default has occurred
and is continuing;
(5) A written opinion of the Borrower's and Subsidiary
Guarantors' counsel, addressed to the Agent and the Lenders, addressing
the issues identified in Exhibit F hereto containing assumptions and
qualifications acceptable to the Agent and the Lenders;
(6) Evidence satisfactory to the Agent that (a) there exists
no injunction or temporary restraining order which, in the judgment of
the Agent, would prohibit the making of the Loans or any litigation
seeking such an injunction or restraining order, and (b) except as set
forth in Schedule 6.7 to this Agreement, there is no action, suit,
proceeding, arbitration or (to the Borrower's knowledge) investigation
before or by any Governmental Authority or private arbitrator pending
or (to the Borrower's knowledge) threatened against the Borrower or any
of its Subsidiaries or any property of any of them (i) challenging the
validity or the enforceability of any material provision of the Loan
Documents or (ii) which will have or could reasonably be expected to
have a Material Adverse Effect.
(7) Written money transfer instructions, if reasonably
requested by the Agent, addressed to the Agent and signed by an
Authorized Officer;
(8) The Subsidiary Guaranty, executed by each Subsidiary
Guarantor;
(9) Such other documents as the Agent or any Lender or its
counsel may have reasonably requested, including, without limitation,
all of the documents reflected on the List of Closing Documents
attached as Exhibit G to this Agreement, including without limitation,
the Collateral Documents required to be delivered on or prior to the
Effective Date;
(10) A copy of this Agreement executed by the Borrower, the
Required Lenders and the Agent; and
(11) Evidence satisfactory to the Agent that the Borrower has
paid to the Agent and the Arranger the fees agreed to in the fee
letters, dated January 7, 2000 and November 28, 2001, among the Agent,
the Arranger and the Borrower.
5.2 Each Advance and Letter of Credit. The Lenders shall not be required to make
any Advance, or issue any Letter of Credit, unless on the applicable Borrowing
Date, or in the case of a Letter of Credit, the date on which the Letter of
Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in Article VI are true
and correct in all material respects as of such Borrowing Date, except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date.
Each Borrowing Notice with respect to each such Advance and the letter
of credit application with respect to each Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 5.2(i) and (ii) have been satisfied. The Agent may require a duly
completed officer's certificate in substantially the form of Exhibit H hereto
and/or a duly completed compliance certificate in substantially the form of
Exhibit I hereto as a condition to making an Advance.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
----------- ------------------------------
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and the other financial accommodations to the
Borrower and to issue the Letters of Credit described herein, the Borrower
represents and warrants as follows to each of the Holders of Secured Obligations
as of the Effective Date, having given effect to the consummation of the
transactions contemplated by the Loan Documents on the Effective Date, and
thereafter on each date as required by Section 5.2:
6.1 Organization; Corporate Powers. The Borrower and each of its Subsidiaries
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing will have
a Material Adverse Effect, and (iii) has all requisite corporate power and
authority to own and operate its property and to conduct its business as
presently conducted and as proposed to be conducted.
6.2 Authority.
--- ----------
(A) The Borrower and each of its Subsidiaries has the requisite
corporate power and authority (i) to execute, deliver and perform each of the
Loan Documents which are to be executed by it and (ii) to file the Loan
Documents which must be filed by it or which have been filed by it as required
by this Agreement or the other Loan Documents or otherwise on or prior to the
Effective Date with any Governmental Authority.
(B) The execution, delivery, performance and filing, as the case may
be, of each of the Loan Documents which must be executed or filed by the
Borrower or any of its Subsidiaries or which have been executed or filed as
required by this Agreement, the other Loan Documents or otherwise on or prior to
the Effective Date and to which the Borrower or any of its Subsidiaries is
party, and the consummation of the transactions contemplated thereby, have been
duly approved by the respective boards of directors and, if necessary, the
shareholders of the Borrower and its Subsidiaries, and such approvals have not
been rescinded. No other corporate action or proceeding on the part of the
Borrower or any of its Subsidiaries is necessary to consummate such
transactions.
(C) Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally), is in full force and effect and no
material term or condition thereof has been amended, modified or waived from the
terms and conditions contained in the Loan Documents delivered to the Agent
pursuant to Section 5.1 without the prior written consent of the Required
Lenders, and the Borrower and its Subsidiaries have, and, to the best of the
Borrower's and its Subsidiaries' knowledge, all other parties thereto have,
performed and complied with all the terms, provisions, agreements and conditions
set forth therein and required to be performed or complied with by such parties
on or before the Effective Date, and no unmatured default, default or breach of
any covenant by any such party exists thereunder.
6.3 No Conflict; Governmental Consents. The execution, delivery and performance
of each of the Loan Documents to which the Borrower or any of its Subsidiaries
is a party do not and will not (i) conflict with the certificate or articles of
incorporation or by-laws of the Borrower or any such Subsidiary, (ii) constitute
a tortious interference with any Contractual Obligation of the Borrower or any
such Subsidiary or conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law
(including, without limitation, any Environmental Property Transfer Act) or
Contractual Obligation of the Borrower or any such Subsidiary, or require
termination of any Contractual Obligation, except such interference, breach,
default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien whatsoever upon any of the
property or assets of the Borrower or any such Subsidiary, other than Liens
permitted by the Loan Documents or (iv) require any approval of the Borrower's
or any such Subsidiary's shareholders except such as have been obtained. Except
as set forth on Schedule 6.3 to this Agreement, the execution, delivery and
performance of each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by any
Governmental Authority, including under any Environmental Property Transfer Act
on or prior to the Effective Date, except (i) filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect and (ii) filings necessary to create or perfect security
interests in the Collateral.
6.4 Financial Statements.
(A) The balance sheets, income statements and statements of cash flow
of the Borrower and its Subsidiaries, copies of which are attached hereto as
Schedule 6.4 to this Agreement, present the financial condition of the Borrower
and such Subsidiaries as of such date, reflect those liabilities reflected in
the notes thereto and resulting from the transactions contemplated by this
Agreement and demonstrate that the Borrower and its Subsidiaries can repay their
debts and satisfy their other obligations as and when due, and can comply with
the requirements of this Agreement. The projections and assumptions expressed in
the financials referenced in this Section 6.4(A) were prepared in good faith and
represent management's opinion based on the information available to the
Borrower at the time so furnished and, since the preparation thereof and up to
the Effective Date, there has occurred no material adverse change in the
business, financial condition, operations, or, prospects of the Borrower, its
Subsidiaries, or the Borrower and its Subsidiaries taken as a whole.
(B) Complete and correct copies of the balance sheet of the Borrower as
at September 30, 1999, and the related statements of income, changes in
stockholders' equity investment and cash flows of the Borrower for the fiscal
period then ended, and the audit report related thereto have been delivered to
the Agent.
6.5 No Material Adverse Change.
Since the Effective Date, there has occurred no event which has had or
could reasonably be expected to result in a Material Adverse Effect.
6.6 Taxes.
(A) Tax Examinations. All material deficiencies which have been asserted
against the Borrower or any of the Borrower's Subsidiaries as a result of any
federal, state, local or foreign tax examination for each taxable year in
respect of which an examination has been conducted have been fully paid or
finally settled or are being contested in good faith, and as of the Effective
Date no issue has been raised by any taxing authority in any such examination
which, by application of similar principles, reasonably can be expected to
result in assertion by such taxing authority of a material deficiency for any
other year not so examined which has not been reserved for in the Borrower's
consolidated financial statements to the extent, if any, required by Agreement
Accounting Principles. Neither the Borrower nor any of the Borrower's
Subsidiaries anticipates any material tax liability with respect to the years
which have not been closed pursuant to applicable law.
(B) Payment of Taxes. All tax returns and reports of the Borrower and its
Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. The Borrower has no knowledge of any proposed
tax assessment against the Borrower or any of its Subsidiaries that will have or
could reasonably be expected to have a Material Adverse Effect.
6.7 Litigation; Loss Contingencies and Violations. Except as set forth in
Schedule 6.7 to this Agreement which lists all pending litigation involving
individual claims against the Borrower or any of its Subsidiaries of more than
$1,000,000, there is no action, suit, proceeding, arbitration or (to the
Borrower's knowledge) investigation before or by any Governmental Authority or
private arbitrator pending or, to the Borrower's knowledge, threatened against
the Borrower or any of its Subsidiaries or any property of any of them (i)
challenging the validity or the enforceability of any material provision of the
Loan Documents or (ii) which will have or could reasonably be expected to have a
Material Adverse Effect. There is no material loss contingency within the
meaning of Agreement Accounting Principles which has not been reflected in the
consolidated financial statements of the Borrower prepared and delivered
pursuant to Section 7.1(D) for the fiscal period during which such material loss
contingency was incurred. Neither the Borrower nor any of its Subsidiaries is
(A) in violation of any applicable Requirements of Law which violation will have
or could reasonably be expected to have a Material Adverse Effect, or (B)subject
to or in default with respect to any final judgment, writ, injunction,
restraining order or order of any nature, decree, rule or regulation of any
court or Governmental Authority which will have or could reasonably be expected
to have a Material Adverse Effect.
6.8 Subsidiaries. Schedule 6.8 to this Agreement (i) contains a description of
the corporate structure of the Borrower, its Subsidiaries and any other Person
in which the Borrower or any of its Subsidiaries holds an Equity Interest; and
(ii) accurately sets forth (A) the correct legal name, the jurisdiction of
incorporation and the jurisdictions in which each of the Borrower and the direct
and indirect Subsidiaries of the Borrower is qualified to transact business as a
foreign corporation, and (B) a summary of the direct and indirect partnership,
joint venture, or other Equity Interests, if any, of the Borrower and each
Subsidiary of the Borrower in any Person that is not a corporation. Except as
described on Schedule 6.8, none of the issued and outstanding Capital Stock of
the Borrower or any of its Subsidiaries is subject to any vesting, redemption,
or repurchase agreement, and there are no warrants or options outstanding with
respect to such Capital Stock.
6.9 ERISA. No Benefit Plan has incurred any material accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither the Borrower nor any member of the Controlled
Group has incurred any material liability to the PBGC which remains outstanding
other than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report filed
with the IRS with respect to each Benefit Plan and furnished to the lenders is
complete and accurate in all material respects. Since the date of each such
Schedule B, there has been no material adverse change in the funding status or
financial condition of the Benefit Plan relating to such Schedule B. Neither the
Borrower nor any member of the Controlled Group has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made a complete
or partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan. Neither the Borrower nor any member of the Controlled Group has failed to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or other payment.
Neither the Borrower nor any member of the Controlled Group is required to
provide security to a Benefit Plan under Section 401(a)(29) of the Code due to a
Plan amendment that results in an increase in current liability for the plan
year. Except as set forth on Schedule 6.9, neither the Borrower nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan
within the meaning of Section 3(1) of ERISA which provides benefits to employees
after termination of employment other than as required by Section 601 of ERISA.
Each Plan which is intended to be qualified under Section 401(a) of the Code as
currently in effect is so qualified, and each trust related to any such Plan is
exempt from federal income tax under Section 501(a) of the Code as currently in
effect. The Borrower and all Subsidiaries are in compliance in all material
respects with the responsibilities, obligations and duties imposed on them by
ERISA and the Code with respect to all Plans. Neither the Borrower nor any of
its Subsidiaries nor any fiduciary of any Plan has engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of the Code
which could reasonably be expected to result in Material Adverse Effect. Neither
the Borrower nor any member of the Controlled Group has taken or failed to take
any action which would constitute or result in a Termination Event. Neither the
Borrower nor any Subsidiary is subject to any material liability under Sections
4063, 4064, 4069, 4204 or 4212(c) of ERISA and no other member of the Controlled
Group is subject to any material liability under Sections 4063, 4064, 4069, 4204
or 4212(c) of ERISA. Neither the Borrower nor any of its Subsidiaries has,
solely by reason of the transactions contemplated hereby, any obligation to make
any payment to any employee pursuant to any Plan or existing contract or
arrangement.
6.10 Accuracy of Information. The information, exhibits and reports furnished by
or on behalf of the Borrower and any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents, the representations and warranties of the Borrower and its
Subsidiaries contained in the Loan Documents, and all certificates and documents
delivered to the Agent and the Lenders pursuant to the terms thereof, taken as a
whole, do not contain as of the date furnished any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
6.11 Material Agreements. Neither the Borrower nor any of its Subsidiaries has
received notice or has knowledge that (i) it is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any Contractual Obligation applicable to it, or (ii) any condition
exists which, with the giving of notice or the lapse of time or both, would
constitute a default with respect to any such Contractual Obligation, in each
case, except where such default or defaults, if any, individually or in the
aggregate will not have or could not reasonably be expected to have a Material
Adverse Effect.
6.12 Compliance with Laws; Securities Activities. (a) The Borrower and its
Subsidiaries are in compliance with all Requirements of Law applicable to them
and their respective businesses, in each case where the failure to so comply
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect.
(b) Without limiting the foregoing clause (a), the Borrower and its Subsidiaries
are in compliance with Regulations T, U and X. Neither the Borrower nor any of
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
"margin stock" (as defined in Regulation U).
6.13 Assets and Properties. The Borrower and each of its Subsidiaries has good
and marketable title to all of its material assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its material leased assets (except insofar as marketability may be limited by
any laws or regulations of any Governmental Authority affecting such assets),
and all such assets and property are free and clear of all Liens, except Liens
permitted under Section 7.2(B). Substantially all of the material assets and
properties owned by, leased to or used by the Borrower and/or each such
Subsidiary of the Borrower are in adequate operating condition and repair,
ordinary wear and tear excepted. Except for Liens granted to the Agent for the
benefit of the Agent and the Holders of Secured Obligations, neither this
Agreement nor any other Loan Document, nor any transaction contemplated under
any such agreement, will affect any right, title or interest of the Borrower or
such Subsidiary in and to any of such assets in a manner that would have or
could reasonably be expected to have a Material Adverse Effect.
6.14 Statutory Indebtedness Restrictions. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby.
6.15 Labor Matters. As of the Effective Date, no attempt to organize the
employees of the Borrower and no labor disputes, strikes or walkouts affecting
the operations of the Borrower or any of its Subsidiaries, is pending, or, to
the Borrower's knowledge, threatened, planned or contemplated, which could
reasonably be expected to have a Material Adverse Effect.
6.16 Environmental Matters. (a) Except as disclosed on Schedule 6.16 to
this Agreement:
(i) the operations of the Borrower and its Subsidiaries comply in all
material respects with Environmental, Health or Safety Requirements
of Law;
(ii) the Borrower and its Subsidiaries have all material permits,
licenses or other authorizations required under Environmental, Health
or Safety Requirements of Law and are in material compliance with such
permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of their
respective present property or operations, or, to the best of the
Borrower's or any of its Subsidiaries' knowledge, any of their
respective past property or operations, are subject to or the subject
of, any investigation known to the Borrower or any of its Subsidiaries,
any judicial or administrative proceeding, order, judgment, decree,
settlement or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any material
remedial action; or (C) any material claims or liabilities arising from
the Release or threatened Release of a Contaminant into the
environment;
(iv) there is not now, nor to the best of the Borrower's or any of its
Subsidiaries' knowledge has there ever been on or in the property of
the Borrower or any of its Subsidiaries any landfill, waste pile,
underground storage tanks, aboveground storage tanks, surface
impoundment or hazardous waste storage facility of any kind, any
polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or any asbestos containing material,
except such as have been operated or maintained in material compliance
with Environmental, Health or Safety Requirements of Law; and
(v) neither the Borrower nor any of its Subsidiaries has any
material Contingent Obligation in connection with any Release or
threatened Release of a Contaminant into the environment.
(b) For purposes of this Section 6.16 "material" means any noncompliance or
basis for liability which could reasonably be likely to subject the Borrower or
any of its Subsidiaries to liability in excess of $1,000,000.
ARTICLE VII: COVENANTS
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7.1 Affirmative Covenants. The Borrower covenants and agrees that so long as any
Commitments are outstanding and thereafter until payment in full of all of the
Obligations (other than contingent indemnity obligations), unless the Required
Lenders shall otherwise give prior written consent:
(A) Preservation of Corporate Existence, Etc. The Borrower shall do or cause to
be done, and shall cause each Subsidiary Guarantor to do or cause to be done,
all things necessary to preserve, renew and keep in full force and effect its
legal existence except to the extent permitted by Section 7.2(C) or 7.2(D), and
its qualification as a foreign corporation in good standing in each jurisdiction
in which the failure to be so qualified could reasonably be expected to have a
Material Adverse Effect and the rights, licenses, permits (including those
required under Environmental, Health or Safety Requirements of Law), franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
businesses; and defend all of the foregoing against all claims, actions,
demands, suits or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory authority; provided,
however, that, notwithstanding the foregoing, the Borrower may effect the
dissolution of CTS Wireless and CTS Manufacturing Ltd., a company organized
under the laws of Thailand.
(B) Compliance with Laws, Etc. The Borrower and its Subsidiaries shall comply in
all material respects with all applicable laws, rules, regulations and orders of
any governmental authority whether federal, state, local or foreign (including
without limitation ERISA, the Code and Environmental, Health or Safety
Requirements of Law), in effect from time to time; and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income, revenues or property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise which, if unpaid could reasonably be
expected to give rise to Liens upon such properties or any portion thereof,
except to the extent that payment of any of the foregoing is then being
contested in good faith by appropriate legal proceedings and with respect to
which adequate financial reserves have been established on the books and records
of the Borrower or Subsidiary in accordance with Agreement Accounting
Principles.
(C) Maintenance of Properties; Insurance. The Borrower shall maintain, preserve
and protect all property that is material to the conduct of the business of the
Borrower or any of its Subsidiaries and keep such property in good repair,
working order and condition and from time to time make, or cause to be made all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and maintain in full force and effect
insurance with responsible and reputable insurance companies or associations in
such amounts, on such terms and covering such risks, including fire and other
risks insured against by extended coverage, as is usually carried by companies
engaged in similar businesses and owning similar properties similarly situated
and maintain in full force and effect public liability insurance, insurance
against claims for personal injury or death or property damage occurring in
connection with any of its activities or any properties owned, occupied or
controlled by it, in such amounts as it shall reasonably deem necessary, and
maintain such other insurance as may be required by law or as may be reasonably
requested by the Agent for purposes of assuring compliance with this Section
7.1(C). The Borrower shall deliver to the Agent endorsements (y) to all "All
Risk" physical damage insurance policies on all of the Borrower's and its
Subsidiaries' tangible personal property and assets and business interruption
insurance policies naming the Agent as loss payee, and (z) to all general
liability and other liability policies naming the Agent as an additional
insured. In the event the Borrower or any of its Subsidiaries, at any time or
times hereafter shall fail to obtain or maintain any of the policies of
insurance required herein or to pay any premium in whole or in part relating
thereto, then the Agent, without waiving or releasing any obligations or
resulting Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the Agent
deems advisable. All sums so disbursed by the Agent shall constitute part of the
Obligations, payable as provided in this Agreement.
(D) Reporting Requirements. The Borrower shall furnish to the Lenders and
the Agent the following:
(i) Promptly and in any event within three (3) calendar days
after becoming aware of the occurrence of (A) any Unmatured Default or Default,
(B) the commencement of any material litigation against, by or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, and any material developments therein, or (C) entering
into any material contract or undertaking that is not entered into in the
ordinary course of business or (D) any development in the business or affairs of
the Borrower or any of its Subsidiaries which has resulted in or which is likely
in the reasonable judgment of the Borrower, to result in a material adverse
change in the business, properties, operations or financial condition of the
Borrower or any of its Subsidiaries or affects the value of, or the Agent's
interest in, the Collateral, taken as a whole, in any material respect, a
statement of the chief financial officer of the Borrower setting forth details
of each such Unmatured Default or Default and such litigation, material contract
or undertaking or development and the action which the Borrower or such
Subsidiary, as the case may be, has taken and proposes to take with respect
thereto;
(ii) As soon as available and in any event within 50 days
after the end of each fiscal quarter of the Borrower, the consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such quarter, and
the related consolidated statements of income and cash flow 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 date or period of the preceding fiscal year, all
in reasonable detail and duly certified (subject to year-end audit adjustments)
by the chief financial officer of the Borrower as having been prepared in
accordance with generally accepted accounting principles, together with a
certificate of the chief financial officer of the Borrower stating (A),
substantially in the form of Exhibit H hereto, that no Unmatured Default or
Default has occurred and is continuing or, if an Unmatured Default or Default
has occurred and is continuing, a statement setting forth the details thereof
and the action which the Borrower has taken and proposes to take with respect
thereto and (B), substantially in the form of Exhibit I hereto, that a
computation (which computation shall accompany such certificate and shall be in
reasonable detail) showing compliance with Section 7.3(A), (B) and (C) is in
conformity with the terms of this Agreement;
(iii) As soon as available and in any event within 15 Business
Days after the end of each monthly accounting period of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such period, and the related consolidated statements of income and cash flow for
the period commencing at the end of the previous fiscal year and ending with the
end of such period setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year, all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer of the Borrower as having been
prepared in accordance with Agreement Accounting Principles, together with a
certificate of the chief financial officer of the Borrower stating,
substantially in the form of Exhibit H hereto, that no Unmatured Default or
Default has occurred and is continuing or, if an Unmatured Default or Default
has occurred and is continuing, a statement setting forth the details thereof
and the action which the Borrower has taken and proposes to take with respect
thereto;
(iv) As soon as available and in any event within 95 days
after the end of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flow of the
Borrower and its Subsidiaries for such fiscal year, with a customary audit
report of independent public accountants selected by the Borrower and acceptable
to the Required Lenders, without qualifications unacceptable to the Required
Lenders;
(v) Promptly after the sending or filing thereof, copies of
all reports, proxy statements and financial statements, including without
limitation Forms 8-K, 10-K and 10-Q, which the Borrower or any of its
Subsidiaries sends to or files with any of their respective security holders or
any securities exchange or the Commission or any successor agency thereof;
(vi) Promptly and in any event within 10 calendar days after
receiving or becoming aware thereof, (A) a copy of any notice of intent to
terminate any Plan filed with the PBGC, (B) a statement of the chief financial
officer of the Borrower setting forth the details of the occurrence of any
Reportable Event with respect to any Plan, (C) a copy of any notice that the
Borrower, any of it Subsidiaries or any ERISA Affiliate may receive from the
PBGC relating to the intention of the PBGC to terminate any Plan or to appoint a
trustee to administer any Plan, or (D) a copy of any notice of failure to make a
required installment or other payment within the meaning of Section 412(n) of
the Code or Section 302(f) of ERISA with respect to any such Plan;
(vii) Promptly and in any event by no later than February 28,
2002, such valuations, appraisals and certificates as the Agent may require in
order to satisfy itself as to the value of the Collateral, the financial
condition and insurance coverage of the Borrower and its Subsidiaries and the
lack of material Contingent Obligations of the Borrower and its Subsidiaries;
and
(viii) Promptly, such other information respecting the
business, properties operations or financial condition of the Borrower or any of
its Subsidiaries, or the Collateral, including, without limitation, schedules
identifying and describing the Collateral and any dispositions thereof or any
Asset Sale (and the use of the Net Cash Proceeds thereof), as any Lender or the
Agent may from time to time reasonably request.
(E) Accounting; Access to Records, Books, Etc. The Borrower shall maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in accordance
with generally accepted accounting principles and to comply with the
requirements of this Agreement and at any reasonable time and from time to time,
(i) permit any Lender or the Agent 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 its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and its Subsidiaries
with their respective directors, officers, employees and independent auditors,
and by this provision the Borrower does hereby authorize such Persons to discuss
such affairs, finances and account with any Lender or the Agent, and (ii) permit
the Agent or any of it agents or representatives to conduct a comprehensive
field audit of its books, records, properties and assets, including, without
limitation, the Collateral.
(F) Additional Subsidiary Documentation. As soon as practicable and in any event
within thirty (30) days after any Person becomes a Subsidiary of the Borrower,
the Borrower shall provide the Agent with written notice thereof setting forth
information in reasonable detail describing the material assets of such Person
and, in the case of a Domestic Subsidiary which qualifies as a Subsidiary
Guarantor, shall cause such Person to become a party to the Subsidiary Guaranty
by executing a supplement thereto and the Collateral Documents as set forth in
Section 7.1(G) below.
Pledge Agreements; Security Agreements and Mortgages. The Borrower
shall execute or cause to be executed:
(i) on or prior to the Effective Date, the Security Agreement, and one or more
Pledge Agreements in favor of the Agent for the benefit of the Holders of
Secured Obligations with respect to all of the Capital Stock owned by the
Borrower and its Domestic Subsidiaries of each of the Domestic Subsidiaries in
existence on the date hereof;
(ii) (x) within five (5) Business Days after any Subsidiary becoming a Domestic
Subsidiary, a Pledge Agreement (or supplement thereto) in favor of the Agent for
the benefit of the Holders of Secured Obligations with respect to all of the
Capital Stock of such Subsidiary owned by the Borrower and its Domestic
Subsidiaries in the form of Exhibit L hereto (in the case of a pledge by the
Borrower) or Exhibit M hereto (in the case of a pledge by a Domestic Subsidiary)
and (y) within thirty (30) days after any Subsidiary becoming a First Tier
Foreign Subsidiary, a pledge agreement (or supplement thereto) or share mortgage
in favor of the Agent for the benefit of the Holders of Secured Obligations with
respect to the lesser of (i) 100% (or, in respect of any First Tier Foreign
Subsidiary, 65% so long as a 100% pledge would cause such First Tier Foreign
Subsidiary's accumulated and undistributed earnings and profits to be deemed to
be repatriated to the Borrower or a Domestic Subsidiary for U.S. federal income
tax purposes) of all the outstanding Capital Stock of each First Tier Foreign
Subsidiary and (ii) all of the outstanding Capital Stock of each First Tier
Foreign Subsidiary currently or hereafter owned by the Borrower and its Domestic
Subsidiaries; and provided that no such pledge of the Capital Stock of a First
Tier Foreign Subsidiary shall be required hereunder to the extent such pledge is
prohibited by applicable law or the Agent and its counsel reasonably determine
that such pledge would not provide material Collateral for the benefit of the
Holders of Secured Obligations pursuant to legally binding, valid and
enforceable Pledge Agreements;
(iii) within five (5) Business Days after any Subsidiary becoming a Subsidiary
Guarantor, a supplement to the Security Agreement (in the form attached
thereto), intellectual property security agreements (or counterparts thereto) in
form and substance satisfactory to the Agent and the other documents required
thereby; and
(iv) within thirty (30) days after the Borrower or any Domestic Subsidiary
acquires any fee interest in real property, a Mortgage executed by such
acquiring Person;
and the Borrower shall deliver to the Agent all such Pledge Agreements,
Subsidiary Guarantees and other Collateral Documents, together with appropriate
corporate resolutions and other documentation (including opinions, UCC financing
statements, real estate title insurance policies, environmental reports, the
stock certificates representing the Capital Stock subject to such pledge, stock
powers with respect thereto executed in blank, and such other documents as shall
be reasonably requested to perfect the Lien of such pledge) in each case in form
and substance reasonably satisfactory to the Agent, and the Agent shall be
reasonably satisfied that it has a first priority perfected pledge of or charge
over the Collateral related thereto; provided that, with respect to the pledge
of Capital Stock in First Tier Foreign Subsidiaries in existence on the date
hereof, Mortgages on real property owned by the Borrower or any of its Domestic
Subsidiaries in existence on the date hereof and intellectual property owned by
the Borrower or any of its Domestic Subsidiaries on the date hereof, no such
relevant Pledge Agreements, Mortgages and intellectual property security
agreements are required to be delivered hereunder until February 28, 2002 (it
being understood and agreed that the failure to deliver such Pledge Agreements,
Mortgages and intellectual property security agreements by February 28, 2002
shall constitute a Default hereunder).
7.2 Negative Covenants. Until the Term Loan Termination Date and
thereafter until payment in full of the Obligations and the performance of all
other obligations of the Borrower under this Agreement, the Borrower agrees
that, unless the Required Lenders shall otherwise consent in writing, it shall
not, and shall not permit any of its Subsidiaries to:
(A) Indebtedness. Create, incur, assume or in any manner become liable in
respect of, or suffer to exist, any Indebtedness other than:
(i) The Obligations;
(ii) The Indebtedness described in Schedule 7.2(A) hereto (including
amounts available to be drawn under the facilities described on such
Schedule), having the same terms as those existing on the date of this
Agreement, but no increase in the amount thereof shall be permitted;
(iii) Indebtedness of any Domestic Subsidiary of the Borrower owing to
the Borrower (provided any such Domestic Subsidiary enters into a
Subsidiary Guaranty with such Domestic Subsidiary's liability
thereunder being limited to an amount equal to its Indebtedness to the
Borrower) or to any other Subsidiary of the Borrower and Indebtedness
of the Borrower owing to any Subsidiary of the Borrower; provided that
if the Borrower is the obligor on such Indebtedness, such Indebtedness
shall be expressly subordinate in full to the Secured Obligations;
(iv) Indebtedness of the Borrower or any Subsidiary other than (i)
through (iii) above, in an amount not exceeding $7,500,000 in aggregate
principal amount outstanding in addition to the amount of such
Indebtedness outstanding as of the Effective Date; and
(v) Indebtedness of any Foreign Subsidiary to any other Foreign Subsidiary;
(vi) Hedging Obligations to the extent permitted by Section 7.2(K).
(B) Liens. Create, incur or suffer to exist any Lien on any of the assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether now owned or hereafter acquired, of the Borrower or any of its
Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being contested in good faith
by appropriate proceedings and as to which adequate financial reserves have
been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA) created and maintained in the
ordinary course of business which are not material in the aggregate, and
which would not reasonably be expected to result in a Material Adverse
Effect and which constitute (A) pledges or deposits under worker's
compensation laws, unemployment insurance laws or similar legislation, (B)
good faith deposits in connection with bids, tenders, contracts or leases
to which the Borrower or any of its Subsidiaries is a party for a purpose
other than borrowing money or obtaining credit, including rent security
deposits, (C) Liens imposed by law, such as those of carriers, warehousemen
and mechanics, if payment of the obligation secured thereby is not yet due,
(D) Liens securing taxes, assessments or other governmental charges or
levies not yet subject to penalties for nonpayment and (E) pledges or
deposits to secure public or statutory obligations of the Borrower or any
of its Subsidiaries, or surety, customs or appeal bonds to which the
Borrower or any of its Subsidiaries is a party;
(iii) Liens affecting real property which constitute minor survey
exceptions or defects or irregularities in title, minor encumbrances,
easements or reservations of rights of others for, rights of way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real
property, provided that all of the foregoing, in the aggregate, do not
at any time materially detract from the value of said properties or
materially impair their use in the operation of the businesses of the
Borrower or any of its Subsidiaries;
(iv) Liens on assets located outside the United States and owned by
foreign Subsidiaries which (A) do not secure aggregate obligations
exceeding $7,500,000 (B) would not result in a Material Adverse Effect
and (C) constitute Liens securing loans to, and owing solely by Foreign
Subsidiaries;
(v) Lien created to secure payment of a portion of the purchase
price of any tangible fixed asset acquired by the Borrower or any of it
Subsidiaries, provided (w) that such Liens may only be created or
suffered to exist upon such fixed asset if the outstanding principal
amount of the Indebtedness secured by such Lien does not exceed the
purchase price paid by the Borrower or such Subsidiary for such fixed
asset, (x) that such Lien does not encumber any other asset at any time
owned by the Borrower or such Subsidiary, (y) that not more than one
such Lien shall encumber such fixed asset at any one time and (z) such
Liens do not secure aggregate Indebtedness exceeding $7,500,000 at any
one time;
(vi) Liens existing on the Effective Date and described on Schedule 7.2(B);
and
(vii) Liens created by the Loan Documents.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and the Holders of
Secured Obligations, as additional collateral for the Obligations.
(C) Merger; Acquisitions: Etc. Purchase or otherwise acquire, whether in one or
a series of transactions, all or a substantial portion of the business assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
of any Person, or all or a substantial portion of the Capital Stock of or other
Equity Interest in any other Person, nor merge or consolidate or amalgamate with
any other Person or take any other action having a similar effect, nor enter
into any joint venture or similar arrangement with any other Person.
(D) Disposition of Assets Etc. Sell, lease, assign, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, assign, transfer
or otherwise dispose of, any of its now owned or hereafter acquired assets
(including without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests) to any Person, except: (i)
the sale of inventory in the ordinary course of business; (ii) the sale or other
disposition of assets or lines of business which are, in the judgment of the
Borrower, nonessential, provided that the fair market value of assets in a
single transaction does not exceed $7,500,000 and the fair market value of
assets in all such transactions does not exceed $7,500,000 for any fiscal year;
(iii) the sale or other disposition of assets by the Borrower or any Subsidiary
to any Subsidiary, provided that, in the case of this clause (iii), (a) solely
if the transferee is a Domestic Subsidiary, the security interests granted
pursuant to the applicable Collateral Documents in the assets so transferred
shall remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such transfer) and (b) any sale or other
disposition of assets by the Borrower or any Domestic Subsidiary to a Foreign
Subsidiary shall not exceed $7,500,000 in the aggregate during the term of this
Agreement, provided, further, that such limitation shall not apply to assets
being transferred from one Foreign Subsidiary to another Foreign Subsidiary in
connection with the Borrower's manufacturing optimization program; (iv) the sale
or other disposition of assets by any consolidated Subsidiary and Subsidiary
Guarantor to another consolidated Subsidiary and Subsidiary Guarantor or by any
consolidated Subsidiary and Subsidiary Guarantor to the Borrower; (v) the sale
or other disposition of any obsolete manufacturing equipment disposed of in the
ordinary course of business or (vi) the Permitted Sales; provided that the
transactions permitted by the foregoing clauses (ii), (v) and (vi) shall only be
permitted if (x) prior to and immediately after any such transaction no Default
or Unmatured Default shall exist or shall have occurred and be continuing and
(y) at least 80% of the proceeds from such transactions constitute cash or Cash
Equivalents.
(E) Nature of Business. Make any material change in the nature of its business
from that engaged in on the date of this Agreement or engage in any other
businesses other than those in which it is engaged on the date of this Agreement
and businesses reasonably related thereto.
(F) Investments, Loans and Advances. Make any loan or advance to any Person or
purchase or otherwise acquire any Capital Stock, assets, obligations or other
securities of, make any capital contribution to, or otherwise invest in, or
acquire any interest in, any Person, except: (i) direct obligations of the
United States of America or any agency thereof with maturities of one year or
less from the date of acquisition; (ii) commercial paper of a domestic issuer
rated at least "A-2" by Standard & Poor's Ratings Group or "P-2" by Xxxxx'x
Investors Service, Inc.; (iii) certificates of deposit with maturities of one
year or less from the date of acquisition issued by any commercial bank
operating within or without the United States of America having capital and
surplus in excess of $100,000,000; (iv) for stock, obligations or securities
received in settlement of debts (created in the ordinary course of business)
owing to the Borrower or any Subsidiary; (v) acquisitions permitted by Section
7.2(C); (vi) preferred stock or corporate bonds of domestic corporations all of
whose senior debt bears a rating of a least "A" by Standard & Poors Ratings
Group or Xxxxx'x Investors Service, Inc.; (vii) stock of any Foreign Subsidiary
which is issued in payment of existing Indebtedness owing to the Borrower
described on Schedule 7.2(a) or (viii) Investments in the aggregate not
exceeding $7,500,000 which are not described in (i) through (vi) above.
(G) Guarantees, Etc. Assume, guarantee, endorse or otherwise be or become
directly or contingently responsible or liable, or permit any of its
Subsidiaries to assume, guarantee, endorse or otherwise be or become directly or
indirectly responsible or liable (including, but not limited to, an agreement to
purchase any obligation, stock, assets, goods or services or to supply or
advance any funds, assets, goods or services, or an agreement to maintain or
cause such Person to maintain a minimum working capital or net worth or
otherwise to assure the creditors of any Person other than a consolidated
Subsidiary against loss) for the obligations of any Person other than the
Borrower or a Subsidiary Guarantor or any other Contingent Obligation with
respect to any Person other than the Borrower or a Subsidiary Guarantor, except
(i) guarantees by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and (ii)
guarantees of Indebtedness permitted pursuant to Section 7.2(A).
(H) Transactions with Affiliates. Enter into, become a party to, or become
liable in respect of, any contract or undertaking with any Affiliate except in
the ordinary course of business and on terms not less favorable to the Borrower
or such Subsidiary than those which could be obtained if such contract or
undertaking were an arm's length transaction with a Person other than an
Affiliate.
(I) Leases. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any obligation as
lessee for the rental or hire of any real or personal property, except: (i)
leases existing on the date of this Agreement and any extensions or renewals
thereof, but no increase in the amount payable thereunder; and (ii) leases
(other than Capitalized Leases or leases constituting Off-Balance Sheet
Liabilities) which do not in the aggregate require the Borrower and its
Subsidiaries on a consolidated basis to make payments (including taxes,
insurance, maintenance and similar expenses which the Borrower or any Subsidiary
is required to pay under the terms of any lease) in any fiscal year of the
Borrower in excess of $10,000,000.
(J) Restricted Payments. Declare or make any Restricted Payment; provided,
however, that the Borrower may pay quarterly dividends at a rate not in excess
of the declared value per share announced by the Borrower on December 7, 2001.
(K) Hedging Obligations. Enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower pursuant to
which the Borrower has hedged its actual or forecasted interest rate, foreign
currency or commodity exposure. Such permitted hedging agreements entered into
by the Borrower and any Lender or any affiliate of any Lender to hedge floating
interest rate risk in an aggregate notional amount not to exceed at any time an
amount equal to the outstanding balance of the Term Loans at such time are
sometimes referred to herein as "Interest Rate Agreements" and the obligations
of the Borrower with respect to such Interest Rate Agreements shall be Secured
Obligations secured by the Collateral.
(L) Margin Regulations. The Borrower will not, nor will it permit any Subsidiary
to, use any of the proceeds of any credit extended hereunder to purchase or
carry any "margin stock" (as defined in Regulation U).
7.3 Financial Covenants. The Borrower shall comply with the following:
(A) Fixed Charge Coverage Ratio. The Borrower and its Subsidiaries shall
maintain on a consolidated basis a ratio ("Fixed Charge Coverage Ratio") of (i)
EBITDA during such period to (ii) the sum of the amounts of (a) Interest Expense
during such period to the extent payable in cash plus (b) the scheduled
amortization of the principal portion of the Term Loans and any other
Indebtedness of the Borrower and its Subsidiaries during such period plus (c)
any Contingent Purchase Price Obligation plus (d) tax expense to the extent paid
during such period plus (e) Restricted Payments paid during such period minus
(f) payments received by the Borrower or any Subsidiary representing
cancellation of purchase orders from Motorola, of at least the ratio set forth
below at the end of the fiscal quarter ending on the corresponding date set
forth below:
Quarter Ending Fixed Charge Coverage
-------------- ---------------------
Ratio
-----
December 31, 2001 1.00 to 1.00
March 31, 2002 1.00 to 1.00
June 30, 2002 1.25 to 1.00
September 30, 2002 1.25 to 1.00
December 31, 2002 1.25 to 1.00
March 31, 2003 1.50 to 1.00
June 30, 2003 1.75 to 1.00
September 30, 2003 and each 2.00 to 1.00
quarter thereafter
In each case, the Fixed Charge Coverage Ratio shall be determined as of the last
day of each fiscal quarter for the four-quarter period ending on such day.
(B) Leverage Ratios. (i) The Borrower and its Subsidiaries on a consolidated
basis shall not permit the ratio (the "Total Leverage Ratio") of (i) Total Debt
to (ii) EBITDA to be greater than the ratio set forth below at the end of the
fiscal quarter ending on the corresponding date set forth below:
Quarter Ending Total Leverage
-------------- --------------
Ratio
-----
December 31, 2001 6.50 to 1.00
March 31, 2002 6.50 to 1.00
June 30, 2002 5.50 to 1.00
September 30, 2002 5.00 to 1.00
December 31, 2002 4.00 to 1.00
March 31, 2003 3.25 to 1.00
June 30, 2003 2.75 to 1.00
September 30, 2003 and each 2.50 to 1.00
quarter thereafter
(ii) The Borrower and its Subsidiaries on a consolidated basis shall
not permit the ratio (the "Senior Leverage Ratio") of (i) Senior Debt to (ii)
EBITDA to be greater than the ratio set forth below at the end of the fiscal
quarter or date ending on the corresponding date set forth below:
Quarter or Date Ending Senior Leverage Ratio
---------------------- ---------------------
December 31, 2001 6.50 to 1.00
April 15, 2002 4.00 to 1.00
June 30, 2002 3.75 to 1.00
September 30, 2002 3.25 to 1.00
December 31, 2002 2.50 to 1.00
March 31, 2003 2.00 to 1.00
June 30, 2003 and each quarter 1.50 to 1.00
thereafter
In each case, the Leverage Ratio shall be determined as of the
last day of each fiscal quarter based upon (i) Total Debt as of the last day of
such fiscal quarter and (ii) EBITDA for the four fiscal quarter period ending on
such day.
(C) Consolidated Net Worth. The Borrower shall not permit the Consolidated Net
Worth of the Borrower and its Subsidiaries to be less than an amount equal to
the sum of (i) 85% of the Consolidated Net Worth of the Borrower and its
Subsidiaries on a consolidated basis as at December 31, 1998 plus (ii) 50% of
Consolidated Net Income of the Borrower and its Subsidiaries for each complete
fiscal year of the Borrower commencing December 31, 1998, provided that if such
Net Income is negative in any fiscal year the amount added for such fiscal year
shall be zero and such negative Net Income shall not reduce the amount of such
Net Income added for any other fiscal year plus (iii) an amount equal to the
proceeds of any Financing by the Borrower involving the issuance of Equity
Interests. For purposes of determining Consolidated Net Worth of the Borrower
and its Subsidiaries as required by this Section 7.4(C) only, Consolidated Net
Worth of the Borrower and its Subsidiaries shall be adjusted as follows: (i)
amounts paid by the Borrower after the Original Credit Agreement Effective Date
to repurchase common stock not exceeding (x) $25,000,000 in aggregate amount for
the period from such Original Credit Agreement Effective Date through the end of
the fiscal year ending December 31, 2000 and (y) $50,000,000 in aggregate amount
at any time thereafter shall not be deducted in the determination of such
Consolidated Net Worth; (ii) the effect of any adjustments in the cumulative
foreign currency translation account of the Borrower and its Subsidiaries shall
be excluded in calculating the Borrower's Consolidated Net Worth; and (iii) the
effect of any charge-offs for in-process research and development costs of the
Borrower and its Subsidiaries attributable to the Motorola CPD Acquisition shall
be excluded in calculating the Borrower's Consolidated Net Worth.
(D) Capital Expenditures. The Borrower will not, nor will it permit any
Subsidiary to, expend for Capital Expenditures during any period set forth
below, in the aggregate for the Borrower and its Subsidiaries, in excess of:
(i) $35,000,000 for the period from January 1, 2002 through December 31,
2002; and
(ii) $40,000,000 for the period from January 1, 2003 through December
31, 2003 and for each period of January 1 through December 31 of each
fiscal year thereafter;
provided that to the extent that the Capital Expenditures made in any
period set forth above are less than the amount set forth for such
period, then after the available amount for the next succeeding fiscal
year has been fully used, the Borrower and the Subsidiaries may make
additional Capital Expenditures during such next succeeding fiscal year
in an aggregate amount that at the time each such Capital Expenditure
is made is not in excess of the unused amount from the immediately
prior period set forth above.
7.4 Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities. The
Borrower will not, nor will it permit any Subsidiary to, enter into or suffer to
exist any (i) Sale and Leaseback Transaction or (ii) any other transaction
pursuant to which it incurs or has incurred Off-Balance Sheet Liabilities,
except for Interest Rate Agreements permitted to be incurred under the terms of
Section 7.2(K) hereof.
7.5 Issuance of Securities. The Borrower will not, nor will it permit any
Subsidiary to, consummate any Financing (other than the issuance or sale of
Equity Interests which do not contain any redemption or put rights) unless the
terms and conditions applicable to such Financing have been approved by the
Required Lenders and the Administrative Agent.
ARTICLE VIII: DEFAULTS
------------- --------
8.1 Defaults. Each of the following occurrences shall constitute a Default
under this Agreement:
(a) Failure to Make Payments When Due. The Borrower shall (i) fail to pay when
due any of the Obligations consisting of principal with respect to the Loans or
(ii) shall fail to pay within two (2) Business Days of the date when due any of
the other Obligations under this Agreement or the other Loan Documents.
(b) Breach of Certain Covenants. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
(i) Section 7.1 and such failure shall continue unremedied for five (5)
Business Days; or
(ii) Section 7.2, 7.3, 7.4 or 7.5.
(c) Breach of Representation or Warranty. Any representation or warranty
made or deemed made by the Borrower to the Agent, the Arranger or any Lender
herein or by the Borrower or any of its Subsidiaries in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made (or deemed made).
(d) Other Defaults. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
paragraphs (a), (b) or (c) of this Section 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the earlier of (i) notice from the Agent or (ii) the
date on which any Authorized Officer shall first have actual knowledge thereof.
(e) Default as to Other Indebtedness. The Borrower or any of its Subsidiaries
shall fail to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) with respect to any Indebtedness
(other than the Obligations) the outstanding principal amount of which
Indebtedness is in excess of $5,000,000; or any breach, default or event of
default shall occur, or any other condition shall exist under any instrument,
agreement or indenture pertaining to any such Indebtedness, if the effect
thereof is to cause an acceleration, mandatory redemption, a requirement that
the Borrower offer to purchase such Indebtedness or other required repurchase of
such Indebtedness, or permit the holder(s) of such Indebtedness to accelerate
the maturity of any such Indebtedness or require a redemption or other
repurchase of such Indebtedness; or any such Indebtedness shall be otherwise
declared to be due and payable (by acceleration or otherwise) or required to be
prepaid, redeemed or otherwise repurchased by the Borrower or any of its
Subsidiaries (other than by a regularly scheduled required prepayment) prior to
the stated maturity thereof.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the Borrower or
any of the Borrower's Subsidiaries and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the
Borrower or any of the Borrower's Subsidiaries in an involuntary case,
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; or any other similar relief shall be granted under
any applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over the Borrower or any of the
Borrower's Subsidiaries or over all or a substantial part of the property
of the Borrower or any of the Borrower's Subsidiaries shall be entered; or
an interim receiver, trustee or other custodian of the Borrower or any of
the Borrower's Subsidiaries or of all or a substantial part of the property
of the Borrower or any of the Borrower's Subsidiaries shall be appointed or
a warrant of attachment, execution or similar process against any
substantial part of the property of the Borrower or any of the Borrower's
Subsidiaries shall be issued and any such event shall not be stayed,
dismissed, bonded or discharged within sixty (60) days after entry,
appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower or any of
the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, (iii) consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property, (iv)
make any assignment for the benefit of creditors or (v) take any corporate
action to authorize any of the foregoing.
(h) Judgments and Attachments. Any money judgment(s) (other than a money
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $1,000,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
(i) Dissolution. Any order, judgment or decree shall be entered against the
Borrower decreeing its involuntary dissolution or split up and such order shall
remain undischarged and unstayed for a period in excess of sixty (60) days; or
the Borrower or any Subsidiary Guarantor shall otherwise dissolve or cease to
exist except as specifically permitted by this Agreement.
(j) Loan Documents; Failure of Security. At any time, for any reason, (i) any
Loan Document as a whole that materially affects the ability of the Agent, or
any of the Lenders, to enforce the Obligations against the Borrower or any
Subsidiary Guarantor or enforce their rights against the Collateral ceases to be
in full force and effect or (ii) the Borrower or any of the Borrower's
Subsidiaries party thereto seeks to repudiate its obligations thereunder.
(k) Termination Event. Any Termination Event occurs which the Required
Lenders believe is reasonably likely to subject the Borrower and the Subsidiary
Guarantors to liability in excess of $1,000,000.
(l) Waiver of Minimum Funding Standard. If the plan administrator of any Plan
applies under Section 412(d) of the Code for a waiver of the minimum funding
standards of Section 412(a) of the Code and any Lender believes the substantial
business hardship upon which the application for the waiver is based could
reasonably be expected to subject either the Borrower or any Controlled Group
member to liability in excess of $1,000,000.
(m) Change of Control. A Change of Control shall occur.
(n) Interest Rate Agreements. Nonpayment by the Borrower of any
obligation under any Interest Rate Agreement or the breach by the Borrower of
any term, provision or condition contained in any such Interest Rate Agreement.
(o) Environmental Matters. The Borrower or any of its Subsidiaries shall
be the subject of any proceeding or investigation pertaining to (i) the Release
by the Borrower or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of the Borrower or any of its Subsidiaries
arising from the Release by any other Person of any Contaminant into the
environment, or (iii) any violation of any Environmental, Health or Safety
Requirements of Law by the Borrower or any of its Subsidiaries, which, in any
case, has subjected or is reasonably likely to subject the Borrower to liability
in excess of $1,000,000 over and above the amount of existing reserves reflected
on the financial statements of the Borrower or CTS Wireless, in each case as of
December 31, 1999.
(p) Collateral Documents. The Borrower shall fail to comply with any of the
terms or provisions of any Collateral Document for five (5) Business Days,
subject to any applicable cure periods contained therein, after notice of such
non-compliance from the Agent.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES
----------- ------------------------------------------------------------------
9.1 Termination of Commitments; Acceleration. If any Default described in
Section 8.1(f) or 8.1(g) occurs with respect to the Borrower, the obligations of
the Lenders to make Loans hereunder and the obligation of the Agent to issue
Letters of Credit hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or action on the
part of the Agent or any Lender. If any other Default occurs, (a) the Lenders
with Revolving Loan Pro Rata Shares greater than fifty percent (50%) may
terminate or suspend the obligations of the Revolving Lenders to make Revolving
Loans hereunder and the obligation of the Issuing Bank to issue Letters of
Credit hereunder, (b) prior to the Term Loan Conversion Date, the Lenders with
Supplemental Syndicated Loan Pro Rata Shares greater than fifty percent (50%)
may terminate or suspend the obligations of the Supplemental Syndicated Lenders
to make Supplemental Syndicated Loans hereunder and/or (c) the Required Lenders
may declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower expressly
waives.
9.2 Amendments. Subject to the provisions of this Article IX, the Required
Lenders (or the Agent with the consent in writing of the Required Lenders) and
the Borrower may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
(i) Postpone or extend the Revolving Loan Termination Date,
Supplemental Syndicated Loan Termination Date, Conversion Date, Term
Loan Termination Date or any other date fixed for any payment of
principal of, or interest on, the Loans, the Reimbursement Obligations
or any fees or other amounts payable to such Lender (except with
respect to (a) any modifications of the provisions relating to
prepayments of Loans and other Obligations or (b) a waiver of the
application of the default rate of interest pursuant to Section 2.11
hereof).
(ii) Reduce the principal amount of any Loans or L/C Obligations, or
reduce the rate or extend the time of payment of interest or fees
thereon (except with respect to a waiver of the application of the
default rate of interest pursuant to Section 2.11 hereof).
(iii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters.
(iv) Increase the amount of any Commitment of any Lender hereunder.
(v) Permit the Borrower to assign its rights under this Agreement.
(vi) Release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty.
(vii) Other than (a) pursuant to a transaction permitted by the terms of
this Agreement or any Loan Document or (b) pursuant to an Asset Sale
the proceeds of which are used to make the prepayments required under
Section 2.5(B)(i) hereof, release all or substantially all of the
Collateral which is subject to the Loan Documents.
(viii) Amend this Section 9.2.
No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent or (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank. The Agent
may waive payment of the fee required under Section 13.3(B) without obtaining
the consent of any of the Lenders.
9.3 Preservation of Rights. No delay or omission of the Lenders or the Agent to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 9.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE X: GENERAL PROVISIONS
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10.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
10.2 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Performance of Obligations. The Borrower agrees that the Agent may,
but shall have no obligation, after the occurrence and during the continuance of
a Default, to (i) pay or discharge taxes, liens, security interests or other
encumbrances levied or placed or threatened against any Collateral (other than
any of the foregoing which is permitted hereunder) and (ii) make any other
payment or perform any act required of the Borrower under any Loan Document or
take any other action which the Agent in its discretion deems necessary or
desirable to enforce the Obligations or to protect or preserve the Collateral,
including, without limitation, any action to (y) effect any repairs or obtain
any insurance called for by the terms of any of the Loan Documents and to pay
all or any part of the premiums therefor and the costs thereof and (z) pay any
rents payable by the Borrower which are more than 30 days past due, or as to
which the landlord has given notice of termination, under any lease. The Agent
shall use its best efforts to give the Borrower notice of any action taken under
this Section 10.3 prior to the taking of such action or promptly thereafter
provided the failure to give such notice shall not affect the Borrower's
obligations in respect thereof. The Borrower agrees to pay the Agent, upon
demand, the principal amount of all funds advanced by the Agent under this
Section 10.3, together with interest thereon at the rate from time to time
applicable to Revolving Loans that are Floating Rate Loans from the date of such
advance until the outstanding principal balance thereof is paid in full. If the
Borrower fails to make payment in respect of any such advance under this Section
10.3 within one (1) Business Day after the date the Borrower receives written
demand therefor from the Agent, the Agent shall promptly notify each Lender and
each Lender agrees that it shall thereupon make available to the Agent, in
Dollars in immediately available funds, the amount equal to such Lender's Pro
Rata Share of such advance. If such funds are not made available to the Agent by
such Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together with
interest thereon at the Federal Funds Effective Rate for each day during the
period commencing on the date of such demand and ending on the date such amount
is received. The failure of any Lender to make available to the Agent its Pro
Rata Share of any such unreimbursed advance under this Section 10.3 shall
neither relieve any other Lender of its obligation hereunder to make available
to the Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Agent. All outstanding principal of, and interest on,
advances made under this Section 10.3 shall constitute Obligations secured by
the Collateral until paid in full by the Borrower.
10.4 Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.7 Expenses; Indemnification.
(A) Expenses. The Borrower shall reimburse the Agent for any reasonable costs,
internal charges and out-of-pocket expenses (including attorneys' and
paralegals' fees and time charges of attorneys and paralegals for the Agent,
which attorneys and paralegals may be employees of the Agent) paid or incurred
by the Agent in connection with the preparation, negotiation, execution,
delivery, syndication, review, amendment, modification, and administration of
the Loan Documents. The Borrower also agrees to reimburse the Agent and the
Lenders for any costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' and paralegals' fees and time charges of attorneys and
paralegals for the Agent and the Lenders, which attorneys and paralegals may be
employees of the Agent or the Lenders) paid or incurred by the Agent or any
Lender in connection with the collection of the Obligations and enforcement of
the Loan Documents. Agent shall provide the Borrower with a detailed statement
of all reimbursements requested under this Section 10.7(A).
(B) Indemnity. The Borrower further agrees to defend, protect, indemnify, and
hold harmless the Agent, the Arranger and each and all of the Lenders and each
of their respective Affiliates, and each of such Agent's, Arranger's, Lender's,
or Affiliate's respective officers, directors, employees, attorneys and agents
(including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article V) (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of:
(i) this Agreement, the other Loan Documents, or any act, event or transaction
related or attendant thereto, the making of or participation in the Loans,
and the issuance of and participation in Letters of Credit hereunder, the
management of such Loans or Letters of Credit, the use or intended use of
the proceeds of the Loans or Letters of Credit hereunder, or any of the
other transactions contemplated by the Loan Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages, personal
injury, death, punitive damages, economic damages, consequential damages,
treble damages, intentional, willful or wanton injury, damage or threat to
the environment, natural resources or public health or welfare, costs and
expenses (including, without limitation, reasonable attorney, expert and
consulting fees and costs of investigation, feasibility or remedial action
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future
relating to violation of any Environmental, Health or Safety Requirements
of Law arising from or in connection with the past, present or future
operations of the Borrower or its Subsidiaries or any of their respective
predecessors in interest, or, the past, present or future environmental,
health or safety condition of any respective property of the Borrower or
its Subsidiaries, the presence of asbestos-containing materials at any
respective property of the Borrower or its Subsidiaries or the Release or
threatened Release of any Contaminant into the environment (collectively,
the "Indemnified Matters");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused by or resulting from the
willful misconduct or gross negligence of such Indemnitee as determined by the
final non-appealed judgment of a court of competent jurisdiction. If the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees. If any action, claim,
investigation or other proceeding is instituted or threatened against any
Indemnitees in respect of which indemnity may be sought hereunder, the Borrower
shall be entitled to assume the defense thereof with counsel selected by the
Borrower (which counsel shall be reasonably satisfactory to such Indemnitees)
and after notice from the Borrower to such Indemnitees of its election so to
assume the defense thereof, the Borrower will not be liable to such Indemnitees
hereunder for any legal or other expenses subsequently incurred by such
Indemnitees in connection with the defense thereof other than reasonable costs
of investigation and such other expenses as have been approved in advance;
provided that (i) if counsel for such Indemnitees determines in good faith that
there is a conflict which requires separate representation for the Borrower and
such Indemnitees, or (ii) the Borrower fails to assume or proceed in a timely
and reasonable manner with the defense of such action or fails to employ counsel
reasonably satisfactory to such Indemnitees in any such action, then in either
such event such Indemnitees shall be entitled to select one primary counsel and,
if necessary, one local counsel, of their own choice to represent such
Indemnitees and the Borrower shall not, or no longer, be entitled to assume the
defense thereof on behalf of such Indemnitees and such Indemnitees shall be
entitled to indemnification for the reasonable expenses (including reasonable
fees and expenses of such counsel) to the extent provided above. Such counsel
shall, to the fullest extent consistent with its professional responsibilities,
cooperate with the Borrower and any counsel designated by the Borrower. Nothing
contained herein shall preclude any Indemnitees, at their own expense, from
retaining additional counsel to represent such Indemnitees in any action with
respect to which indemnity may be sought from the Borrower hereunder. The
Borrower shall not be liable under this Agreement for any settlement made by any
Indemnitees without the Borrower's prior written consent (which consent shall
not be unreasonably withheld), and the Borrower agrees to indemnify and hold
harmless any Indemnitees from and against any loss or liability by reason of the
settlement of any claim or action with the consent of the Borrower. The Borrower
shall not settle any claim or action without the prior written consent of the
Indemnitees, which consent shall not be unreasonably withheld.
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower further agrees
to assert no claim against any of the Indemnitees on any theory of liability for
consequential, special, indirect, exemplary or punitive damages. No settlement
shall be entered into by the Borrower or any of its Subsidiaries with respect to
any claim, litigation, arbitration or other proceeding relating to or arising
out of the transactions evidenced by this Agreement or the other Loan Documents
(whether or not the Agent or any Lender or any Indemnitee is a party thereto)
unless such settlement releases all Indemnitees from any and all liability with
respect thereto.
(D) Survival of Agreements. The obligations and agreements of the Borrower under
this Section 10.7 shall survive the termination of this Agreement.
10.8 Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
10.9 Accounting. Except as provided to the contrary herein, all accounting terms
used herein shall be interpreted and all accounting determinations hereunder
shall be made in accordance with Agreement Accounting Principles. If any changes
in Agreement Accounting Principles are hereafter required or permitted and are
adopted by the Borrower with the agreement of its independent public accountants
and such changes result in a change in the method of calculation of any of the
financial covenants, restrictions or standards herein or in the related
definitions or terms used therein ("Accounting Changes"), the parties hereto
agree to enter into negotiations, in good faith, in order to amend such
provisions in a credit neutral manner so as to reflect equitably such Accounting
Changes with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such changes as if such changes had
not been made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the Agent and the Required Lenders, no Accounting
Change shall be given effect in such calculations and all financial statements
and reports required to be delivered hereunder shall be prepared in accordance
with Agreement Accounting Principles without taking into account such Accounting
Changes. In the event such amendment is entered into with respect to any
Accounting Changes, all references in this Agreement to Agreement Accounting
Principles shall mean generally accepted accounting principles as of the date of
such amendment.
10.10 Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 Nonliability of Lenders. The relationship between the Borrower and the
Lenders and the Agent shall be solely that of borrower and lender. Neither the
Agent nor any Lender shall have any fiduciary responsibilities to the Borrower.
Neither the Agent nor any Lender undertakes any responsibility to the Borrower
to review or inform the Borrower of any matter in connection with any phase of
the Borrower's business or operations.
10.12 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, THE
ARRANGER OR ANY LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS
(WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF THE PARTIES
HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE RESOLVED BY STATE OR
FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK. EACH OF THE PARTIES HERETO
WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
ARTICLE XI: THE AGENT
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11.1 Appointment; Nature of Relationship. Bank One is appointed by the Lenders
as the Agent hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
XI. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any of the Holders of Secured Obligations by reason of this
Agreement and that the Agent is merely acting as the representative of the
Holders of Secured Obligations with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the
contractual representative of the Holders of Secured Obligations, the Agent (i)
is a "representative" of the Holders of Secured Obligations within the meaning
of Section 9-102 of the Uniform Commercial Code and (ii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders, for itself and on behalf of its affiliates as Holders of Secured
Obligations, agrees to assert no claim against the Agent on any agency theory or
any other theory of liability for breach of fiduciary duty, all of which claims
each of the Holders of Secured Obligations waives.
11.2 Powers. The Agent shall have and may exercise such powers under the Loan
Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or under any of the other
Loan Documents except any action specifically provided by the Loan Documents
required to be taken by the Agent.
11.3 General Immunity. Neither the Agent nor any of its directors, officers,
agents or employees shall be liable to the Borrower, the Lenders or any Lender
for any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except to the extent
such action or inaction is found in a final judgment by a court of competent
jurisdiction to have arisen solely from the gross negligence or willful
misconduct of such Person.
11.4 No Responsibility for Loans, Creditworthiness, Collateral, Recitals, Etc.
Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (i)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or Unmatured Default; or (v) the validity,
effectiveness or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith. The Agent shall not be responsible to
any Lender for any recitals, statements, representations or warranties herein or
in any of the other Loan Documents, for the perfection or priority of any of the
Liens on any of the Collateral, or for the execution, effectiveness,
genuineness, validity, legality, enforceability, collectibility, or sufficiency
of this Agreement or any of the other Loan Documents or the transactions
contemplated thereby, or for the financial condition of any Subsidiary
Guarantor, the Borrower or any of its Subsidiaries.
11.5 Action on Instructions of Lenders. The Agent in all cases, as between the
Agent and the Lenders, shall be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and on all holders of Notes and all Holders of Secured Obligations. As
between the Agent and the Lenders, the Agent shall be fully justified in failing
or refusing to take any action hereunder and under any other Loan Document
unless it shall first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
11.6 Employment of Agents and Counsel. The Agent may execute any of its duties
as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
11.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely upon
any Note, notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may be
employees of the Agent.
11.8 The Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective Pro
Rata Shares (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
solely from the gross negligence or willful misconduct of the Agent.
11.9 Rights as a Lender. With respect to its Revolving Loan Commitment, its
Supplemental Syndicated Loan Commitment, its Term Loan Commitment, Loans made by
it and the Notes issued to it, the Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as through it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which such Person is not prohibited
hereby from engaging with any other Person.
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender 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 and the other Loan Documents.
11.11 Successor Agent. The Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint, on behalf of the Borrower and the
Lenders, a successor Agent. If no successor Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
days after the retiring Agent's giving notice of resignation, then the retiring
Agent may appoint, on behalf of the Borrower and the Lenders, a successor Agent.
Notwithstanding anything herein to the contrary, so long as no
Default has occurred and is continuing, each such successor Agent shall be
subject to approval by the Borrower, which approval shall not be unreasonably
withheld. Such successor Agent shall be a commercial bank having capital and
retained earnings of at least $50,000,000. Upon the acceptance of any
appointment as the Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XI shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent hereunder and under the other Loan Documents.
11.12 Collateral Documents. (a) Each Lender authorizes the Agent to enter into
each of the Collateral Documents to which it is a party and to take all action
contemplated by such documents. Each Lender agrees that no Holder of Secured
Obligations (other than the Agent) shall have the right individually to seek to
realize upon the security granted by any Collateral Document, it being
understood and agreed that such rights and remedies may be exercised solely by
the Agent for the benefit of the Holders of Secured Obligations upon the terms
of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by
any Person as collateral security for the Obligations, the Agent is hereby
authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Agent on behalf of the Holders of
Secured Obligations.
(c) The Lenders hereby authorize the Agent, at its option and
in its discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment and satisfaction
of all of the Obligations at any time arising under or in respect of this
Agreement or the Loan Documents or the transactions contemplated hereby or
thereby; (ii) as permitted by, but only in accordance with, the terms of the
applicable Loan Document; or (iii) if approved, authorized or ratified in
writing by the Required Lenders, unless such release is required to be approved
by all of the Lenders hereunder. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 11.12(c).
(d) Upon any sale, transfer or other disposition of assets
constituting Collateral which is expressly permitted pursuant to the terms of
any Loan Document, or consented to in writing by the Required Lenders or all of
the Lenders, as applicable, and upon at least five (5) Business Days' prior
written request by the Borrower, the Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to the Agent for the benefit of the
Holders of Secured Obligations herein or pursuant hereto upon the Collateral
that was sold, transferred or disposed; provided, however, that (i) the Agent
shall not be required to execute any such document on terms which, in the
Agent's commercially reasonable opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Secured Obligations or any Liens upon (or
obligations of the Borrower or any Subsidiary in respect of) all interests
retained by the Borrower or any Subsidiary, including (without limitation) the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
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12.1 Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any of the Obligations shall become due and
payable and remain unpaid, any indebtedness from any Lender to the Borrower
(including all account balances, whether provisional or final and whether or not
collected or available) may be offset and applied toward the payment of the
Obligations owing to such Lender. Each Lender agrees promptly to notify the
Borrower and the Agent after any such setoff and application made by such
Lender.
12.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 Application of Payments. The Agent shall, unless otherwise specified at the
direction of the Required Lenders which direction shall be consistent with the
last sentence of this Section 12.3, apply all payments and prepayments in
respect of any Obligations, including any such payments or prepayments made with
proceeds of Collateral, in the following order:
(A) first, to pay interest on and then principal of any
portion of the Loans which the Agent may have advanced on behalf of any
Lender for which the Agent has not then been reimbursed by such Lender
or the Borrower;
(B) second, to pay interest on and then principal of any
advance made under Section 10.3 for which the Agent has not then been
paid by the Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees,
expense reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees,
expenses, reimbursements or indemnities then due to the Lenders and the
issuer(s) of Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than
Swing Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of
principal outstanding on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans), Reimbursement
Obligations and Hedging Obligations under Interest Rate Agreements on a
pro rata basis; and
(I) ninth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied first, to repay
outstanding Floating Rate Loans, and then to repay outstanding Eurodollar Rate
Loans with those Eurodollar Rate Loans which have earlier expiring Interest
Periods being repaid prior to those which have later expiring Interest Periods.
The order of priority set forth in this Section 12.3 and the related provisions
of this Agreement are set forth solely to determine the rights and priorities of
the Agent, the Lenders, the Issuing Bank and other Holders of Secured
Obligations as among themselves. The order of priority set forth in clauses (D)
through (I) of this Section 12.3 may at any time and from time to time be
changed by the Required Lenders without necessity of notice to or consent of or
approval by the Borrower, or any other Person; provided, that the order of
priority of payments in respect of Swing Line Loans may be changed only with the
prior written consent of the Swing Line Bank. The order of priority set forth in
clauses (A) through (C) of this Section 12.3 may be changed only with the prior
written consent of the Agent.
12.4 Relations Among Lenders.
(a) Except with respect to the exercise of set-off rights of any Lender in
accordance with Section 12.1, the proceeds of which are applied in accordance
with this Agreement, and except as set forth in Section 12.4(b) below, each
Lender agrees that it will not take any action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Collateral Document or Loan Document, without the prior written consent
of the Required Lenders or, as may be provided in this Agreement or the other
Loan Documents, at the direction of the Agent.
(b) The Lenders are not partners or co-venturers, and no Lender shall be liable
for the acts or omissions of, or (except as otherwise set forth herein in case
of the Agent) authorized to act for, any other Lender. Notwithstanding the
foregoing, and subject to Section 12.2, any Lender shall have the right to
enforce on an unsecured basis the payment of the principal of and interest on
any Loan made by it after the date such principal or interest has become due and
payable pursuant to the terms of this Agreement.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
---------------------------------------------------------------
13.1 Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrower and the Lenders
and their respective successors and assigns, except that (i) the Borrower shall
not have the right to assign its rights or obligations under the Loan Documents
and (ii) any assignment by any Lender must be made in compliance with Section
13.3 hereof. Notwithstanding clause (ii) of this Section 13.1, any
Lender may at any time, without the consent of the Borrower or the Agent, assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 13.3 hereof in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
13.2 Participations.
(A) Permitted Participants; Effect. Subject to the terms set forth in this
Section 13.2, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Revolving Loan Commitment of such
Lender, any L/C Interest of such Lender or any other interest of such Lender
under the Loan Documents on a pro rata or non-pro rata basis. Notice of such
participation to the Borrower and the Agent shall be required prior to any
participation becoming effective with respect to a Participant which is not a
Lender or an Affiliate thereof. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any such Note for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement shall
be determined as if such Lender had not sold such participating interests, and
the Borrower and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the Loan
Documents except that, for purposes of Article IV hereof, the Participants shall
be entitled to the same rights as if they were Lenders.
(B) Voting Rights. Each Lender shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment, modification or waiver
with respect to any Loan, Revolving Loan Commitment in which such Participant
has an interest which forgives principal, interest or fees or reduces the
interest rate or fees payable pursuant to the terms of this Agreement with
respect to any such Loan, Revolving Loan Commitment postpones any date fixed for
any regularly-scheduled payment of principal of, or interest or fees on, any
such Loan, Revolving Loan Commitment or releases all or substantially all of the
Collateral, if any, securing any such Loan.
(C) Benefit of Setoff. The Borrower agrees that each Participant shall be deemed
to have the right of setoff provided in Section 12.1 hereof in respect to its
participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
right of setoff provided in Section 12.1 hereof with respect to the amount of
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
Section 12.1 hereof, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.2 as if each Participant were a Lender.
13.3 Assignments.
(A) Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Revolving
Loan Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit, and its obligation to participate in additional
Letters of Credit hereunder) in accordance with the provisions of this Section
13.3. Each assignment shall be of a constant, and not a varying, ratable
percentage of all of the assigning Lender's rights and obligations under this
Agreement. Such assignment shall be substantially in the form of Exhibit E
hereto and shall not be permitted hereunder unless such assignment is either for
all of such Lender's rights and obligations under the Loan Documents or, without
the prior written consent of the Agent, involves loans and commitments in an
aggregate amount of at least $5,000,000 (which minimum amount may be waived by
the Required Lenders after the occurrence of a Default or Unmatured Event of
Default). The consent of the Agent (which consent shall not be unreasonably
withheld) shall be required prior to an assignment becoming effective with
respect to a Purchaser which is not a Lender or an Affiliate thereof.
(B) Effect; Effective Date. Upon (i) delivery to the Agent of a notice of
assignment, substantially in the form attached as Appendix I to Exhibit E hereto
(a "Notice of Assignment"), together with any consent required by Section
13.3.(A) hereof, and (ii) payment of a $3,500 fee by the assignee or the
assignor (as agreed) to the Agent for processing such assignment, such
assignment shall become effective on the effective date specified in such Notice
of Assignment. The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the purchase
of the Commitment, Loans and L/C Obligations under the applicable assignment
agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be "plan
assets" under ERISA. On and after the effective date of such assignment, such
Purchaser, if not already a Lender, shall for all purposes be a Lender party to
this Agreement and any other Loan Documents executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further consent or
action by the Borrower, the Lenders or the Agent shall be required to release
the transferor Lender with respect to the percentage of the Aggregate Revolving
Loan Commitment, Loans and Letter of Credit participations assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 13.3(B), the transferor Lender, the Agent and the Borrower shall
make appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Purchaser, in each case in principal amounts reflecting their
Revolving Loan Commitment and their Term Loans, as adjusted pursuant to such
assignment.
13.4 Confidentiality. Subject to Section 13.5, the Agent and the Lenders and
their respective representatives shall hold all nonpublic information obtained
pursuant to the requirements of this Agreement and identified as such by the
Borrower in accordance with such Person's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure reasonably required by a
prospective Transferee in connection with the contemplated participation or
assignment or as required or requested by any Governmental Authority or
representative thereof or pursuant to legal process and shall require any such
Transferee to agree (and require any of its Transferees to agree in writing) to
comply with this Section 13.4. In no event shall the Agent or any Lender be
obligated or required to return any materials furnished by the Borrower;
provided, however, each prospective Transferee shall be required to agree that
if it does not become a participant or assignee it shall return all materials
furnished to it by or on behalf of the Borrower in connection with this
Agreement.
13.5 Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries and the Collateral; provided that
prior to any such disclosure, such prospective Transferee shall agree in writing
to preserve in accordance with Section 13.4 the confidentiality of any
confidential information described therein.
ARTICLE XIV: NOTICES
--------------------
14.1 Giving Notice. Except as otherwise permitted by Section 2.14 with respect
to borrowing notices, all notices and other communications provided to any party
hereto under this Agreement or any other Loan Documents shall be in writing or
by telex or by facsimile and addressed or delivered to such party at its address
set forth below its signature hereto or at such other address as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
14.2 Change of Address. The Borrower, the Agent and any Lender may each change
the address for service of notice upon it by a notice in writing to the other
parties hereto.
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ARTICLE XV: COUNTERPARTS
----------- ------------
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Required Lenders and each party hereto has notified the Agent by
telex, facsimile or telephone, that it has taken such action.
[Remainder of This Page Intentionally Blank]
Signature Page
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent
have executed this Agreement as of the date first above written.
CTS CORPORATION, as the Borrower
By:___________________________
Name:
Title:
Address: 000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
BANC ONE CAPITAL MARKETS, INC.,
as the Arranger
By:___________________________
Name:
Title:
Address: _________________
Attention: _________________
Telephone No.: (___) _________
Facsimile No.: (___) _________
BANK ONE, NA (formerly known as NBD BANK, N.A.),
as the Agent, as a Lender, as the Issuing Bank
and as the Swing Line Bank
By:___________________________
Name:
Title:
Address: _________________
Attention: _________________
Telephone No.: (___) _________
Facsimile No.: (___) _________
ABN AMRO BANK N.V., as Documentation Agent and as a Lender
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXXX TRUST AND SAVINGS BANK,
as Syndication Agent and as a Lender
By:___________________________
Name:
Title:
Address: 000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE NORTHERN TRUST COMPANY,
as a Lender
By:___________________________
Name:
Title:
Address: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By:___________________________
Name: Xxxx X. Xxxxx
Title: Vice President
Address: Mailcode: OH-01-27-0606
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
NATIONAL CITY BANK OF INDIANA,
as a Lender
By:___________________________
Name:
Title:
Address 000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
Telephone No.: (000) 000-0000, ext. 237
Facsimile No.: (000) 000-0000
THE BANK OF TOKYO-MITSUBISHI, LTD.
as a Lender
By:___________________________
Name: Xxxxxxxxxx Xxxxxxxxx
Title: Deputy General Manager
Address: 000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
SUNTRUST BANK,
as a Lender
By:___________________________
Name:
Title:
Address: 000 Xxxxxxxxx Xxxxxx, XX
0xx Xxxxx
Mail Code 1928
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
WACHOVIA BANK, N.A.,
as a Lender
By:___________________________
Name:
Title:
Address: 000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement"), dated as of December
20, 2001 is made by CTS Corporation, an Indiana corporation (the "Borrower"),
each of the Subsidiaries of the Borrower signatory hereto as of the date hereof
(collectively, the "Initial Grantors") and any new direct or indirect Subsidiary
of the Borrower, whether now existing or hereafter formed, which becomes party
to this Agreement by executing an Addendum hereto in substantially the form
attached as Annex I (collectively, together with the Initial Grantors, and in
each case with its respective successors and assigns, including
debtors-in-possession on behalf thereof, the "Grantors") in favor of BANK ONE,
NA (the "Agent") for its benefit and for the benefit of the "Holders of Secured
Obligations" (as defined below).
PRELIMINARY STATEMENT
WHEREAS, the Borrower has entered into that certain Third
Amended and Restated Credit Agreement dated as of December 20, 2001 by and among
the Borrower, the financial institutions from time to time parties thereto as
lenders (the "Lenders") and Bank One, NA, as the Agent (the "Agent") (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), which Credit Agreement amends and restates in its
entirety the Second Amended and Restated Credit Agreement, dated as of February
1, 2000 (as amended, the "Prior Credit Agreement"), to which the Borrower is a
party;
WHEREAS, the Credit Agreement, among other things,
re-evidences the Borrower's outstanding obligations under the Prior Credit
Agreement and provides, subject to the terms and conditions of the Credit
Agreement, for the making of advances, loans and other financial accommodations
by the Lenders to or for the benefit of the Borrower;
WHEREAS, the Borrower owns, directly or indirectly, all or a
majority of the issued and outstanding Capital Stock of each Grantor (other than
the Borrower); and such Grantors shall derive benefits, both direct and
indirect, by the effectiveness of the Credit Agreement;
WHEREAS, each Grantor (other than the Borrower) has entered
into that certain Amended and Restated Guaranty (the "Subsidiary Guaranty"),
pursuant to which it has guaranteed, without limitation and with full recourse,
the payment when due of all Secured Obligations, including, without limitation,
all principal, interest, letter of credit reimbursement obligations and other
amounts that shall be at any time payable by the Borrower under the Credit
Agreement or the other Loan Documents;
WHEREAS, each Grantor wishes to grant, to the Agent for the
benefit of the Holders of Secured Obligations, a security interest in and a Lien
on and against its property to secure its respective obligations under, in the
case of the Borrower, the Credit Agreement, and, in the case of each other
Grantor, the Subsidiary Guaranty;
WHEREAS, it is a condition precedent to the effectiveness of
the Credit Agreement that the Grantors shall have granted the security interests
and Liens contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined, and the following terms
shall have the following meanings (such meanings being equally applicable to
both the singular and the plural forms of the terms defined):
"Agreement" shall mean this Security Agreement, as the same
may from time to time be amended, restated, modified or supplemented, and shall
refer to this Agreement as the same may be in effect at the time such reference
becomes operative.
"Collateral" shall mean all property and interests in property
now owned or hereafter at any time acquired by any Grantor in or upon which a
Lien is granted in favor of the Agent by such Grantor under this Agreement or
any of the documents or agreements executed in connection herewith, including,
without limitation, the property described in Section 2.
"Holders of Secured Obligations" is defined in the Credit
Agreement.
"Proceeds" shall mean whatever is receivable or received from
or upon the sale, lease, license, collection, use, exchange or other
disposition, whether voluntary or involuntary, of any Collateral, including
"proceeds" as defined in the UCC, any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to or for the account of any Grantor
from time to time with respect to any of the Collateral, any and all payments
(in any form whatsoever) made or due and payable to any Grantor from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of Governmental Authority), any and all other
amounts from time to time paid or payable under or in connection with any of the
Collateral or for or on account of any damage or injury to or conversion of any
Collateral by any Person, any and all other tangible or intangible property
received upon the sale or disposition of Collateral, and all proceeds of
proceeds.
"UCC" shall mean the Illinois Uniform Commercial Code, as
amended or supplemented from time to time; provided, however, in the event that,
by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Agent's and the Holders of Secured Obligations'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions. Any and all
terms used in this Security Agreement which are defined in the UCC shall be
construed and defined in accordance with the meaning and definition ascribed to
such terms under the UCC, unless otherwise defined herein.
Section 2. (A) Grant of Security. To secure the prompt and complete payment,
observance and performance of, in the case of the Borrower, the Secured
Obligations, and, in the case of each other Grantor, its guaranty of the
Borrower's Secured Obligations as set forth in the Subsidiary Guaranty, each
Grantor hereby assigns and pledges to the Agent, for the benefit of the Agent
and the Holders of Secured Obligations, and grants to the Agent for the benefit
of the Agent and the Holders of Secured Obligations, a security interest in, all
of such Grantor's right, title and interest in and to the following, whether now
owned or existing or hereafter arising or acquired and wheresoever located and
Proceeds thereof:
ACCOUNTS: All "accounts" as such term is defined in the UCC,
whether now owned or hereafter acquired or arising; each Grantor intends that
the term "accounts", as used herein, be construed in its broadest sense, and
such term shall include, without limitation, all present and future accounts,
(including, without limitation, health-care-insurance receivables, contract
rights, and all other forms of monetary obligations owing to any Grantor, and
all credit insurance, guaranties, or security therefor) (except those evidenced
by instruments or chattel paper), whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by performance
(collectively, "Accounts");
BOOKS AND RECORDS: All presently existing and hereafter
acquired or created books and records of each Grantor, including all records
(including maintenance and warranty records), ledgers, computer programs and
files, disc or tape files, printouts, runs, and other computer prepared
information indicating, summarizing, or evidencing the Collateral;
CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: All chattel paper
(including tangible chattel paper, intangible chattel paper and electronic
chattel paper), leases, all instruments, including, without limitation, the
notes and debt instruments described in Schedule 1-A hereto (the "Pledged Debt")
and all payments thereunder and instruments and other property from time to time
delivered in respect thereof or in exchange therefor, and all bills of sale,
bills of lading, warehouse receipts and other documents and documents of title,
whether or not negotiable, and includes all other documents which purport to be
issued by a bailee or agent and purport to cover goods in any bailee's or
agent's possession which are either identified or are fungible portions of an
identified mass, including such documents of title made available to Agent for
the purpose of ultimate sale or exchange of goods or for the purpose of loading,
unloading, storing, shipping, transshipping, manufacturing, processing or
otherwise dealing with goods in a manner preliminary to their sale or exchange,
in each instance whether now owned or hereafter acquired by any Grantor;
CONTRACT RIGHTS: All rights and interests in and to any
pending or executory contracts, requests for quotations, invitations for bid,
agreements, leases and arrangements of which each Grantor is a party to or in
which such Grantor has an interest;
DEPOSIT ACCOUNTS: All "deposit accounts" as such term is
defined in the UCC, whether now owned or hereafter acquired or arising; each
Grantor intends that the terms "deposit accounts", as used herein, be construed
in its broadest sense, and such term shall include, without limitation, all
demand, time, savings, passbook or similar accounts now or hereafter maintained
by or for the benefit of each Grantor with an organization that is engaged in
the business of banking including a bank, savings bank, savings and loan
association, credit union and trust companies, and all funds and amounts
therein, whether or not restricted or designated for a particular purpose
(collectively, "Deposit Accounts");
EQUIPMENT: All "equipment" as such term is defined in the UCC,
whether now owned or hereafter acquired or arising; each Grantor intends that
the term "equipment", as used herein, be construed in its broadest sense, and
such term shall include, without limitation, all machinery, all manufacturing,
distribution, selling, data processing and office equipment, all furniture,
furnishings, appliances, fixtures and trade fixtures, tools, tooling, molds,
dies, vehicles, rolling stock, vessels, trucks, buses, motor vehicles and all
other goods (including software embedded in such goods) of every type and
description (other than Inventory or consumer goods), in each instance whether
now owned or hereafter acquired by such Grantor and wherever located
(collectively, "Equipment");
GENERAL INTANGIBLES: All "general intangibles" (including
payment intangibles) as such term is defined in the UCC, whether now owned or
hereafter acquired or arising; each Grantor intends that the term "general
intangibles", as used herein, be construed in its broadest sense, and such term
shall include, without limitation, the uniform resource locator (xxx.xxx.xxx),
all rights, interests, choses in action, causes of actions, claims and all other
intangible property of such Grantor of every kind and nature (other than
Accounts), in each instance whether now owned or hereafter acquired by such
Grantor and however and whenever arising, including, without limitation, all
corporate and other business records; all loans, royalties, and other
obligations receivable; all customer lists, credit files, correspondence, and
advertising materials; all firm sale orders, other contracts and contract
rights; all interests in partnerships and joint ventures; all tax refunds and
tax refund claims; all right, title and interest under leases, subleases,
licenses and concessions and other agreements relating to real or personal
property; all payments due or made to such Grantor in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of any property
by any person or governmental authority; all payments due or made to such
Grantor in connection with any choses in action, causes of action or other
claims; all rights to receive funds in respect of any deposit accounts (general
or special) with any bank or other financial institution, including, without
limitation, any deposits or other sums at any time credited by or due to such
Grantor from any of the Holders of Secured Obligations or any of their
respective Affiliates with the same rights therein as if the deposits or other
sums were credited by or due from such Holder of Secured Obligations; all
credits with and other claims against carriers and shippers; all rights to
indemnification; all patents and patent applications (including all reissues,
divisions, continuations and extensions) (collectively, "Patents"); all trade
secrets and inventions; all copyrights and copyright applications (including all
computer software and related documentation) (collectively, "Copyrights"); all
service marks and service xxxx applications and all rights and interests in and
to trademarks, trademark registrations and applications therefor, trade names,
corporate names, brand names, slogans and all goodwill associated with the
foregoing (collectively, "Trademarks"; and together with Copyrights and Patents,
"Intellectual Property"); all license agreements and franchise agreements, all
reversionary interests in pension and profit sharing plans and reversionary,
beneficial and residual interest in trusts; all proceeds of insurance of which
such Grantor is beneficiary; all guaranties, liens, security interests and other
security held by or granted to such Grantor; and all other intangible property,
whether or not similar to the foregoing;
INTEREST AND CURRENCY CONTRACTS: Any and all interest rate,
commodity or currency exchange agreements or derivative agreements, including
without limitation, cap, collar, floor, forward or similar agreements or other
rate, currency or price protection arrangements or Interest Rate Agreements;
INVENTORY: All "inventory" as such term is defined in the UCC,
whether now owned or hereafter acquired or arising; each Grantor intends that
the term "inventory", as used herein, be construed in its broadest sense, and
such term shall include, without limitation, all goods (including software
embedded in such goods) now owned or hereafter acquired by such Grantor
(wherever located, whether in the possession of such Grantor or of a bailee or
other person for sale, storage, transit, processing, use or otherwise and
whether consisting of whole goods, spare parts, components, supplies, materials,
or consigned, returned or repossessed goods) which are held for sale or lease,
which are to be furnished (or have been furnished) under any contract of service
or which are raw materials, work in process or materials used or consumed in
such Grantor's business (collectively, "Inventory");
INVESTMENT PROPERTY: All "investment property" as such term
is defined in the UCC, whether now owned or hereafter acquired or arising;
LETTER-OF-CREDIT RIGHTS: All "letter-of-credit rights" as
such term is defined in the UCC, whether now owned or hereafter acquired or
arising;
LAB PROCESSING AND ENGINEERING INFORMATION: All rights and
interests in and to processes, lab journals, and notebooks, data, trade secrets,
know-how, product formulae and information, manufacturing, engineering and other
drawings and manuals, technology, blueprints, research and development reports,
agency agreements, technical information, technical assistance, engineering
data, design and engineering specifications, and similar materials recording or
evidencing expertise used in or employed by each Grantor (including any license
for the foregoing), in each case whether now owned or hereafter acquired or
arising;
OTHER PROPERTY: All property or interests in property now
owned or hereafter acquired by each Grantor which now are or hereafter may come
within the possession, custody or control of the Agent or any of the Holders of
Secured Obligations or any agent or Affiliate of any of them in any way and for
any purpose (whether for safekeeping, deposit, custody, pledge, transmission,
collection or otherwise); and all rights and interests of such Grantor, now
existing or hereafter arising and however and wherever arising, in respect of
any and all (i) notes, drafts, letters of credit, stocks, bonds, and debt and
equity securities, whether or not certificated, investment property (as defined
in the UCC) and warrants, options, puts and calls and other rights to acquire or
otherwise relating to the same; (ii) money; (iii) proceeds of loans, including,
without limitation, Loans made under the Credit Agreement; and (iv) insurance
proceeds and books and records relating to any of the property covered by this
Agreement; together, in each instance, with all accessions and additions
thereto, substitutions therefor, and replacements, Proceeds and products
thereof; and
SUPPORTING OBLIGATIONS: All "supporting obligations", as
such term is defined in the UCC, in respect of any of the foregoing property,
whether now owned or hereafter acquired or arising.
(B) Certain Limited Exceptions. Notwithstanding anything
herein to the contrary, in no event shall the Collateral include, and no Grantor
shall be deemed to have granted a security interest in, any of such Grantor's
right, title or interest (a) in any Intellectual Property if the grant of such
security interest shall constitute or result in the abandonment of, invalidation
of or rendering unenforceable any right, title or interest of any Grantor
therein; or (b) in any license, contract or agreement to which such Grantor is a
party or any of its rights or interests thereunder, to the extent, that such a
grant would, under the terms of such license, contract or agreement, or
otherwise, result in a breach or termination of the terms of, or constitute a
default under or termination of any such license, contract or agreement (other
than to the extent that any such term would be rendered ineffective pursuant to
Section 9-406 of the Uniform Commercial Code (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity); provided, that each Grantor
agrees to use all reasonable efforts to obtain all requisite consent to enable
such Grantor to provide a security interest in such asset and, in any event,
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
Section 3. Authorization. Each Grantor hereby authorizes the Agent to retain and
each Holder of Secured Obligations, and each Affiliate of the Agent and of each
Holder of Secured Obligations, to pay or deliver to the Agent, for the benefit
of the Holders of Secured Obligations, without any necessity on any Holder of
Secured Obligation's part to resort to other security or sources of
reimbursement for the Secured Obligations, at any time following the occurrence
and during the continuance of any Default, and without further notice to such
Grantor (such notice being expressly waived), any of the deposits referred to in
Section 2 (whether general or special, time or demand, provisional or final) or
other sums or property held by such Person, for application against any portion
of the Secured Obligations, irrespective of whether any demand has been made or
whether such portion of the Secured Obligations is due and payable. The Agent
may give notice of the above authorization, grant of a security interest and
assignment of the aforesaid deposits and other sums by each Grantor to, and may
make any suitable arrangements with, any such Holder of Secured Obligations for
effectuation thereof, and each Grantor hereby irrevocably appoints the Agent as
its attorney to collect any and all such deposits or other sums to the extent
any such payment is not made to the Agent by such Holder of Secured Obligations
or Affiliate thereof; provided, that the Agent agrees not to exercise such
powers as attorney-in-fact unless a Default has occurred and is continuing.
Section 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain solely liable under the contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) neither the Agent nor the Holders of Secured Obligations shall have any
responsibility, obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Agent or
the Holders of Secured Obligations be required or obligated, in any manner, to
(i) perform or fulfill any of the obligations or duties of any Grantor
thereunder, (ii) make any payment, or make any inquiry as to the nature or
sufficiency of any payment received by any Grantor or the sufficiency of any
performance by any party under any such contract or agreement or (iii) present
or file any claim, or take any action to collect or enforce any claim for
payment assigned hereunder.
Section 5. Representations and Warranties. Each Grantor represents and warrants,
as of the date of this Agreement, or as of the date such Grantor becomes a party
to this Agreement pursuant to the execution of an Addendum hereto in
substantially the form of Annex I, and as of each date on which the
representations and warranties under Article VI of the Credit Agreement shall be
made (except for changes permitted or contemplated by this Agreement or the
other Loan Documents) until termination of this Agreement pursuant to Section
24:
(A) The exact legal name, jurisdiction of incorporation and Organizational
Identification Number, if any, of each Grantor is set forth on Schedule 1
to this Agreement, or the applicable Addendum hereto, and each Grantor's
Federal Taxpayer Identification Number is set forth on Schedule 5 hereto or
on such Grantor's Addendum hereto, as applicable. The locations listed for
each Grantor on Schedule 2 hereto constitute all locations at which
Inventory and/or Equipment of such Grantor is located and each applicable
Grantor has exclusive possession and control of such Equipment and
Inventory, except for such Inventory and Equipment which is (i) temporarily
in transit between such locations, or (ii) temporarily stored with third
parties or held by third parties for processing, storage, engineering,
evaluation, repairs or sale, the proper corporate names of which third
parties, the location of such Inventory and/or Equipment, the nature of the
relationship between the applicable Grantor and such third parties, and the
maximum value of Inventory and/or Equipment at such third parties are set
forth in Schedule 2-A. Schedules 2 and 2-A shall be amended to include
locations of any Equipment and/or Inventory of any Grantor party hereto as
a result of executing an Addendum hereto, and may be amended to reflect (1)
additional locations acquired or utilized in connection with Acquisitions
permitted by Section 7.2(C) of the Credit Agreement or (2) new arrangements
with third parties for manufacturing, processing, engineering, evaluation,
repairs, storage, bailment or consignment, provided, in each case, the
applicable Grantor is in full compliance with Sections 6 and 9 below in
connection with such locations. The chief place of business and chief
executive office of each Grantor is located at the address of such Grantor
set forth on Schedule 1 hereto or in such Grantor's Addendum hereto, as
applicable. All Books and Records concerning any Accounts and all originals
of all chattel paper which evidence any Account are located at the
addresses listed on Schedule 2 and none of the Accounts is evidenced by a
promissory note or other instrument except for such notes and other
instruments listed on Schedule 1-A and delivered to Agent as part of the
Pledged Debt.
(B) Each Grantor is the legal and beneficial owner of its respective
portion of the Collateral free and clear of all Liens except for Liens
permitted by Section 7.2(B) of the Credit Agreement. Each Grantor
currently conducts business under its legal name and, in certain areas
and for certain operations, the additional trade names listed on
Schedule 3 or on such Grantor's Addendum hereto, as applicable. No
Grantor uses any trade names or fictitious names, except as set forth
on Schedule 3 or on such Grantor's Addendum hereto, as applicable.
(C) This Agreement creates in favor of the Agent a legal, valid and
enforceable security interest in the Collateral. When financing
statements have been filed in the appropriate offices against each
Grantor in the locations listed for such Grantor on Schedule 2-B, the
Agent will have, and, with respect to the Existing Grantors, will
continue to have, a fully perfected first priority lien on, and
security interest in, the Collateral in which a security interest may
be perfected by such filing in such filing office under the applicable
UCC, subject only to Liens permitted by Section 7.2(B) of the Credit
Agreement and to the rights of the United States government with
respect to United States government receivables.
(D) The execution, delivery and performance of this Agreement does not and will
not (i) conflict with the organizational documents of any Grantor or (ii)
require any approval of any Grantor's Board of Directors, or shareholders
or unitholders, as applicable, except such as have been obtained. No
authorization, approval or other action by, and no notice to or filing
with, any Governmental Authority, that has not already been taken or made
and that is in full force and effect, is required (a) for the grant by any
Grantor of the security interest in the Collateral granted hereby; (b) for
the execution, delivery or performance of this Agreement by any Grantor; or
(c) for the exercise by the Agent of any of its rights or remedies
hereunder, except (A) for the filing of UCC financing statements as
contemplated herein, (B) the recordation of the security interests granted
in Intellectual Property and related licenses and applications in the
applicable registries and (C) as may be required in connection with the
disposition of any investment property by laws generally affecting the
offering and sale of securities.
(E) The Pledged Debt and any other indebtedness subject hereto
issued by any Affiliate of any Guarantor, and to the best of such
Grantor's knowledge, all other Pledged Debt and indebtedness subject
hereto, have been duly authorized, issued and delivered, and are the
legal, valid, binding and enforceable obligations of the respective
issuers thereof.
(F) Schedule 4 contains a complete list of all
of the Deposit Accounts of each Grantor as of the Effective Date, and
such Grantor will amend and update Schedule 4 by delivering
supplemental reports to the Agent promptly following the establishment
of any additional Deposit Accounts, but in any event not less
frequently than on an annual basis, and at any time requested by the
Agent or any Holder of Secured Obligations.
Section 6. Perfection and Maintenance of Security Interests and Liens. Each
Grantor agrees that, until the termination of this Agreement or the release by
the Agent of its security interests in and Liens on and against the Collateral,
in either case pursuant to Section 24, or the release by the Agent of its
security interest in and Liens on the Collateral pursuant to Section 11.12 of
the Credit Agreement, the Agent's security interests in and Liens on
and against the Collateral and all Proceeds and products thereof shall continue
in full force and effect. Each Grantor shall perform any and all steps
reasonably requested by the Agent or any Holder of Secured Obligations to
perfect, maintain and protect the Agent's security interests in and Liens on and
against such Grantor's respective portion of Collateral granted or purported to
be granted hereby or to enable the Agent to exercise its rights and remedies
hereunder with respect to any Collateral, including, without limitation:
(i) executing and filing financing or continuation statements, or amendments
thereof, in form and substance reasonably satisfactory to the Agent;
(ii) delivering to the Agent all certificates, notes and other instruments
representing or evidencing Collateral, which certificates, notes and other
instruments have been duly endorsed and are accompanied by duly executed
instruments of transfer or assignment, including, but not limited to, note
powers, all in form and substance satisfactory to the Agent;
(iii)if requested by the Agent, delivering to the Agent warehouse receipts
covering that portion of the Collateral, if any, located in warehouses and
for which warehouse receipts are issued;
(iv) after the occurrence and during the continuance of a Default, transferring
Inventory and Equipment to warehouses designated by the Agent or taking
such other steps as are deemed necessary by the Agent to maintain the
Agent's control of the Inventory and Equipment;
(v) marking conspicuously each instrument, document, contract, chattel paper
and all books and records pertaining to the Collateral with a legend, in
form and substance satisfactory to the Agent, indicating that such
document, contract, chattel paper, or Collateral is subject to the security
interest granted hereby;
(vi) using its commercially reasonable best efforts to obtain waivers of Liens
and access agreements in substantially the form of Exhibit A hereto (or
such other form as may be agreed to by the Agent) from landlords and
mortgagees with respect to all premises leased by such Grantor as of the
Effective Date, and using its commercially reasonable best efforts to
obtain waivers of Liens and access agreements in substantially the form of
Exhibit B (or such other form as may be agreed to by the Agent) from the
appropriate Person with respect to all of such Grantor's Inventory or
Equipment, that, as of the Effective Date, is temporarily stored with third
parties or held by third parties for processing, storage, engineering,
repair or sale; provided, however, that prior to the occurrence of a
Default, no Grantor shall be required to deliver to the Agent waivers of
Liens and access agreements from any landlord, mortgagee or other third
party on whose premises less than $500,000 of Collateral is located;
(vii)using its commercially reasonable best efforts to obtain waivers of Liens
and access agreements in substantially the form of Exhibit A hereto (or
such other form as may be agreed to by the Agent) from landlords and
mortgagees with respect to any premises in respect of which such Grantor
enters into any lease arrangement as lessee after the Effective Date and
using its commercially reasonable best efforts to obtain waivers of Liens
and access agreements in substantially the form of Exhibit B (or such other
form as may be agreed to by the Agent) from the appropriate Person with
respect to any Inventory or Equipment temporarily stored with third parties
or held by third parties for processing, storage, engineering, repair or
sale beginning on any date after the Effective Date (in connection with
which each Grantor shall be permitted to and hereby is required to update
Schedule 2-A); provided, however, that prior to the occurrence of a
Default, no Grantor shall be required to deliver to the Agent waivers of
Liens and access agreements from any landlord, mortgagee or third party on
whose premises less than $500,000 of Collateral is located;
(viii) at the request of the Agent, appear in and defend any action or
proceeding which may affect adversely such Grantor's title to, or the
security interest of Agent in, any of the Collateral;
(ix) cooperating with the Agent in obtaining a control agreement in form and
substance satisfactory to the Agent with respect to all Deposit Accounts,
electronic chattel paper, investment property, and letter-of-credit rights;
and
(x) executing and delivering all further instruments and documents, and taking
all further action, as the Agent or any Holder of Secured Obligations may
reasonably request.
Section 7. Financing Statements. Each Grantor hereby authorizes the Agent to
file one or more financing or continuation statements and amendments thereto,
disclosing the security interest granted to the Agent under this Agreement
without such Grantor's signature appearing thereon, and the Agent agrees to
notify each Grantor when such a filing has been made. Each Grantor agrees that a
carbon, photographic, photostatic, or other reproduction of this Agreement or of
a financing statement is sufficient as a financing statement. If any Inventory
or Equipment is in the possession or control of any warehouseman or any
Grantor's agents or processors, such Grantor shall, upon the Agent's request,
notify such warehouseman, agent or processor of the Agent's security interest in
such Inventory and Equipment and, upon the Agent's request, instruct them to
hold all such Inventory or Equipment for the Agent's account and subject to the
Agent's instructions.
Section 8. Filing Costs. Grantors shall pay the costs of, or incidental to, all
UCC, tax lien and judgment searches and all recordings or filings of all
financing statements, including, without limitation, any filing expenses
incurred by the Agent pursuant to Section 7.
Section 9. Equipment and Inventory. Each Grantor covenants and agrees with the
Agent that from the date of this Agreement and until the termination of this
Agreement pursuant to Section 24, each Grantor shall:
(A) Keep its Equipment and Inventory (other than Equipment or
Inventory sold or disposed of as permitted by the Credit Agreement) at
the places specified in Section 5(A) (as amended or supplemented from
time to time), except for Equipment and Inventory (i) temporarily in
transit to, from or between such locations or (ii) temporarily stored
with third parties or held by third parties for processing, storage,
consignment, engineering, repair or sale and set forth in Schedule 2-A
(other
than such locations where such Collateral was required to be removed
pursuant to the provisions of Section 6), and deliver written notice to
the Agent at least thirty (30) days prior to establishing any other
location at which or third party with which it reasonably expects to
maintain Inventory and/or Equipment in which location or with which
third party all action required by this Agreement shall have been taken
with respect to all such Equipment and Inventory;
(B) Maintain or cause to be maintained in good repair, working order and
condition, excepting ordinary wear and tear and damage due to casualty, all
of the Equipment, and make or cause to be made all appropriate repairs,
renewals and replacements thereof, as quickly as practicable after the
occurrence of any loss or damage thereto which are necessary or desirable
to such end; and
(C) Comply with the terms of the Credit Agreement with respect to such
Equipment and Inventory, including, without limitation, the maintenance and
insurance provisions set forth in Section 7.1(C) of the Credit Agreement.
Section 10. Accounts. Each Grantor covenants and agrees with the Agent that from
and after the date of this Agreement and until the termination of this Agreement
pursuant to Section 24, each Grantor shall:
(A) Keep its jurisdiction of organization, chief place of business and chief
executive office and the office where it keeps its books and records at its
address set forth on Schedule 1 hereto or its Addendum hereto, as
applicable, and keep the offices where it keeps all originals of all
chattel paper which evidence Accounts at the locations therefor specified
in Section 5(A) or, upon thirty (30) days' prior written notice to the
Agent, at such other locations within the United States in a jurisdiction
where all actions required by Section 6 shall have been taken with respect
to the Accounts. Such Grantor will hold and preserve such books and records
(in accordance with such Grantor's usual document retention practices) and
chattel paper and will permit representatives of the Agent at any time upon
reasonable notice during normal business hours to inspect and make
abstracts from such books and records and chattel paper; and
(B) In any suit, proceeding or action brought by the Agent under any Account
comprising part of the Collateral, such Grantor will save, indemnify and
keep each of the Holders of Secured Obligations harmless from and against
all expenses, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the
obligor thereunder, arising out of a breach by such Grantor of any
obligation or arising out of any other agreement, indebtedness or liability
at any time owing to or in favor of such Holder of Secured Obligations from
such Grantor and all such obligations of such Grantor shall be and shall
remain enforceable against and only against such Grantor and shall not be
enforceable against any of the Holders of Secured Obligations.
Section 11. Leased Real Property. Each Grantor covenants and agrees with the
Agent that from and after the date of this Agreement and until termination of
this Agreement pursuant to Section 24, that:
(A) Promptly following, but not later than ninety (90) days after,
the close of each fiscal year (or at any other time requested by the
Agent or any of the Holders of Secured Obligations), such Grantor will
furnish to the Agent a report certified to be true and correct by such
Grantor containing a list of each of such Grantor's leased premises;
the name or names of all owners; rentals being paid; and whether such
Grantor has obtained waivers of Liens and access agreements in form and
substance satisfactory to the Agent with respect to any lease with
respect of such premises in accordance with Section 6.
(B) From and after the occurrence of a Default, the Agent may, but
need not, make any payment or perform any act hereinbefore required of
such Grantor with respect to such Grantor's leased premises in any form
and manner deemed expedient. All money paid for any of the purposes
herein authorized and all other moneys advanced by the Agent to protect
the lien hereof shall be additional Secured Obligations secured hereby
and shall become immediately due and payable without notice and shall
bear interest thereon at the default interest rate (determined by
reference to the Floating Rate) as provided in Section 2.11 of the
Credit Agreement until paid to the Agent in full.
(C) Such Grantor agrees that it will not amend any lease in a manner
that adversely affects the interests of the Holders of Secured
Obligations without the Agent's prior written consent.
Section 12. General Covenants. Each Grantor covenants and agrees with the Agent
that from and after the date of this Agreement and until termination of this
Agreement pursuant to Section 24, such Grantor shall:
(A) Keep and maintain at such Grantor's own cost and expense
satisfactory and complete records of such Grantor's Collateral in a
manner consistent with such Grantor's current business practice and,
where applicable, Agreement Accounting Principles, including, without
limitation, a record of all payments received and all credits granted
with respect to such Collateral. Such Grantor shall, for the Agent's
further security, deliver and turn over to the Agent or the Agent's
designated representatives at any time following the occurrence and
during the continuation of a Default, any such books and records
(including, without limitation, any and all computer tapes, programs
and files and any and all source and object codes relating to such
Collateral in which such Grantor has an interest or any part or parts
thereof);
(B) Such Grantor will not create, permit or suffer to exist, and
will defend the Collateral against, and take such other action as is
necessary to remove, any Lien on such Collateral other than Liens
permitted under Section 7.2(B) of the Credit Agreement, and will defend
the right, title and interest of the Agent in and to such Grantor's
rights to such Collateral, including, without limitation, the proceeds
and products thereof, against the claims and demands of all Persons
whatsoever; and
(C) Such Grantor will not (i) make any change to its name, principal place of
business, organizational structure or location of books and records or use
any tradenames, fictitious names, assumed names or "doing business as"
names unless, at least 30 days prior to the effective date of any such name
change, change in principal place of business, change in organizational
structure, change in location of its books and records, or change in trade
or fictitious names, such Grantor notifies the Agent and delivers thereto
acknowledgment copies of such financing statements which the Agent may
reasonably request to reflect such name change, location change, change in
limited liability Borrower structure or fictitious name change or use,
together with such other documents and instruments that the Agent may
reasonably request in connection therewith, and has taken all other steps
to ensure that the Agent, for the benefit of the Holders of Secured
Obligations, continues to have a first priority, perfected ownership or
security interest in all the Collateral owned by such Grantor, or (ii)
change its jurisdiction of organization unless the Agent shall have
received from such Grantor prior to such change, (a) those items described
in clause (i) hereof, and (b) prior to the effective date thereof, if the
Agent shall so request, an opinion of counsel, in form and substance
reasonably satisfactory to the Agent, as to such Grantor's organization,
valid existence and good standing and as to the matters referred to in the
first sentence of Section 5(A).
Section 13. Agent Appointed Attorney-in-Fact. Such Grantor hereby irrevocably
appoints the Agent as such Grantor's attorney-in-fact, coupled with an interest,
with full authority in the place and stead of such Grantor and in the name of
such Grantor or otherwise, from time to time in the Agent's discretion, to take
any action and to execute any instrument which the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation, following the occurrence and during the continuance of a Default,
to:
(i) obtain and adjust insurance required to be paid to the Agent or any
Holders of Secured Obligations pursuant to the Credit Agreement;
(ii) ask, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(iii) receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (i)
or (ii) above;
(iv) file any claims or take any action or institute any proceedings
which the Agent may deem necessary or desirable for the collection of
any of the Collateral, or otherwise to enforce the rights of the Agent
with respect to any of the Collateral;
(v) obtain access to records maintained for such Grantor by computer
services companies and other service companies or bureaus;
(vi) send requests under such Grantor's, the Agent's or a fictitious name
to such Grantor's customers or account debtors for verification of
Accounts; and
(vii) do all other things reasonably necessary to carry out this Agreement.
Each Grantor agrees that neither the Agent, nor any of its designees or
attorneys-in-fact, will be liable for any act of commission or omission, or for
any error of judgment or mistake of fact or law with respect to the exercise of
the power of attorney granted under this Section 13, other than as a result of
its or their gross negligence or willful misconduct.
Section 14. Agent May Perform; Collection of Accounts. If any Grantor fails to
perform any agreement contained herein, the Agent may perform, or cause
performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall constitute Secured Obligations and shall be payable
by such Grantor under Section 21. Following the occurrence and during the
continuance of a Default, the Agent shall have the right (i) to notify any
account debtors (as defined in the UCC) of any Grantor to make payments directly
to the Agent for application to the Secured Obligations and (ii) to enforce each
Grantor's rights against the applicable account debtors.
Section 15. Agent's Duties. The powers conferred on the Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for monies actually received by
it hereunder, the Agent shall not have any duty as to any Collateral. The Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Agent accords its own property,
it being understood that the Agent shall be under no obligation to take any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral, but may do so at its option, and all reasonable
expenses incurred in connection therewith shall be for the sole account of such
Grantor and shall be added to the Secured Obligations. Grantors bear all risk of
loss or damage of any of the Collateral, except to the extent such loss or
damage shall arise solely from the gross negligence or willful misconduct of the
Agent.
Section 16. Remedies.
(A) If any Default shall have occurred and be continuing:
(i) the Agent shall have, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party upon default under the UCC (whether or not the UCC applies to
the affected Collateral) and further, the Agent may, without notice, demand
or legal process of any kind (except as may be required by law), all of
which each Grantor waives, at any time or times, (x) enter such Grantor's
owned or leased premises and take physical possession of the Collateral and
maintain such possession on such Grantor's owned or leased premises, at no
cost to the Agent or any of the Holders of Secured Obligations, or remove
the Collateral, or any part thereof, to such other place(s) as the Agent
may desire, (y) require any Grantor to, and such Grantor hereby agrees that
it will at its expense and upon request of the Agent forthwith, assemble
all or any part of its respective portion of the Collateral as directed by
the Agent and make it available to the Agent at a place to be designated by
the Agent which is reasonably convenient to the Agent and (z) without
notice except as specified below, sell, lease, assign, grant an option or
options to purchase or otherwise dispose of the Collateral or any part
thereof at public or private sale, at any exchange, broker's board or at
any of the offices of the Agent or elsewhere, for cash, on credit or for
future delivery, or upon such other terms as the Agent may deem
commercially reasonable. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten (10) days' notice to such
Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.
The Agent shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. The Agent shall have no obligation
to clean-up or otherwise prepare the Collateral for sale. It is not
necessary that the Collateral be present at any such sale.
(ii) The Agent shall apply all cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of
the Collateral (after payment of any amounts payable to the Agent pursuant
to Section 21), to the Holders of Secured Obligations, against all or any
part of the Secured obligations in such order as may be required by the
Credit Agreement or, to the extent not specified therein, as determined by
the Required Lenders. Any surplus of such cash or cash proceeds held by the
Agent and remaining after payment in full of all the Secured Obligations
shall be paid over to such Grantor or to whomsoever may be lawfully
entitled to receive such surplus.
(B) The Agent shall have no obligation to attempt to satisfy the Secured
Obligations by collecting them from any third Person which may be liable
for them or any portion thereof, and the Agent may release, modify or waive
any collateral provided by any other Person as security for the Secured
Obligations or any portion thereof, all without affecting the Agent's
rights against any Grantor. Each Grantor waives any right it may have to
require any Holder of Secured Obligations to pursue any third Person for
any of the Secured Obligations.
(C) The Agent may comply with any applicable state or federal law requirements
in connection with a disposition of the Collateral, and the Agent's
compliance therewith will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.
(D) The Agent may sell the Collateral without giving any warranties as to the
Collateral. The Agent may specifically disclaim any warranties of title or
the like. Any such action will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.
(E) If the Agent sells any of the Collateral upon credit, the Secured
Obligations will only be reduced to the extent of payments actually made by
the purchaser, received by Agent and applied to the
indebtedness of the purchaser. In the event that the purchaser fails to pay
for the Collateral, the Agent my resell the Collateral and the Secured
Obligations will be reduced to the extent of the proceeds of such sale.
(F) The Agent shall be under no obligation to marshal any assets in favor of
any Grantor, or against or in payment of the Secured Obligations or any
other obligation owed to any Holder of Secured Obligations by any Grantor
or any other Person.
(G) Upon the exercise by the Agent of any power, right, privilege, or remedy
pursuant to this Agreement which requires any consent,
approval, registration, qualification, or authorization of any
Governmental Authority, each Grantor agrees to execute and deliver, or to
cause the execution and delivery of, all applications, certificates,
instruments, assignments, and other documents and papers that the Agent or
any purchaser of the Collateral may be required to obtain for such
governmental consent, approval, registration, qualification, or
authorization.
(H) Each Grantor waives all claims, damages and demands against the Agent or
any of the Holders of Secured Obligations, as the case may be, arising out
of the repossession, retention or sale of any of the Collateral or any part
or parts thereof, except any such claims, damages and awards arising solely
out of the gross negligence or willful misconduct of the Agent or any of
the Holders of Secured Obligations, as the case may be, as determined in a
final, non-appealable judgment of a court of competent jurisdiction.
(I) The rights and remedies provided under this Agreement are cumulative and
may be exercised singly or concurrently and are not exclusive of any rights
and remedies provided by applicable law or equity.
Section 17. Exercise of Remedies. In connection with the exercise of its
remedies pursuant to Section 16, the Agent may, (i) exchange, enforce, waive or
release any portion of the Collateral and any other security for the Secured
Obligations; (ii) apply such Collateral or security and direct the order or
manner of sale thereof as the Agent may, from time to time, determine; and (iii)
settle, compromise, collect or otherwise liquidate any such Collateral or
security in any manner following the occurrence of a Default, without affecting
or impairing the Agent's right to take any other further action with respect to
any remaining Collateral or security or any part thereof.
Section 18. License.
(A) The Agent is hereby granted a license or other right to use, following the
occurrence and during the continuance of a Default, without charge, any
Grantor's labels, patents, copyrights, trade secrets, trade names,
trademarks, service marks, customer lists and advertising matter, or any
property of a similar nature, as any of the foregoing pertains to the
Collateral, in completing production of, advertising for sale, and/or
selling any Collateral; and
(B) Each Grantor's rights under all licenses and all franchise agreements shall
inure to the Agent's benefit.
Section 19. Injunctive Relief. Each Grantor recognizes that in the event such
Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Holders of Secured Obligations; therefore, such Grantor agrees
that the Holders of Secured Obligations, if the Agent so determines and
requests, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 20. Interpretation and Inconsistencies; Merger.
(A) The rights and duties created by this Agreement shall, in all cases, be
interpreted consistently with, and shall be in addition to (and not in lieu
of), the rights and duties created by the Credit Agreement and the other
Loan Documents. In the event that any provision of this Agreement shall be
inconsistent with any provision of the Credit Agreement or any other Loan
Document, such provision of the other Loan Document shall govern.
(B) Except as provided in subsection (A) above, this Agreement represents the
final agreement of the Grantors and the Agent with respect to the matters
contained herein and may not be contradicted by evidence of prior or
contemporaneous agreements, or subsequent oral agreements, between the
Grantors and the Agent or any other Holder of Secured Obligations.
Section 21. Expenses. Each Grantor will upon demand pay to the Agent and/or the
Holders of Secured Obligations the amount of any and all reasonable expenses,
including the reasonable fees and disbursements of their counsel and of any
experts and agents, as provided in Section 10.7 of the Credit Agreement.
Section 22. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by any Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Agent
and the applicable Grantor, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. The
addition of any Subsidiary as a Grantor hereunder by execution of an Addendum in
the form of Annex I (with such modifications as shall be acceptable to the
Agent) shall not require receipt of any consent from or other execution of any
documentation by any other Grantor party hereto.
Section 23. Notices. All notices and other communications provided to any party
hereto under this Agreement shall be delivered to such party in the manner set
forth in Section 14.1 of the Credit Agreement at its address set forth on
Schedule 1 hereto or on its respective Addendum hereto, as applicable, or at
such other address as may be designated by such party in a notice to the other
parties.
Section 24. Continuing Security Interest; Termination.
(A) Except as provided in Section 24(B), this Agreement shall create a
continuing security interest in the Collateral and shall (i) remain in full
force and effect until the later of (a) the payment or satisfaction in full
in cash of the Secured Obligations and (b) the termination or expiration of
the Commitments, all Letters of Credit issued pursuant to the Credit
Agreement and the other Loan Documents, (ii) be binding upon each Grantor,
their respective successors and assigns and (iii) inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the Agent and
the Holders of Secured Obligations. Nothing set forth herein or in any
other Loan Document is intended or shall be construed to give any other
Person any right, remedy or claim under, to or in respect of this Agreement
or any other Loan Document or any Collateral. Each Grantor's respective
successors and assigns shall include, without limitation, a receiver,
trustee or debtor-in-possession thereof or therefor.
(B) Upon the later of (i) the payment or satisfaction in full in cash of the
Secured Obligations and (ii) the termination or expiration of the
Commitments, all Letters of Credit issued pursuant to the Credit Agreement
and the other Loan Documents, this Agreement and the security interest
granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantor. Upon any such termination of security
interest, such Grantor shall be entitled to the return, upon its request
and at its expense, of such of the Collateral held by the Agent as shall
not have been sold or otherwise applied pursuant to the terms hereof and
the Agent will, at such Grantor's expense, execute and deliver to such
Grantor such other documents as such Grantor shall reasonably request to
evidence such termination. In connection with any sales of assets permitted
under the Credit Agreement, and provided adequate provision is made for the
application of the proceeds thereof in a manner consistent with the
requirements of the Credit Agreement, the Agent will release and terminate
the liens and security interests granted under this Agreement with respect
to such assets.
Section 25. Severability; No Strict Construction.
(A) It is the parties' intention that this Agreement be interpreted in such a
way that it is valid and effective under applicable law. However, if one or
more of the provisions of this Agreement shall for any reason be found to
be invalid or unenforceable, the remaining provisions of this Agreement
shall be unimpaired.
(B) The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
(C) No duties or obligations of any Grantor hereunder shall be released,
discharged or otherwise affected by the addition or removal of any other
Grantor hereunder or the release of any security interest in or lien
against any individual Grantor's portion of the Collateral.
Section 26. GOVERNING LAW. ANY DISPUTE BETWEEN ANY GRANTOR AND THE AGENT OR ANY
OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE
LAWS (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW
YORK (EXCEPT TO THE EXTENT THAT THE UCC PROVIDES FOR THE APPLICATION OF LAWS OF
ANOTHER STATE). THE PARTIES TO THIS AGREEMENT HAVE VOLUNTARILY ELECTED THAT,
EXCEPT AS OTHERWISE PROVIDED IN THE PRECEDING SENTENCE, THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS AND ALL LOANS BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.
Section 27. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 28. Entire Agreement. This Agreement embodies the final and entire
agreement and understanding among the Grantors, the Agent and the Lenders and
supersedes all prior agreements and understandings among the Grantors, the Agent
and the Lenders relating to the subject matter hereof. This Agreement may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties
hereto.
The remainder of this page is intentionally blank.
SIGNATURE PAGE TO SECURITY AGREEMENT
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
BANK ONE, NA, as Agent
By:____________________________________
Name:
Title:
CTS CORPORATION
By:__________________________________
Name:
Title:
CTS CORPORATION (DELAWARE) LTB INVESTMENT CORPORATION
By: _________________________
Name: By: _________________________
Title: Name:
Title:
CTS WIRELESS COMPONENTS, INC. DYNAMICS CORPORATION OF AMERICA
By: _________________________ By: _________________________
Name: Name:
Title: Title:
PLEDGE OVER SHARES
BETWEEN
1. CTS CORPORATION, a corporation organised under the laws of the
State of Indiana, the United States of America (the"Pledgor");
AND
2. BANK ONE, NA, a national banking association of the United
States of America, as Agent under the Credit Agreement, as hereinafter
defined (the "Administrative Agent," which expression shall include any
person for the time being appointed as Agent for the purpose of, and in
accordance with, the Credit Agreement).
WHEREAS, the Pledgor has entered into the Credit Agreement pursuant to which,
subject to the terms and conditions provided therein, the Lenders have agreed to
make loans and other financial accommodations to the Pledgor and the Agent has
agreed to act as administrative agent for the Lenders.
WHEREAS, the Administrative Agent has required, under the terms of the Credit
Agreement, that the Pledgor execute and deliver this Pledge Over Shares.
NOW THIS PLEDGE WITNESSES as follows:
1. INTERPRETATION
1.1 Words and expressions defined in the Credit Agreement shall, in
the absence of express indication to the contrary and save where the
context or subject matter otherwise requires, have the same meanings
when used in this Pledge.
1.2 Definitions
In this Deed:
"Borrower Credit Documents" means the documents described,
collectively, in the definition of "Loan Documents" in the Credit
Agreement.
"Business Day" has the meaning given to it in the Credit Agreement.
"Collateral Documents" means the documents described, collectively, in
the definition of "Collateral Documents" in the Credit Agreement.
"Company" means CTS Corporation U.K. Ltd, a company incorporated under
the law of Scotland (Company No.SC090209) and having its Registered
Office at Xxxxxxxx Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxxxx, Xxxxxx X00 0XX
"Credit Agreement" means the Third Amended and Restated Credit
Agreement dated as of 20 December, 2001 made between the Pledgor as
Borrower, the Administrative Agent, and the Lenders as defined therein,
as amended, varied, novated or supplemented from time to time.
"Default" means a "Default" as described in Article VII of the Credit
Agreement.
Signature Page to
Charge Over shares
"Delegate" means a delegate or sub-delegate appointed pursuant to
clause 11.3.
"Dissolution" of a person includes the bankruptcy, insolvency,
liquidation, amalgamation, reconstruction, reorganisation,
administration, administrative or other receivership, or dissolution of
that person, and any equivalent or analogous proceeding by whatever
name known and in whatever jurisdiction, and any step taken (including,
but without limitation, the presentation of a petition or the passing
of a resolution) for or with a view to any of the foregoing.
"Dividends" means all dividends, interest and other income paid or
payable in cash in respect of the Original Shares and the Related
Assets.
"Finance Documents" means the Borrower Credit Documents and the
Collateral Documents.
"Original Shares" means the Shares listed in Part 1 of the Schedule
hereto "Pledge" means all or any of the Security created, or which may
at anytime be created, by or pursuant to this pledge.
"Pledged Portfolio" means the Original Shares and the Related Assets.
"Related Assets" means all Shares, Dividends, rights or other property
or monies which accrue or are offered, issued, paid or payable at any
time (by way of bonus, rights, redemption, conversion, exchange,
substitution, consolidation, subdivision, preference, warrant, option,
purchase or otherwise) in respect of the Original Shares or any Shares,
Dividends, rights or other property or monies previously accruing,
offered, issued or paid as mentioned in this definition.
"Rights" means rights, benefits, powers, privileges, authorities,
discretions and remedies (in each case, of any nature whatsoever).
"Secured Obligations" means (i) all obligations owing to the
Administrative Agent (whether for its own account or as Agent pursuant
to the Credit Agreement) by the Pledgor under or pursuant to the
Finance Documents and (ii) all "Secured Obligations" (as such term is
defined in the Credit Agreement), in each case whether present or
future, actual or contingent (and whether incurred by the Pledgor alone
or jointly, and whether as principal, guarantor, cautioner or surety or
in some other capacity).
"Security" includes any mortgage, fixed or floating charge,
encumbrance, lien, pledge, hypothecation, assignment by way of
security, or title retention arrangement (other than in respect of
goods purchased in the ordinary course of trading) and any agreement or
arrangement having substantially the same economic or financial effect
as any of the foregoing (including any "holdback" or "flawed asset"
arrangement).
"Shares" means stocks, shares and other securities of any kind held by
the Pledgor.
1.3 In this Agreement:
(a) the rules of interpretation contained in Article 1 (Definitions) of the
Credit Agreement shall apply to the construction of this Pledge;
(b) any reference in this Pledge to the "Administrative Agent" shall be
construed so as to include their and any subsequent successors and
permitted assignees and transferees and, in the case of the Administrative
Agent, any person for the time being appointed as administrative agent or
administrative agents in accordance with this Pledge; and
(c) references in this Pledge to any Clause or any Schedule shall be to a
clause or schedule contained in this Pledge.
2. UNDERTAKING TO PAY
The Pledgor undertakes with the Administrative Agent to pay and
discharge all Secured Obligations in accordance with the provisions of
the Credit Agreement.
3. PLEDGE
As continuing security for the payment and discharge of all the Secured
Obligations the Pledgor pledges and assigns to the Administrative Agent
its whole right, title, interest and benefit (including any Rights) in
and to the Original Shares and the Related Rights and all other
securities (if any) which are hereafter transferred or delivered to the
Administrative Agent or its nominee or otherwise agreed to be held on
the terms of this Pledge (including without prejudice to the foregoing
generality any Related Assets).
4. UNDERTAKING TO DEPOSIT AND FURTHER ASSURANCES
4.1 Original Shares
The Pledgor shall, immediately after the execution of this Pledge in
the case of the Original Shares, deposit (or procure there to be
deposited) with the Administrative Agent or its nominee:
(a) all share certificates, documents of title and other documentary evidence
of ownership in relation to such Original Shares; and
(b) stock transfer forms in respect of such Original Shares executed by the
Pledgor (or if appropriate, its nominee in whose name such shares are
registered) with the name of the transferee left blank or, if the
Administrative Agent so requires, duly executed by the Pledgor or such
nominee in favour of the Administrative Agent (or the Administrative
Agent's nominee), together with such other documents as the Administrative
Agent may reasonably require to enable the Administrative Agent (or the
Administrative Agent's nominee) or any purchaser to be registered as the
owner of, or otherwise to obtain legal title to, such Original Shares.
4.2 Articles of Association
The Pledgor shall, immediately upon the execution of this Deed, procure
that a special resolution of the Company is passed resolving to amend
its Articles of Association in the form specified in Part 2 of the
Schedule. From and after the date hereof, the Pledgor undertakes that
it shall not permit the Articles of Association of the Company to be
amended or modified in any way that would be adverse to the interests
of the Administrative Agent.
4.3 Related Assets
The Pledgor shall, promptly upon the accrual, offer, issue or payment
of any Related Assets, deliver or pay to the Administrative Agent or
procure the delivery or payment to the Administrative Agent of:
(a) all such Related Assets or the share certificates,
renounceable certificates, letters of allotment, documents
of title and other documentary evidence of ownership
in relation to them; and
(b) stock transfer forms in respect of any Shares comprised
in such Related Assets executed by the Pledgor (or if
appropriate, its nominee in whose name such shares are
registered) with the name of the transferee left blank or, if
the Administrative Agent so requires, duly executed by the
Pledgor or such nominee in favour of the Administrative Agent
(or the Administrative Agent's nominee) together with such
other documents as the Administrative Agent may reasonably
require to enable the Administrative Agent (or the
Administrative Agent's nominee) or any purchaser to be
registered as the owner of, or otherwise to obtain legal title
to, the Shares comprised in such Related Assets.
4.4 Further Assurances
In addition to and without prejudice to anything else contained in this
Pledge, the Pledgor shall, at its own cost, promptly execute and do all
such deeds, instruments, transfers, renunciations, proxies, notices,
documents, assurances, acts and things in such form as the
Administrative Agent may from time to time deem reasonably necessary or
advisable:
(a) for perfecting, preserving or protecting the Pledge or the priority of
the Pledge; and
(b) for facilitating the realisation of the Pledge or for enforcing
the same or exercising any of the Administrative Agent's
Rights hereunder.
4.5 Pledged Portfolio
Notwithstanding anything to the contrary provided in this Pledge, the
Pledgor undertakes with the Administrative Agent that under no
circumstances shall the Pledged Portfolio exceed, nor any steps be
taken by either the Pledgor or the Administrative Agent that would
result in the Pledged Portfolio exceeding, 65 percent (65%) in nominal
value of the entire issued share capital of the Company.
5. REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants to the Administrative Agent that:
(a) it is the sole direct, unfettered legal and beneficial owner of the
Pledged Portfolio;
(b) no Security (other than the Pledge) exists on, over or with respect to
any of the Pledged Portfolio;
(c) it has not sold, transferred, lent, assigned, parted with its
interest in, disposed of, granted any option in respect of or otherwise
dealt with any of its Rights, title and interest in and to the Pledged
Portfolio, or agreed to do any of the foregoing (other than pursuant to
this Pledge);
(d) the Original Shares and any Shares comprised in any Related
Assets are fully paid and there are no moneys or liabilities
outstanding in respect of any of the Pledged Portfolio;
(e) the Original Shares and any Shares comprised in any Related
Assets have been duly authorised and validly issued and are free from
any restrictions on transfer or rights of pre-emption and represent
sixty-five percent (65%), in nominal value, of the entire issued share
capital of the Company;
(f) it has the power to enter into, and perform and comply with its
obligations under, this Pledge, and to create the Pledge;
(g) the execution, delivery and performance of this Pledge will not
contravene any law or regulation to which the Pledgor is subject or any
provision of the Pledgor's Articles of Incorporation or Bylaws (or
equivalent incorporation and governing documents);
(h) all actions, conditions and things required to be taken, fulfilled
and done (including the obtaining of any necessary consents) in
order to:
(i) enable it lawfully to enter into, and perform and comply with its
obligations under, this Pledge;
(ii) ensure that those obligations are valid, legal, binding and
enforceable;
(iii) permit the creation of the Pledge and ensure
that (subject to all necessary registrations thereof
being made) the Pledge is a valid, legal, binding and
enforceable first fixed security over the Pledged
Portfolio ranking in priority to the interests of any
liquidator, administrator or creditor of the Pledgor,
except as expressly permitted otherwise in the Credit
Agreement; and
(iv) make this Pledge admissible in evidence in the courts of Scotland;
have been taken, fulfilled and done;
(i) the obligations of the Pledgor under this Pledge and
(subject to all necessary registrations thereof being made)
the Pledge are and will be until fully discharged valid,
legal, binding and enforceable and the Pledge constitutes a
first fixed security over the Pledged Portfolio ranking in
priority to the interests of any liquidator, administrator or
creditor of the Pledgor, except as expressly permitted
otherwise in the Credit Agreement; and
(j) each of the above representations and warranties will be correct
and complied with in all respects at all times during the continuance
of the Pledge as if repeated then by reference to the then existing
circumstances.
6. UNDERTAKINGS
The Pledgor shall (except as provided in the Credit Agreement):
(a) not create, attempt to create or permit to subsist any Security
(other than the Pledge) on, over or with respect to any of the Pledged
Portfolio or the right to receive or be paid the same or agree to do
so;
(b) not sell, transfer, lend, assign, part with its interest in,
dispose of, grant any option in respect of or otherwise deal with any
of its Rights, title and interest in and to the Pledged Portfolio, or
agree to do any of the foregoing (otherwise than pursuant to this
Pledge);
(c) not take or omit to take any action which act or omission could
adversely affect or diminish the value of any of the Pledged
Portfolio;
(d) ensure that there are no moneys or liabilities outstanding in respect
of any of the Pledged Portfolio;
(e) ensure that the Original Shares and any Shares comprised in any
Related Assets are free from any restriction on transfer or
rights of pre-emption;
(f) take all action within its power to procure, maintain in effect
and comply with all the terms and conditions of all approvals,
authorisations, consents and registrations necessary or appropriate for
anything provided for on its part in this Pledge;
(g) ensure that the Pledge will at all times be a legally valid and
binding first fixed security over the Pledged Portfolio ranking in
priority to the interests of any liquidator, administrator or creditor
of the Pledgor;
(h) without prejudice to clause 5(d), punctually pay all calls,
subscription moneys and other moneys payable on or in respect of any of
the Pledged Portfolio and indemnify and keep indemnified the
Administrative Agent and its nominees against any reasonable cost,
liabilities or expenses which it or they may suffer or incur as a
result of any failure by the Pledgor to pay the same;
(i) deliver to the Administrative Agent a copy of every circular,
notice, report, set of accounts or other document received by the
Pledgor in respect of or in connection with any of the Pledged
Portfolio as soon as reasonably practicable following receipt by the
Pledgor of such document;
(j) promptly deliver to the Administrative Agent all such information
concerning the Pledged Portfolio as the Administrative
Agent may request from time to time; and
(k) ensure that the Company does not issue any shares after the date of
this Pledge.
7. PLEDGOR'S RIGHTS BEFORE ENFORCEMENT
7.1 Subject to clause 7.2 until the Pledge shall become enforceable, the
Pledgor shall be entitled to:
(a) receive and retain free from the Pledge any Dividends paid to it, provided
that sixty-five percent (65%) of any dividends paid in stock and sixty-five
percent (65%) of any payment made to redeem or repurchase Shares shall be
Related Assets subject to the Pledge; and
(b) exercise and control the exercise of all voting and other Rights relating
to the Pledged Portfolio and to the extent that the Administrative Agent or
its nominee is the registered holder of the Pledged Portfolio, the
Administrative Agent shall or, as the case may be, procure that its nominee
shall,in respect of the exercise of all voting and other Rights relating to
the Pledged Portfolio either: (i) act in accordance with the reasonable
instructions of the Pledgor or (ii) execute a proxy in favour of the
Pledgor in accordance with Clause 7.3 provided that the Pledgor shall not
exercise or instruct the Administrative Agent (or its nominee) to exercise
voting and other Rights in any manner prejudicial to the interests of the
Administrative Agent (or its nominee) under this Pledge and in particular
the Pledgor shall not exercise or instruct the Administrative Agent (or its
nominee) to exercise any voting and other Rights in any manner to cause, or
otherwise permit (a) a variation of the Rights attaching to or conferred by
all or any part of the Pledged Portfolio, or (b) an increase in the issued
share capital of any company whose shares are charged pursuant to this
Pledge which in the opinion of the Administrative Agent would prejudice the
value of, or the ability of the Administrative Agent to realise, the
security created by this Pledge.7.2.
7.2 The Administrative Agent and its nominee shall be under
no obligation to act in relation to the Pledged Portfolio in
any way and shall not be liable to the Xxxxxxx for acting or
omitting to act in any way in relation to the Pledged
Portfolio.
7.3 Following the execution of this Pledge, the Administrative
Agent or its nominee (as the case may be) may execute a proxy
in favour of the Pledgor substantially in the form set out
in Part 3 of the Schedule hereto and such proxy shall
terminate immediately following an Event of Default, or
at any other time prior thereto as the Administrative Agent or
its nominee (as the case may be) may direct.
8. ENFORCEMENT
Subject to Clause 7, the Pledge shall become enforceable upon and at
any time after the occurrence of a Default which is continuing
unremedied or unwaived, and not before.
9. DEALINGS WITH PLEDGED PORTFOLIO ON ENFORCEMENT
9.1 Rights of Administrative Agent
At any time after the Pledge has become enforceable, the Administrative
Agent shall have the right, without any notice to or consent of the
Pledgor:
(a) Possession
(to the extent it has not already done so) to take possession of, and
to collect the Pledged Portfolio, and in particular to take any steps
necessary to vest all or any of the Pledged Portfolio in the name of
the Administrative Agent or its nominee (including completing any
transfers of any Shares comprised in the Pledged Portfolio) and to
receive and retain any Dividends;
(b) Sell
to sell, exchange, convert into money or otherwise dispose of or
realise the Pledged Portfolio (whether by public offer or private
contract) to any person and for such consideration (whether comprising
cash, debentures or other obligations, Shares or other valuable
consideration of any kind) and on such terms (whether payable or
deliverable in a lump sum or by installments) as it may think fit, and
for this purpose to complete any transfers of the Pledged Portfolio;
(c) Voting Rights
for the purpose of preserving the value of the Pledge or realising the
same, to exercise or direct the exercise of all voting and other Rights
relating to the Pledged Portfolio in such manner as it may think fit;
(d) Claims
to settle, adjust, refer to arbitration, compromise and arrange any
claims, accounts, disputes, questions and demands relating in any way
to the Pledged Portfolio;
(e) Legal actions
to bring, prosecute, enforce, defend and abandon actions, suits
and proceedings in relation to the Pledged Portfolio; and
(f) Other Rights
to do all such other acts and things it may reasonably consider
necessary or expedient for the realisation of the Pledged Portfolio or
incidental to the exercise of any of the Rights conferred on it under
or in connection with this Pledge or otherwise and to concur in the
doing of anything which it has the Right to do and to do any such thing
jointly with any other person.
9.2 Obligations of Pledgor
After the Pledge has become enforceable:
(a) all Dividends shall be paid to and retained by the Administrative
Agent, and any such moneys which may be received by the Pledgor shall,
pending such payment, be segregated from any other property of the
Pledgor and held in trust for the Administrative Agent
10. APPLICATION OF MONEYS
10.1 All moneys arising from the exercise of the powers of enforcement
under this Pledge shall (except as may be otherwise required by
applicable law) be held and applied in accordance with the Credit
Agreement.
11. GENERAL RIGHTS OF ADMINISTRATIVE aGENT
11.1 Redemption of Security
The Administrative Agent may at any time redeem any Security over the
Pledged Portfolio having priority to the Pledge or procure the transfer
thereof to the Administrative Agent and may settle the accounts of
encumbrancers. Any accounts so settled shall be conclusive and binding
on the Pledgor. The Pledgor shall on demand pay to the Administrative
Agent all principal moneys, interest, costs, charges, losses,
liabilities and expenses of and incidental to any such redemption or
transfer.
11.2 New Account
At any time following:
(a) the Administrative Agent receiving notice (either actual or
constructive) of any subsequent Security affecting the Pledged
Portfolio; or
(b) the Dissolution of the Pledgor,
the Administrative Agent may open a new account in the name of the
Pledgor (whether or not it permits any existing account to continue).
If the Administrative Agent does not open such a new account, it shall
nevertheless be treated as if it had done so at the time when the
notice was received or was deemed to have been received or, as the case
may be, the Dissolution commenced. Thereafter, all payments made by the
Pledgor to the Administrative Agent or received by the Administrative
Agent for the account of the Pledgor shall be credited or treated as
having been credited to the new account and shall not operate to reduce
the amount secured by this Pledge at the time when the Administrative
Agent received or was deemed to have received such notice or, as the
case may be, the Dissolution commenced.
11.3 Delegation
The Administrative Agent may delegate in any manner to any person any
of the Rights which are for the time being exercisable by the
Administrative Agent under this Pledge. Any such delegation may be made
upon such terms and conditions (including power to sub-delegate) as the
Administrative Agent may think fit.
11.4 Set-off by Administrative Agent
The Administrative Agent may at any time, without notice to the Pledgor
and without prejudice to any of the Administrative Agent's other
Rights, set off any Secured Obligations which are due and unpaid
against any obligation (whether or not matured) owed by the
Administrative Agent to the Pledgor, regardless of the place of payment
or booking branch, and for that purpose the Administrative Agent may
convert one currency into another at the rate of exchange determined by
the Administrative Agent in its absolute discretion to be prevailing at
the date of set-off. For the purposes of this Clause 11 and Clause 16
set-off shall include any right of retention, compensation, balancing
of accounts on insolvency and any deduction.
12. LIABILITY OF ADMINISTRATIVE Agent, DELEGATES AND NOMINEES
12.1 Possession
If the Administrative Agent or any Delegate shall take possession of
the Pledged Portfolio, it may at any time relinquish such possession to
the Pledgor.
12.2 Administrative Agent's Liability
The Administrative Agent shall not in any circumstances (whether by
reason of taking possession of the Pledged Portfolio or for any other
reason whatsoever and whether as mortgagee in possession or on any
other basis whatsoever):
(a) be liable to account to the Pledgor or any other person for anything
except the Administrative Agent's own actual receipts; or
(b) be liable to the Pledgor or any other person for any
costs, charges, losses, damages, liabilities or expenses
arising from any realisation of the Pledged Portfolio or from
any exercise or non-exercise by the Administrative Agent of
any Right conferred upon it in relation to the Pledged
Portfolio or from any act, default, omission or misconduct of
the Administrative Agent, its officers, employees or agents in
relation to the Pledged Portfolio except to the extent that
they shall be caused by the Administrative Agent's own fraud,
negligence or willful misconduct or that of its officers or
employees.
12.3 Delegate's and Nominee's Liability
All provisions of clause 12.2 shall apply, mutatis mutandis, in respect
of the liability of any Delegate or nominee of the Administrative Agent
or any officer, employee or agent of the Administrative Agent, any
Delegate or any nominee of the Administrative Agent.
12.4 Indemnity
The Administrative Agent, any nominee of the Administrative Agent and
every Delegate, attorney, manager, agent or other person appointed by
the Administrative Agent hereunder shall be entitled to be indemnified
out of the Pledged Portfolio in respect of all liabilities and expenses
incurred by any of them in the lawful execution of any of its Rights
and against all actions, proceedings, costs, claims and demands in
respect of any matter or thing done or omitted in any way relating to
the Pledged Portfolio, and the Administrative Agent and any such
Delegate, attorney, manager, agent or other person appointed by the
Administrative Agent hereunder may retain and pay all sums in respect
of the same out of any moneys received. The rights of indemnification
set forth in this clause 12.4 shall not apply to the extent that such
liabilities or expenses are incurred solely by reason of the fraud,
negligence or willful misconduct of the Administrative Agent, Delegate
or appointee, as appropriate. The rights to indemnification set forth
in this clause 12.4 shall not be in any way in limitation of the rights
to indemnification granted under Section 10.7 of the Credit Agreement.
13. PROTECTION OF THIRD PARTIES
13.1 No person dealing with the Administrative Agent or any Delegate
shall be concerned to inquire whether any event has happened upon which
any of the Rights conferred under or in connection with this Pledge are
or may be exercisable, whether any consent, regulations, restrictions
or directions relating to such Rights have been obtained or complied
with or otherwise as to the propriety or regularity of acts purporting
or intended to be in exercise of any such Rights or as to the
application of any money borrowed or raised or other proceeds of
enforcement. All the protections to purchasers at law for the time
being in force shall apply to any person purchasing from or dealing
with the Administrative Agent or any Delegate.
13.2 The receipt of the Administrative Agent shall be an absolute and
conclusive discharge to a purchaser and shall release him of any
obligation to see to the application of any moneys paid to or by the
direction of the Administrative Agent.
13.3 In clauses 13.1 and 13.2, "purchaser" includes any person
acquiring, for money or money's worth, any Security over, or any other
interest or right whatsoever in relation to, any of the Pledged
Portfolio.
14. CONTINUING SECURITY
The Pledge shall be a continuing security for the Secured Obligations
and shall not be satisfied, discharged or affected by any intermediate
payment or settlement of account (whether or not any Secured
Obligations remain outstanding thereafter) or any other matter or thing
whatsoever including the intermediate satisfaction by the Pledgor of
the whole or any part of the Secured Obligations.
15. OTHER SECURITY
The Pledge shall be in addition to and shall not be prejudiced by any
other security or any guarantee or indemnity or other document which
the Administrative Agent may at any time hold for the payment of the
Secured Obligations.
16. PLEDGE NOT TO BE AFFECTED
Without prejudice to clauses 11 and 12, neither the Pledge nor the
liability of the Pledgor for the Secured Obligations shall be
prejudiced or affected by:
(a) any variation or amendment of, or waiver or release granted under or
in connection with, any other security or any guarantee or indemnity
or other document;
(b) time being given, or any other indulgence or concession being granted,
by the Administrative Agent to the Pledgor or any other person;
(c) any of the obligations of the Pledgor under the Credit Agreement
or under any other security relating to the Credit Agreement being or
becoming illegal, invalid, unenforceable or ineffective in any respect;
(d) any failure to take, or fully to take, any security contemplated
by the Credit Agreement or otherwise agreed to be taken in respect of
the Pledgor's obligations under the Credit Agreement;
(e) any failure to realise or fully to realise the value of, or any
release, discharge, exchange or substitution of, any such security or
taken in respect of the Pledgor's obligations under the Credit
Agreement;
(f) the winding-up, insolvency, liquidation, dissolution,
administration or re-organisation (and any equivalent or analogous
proceeding by whatever name known and in whatever jurisdiction) of the
Pledgor or any other person;
(g) any change in the constitution of the Pledgor;
(h) any amalgamation, merger or reconstruction that may be effected
by the Administrative Agent with any other person or any sale or
transfer of the whole or any part of the undertaking, property and
assets of the Administrative Agent to any other person;
(i) the existence of any claim, set-off or other right which the Pledgor
may have at any time against the Administrative Agent or any other
person;
(j) the making or absence of any demand for payment of any Secured
Obligations on the Pledgor or any other person, whether by
the Administrative Agent or any other person;
(k) any arrangement or compromise entered into by the Administrative Agent
with the Chargor or any other person; or
(l) any other thing done or omitted or neglected to be done by the
Administrative Agent or any other person or any other dealing, fact,
matter or thing which, but for this provision, might operate to
prejudice or affect the liability of the Pledgor for the Secured
Obligations.
17. RELEASE OF PLEDGED PORTFOLIO
17.1 Release of Pledged Portfolio
If the Administrative Agent is satisfied that:
(a) all Secured Obligations have been irrevocably paid or discharged
in full in cash, neither the Lenders nor the Administrative Agent has
any further contingent obligations to lend or grant or create any other
commitment or liabilities under or in connection with the Credit
Agreement or any instruments or documents related or issued pursuant
thereto and the Credit Agreement has been terminated; or
(b) Security or a guarantee for the Secured Obligations, in each
case acceptable in its absolute discretion to the
Administrative Agent, has been provided in substitution for
this Pledge,
then, subject to clause 17.2, the Administrative Agent shall at the
request and cost of the Pledgor execute such deeds and documents and do
all such acts and things as may be necessary to release, re-assign and
discharge the Pledged Portfolio from the Pledge.
17.2 Retention of Deed
If the Pledgor requests the Administrative Agent to release reassign
and discharge the Pledged Portfolio from the Pledge following any
payment or discharge made or security or guarantee given in relation to
the Secured Obligations by a person other than the Pledgor (a "Relevant
Transaction"), the Administrative Agent shall be entitled to retain
this Pledge (and all stock and share certificates, documents of title
and other documentary evidence of ownership in relation to the Pledged
Portfolio deposited with the Administrative Agent pursuant to clause 4)
and shall not be obliged to release reassign and discharge the Pledged
Portfolio from the Pledge until the expiry of the Retention Period in
relation to that Relevant Transaction. If at any time before the expiry
of that Retention Period the winding-up, dissolution, administration or
re-organisation of such other person shall have commenced, the
Administrative Agent may continue to retain this Pledge (and all such
stock and share certificates, documents of title and documentary
evidence) and shall not be obliged to release reassign and discharge
the Pledged Portfolio from the Pledge for such further period as the
Administrative Agent may reasonably determine.
17.3 Retention Period
For the purpose of clause 17.2, "Retention Period" means, in relation
to any Relevant Transaction, the period which commences on the date
when that Relevant Transaction was made or given, and which ends on the
date falling one month after the expiration of the maximum period
within which that Relevant Transaction can be avoided, reduced or
invalidated by virtue of any applicable law or for any other reason
whatsoever.
18. POWER OF ATTORNEY
18.1 Appointment
The Pledgor hereby appoints, irrevocably and by way of security, the
Administrative Agent and any person nominated in writing by the
Administrative Agent as attorney of the Pledgor severally to be the
attorney of the Pledgor (with full powers of substitution and
delegation), on its behalf and in its name or otherwise, at such time
and in such manner as the attorney may think fit:
(a) to do anything which the Pledgor is or may be obliged to do (but
has not done) under this Pledge including, but without
limitation, to complete and execute any transfer of Shares; and
(b) generally to exercise all or any of the Rights conferred on the
Administrative Agent in relation to the Pledged Portfolio or under or
in connection with this Pledge.
18.2 Ratification
The Pledgor undertakes to ratify and confirm whatever any attorney
shall do or purport to do in the exercise or purported exercise of the
power of attorney in clause 15.1.
19. CURRENCY INDEMNITY
19.1 Currency Indemnity
If, under any applicable law, whether pursuant to a judgement against
the Pledgor or for any other reason, any payment under or in connection
with this Pledge is made or falls to be satisfied in a currency (the
"Other Currency") other than the currency in which the relevant payment
is expressed to be payable (the "Required Currency"), then, to the
extent that the payment actually received by the Administrative Agent
(when converted into the Required Currency at the rate of exchange on
the date of payment or, if it is not practicable for the Administrative
Agent to make the conversion on that date, at the rate of exchange as
soon afterwards as it is practicable for the Administrative Agent to do
so) falls short of the amount expressed to be due or payable under or
in connection with this Pledge, the Pledgor shall, as an original and
independent obligation under this Pledge, indemnify and hold the
Administrative Agent harmless against the amount of such shortfall.
19.2 Rate of Exchange
For the purpose of clause 16.1, "rate of exchange" means the rate at
which the Administrative Agent is able on the relevant date to purchase
the Required Currency with the Other Currency and shall take into
account any commission, premium and other costs of exchange and taxes
payable in connection with such purchase.
20. CERTIFICATE TO BE CONCLUSIVE EVIDENCE
For all purposes, including any proceedings, a copy of a certificate
signed by an officer of the Administrative Agent as to the amount of
any indebtedness comprised in the Secured Obligations for the time
being shall, in the absence of manifest error, be conclusive evidence
against the Pledgor as to the amount thereof.
21. STAMP DUTY
The Pledgor shall pay promptly, and in any event before any penalty
becomes payable, all stamp, documentary and similar taxes, if any,
payable in connection with the entry into, performance, enforcement or
admissibility in evidence of this Pledge or any other document referred
to in this Pledge, and shall indemnify the Administrative Agent against
any liability with respect to, or resulting from any delay in paying or
omission to pay, any such tax.
22. COMMUNICATIONS
Save as specifically otherwise provided in this Pledge, the provisions
of the Credit Agreement shall apply to any notice, demand or other
communication to be served under this Pledge. For the purposes hereof,
the address and facsimile number of each party hereto shall be as shown
immediately after its name on the signature page of this Pledge or at
such other address or number as it may from time to time notify in
writing to the other party.
23. RIGHTS AND WAIVERS
23.1 Delay
No delay or omission on the part of the Administrative Agent in
exercising any Right provided by law or under this Pledge shall impair
such Right or operate as a waiver thereof or of any other Right.
23.2 Single or Partial Exercise
The single or partial exercise by the Administrative Agent of any Right
provided by law or under this Pledge shall not preclude any other or
further exercise thereof or the exercise of any other Right.
23.3 Rights to be Cumulative
The Rights provided in this Pledge are cumulative with, and not
exclusive of, any Rights provided by law.
24. INVALIDITY
If at any time any provision of this Pledge is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, neither:
(a) the legality, validity or enforceability in that jurisdiction of any
other provision of this Pledge; nor
(b) the legality, validity or enforceability under the law of any
other jurisdiction of that or any other provision of this Pledge, shall
be affected or impaired.
25. ASSIGNMENT BY ADMINISTRATIVE AGENT
The Administrative Agent may at any time, without the consent of the
Pledgor, assign or transfer the whole or, as the case may be, any part
of the Administrative Agent's Rights under this Pledge to any person to
whom the whole or any part of any of the Administrative Agents's Rights
under the Credit Agreement shall be assigned or transferred.
26. GOVERNING LAW
This Deed shall be governed by and construed in accordance with Scots
law.
27. JURISDICTION
27.1 The Parties agree that the Courts of Scotland are to have
jurisdiction to settle any disputes which may arise out of or in
connection with this Pledge and that accordingly any Proceedings may be
brought in such Court. Nothing contained in this clause shall limit the
right of the Administrative Agent to take proceedings against the
Pledgor in any other Court or competent jurisdiction, nor shall the
taking of proceedings in one or more jurisdiction preclude the taking
of proceedings in any other jurisdiction, whether concurrently or not,
to the extent permitted by the law of such other jurisdiction.
27.2 The Pledgor hereby appoints the persons below to accept service
of any proceedings in the Scottish courts on its behalf. If for any
reason any such agent shall cease to act as agent aforesaid of the
Pledgor, the Pledgor shall forthwith appoint a replacement agent in
Glasgow. Failing such appointment within 15 days after demand by any
other party to this Agreement, the agent shall be entitled to appoint
another agent on behalf of the Pledgor. Nothing herein shall affect the
right to reserve process in any other manner permitted by law.
Name: CTS Corporation UK Limited
Address: Blantyre Industrial Estate
High Blantyre
GLASGOW G72 OXA
8. CONSENT TO REGISTRATION
And we consent to registration hereof for preservation and execution
IN WITNESS WHEREOF these presents written on this and the preceding 16 pages
together with the Schedule annexed hereto are executed as follows:-
Subscribed for and on behalf of
CTS CORPORATION
.................................................................
Authorised Signatory
at
on the
acting by
its authorised signatory acting under the authority of its board of directors
Before this Witness
Name: _____________________________
Address: _____________________________
Title: _____________________________
Notice Details:
Address: CTS Corporation
000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000 X.X.X.
Facsimile: 000 000 0000
Attn: Xxxxx Xxxxxxxx
Signed for and on behalf of
BANK ONE, NA
...............................................
Authorised Signatory
At
On the
Acting by
Its authorised signatory
Before this Witness
Name: ______________________________
Address: _____________________________
Title: _______________________________
Notice Details:
Address: 1 Bank Xxx Xxxxx
.........Xxxx Xxxxx XX0-0000
.........Chicago, Illinois 60670
.........U.S.A.
Facsimile:........
Attn: .........
Thisis the Schedule referred to in the foregoing Pledge over Shares by
CTS Corporation in favour of Bank One, NA
Part 1
ORIGINAL SHARES
Name of Company No of Class of Nominal Value of Registered
Shares Shares each share Holder(s) as at
the date hereof
CTS Corporation UK 1,220,885 Ordinary (pound)1.00 CTS Corporation
Limited
(Registered No
SC090209)
FORM OF AGREEMENT
PLEDGE AGREEMENT 1
THIS PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of
December 20, 2001, is entered into by and between ___________________________, a
__________________ corporation (the "Pledgor"), and Bank One, NA, as contractual
representative (the "Agent") for itself and for the "Holders of Secured
Obligations" under and as defined in the below described Credit Agreement.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings ascribed to such terms in such Credit Agreement.
WITNESSETH:
WHEREAS, CTS Corporation, an Indiana corporation (the
"Borrower") has entered into that certain Third Amended and Restated Credit
Agreement, dated as of December 20, 2001, by and among the Borrower, the
financial institutions from time to time parties thereto as lenders (the
"Lenders"), and the Agent (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), which Credit
Agreement amends and restates in its entirety the Second Amended and Restated
Credit Agreement, dated as of February 1, 2000 (as amended, the "Prior Credit
Agreement"), to which the Borrower is a party;
WHEREAS, the Credit Agreement, among other things,
re-evidences the Borrower's outstanding obligations under the Prior Credit
Agreement and provides, subject to the terms thereof, for future extensions from
time to time of credit and other financial accommodations by the Lenders to the
Borrower;
WHEREAS, the Borrower owns, directly or indirectly, all or
substantially all of the issued and outstanding Capital Stock of the Pledgor;
and the Pledgor shall derive benefits, both direct and indirect, by the
effectiveness of the Credit Agreement;
WHEREAS, the Pledgor has entered into that certain Amended and
Restated Guaranty dated as of December 20, 2001 (the "Subsidiary Guaranty"),
pursuant to which it has guaranteed, without limitation and with full recourse,
the payment when due of all Secured Obligations, including without limitation
all principal interest, letter of credit reimbursement obligations and other
amounts that shall be at any time payable by the Borrower under the Credit
Agreement or the other Loan Documents;
WHEREAS, the Pledgor, in conjunction with the Borrower's entry
into the Credit Agreement, wishes to grant a security interest in and lien upon
its equity interests in certain of its Subsidiaries;
--------------------------
1 Pledgor to revise factual information set forth in each Exhibit and Schedule
hereto as appropriate.
WHEREAS, Schedule I hereto sets forth certain of the Pledgor's
Subsidiaries (the "Initial Pledged Subsidiaries");
WHEREAS, Pledgor may from time to time execute and deliver to
the Agent a supplement to this Pledge Agreement substantially in the form of
Exhibit A hereto (each such supplement, a "Pledge Supplement") setting forth
additional Subsidiaries of the Pledgor (the "Additional Pledged Subsidiaries")
(the Initial Pledged Subsidiaries and the Additional Pledged Subsidiaries,
collectively referred to herein as the "Pledged Subsidiaries"); and
WHEREAS, the Agent and the Lenders have required, as a
condition to the effectiveness of the Credit Agreement, that the Pledgor execute
and deliver this Pledge Agreement;
NOW, THEREFORE, for and in consideration of the foregoing and
of any financial accommodations or extensions of credit (including, without
limitation, any loan or advance by renewal, refinancing or extension of the
agreements described hereinabove or otherwise) heretofore, now or hereafter made
to or for the benefit of the Pledgor pursuant to the Credit Agreement or any
other agreement, instrument or document executed pursuant to or in connection
therewith, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the Agent hereby
agree as follows:
Section 1. Pledge. The Pledgor hereby pledges to the Agent, for the benefit of
the Agent and the Holders of Secured Obligations, and grants to the Agent for
the benefit of the Agent and the Holders of Secured Obligations, a security
interest in, the collateral described in Sections 1.1 through 1.5 below
(collectively, the "Pledged Collateral"):
1.1 Corporations.
(a) The shares of the capital stock of the Pledged Subsidiaries which are
corporations, now or at any time or times hereafter owned by the Pledgor (such
shares being identified on Schedule I attached hereto or on any Schedule I
attached to any applicable Pledge Supplement), and the certificates representing
the shares of such capital stock, all options and warrants for the purchase of
shares of the stock of such Pledged Subsidiaries now or hereafter held in the
name of the Pledgor (all of said capital stock, options and warrants and all
capital stock held in the name of the Pledgor as a result of the exercise of
such options or warrants being hereinafter collectively referred to as the
"Pledged Stock"), herewith, or from time to time, delivered to the Agent
accompanied by stock powers in the form of Exhibit B attached hereto and made a
part hereof (the "Powers") duly executed in blank, and all dividends, cash,
instruments, investment property and other property from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any or
all of the Pledged Stock.
(b) All additional shares of capital stock of the Pledged Subsidiaries
described in Section 1.1(a) above from time to time acquired by the Pledgor in
any manner, and the certificates, which shall be delivered to the Agent,
representing such additional shares (any such additional shares shall constitute
part of the Pledged Stock and the Agent is irrevocably authorized to
unilaterally amend Schedule I hereto or on any Schedule I to any applicable
Pledge Supplement to reflect such additional shares), and all purchase options,
warrants, dividends, cash, instruments, investment property and other rights and
options from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares.
1.2 Limited Liability Companies
(a) The membership interests of Pledgor in the Pledged Subsidiaries which are
limited liability companies now or at any time or times hereafter owned by the
Pledgor, and any certificates representing such membership interests in the
Pledged Subsidiaries (such membership interests being identified on Schedule I
attached hereto or on any Schedule I attached to any applicable Pledge
Supplement), all of the right, title and interest of the Pledgor in, to and
under its respective percentage interest, shares or units as a member and all
investment property in respect of such membership interests, including, without
limitation, Pledgor's interest in (or allocation of) the profits, losses,
income, gains, deductions, credits or similar items of such Pledged Subsidiaries
and the right to receive distributions of such Pledged Subsidiary's cash, other
property, assets, and all options and warrants for the purchase of membership
interests, whether now existing or hereafter arising, whether arising under the
terms of the certificates of formation, the limited liability company agreements
or any of the other organizational documents (such documents hereinafter
collectively referred to as the "Operating Agreements") of such Pledged
Subsidiaries, or at law or in equity, or otherwise and any and all of the
proceeds thereof (all of said membership interests, certificates, and warrants
being hereinafter collectively referred to as the "Pledged Membership
Interests") herewith delivered to the Agent, and all distributions, cash,
instruments, investment property and other property from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any or
all of the Pledged Membership Interests.
(b) Any additional membership interests in the Pledged Subsidiaries
described in Section 1.2(a) above from time to time acquired by the Pledgor in
any manner, and any certificates, which shall be delivered to the Agent,
representing such additional membership interests or any additional percentage
interests, shares, units, options or warrants of membership interests in Pledged
Subsidiaries (any such additional interests shall constitute part of the Pledged
Membership Interests and the Agent is irrevocably authorized to unilaterally
amend Schedule I hereto or any Schedule I to any applicable Pledge Supplement
from time to time to reflect such additional interests), and all options,
warrants, distributions, investment property, cash, instruments and other rights
and options from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such interests, and the Pledgor
shall promptly thereafter deliver to the Agent a certificate duly executed by
the Pledgor describing such percentage interests, certificates, units, options
or warrants and certifying that the same have been duly pledged hereunder.
1.3 Partnerships.
(a) All of the partnership interests of the Pledgor, in and to the Pledged
Subsidiaries which are partnerships now or at any time or times hereafter owned
by the Pledgor (such partnership interests being identified on Schedule I
attached hereto to or on Schedule I to any applicable Pledge Supplement), the
property (and interests in property) that is owned by such Pledged Subsidiaries,
all of the Pledgor's rights, if any, to participate in the management of such
Pledged Subsidiaries, all rights, privileges, authority and powers of the
Pledgor as owner or holder of its partnership interests in such Pledged
Subsidiaries, including, but not limited to, all contract rights related
thereto, all rights, privileges, authority and powers relating to the economic
interests of the Pledgor as owner or holder of its partnership interests in such
Pledged Subsidiaries, including, without limitation, all contract rights related
thereto, all options and warrants of the Pledgor for the purchase of any
partnership interests in such Pledged Subsidiaries, all documents and
certificates representing or evidencing the Pledgor's partnership interests in
such Pledged Subsidiaries, all of the Pledgor's interest in and to the profits
and losses of such Pledged Subsidiaries and the Pledgor's right as a partner of
such Pledged Subsidiaries to receive distributions of such Pledged Subsidiaries'
assets, upon complete or partial liquidation or otherwise, all of the Pledgor's
right, title and interest to receive payments of principal and interest on any
loans and/or other extensions of credit made by the Pledgor or its Affiliates to
such Pledged Subsidiaries, all distributions, cash, instruments, investment
property and other property from time to time received, receivable or otherwise
distributed in respect of, or in exchange for, the Pledgor's partnership
interests in such Pledged Subsidiaries, and any other right, title, interest,
privilege, authority and power of the Pledgor in or relating to such Pledged
Subsidiaries, all whether now existing or hereafter arising, and whether arising
under any partnership agreements of such Pledged Subsidiaries (as the same may
be amended, modified or restated from time to time, the "Partnership
Agreements") or otherwise, or at law or in equity and all books and records of
the Pledgor pertaining to any of the foregoing (all of the foregoing being
referred to collectively as the "Pledged Partnership Interests").
(b) Any additional partnership interests in the Pledged Subsidiaries
described in Section 1.3(a) above from time to time acquired by the Pledgor in
any manner, (any such additional interests shall constitute part of the Pledged
Partnership Interests and the Agent is irrevocably authorized to unilaterally
amend Schedule I hereto or any Schedule I to any applicable Pledge Supplement
from time to time to reflect such additional interests), and all options,
warrants, distributions, investment property, cash, instruments and other rights
and options from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such interests, and the Pledgor
shall promptly thereafter deliver to the Agent a certificate duly executed by
the Pledgor describing such percentage interests, options or warrants and
certifying that the same have been duly pledged hereunder.
1.4 Other Property. The property and interests in property described
in Section 3 below.
1.5 Proceeds. All proceeds of the collateral described in Sections 1.1
through 1.4 above.
Section 2. Security for Obligations. The liens and security interests
granted pursuant hereto in the Pledged Collateral secure the prompt payment,
performance and observance of the Pledgor's guaranty of the Borrower's Secured
Obligations as set forth in the Subsidiary Guaranty.
Section 3. Pledged Collateral Adjustments. If, during the term of this
Pledge Agreement:
(a) Any stock dividend, reclassification, readjustment or other change is
declared or made in the capital structure of any of the Pledged Subsidiaries, or
any option included within the Pledged Collateral is exercised, or both, or
(b) Any subscription warrants or any other rights or options shall be
issued in connection with the Pledged Collateral, then all new, substituted and
additional membership or partnership interests, certificates, shares, warrants,
rights, options, investment property or other securities, issued by reason of
any of the foregoing, shall be immediately delivered to and held by the Agent
under the terms of this Pledge Agreement and shall constitute Pledged Collateral
hereunder; provided, however, that nothing contained in this Section 3 shall be
deemed to permit any distribution or stock dividend, issuance of additional
membership or partnership interests or stock, warrants, rights or options,
reclassification, readjustment or other change in the capital structure of any
Pledged Subsidiary which is not expressly permitted by the Credit Agreement.
Section 4. Subsequent Changes Affecting Pledged Collateral. The Pledgor
represents and warrants that it has made its own arrangements for keeping itself
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, cash distributions or other distributions reorganization or other
exchanges, tender offers and voting rights), and the Pledgor agrees that neither
the Agent nor any of the Holders of Secured Obligations shall have any
obligation to inform the Pledgor of any such changes or potential changes or to
take any action or omit to take any action with respect thereto. The Agent may,
during the continuance of a Default, without notice and at its option, transfer
or register the Pledged Collateral or any part thereof into its or its nominee's
name with or without any indication that such Pledged Collateral is subject to
the security interest hereunder. In addition, the Agent may during the
continuance of a Default exchange certificates or instruments representing or
evidencing Pledged Shares, Pledged Membership Interests or Pledged Partnership
Interests for certificates or instruments of smaller or larger denominations.
Section 5. Representations and Warranties. The Pledgor represents and
warrants as follows:
(a) The Pledgor is the sole legal and beneficial owner of the percentage
of the issued and outstanding common stock, membership interests or partnership
interests, as applicable, of each of the Pledged Subsidiaries set forth opposite
the name of such Pledged Subsidiary on Schedule I hereto;
(b) The Pledgor has full corporate power and authority to enter into
this Pledge Agreement;
(c) There are no restrictions upon the voting rights associated with, or
upon the transfer of, any of the Pledged Collateral;
(d) The Pledgor has the right to vote, pledge and grant a security
interest in or otherwise transfer such Pledged Collateral free of any Liens,
except for Liens permitted under Section 7.2(B) of the Credit Agreement;
(e) The Pledgor owns the Pledged Collateral free and clear of any pledge,
mortgage, hypothecation, lien, charge, encumbrance or any security interest
therein, except for the pledge and security interest granted to the Agent and
the Holders of Secured Obligations hereunder, and except for any Lien permitted
under Section 7.2(B) of the Credit Agreement and any restrictions on transfer
contained in the Operating Agreements, the Partnership Agreements and any other
shareholders' agreement regarding any of the Pledged Stock;
(f) The pledge of the Pledged Collateral does not violate (1) the
articles, by-laws, Operating Agreements or Partnership Agreements, as
applicable, of the Pledged Subsidiaries, or any indenture, mortgage, bank loan
or credit agreement to which the Pledgor or any of the Pledged Subsidiaries is a
party or by which any of their respective properties or assets may be bound; or
(2) any restriction on such transfer or encumbrance of such Pledged Collateral;
(g) The Pledgor (1) shall cause the Pledged Subsidiaries which are
limited liability companies or limited partnerships to make a notation on their
respective records, which notation shall indicate the security interest granted
hereby, and (2) agrees to execute and deliver to each such Pledged Subsidiary a
pledge instruction ("Pledge Instruction") substantially in the form of Exhibit C
hereto, and, with respect to uncertificated limited liability company or limited
partnership interests, such notation, together with the filing of a financing
statement with respect to such uncertificated interest or execution of a control
agreement, in either case, according to the UCC (as defined in the Security
Agreement), shall create a valid and perfected first priority security interest
in such Pledged Collateral, in favor of the Agent for the benefit of the Agent
and the Holders of Secured Obligations, to the extent that such security
interest can be perfected in such Pledged Collateral by the filing of a
financing statement or the execution of a control agreement, as the case may be,
securing the payment and performance of the Secured Obligations;
(h) The Pledgor agrees to execute and file financing statements pursuant
to the UCC (as defined in the Security Agreement) as the Agent may request to
perfect the security interest granted hereby;
(i) No authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body that has not been
obtained is required either (i) for the pledge of the Pledged Collateral
pursuant to this Pledge Agreement or for the execution, delivery or performance
of this Pledge Agreement by the Pledgor (except for the filing of financing
statements contemplated pursuant to the term of Section 5(h) hereof) or (ii) for
the exercise by the Agent of the voting or other rights provided for in this
Pledge Agreement or the remedies in respect of the Pledged Collateral pursuant
to this Pledge Agreement (except as may be required in connection with such
disposition by laws affecting the offering and sale of securities generally);
(j) Upon delivery of each of the certificates representing the Pledged
Collateral, or, as applicable, in the case of certain uncertificated limited
liability company or limited partnership interests, upon execution of a control
agreement, the pledge of the Pledged Collateral pursuant to this Pledge
Agreement will create a valid and perfected first priority security interest in
the Pledged Collateral, in favor of the Agent for the benefit of the Agent and
the Holders of Secured Obligations, to the extent that such security interest
can be perfected by possession of such certificates, or to the extent that such
security interest can be perfected by the filing of financing statements, as the
case may be, securing the payment and performance of the Secured Obligations,
except for any Lien permitted under Section 7.2(B) of the Credit Agreement;
(k) The Powers are duly executed and give the Agent the authority they
purport to confer; and
(l) As of the Effective Date, Pledgor has no obligation to make further
capital contributions or make any other payments to the Pledged Subsidiaries
with respect to its interest therein.
Section 6. Voting Rights. During the term of this Pledge Agreement, and
except as provided in this Section 6 below, the Pledgor shall have (i) the right
to vote the Pledged Stock, Pledged Membership Interests or Pledged Partnership
Interests on all governing questions in a manner not inconsistent with the terms
of this Pledge Agreement, the Credit Agreement and any other agreement,
instrument or document executed pursuant thereto or in connection therewith and
(ii) the right to be a member or a partner of all the Pledged Subsidiaries which
are limited liability companies or partnerships, respectively. During the
continuation of a Default, the Agent or the Agent's nominee may, at the Agent's
or such nominee's option and following written notice from the Agent to the
Pledgor, (i) exercise all voting powers pertaining to the Pledged Collateral,
including the right to take action by shareholder consent and (ii) become a
member or partner of each and all of the Pledged Subsidiaries which are limited
liability companies or partnerships, respectively, and as such (x) exercise, or
direct the Pledgor as to the exercise of all voting, consent, managerial,
election and other membership rights to the applicable Pledged Collateral and
(y) exercise, or direct the Pledgor as to the exercise of any and all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining to the applicable Pledged Collateral, as if the Agent were the
absolute owner thereof, all without liability except to account for property
actually received by it, but the Agent shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible for any
failure so to do or delay in so doing. Such authorization shall constitute an
irrevocable voting proxy from the Pledgor to the Agent or, at the Agent's
option, to the Agent's nominee.
Section 7. Dividends and Other Distributions.
(a) So long as no Default shall have occurred and is continuing:
(i) The Pledgor shall be entitled to receive and retain any and all
dividends, cash distributions and interest paid in respect of the Pledged
Collateral to the extent such distributions are not prohibited by the Credit
Agreement, provided, however, that any and all
(A) distributions, dividends and interest paid or
payable other than in cash with respect to, and instruments
and other property received, receivable or otherwise
distributed with respect to, or in exchange for, any of the
Pledged Collateral;
(B) dividends and other distributions paid or payable
in cash with respect to any of the Pledged Collateral on
account of a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in surplus; and
(C) cash paid, payable or otherwise distributed with
respect to principal of, or in redemption of, or in exchange
for, any of the Pledged Collateral;
shall be Pledged Collateral, and shall be forthwith delivered to the
Agent to hold, for the benefit of the Agent and the Holders of Secured
Obligations, as Pledged Collateral and shall, if received by the
Pledgor, be received in trust for the Agent, for the benefit of the
Agent and the Holders of Secured Obligations, be segregated from the
other property or funds of the Pledgor, and be delivered immediately to
the Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement); and
(ii) The Agent shall execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies and other instruments as the Pledgor
may reasonably request for the purpose of enabling the Pledgor to receive the
dividends or interest payments which it is authorized to receive and retain
pursuant to clause (i) above.
(b) After the occurrence and during the continuance of a Default:
(i) All rights of the Pledgor to receive the dividends, distributions and
interest payments which it would otherwise be authorized to receive and retain
pursuant to Section 7(a)(i) hereof shall cease, and all such rights shall
thereupon become vested in the Agent, for the benefit of the Agent and the
Holders of Secured Obligations, which shall thereupon have the sole right to
receive and hold as Pledged Collateral such dividends, distributions and
interest payments;
(ii) All dividends, distributions and interest payments which are
received by the Pledgor contrary to the provisions of clause (i) of this Section
7(b) shall be received in trust for the Agent, for the benefit of the Agent and
the Holders of Secured Obligations, shall be segregated from other funds of the
Pledgor and shall be paid over immediately to the Agent as Pledged Collateral in
the same form as so received (with any necessary endorsements);
(iii) The Pledgor shall, upon the request of the Agent, at Pledgor's
expense, execute and deliver, and cause its officers, directors, members,
managing members or general partners, where applicable, to execute and deliver,
all such instruments and documents, and do or cause to be done all such other
acts and things, as may be necessary or, in the opinion of the Agent, the
Pledgor or their respective counsel, advisable to register the applicable
Pledged Collateral under the provisions of the Securities Act of 1933, as
amended (the "Securities Act") and to exercise its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related prospectus
which, in the opinion of the Agent, the Pledgor or their respective counsel, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(iv) The Pledgor shall, upon the request of the Agent, at Pledgor's
expense, use its best efforts to qualify the Pledged Collateral under state
securities or "Blue Sky" laws and to obtain all necessary governmental approvals
for the sale of the Pledged Collateral, as requested by the Agent;
(v) The Pledgor shall, upon the request of the Agent, at the Pledgor's
expense, make available to the holders of its securities, as soon as
practicable, earnings statements which will satisfy the provisions of Section
11(a) of the Securities Act; and
(vi) The Pledgor shall, upon the request of the Agent, at the Pledgor's
expense, do or cause to be done all such other acts and things as may be
necessary to make such sale of the Pledged Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Pledgor will reimburse the Agent and/or the Holders of Secured Obligations
for all expenses incurred by the Agent and/or the Holders of Secured
Obligations, including, without limitation, reasonable attorneys' and
accountants' fees and expenses in connection with the foregoing. Upon or at any
time after the occurrence of a Default, if the Agent determines that, prior to
any public offering of any securities constituting part of the Pledged
Collateral, such securities should be registered under the Securities Act and/or
registered or qualified under any other federal or state law and such
registration and/or qualification is not practicable, then the Pledgor agrees
that it will be commercially reasonable if a private sale, upon at least ten
(10) days' notice to the Pledgor, is arranged so as to avoid a public offering,
even though the sales price established and/or obtained at such private sale may
be substantially less then prices which could have been obtained for such
security on any market or exchange or in any other public sale. The Pledgor
hereby indemnifies and holds harmless the Agent and the Holders of Secured
Obligations for any and all liabilities incurred by either the Agent or the
Holders of Secured Obligations as a result of becoming a member or a partner of
any of the Pledged Subsidiaries, except to the extent caused by their gross
negligence or willful misconduct.
Section 8. Transfers and Other Liens. The Pledgor agrees that it will not
(i) sell or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral without the prior written consent of the Agent, except as
permitted under the Loan Documents, or (ii) create or permit to exist any Lien
upon or with respect to any of the Pledged Collateral, except for the security
interest under this Pledge Agreement, and except for any Lien permitted under
Section 7.2(B) of the Credit Agreement. Section
9. Remedies.
(a) If any Default shall occur and be continuing, the Agent shall have,
in addition to any other rights given under this Pledge Agreement or by
applicable law, all of the rights and remedies with respect to the Pledged
Collateral of a secured party under the UCC (as defined in the Security
Agreement). The Agent (personally or through an agent) is hereby authorized and
empowered to transfer and register in its name or in the name of its nominee the
whole or any part of the Pledged Collateral, to exercise all voting rights with
respect thereto, to collect and receive all cash dividends or distributions and
other distributions made thereon, and to otherwise act with respect to the
Pledged Collateral as though the Agent were the outright owner thereof (in the
case of a limited liability company, the sole member and manager thereof and, in
the case of a partnership, a partner thereof), the Pledgor hereby irrevocably
constituting and appointing the Agent as the proxy and attorney-in-fact of the
Pledgor, with full power of substitution to do so; provided, however, that the
Agent shall have no duty to exercise any such right or to preserve the same and
shall not be liable for any failure to do so or for any delay in doing so;
provided, further, however, that the Agent agrees to exercise such proxy and
powers only so long as a Default shall have occurred and is continuing and
following written notice thereof. In addition, after the occurrence of a
Default, the Agent shall have such powers of sale and other powers as may be
conferred by applicable law. With respect to the Pledged Collateral or any part
thereof which shall then be in or shall thereafter come into the possession or
custody of the Agent or which the Agent shall otherwise have the ability to
transfer under applicable law, the Agent may, in its sole discretion, without
notice except as specified below, after the occurrence and during the
continuation of a Default, sell or cause the same to be sold at any exchange,
broker's board or at public or private sale, in one or more sales or lots, at
such price as the Agent may deem best, for cash or on credit or for future
delivery, without assumption of any credit risk, and the purchaser of any or all
of the Pledged Collateral so sold shall thereafter own the same, absolutely free
from any claim, encumbrance or right of any kind whatsoever. The Agent and each
of the Holders of Secured Obligations may, in its own name, or in the name of a
designee or nominee, buy the Pledged Collateral at any public sale and, if
permitted by applicable law, buy the Pledged Collateral at any private sale. The
Pledgor will pay to the Agent all reasonable expenses (including, without
limitation, court costs and reasonable attorneys' and paralegals' fees and
expenses) of, or incidental to, the enforcement of any of the provisions hereof.
The Agent agrees to distribute any proceeds of the sale of the Pledged
Collateral in accordance with the Credit Agreement and the Pledgor shall remain
liable for any deficiency following the sale of the Pledged Collateral.
(b) Unless any of the Pledged Collateral threatens to decline speedily
in value or is or becomes of a type sold on a recognized market, the Agent will
give the Pledgor reasonable notice of the time and place of any public sale
thereof, or of the time after which any private sale or other intended
disposition is to be made. Any sale of the Pledged Collateral conducted in
conformity with reasonable commercial practices of banks, commercial finance
companies, insurance companies or other financial institutions disposing of
property similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Notwithstanding any provision to the contrary contained herein, the
Pledgor agrees that any requirements of reasonable notice shall be met if such
notice is received by the Pledgor as provided in Section 21 below at least ten
(10) days before the time of the sale or disposition; provided, however, that
Agent may give any shorter notice that is commercially reasonable under the
circumstances. Any other requirement of notice, demand or advertisement for sale
is waived, to the extent permitted by law.
(c) In view of the fact that federal and state securities laws may
impose certain restrictions on the method by which a sale of the Pledged
Collateral may be effected after a Default, the Pledgor agrees that after the
occurrence and during the continuation of a Default, the Agent may, from time to
time, attempt to sell all or any part of the Pledged Collateral by means of a
private placement restricting the bidders and prospective purchasers to those
who are qualified and will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, the Agent may solicit
offers to buy the Pledged Collateral, or any part of it, from a limited number
of investors deemed by the Agent, in its reasonable judgment, to be financially
responsible parties who might be interested in purchasing the Pledged
Collateral. If the Agent solicits such offers from not less than four (4) such
investors, then the acceptance by the Agent of the highest offer obtained
therefrom shall be deemed to be a commercially reasonable method of disposing of
such Pledged Collateral; provided, however, that this Section does not impose a
requirement that the Agent solicit offers from four or more investors in order
for the sale to be commercially reasonable.
Section 10. Agent Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Agent its attorney-in-fact, coupled with an interest, with full
authority, in the name of the Pledgor or otherwise, from time to time in the
Agent's sole discretion, to take any action and to execute any instrument which
the Agent may deem necessary or advisable to accomplish the purposes of this
Pledge Agreement, including, without limitation, to receive, endorse and collect
all instruments made payable to the Pledgor representing any dividend,
distribution, interest payment or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same and to
arrange for the transfer of all or any part of the Pledged Collateral on the
books of the Pledged Subsidiaries to the name of the Agent or the Agent's
nominee; provided, however that the Agent agrees to exercise such powers only so
long as a Default shall have occurred and is continuing.
Section 11. Waivers.
(i) The Pledgor waives presentment and demand for payment of any of the
Secured Obligations, protest and notice of dishonor or Default with respect to
any of the Secured Obligations and all other notices to which the Pledgor might
otherwise be entitled except as otherwise expressly provided herein or in the
Credit Agreement.
(ii) The Pledgor understands and agrees that its obligations and
liabilities under this Pledge Agreement shall remain in full force and effect,
notwithstanding foreclosure of any real property securing all or any part of the
Secured Obligations by trustee sale or any other reason impairing the right of
the Pledgor, the Agent or any of the Holders of Secured Obligations to proceed
against any Pledged Subsidiary, any other guarantor or any Pledged Subsidiary or
such guarantor's property. The Pledgor agrees that all of its obligations under
this Pledge Agreement shall remain in full force and effect without defense,
offset or counterclaim of any kind, notwithstanding that the Pledgor's rights
against any Pledged Subsidiary may be impaired, destroyed or otherwise affected
by reason of any action or inaction on the part of the Agent or any Holder of
Secured Obligations.
(iii) The Pledgor hereby expressly waives the benefits of any law in any
jurisdiction purporting to allow a guarantor or pledgor to revoke a continuing
guaranty or pledge with respect to any transactions occurring after the date of
the guaranty or pledge.
Section 12. Term. This Pledge Agreement shall remain in full force and effect
until the Secured Obligations have been fully and indefeasibly paid in cash and
the Commitments and Letters of Credit issued under the Credit Agreement shall be
terminated or expired. Upon the termination of this Pledge Agreement as provided
above (other than as a result of the sale of the Pledged Collateral), the Agent
will release the security interest created hereunder and, if it then has
possession of the Pledged Stock, will deliver the Pledged Stock and the Powers
to the Pledgor.
Section 13. Definitions. The singular shall include the plural and vice
versa and any gender shall include any other gender as the context may require.
Section 14. Successors and Assigns. This Pledge Agreement shall be binding
upon and inure to the benefit of the Pledgor, the Agent, for the benefit of
itself and the Holders of Secured Obligations, and their respective successors
and assigns. The Pledgor's successors and assigns shall include, without
limitation, a receiver, trustee or debtor-in-possession of or for the Pledgor.
Section 15. GOVERNING LAW. THE PARTIES HAVE VOLUNTARILY ELECTED THAT THIS
PLEDGE AGREEMENT AND ALL LOANS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS (WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS) OF THE STATE OF
NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. ANY
DISPUTE BETWEEN THE PLEDGOR AND THE AGENT OR ANY LENDER, OR ANY OTHER HOLDER OF
SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS (WITHOUT REGARD TO THE CONFLICT OF
LAW PROVISIONS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS (EXCEPT TO THE EXTENT THAT THE UCC PROVIDES FOR THE
APPLICATION OF LAWS OF ANOTHER STATE), WHICH IS THE PRINCIPAL PLACE OF BUSINESS
OF THE AGENT.
Section 16. CONSENT TO JURISDICTION; SERVICE OF PROCESS;
JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH
OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS PLEDGE AGREEMENT WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL
COURTS LOCATED NEW YORK COUNTY, NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF NEW YORK COUNTY, NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE PLEDGOR AGREES THAT THE AGENT,
ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED
AGAINST THE PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH
PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE PLEDGOR OR (2) REALIZE ON
THE COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS OR (3) ENFORCE
A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE PLEDGOR
AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
SUCH PERSON. THE PLEDGOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
SUBSECTION (B).
(C) SERVICE OF PROCESS; VENUE. THE PLEDGOR WAIVES PERSONAL
SERVICE OF ANY PROCESS UPON IT. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO
LIMIT THE ABILITY OF THE AGENT OR THE HOLDERS OF SECURED OBLIGATIONS TO SERVE
ANY WRITS, SERVICE OF PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING
ISSUED BY ANY COURT IN ANY MANNER PERMITTED BY APPLICABLE LAW. THE PLEDGOR
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS PLEDGE AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH
ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES
HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS PLEDGE AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
(E) WAIVER OF BOND. THE PLEDGOR WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO REALIZE ON THE COLLATERAL, ENFORCE ANY JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS PLEDGE
AGREEMENT OR ANY OTHER LOAN DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH
OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS PLEDGE AGREEMENT AND,
SPECIFICALLY, THE PROVISIONS OF THIS SECTION 16, WITH ITS COUNSEL.
Section 17. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Pledge Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Pledge
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Pledge Agreement.
Section 18. Severability. Whenever possible, each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but, if any provision of this Pledge Agreement shall be held to
be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Pledge Agreement.
Section 19. Further Assurances. The Pledgor agrees that it will
cooperate with the Agent and will execute and deliver, or cause to be executed
and delivered, all such other stock powers, proxies, instruments and documents,
and will take all such other actions, including, without limitation, the
execution and filing of financing statements, as the Agent may reasonably
request from time to time in order to carry out the provisions and purposes of
this Pledge Agreement.
Section 20. The Agent's Duty of Care. The Agent shall not be liable for
any acts, omissions, errors of judgment or mistakes of fact or law including,
without limitation, acts, omissions, errors or mistakes with respect to the
Pledged Collateral, except for those arising out of or in connection with the
Agent's (i) gross negligence or willful misconduct, or (ii) failure to use
reasonable care with respect to the safe custody of the Pledged Collateral in
the Agent's possession. Without limiting the generality of the foregoing, the
Agent shall be under no obligation to take any steps necessary to preserve
rights in the Pledged Collateral against any other parties but may do so at its
option. All expenses incurred in connection therewith shall be for the sole
account of the Pledgor, and shall constitute part of the Secured Obligations
secured hereby.
Section 21. Notices. All notices and other communications required or
desired to be served, given or delivered hereunder shall be given in the manner
and to the addresses set forth in the Credit Agreement.
Section 22. Amendments, Waivers and Consents. No amendment or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent pursuant to the terms of the Credit Agreement, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 23. Section Headings. The section headings herein are for convenience of
reference only, and shall not affect in any way the interpretation of any of the
provisions hereof. Section 24. Execution in Counterparts. This Pledge Agreement
may be executed in any number of counterparts, each of which shall be an
original, but all of which shall together constitute one and the same agreement.
Section 25. Merger. This Pledge Agreement and the other Loan Documents
embody the final and entire agreement and understanding among the Pledgor, the
Agent and the Holders of Secured Obligations and supersede all prior agreements
and understandings among the Pledgor, the Agent and the Holders of Secured
Obligations relating to the subject matter thereof. This Pledge Agreement and
the other Loan Documents may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties hereto.
The remainder of this page is intentionally blank.
IN WITNESS WHEREOF, the Pledgor and the Agent have executed
this Pledge Agreement as of the date set forth above.
--------------------------------------
By:__________________________
Name:
Title:
BANK ONE, NA, as Agent for itself and the
Holders of Secured Obligations
By:
Name:
Title:
PLEDGE AGREEMENT1
(CTS Corporation)
THIS PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of
December 20, 2001, is entered into by and between CTS Corporation, an Indiana
corporation (the "Pledgor"), and Bank One, NA, as contractual representative
(the "Agent") for itself and for the "Holders of Secured Obligations" under and
as defined in the below described Credit Agreement. Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
ascribed to such terms in such Credit Agreement.
WITNESSETH:
WHEREAS, the Pledgor has entered into that certain Third
Amended and Restated Credit Agreement, dated as of December 20, 2001, by and
among the Pledgor, the financial institutions from time to time parties thereto
as lenders (the "Lenders"), and the Agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
which Credit Agreement amends and restates in its entirety the Second Amended
and Restated Credit Agreement, dated as of February 1, 2000 (as amended, the
"Prior Credit Agreement"), to which the Pledgor is a party;
WHEREAS, the Credit Agreement, among other things,
re-evidences the Pledgor's outstanding obligations under the Prior Credit
Agreement and provides, subject to the terms thereof, for future extensions from
time to time of credit and other financial accommodations by the Lenders to the
Pledgor;
WHEREAS, the Pledgor, in conjunction with its entry into the
Credit Agreement, wishes to grant a security interest in and lien upon its
equity interests in certain of its Subsidiaries;
WHEREAS, Schedule I hereto sets forth certain of the Pledgor's
Subsidiaries (the "Initial Pledged Subsidiaries");
WHEREAS, Pledgor may from time to time execute and deliver to
the Agent a supplement to this Pledge Agreement substantially in the form of
Exhibit A hereto (each such supplement, a "Pledge Supplement") setting forth
additional Subsidiaries of the Pledgor (the "Additional Pledged Subsidiaries")
(the Initial Pledged Subsidiaries and the Additional Pledged Subsidiaries,
collectively referred to herein as the "Pledged Subsidiaries"); and
WHEREAS, the Agent and the Lenders have required, as a
condition to the effectiveness of the Credit Agreement, that the Pledgor execute
and deliver this Pledge Agreement;
---------------------
1 Pledgor to revise factual information set forth in each Exhibit and Schedule
here to as appropriate.
NOW, THEREFORE, for and in consideration of the foregoing and
of any financial accommodations or extensions of credit (including, without
limitation, any loan or advance by renewal, refinancing or extension of the
agreements described hereinabove or otherwise) heretofore, now or hereafter made
to or for the benefit of the Pledgor pursuant to the Credit Agreement or any
other agreement, instrument or document executed pursuant to or in connection
therewith, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the Agent hereby
agree as follows:
Section 1. Pledge. The Pledgor hereby pledges to the Agent, for the benefit of
the Agent and the Holders of Secured Obligations, and grants to the Agent for
the benefit of the Agent and the Holders of Secured Obligations, a security
interest in, the collateral described in Sections 1.1 through 1.5 below
(collectively, the "Pledged Collateral"):
1.1 Corporations.
(a) The shares of the capital stock of the Pledged Subsidiaries which are
corporations, now or at any time or times hereafter owned by the Pledgor (such
shares being identified on Schedule I attached hereto or on any Schedule I
attached to any applicable Pledge Supplement), and the certificates representing
the shares of such capital stock, all options and warrants for the purchase of
shares of the stock of such Pledged Subsidiaries now or hereafter held in the
name of the Pledgor (all of said capital stock, options and warrants and all
capital stock held in the name of the Pledgor as a result of the exercise of
such options or warrants being hereinafter collectively referred to as the
"Pledged Stock"), herewith, or from time to time, delivered to the Agent
accompanied by stock powers in the form of Exhibit B attached hereto and made a
part hereof (the "Powers") duly executed in blank, and all dividends, cash,
instruments, investment property and other property from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any or
all of the Pledged Stock.
(b) All additional shares of capital stock of the Pledged Subsidiaries
described in Section 1.1(a) above from time to time acquired by the Pledgor in
any manner, and the certificates, which shall be delivered to the Agent,
representing such additional shares (any such additional shares shall constitute
part of the Pledged Stock and the Agent is irrevocably authorized to
unilaterally amend Schedule I hereto or on any Schedule I to any applicable
Pledge Supplement to reflect such additional shares), and all purchase options,
warrants, dividends, cash, instruments, investment property and other rights and
options from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares.
1.2 Limited Liability Companies
(a) The membership interests of Pledgor in the Pledged Subsidiaries which
are limited liability companies now or at any time or times hereafter owned by
the Pledgor, and any certificates representing such membership interests in the
Pledged Subsidiaries (such membership interests being identified on Schedule I
attached hereto or on any Schedule I attached to any applicable Pledge
Supplement), all of the right, title and interest of the Pledgor in, to and
under its respective percentage interest, shares or units as a member and all
investment property in respect of such membership interests, including, without
limitation, Pledgor's interest in (or allocation of) the profits, losses,
income, gains, deductions, credits or similar items of such Pledged Subsidiaries
and the right to receive distributions of such Pledged Subsidiary's cash, other
property, assets, and all options and warrants for the purchase of membership
interests, whether now existing or hereafter arising, whether arising under the
terms of the certificates of formation, the limited liability company agreements
or any of the other organizational documents (such documents hereinafter
collectively referred to as the "Operating Agreements") of such Pledged
Subsidiaries, or at law or in equity, or otherwise and any and all of the
proceeds thereof (all of said membership interests, certificates, and warrants
being hereinafter collectively referred to as the "Pledged Membership
Interests") herewith delivered to the Agent, and all distributions, cash,
instruments, investment property and other property from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any or
all of the Pledged Membership Interests.
(b) Any additional membership interests in the Pledged Subsidiaries
described in Section 1.2(a) above from time to time acquired by the Pledgor in
any manner, and any certificates, which shall be delivered to the Agent,
representing such additional membership interests or any additional percentage
interests, shares, units, options or warrants of membership interests in Pledged
Subsidiaries (any such additional interests shall constitute part of the Pledged
Membership Interests and the Agent is irrevocably authorized to unilaterally
amend Schedule I hereto or any Schedule I to any applicable Pledge Supplement
from time to time to reflect such additional interests), and all options,
warrants, distributions, investment property, cash, instruments and other rights
and options from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such interests, and the Pledgor
shall promptly thereafter deliver to the Agent a certificate duly executed by
the Pledgor describing such percentage interests, certificates, units, options
or warrants and certifying that the same have been duly pledged hereunder.
1.3 Partnerships.
(a) All of the partnership interests of the Pledgor, in and to the
Pledged Subsidiaries which are partnerships now or at any time or times
hereafter owned by the Pledgor (such partnership interests being identified on
Schedule I attached hereto to or on Schedule I to any applicable Pledge
Supplement), the property (and interests in property) that is owned by such
Pledged Subsidiaries, all rights, privileges, authority and powers of the
Pledgor as owner or holder of its partnership interests in such Pledged
Subsidiaries, including, but not limited to, all contract rights related
thereto, all rights, privileges, authority and powers relating to the economic
interests of the Pledgor as owner or holder of its partnership interests in such
Pledged Subsidiaries, including, without limitation, all contract rights related
thereto, all options and warrants of the Pledgor for the purchase of any
partnership interests in such Pledged Subsidiaries, all documents and
certificates representing or evidencing the Pledgor's partnership interests in
such Pledged Subsidiaries, all of the Pledgor's interest in and to the profits
and losses of such Pledged Subsidiaries and the Pledgor's right as a partner of
such Pledged Subsidiaries to receive distributions of such Pledged Subsidiaries'
assets, upon complete or partial liquidation or otherwise, all of the Pledgor's
right, title and interest to receive payments of principal and interest on any
loans and/or other extensions of credit made by the Pledgor or its Affiliates to
such Pledged Subsidiaries, all distributions, cash, instruments, investment
property and other property from time to time received, receivable or otherwise
distributed in respect of, or in exchange for, the Pledgor's partnership
interests in such Pledged Subsidiaries, and any other right, title, interest,
privilege, authority and power of the Pledgor in or relating to such Pledged
Subsidiaries, all whether now existing or hereafter arising, and whether arising
under any partnership agreements of such Pledged Subsidiaries (as the same may
be amended, modified or restated from time to time, the "Partnership
Agreements") or otherwise, or at law or in equity and all books and records of
the Pledgor pertaining to any of the foregoing (all of the foregoing being
referred to collectively as the "Pledged Partnership Interests").
(b) Any additional partnership interests in the Pledged Subsidiaries
described in Section 1.3(a) above from time to time acquired by the Pledgor in
any manner, (any such additional interests shall constitute part of the Pledged
Partnership Interests and the Agent is irrevocably authorized to unilaterally
amend Schedule I hereto or any Schedule I to any applicable Pledge Supplement
from time to time to reflect such additional interests), and all options,
warrants, distributions, investment property, cash, instruments and other rights
and options from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such interests, and the Pledgor
shall promptly thereafter deliver to the Agent a certificate duly executed by
the Pledgor describing such percentage interests, options or warrants and
certifying that the same have been duly pledged hereunder.
1.4 Other Property. The property and interests in property described in
Section 3 below.
1.5 Proceeds. All proceeds of the collateral described in Sections 1.1
through 1.4 above.
Section 2. Security for Obligations. The Pledged Collateral secures the
prompt payment, performance and observance of the Secured Obligations.
Section 3. Pledged Collateral Adjustments. If, during the term of this
Pledge Agreement:
(a) Any stock dividend, reclassification, readjustment or other change is
declared or made in the capital structure of any of the Pledged Subsidiaries, or
any option included within the Pledged Collateral is exercised, or both, or
(b) Any subscription warrants or any other rights or options shall be
issued in connection with the Pledged Collateral, then all new, substituted and
additional membership or partnership interests, certificates, shares, warrants,
rights, options, investment property or other securities, issued by reason of
any of the foregoing, shall be immediately delivered to and held by the Agent
under the terms of this Pledge Agreement and shall constitute Pledged Collateral
hereunder; provided, however, that nothing contained in this Section 3 shall be
deemed to permit any distribution or stock dividend, issuance of additional
membership or partnership interests or stock, warrants, rights or options,
reclassification, readjustment or other change in the capital structure of any
Pledged Subsidiary which is not expressly permitted by the Credit Agreement.
Section 4. Subsequent Changes Affecting Pledged Collateral. The Pledgor
represents and warrants that it has made its own arrangements for keeping itself
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, cash distributions or other distributions reorganization or other
exchanges, tender offers and voting rights), and the Pledgor agrees that neither
the Agent nor any of the Holders of Secured Obligations shall have any
obligation to inform the Pledgor of any such changes or potential changes or to
take any action or omit to take any action with respect thereto. The Agent may,
during the continuance of a Default, without notice and at its option, transfer
or register the Pledged Collateral or any part thereof into its or its nominee's
name with or without any indication that such Pledged Collateral is subject to
the security interest hereunder. In addition, the Agent may during the
continuance of a Default exchange certificates or instruments representing or
evidencing Pledged Shares, Pledged Membership Interests or Pledged Partnership
Interests for certificates or instruments of smaller or larger denominations.
Section 5. Representations and Warranties. The Pledgor represents and
warrants as follows:
(a) The Pledgor is the sole legal and beneficial owner of the percentage
of the issued and outstanding common stock, membership interests or partnership
interests, as applicable, of each of the Pledged Subsidiaries set forth opposite
the name of such Pledged Subsidiary on Schedule I hereto;
(b) The Pledgor has full corporate power and authority to enter into this
Pledge Agreement;
(c) There are no restrictions upon the voting rights associated with, or
upon the transfer of, any of the Pledged Collateral;
(d) The Pledgor has the right to vote, pledge and grant a security
interest in or otherwise transfer such Pledged Collateral free of any Liens,
except for Liens permitted under Section 7.2(B) of the Credit Agreement;
(e) The Pledgor owns the Pledged Collateral free and clear of any pledge,
mortgage, hypothecation, lien, charge, encumbrance or any security interest
therein, except for the pledge and security interest granted to the Agent and
the Holders of Secured Obligations hereunder, and except for any Lien permitted
under Section 7.2(B) of the Credit Agreement and any restrictions on transfer
contained in the Operating Agreements, the Partnership Agreements and any other
shareholders' agreement regarding any of the Pledged Stock;
(f) The pledge of the Pledged Collateral does not violate (1) the
articles, by-laws, Operating Agreements or Partnership Agreements, as
applicable, of the Pledged Subsidiaries, or any indenture, mortgage, bank loan
or credit agreement to which the Pledgor or any of the Pledged Subsidiaries is a
party or by which any of their respective properties or assets may be bound; or
(2) any restriction on such transfer or encumbrance of such Pledged Collateral;
(g) The Pledgor (1) shall cause the Pledged Subsidiaries which are
limited liability companies or limited partnerships to make a notation on their
respective records, which notation shall indicate the security interest granted
hereby, and (2) agrees to execute and deliver to each such Pledged Subsidiary a
pledge instruction ("Pledge Instruction") substantially in the form of Exhibit C
hereto, and, with respect to uncertificated limited liability company or limited
partnership interests, such notation, together with the filing of a financing
statement with respect to such uncertificated interest or execution of a control
agreement, in either case, according to the UCC (as defined in the Security
Agreement), shall create a valid and perfected first priority security interest
in such Pledged Collateral, in favor of the Agent for the benefit of the Agent
and the Holders of Secured Obligations, to the extent that such security
interest can be perfected in such Pledged Collateral by the filing of a
financing statement or the execution of a control agreement, as the case may be,
securing the payment and performance of the Secured Obligations;
(h) The Pledgor agrees to execute and file financing statements pursuant
to the UCC (as defined in the Security Agreement) as the Agent may request to
perfect the security interest granted hereby;
(i) No authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body that has not been
obtained is required either (i) for the pledge of the Pledged Collateral
pursuant to this Pledge Agreement or for the execution, delivery or performance
of this Pledge Agreement by the Pledgor (except for the filing of financing
statements contemplated pursuant to Section 5(h) hereof) or (ii) for the
exercise by the Agent of the voting or other rights provided for in this Pledge
Agreement or the remedies in respect of the Pledged Collateral pursuant to this
Pledge Agreement (except as may be required in connection with such disposition
by laws affecting the offering and sale of securities generally);
(j) Upon delivery of each of the certificates representing the Pledged
Collateral, or, as applicable, the filing of the financing statements pursuant
to Section 5(h) hereof, the pledge of the Pledged Collateral pursuant to this
Pledge Agreement will create a valid and perfected first priority security
interest in the Pledged Collateral, in favor of the Agent for the benefit of the
Agent and the Holders of Secured Obligations, to the extent that such security
interest can be perfected by possession of such certificates, or to the extent
that such security interest can be perfected by the filing of financing
statements, as the case may be, securing the payment and performance of the
Secured Obligations, except for any Lien permitted under Section 7.2(B) of the
Credit Agreement;
(k) The Powers are duly executed and give the Agent the authority they
purport to confer; and
(l) As of the Effective Date, Pledgor has no obligation to make further
capital contributions or make any other payments to the Pledged Subsidiaries
with respect to its interest therein.
Section 6. Voting Rights. During the term of this Pledge Agreement, and
except as provided in this Section 6 below, the Pledgor shall have the right to
vote the Pledged Stock, Pledged Membership Interests or Pledged Partnership
Interests on all governing questions in a manner not inconsistent with the terms
of this Pledge Agreement, the Credit Agreement and any other agreement,
instrument or document executed pursuant thereto or in connection therewith.
During the continuation of a Default, the Agent or the Agent's nominee may, at
the Agent's or such nominee's option and following written notice from the Agent
to the Pledgor, exercise all voting powers pertaining to the Pledged Collateral,
including the right to take action by shareholder consent, all without liability
except to account for property actually received by it, but the Agent shall have
no duty to exercise any of the aforesaid rights, privileges or options and shall
not be responsible for any failure so to do or delay in so doing. Such
authorization shall constitute an irrevocable voting proxy from the Pledgor to
the Agent or, at the Agent's option, to the Agent's nominee.
Section 7. Dividends and Other Distributions.
(a) So long as no Default shall have occurred and is continuing:
(i) The Pledgor shall be entitled to receive and retain any and all dividends,
cash distributions and interest paid in respect of the Pledged Collateral to the
extent such distributions are not prohibited by the Credit Agreement, provided,
however, that any and all
(A) distributions, dividends and interest paid or
payable other than in cash with respect to, and instruments
and other property received, receivable or otherwise
distributed with respect to, or in exchange for, any of the
Pledged Collateral;
(B) dividends and other distributions paid or payable
in cash with respect to any of the Pledged Collateral on
account of a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in surplus; and
(C) cash paid, payable or otherwise distributed with
respect to principal of, or in redemption of, or in exchange
for, any of the Pledged Collateral;
shall be Pledged Collateral, and shall be forthwith delivered to the
Agent to hold, for the benefit of the Agent and the Holders of Secured
Obligations, as Pledged Collateral and shall, if received by the
Pledgor, be received in trust for the Agent, for the benefit of the
Agent and the Holders of Secured Obligations, be segregated from the
other property or funds of the Pledgor, and be delivered immediately to
the Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement); and
(ii) The Agent shall execute and deliver (or cause to be executed and delivered)
to the Pledgor all such proxies and other instruments as the Pledgor may
reasonably request for the purpose of enabling the Pledgor to receive the
dividends or interest payments which it is authorized to receive and retain
pursuant to clause (i) above.
(b) After the occurrence and during the continuance of a Default:
(i) All rights of the Pledgor to receive the dividends, distributions and
interest payments which it would otherwise be authorized to receive and retain
pursuant to Section 7(a)(i) hereof shall cease, and all such rights shall
thereupon become vested in the Agent, for the benefit of the Agent and the
Holders of Secured Obligations, which shall thereupon have the sole right to
receive and hold as Pledged Collateral such dividends, distributions and
interest payments; and
(ii) All dividends, distributions and interest payments which are received
by the Pledgor contrary to the provisions of clause (i) of this Section 7(b)
shall be received in trust for the Agent, for the benefit of the Agent and the
Holders of Secured Obligations, shall be segregated from other funds of the
Pledgor and shall be paid over immediately to the Agent as Pledged Collateral in
the same form as so received (with any necessary endorsements);
The Pledgor will reimburse the Agent and/or the Holders of Secured Obligations
for all expenses incurred by the Agent and/or the Holders of Secured
Obligations, including, without limitation, reasonable attorneys' and
accountants' fees and expenses in connection with the foregoing.
Section 8. Transfers and Other Liens. The Pledgor agrees that it will not (i)
sell or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral without the prior written consent of the Agent, except as
permitted under the Loan Documents, or (ii) create or permit to exist any Lien
upon or with respect to any of the Pledged Collateral, except for the security
interest under this Pledge Agreement, and except for any Lien permitted under
Section 7.2(B) of the Credit Agreement.
Section 9. Remedies.
(a) If any Default shall occur and be continuing, the Agent shall have,
in addition to any other rights given under this Pledge Agreement or by
applicable law, all of the rights and remedies with respect to the Pledged
Collateral of a secured party under the UCC (as defined in the Security
Agreement). The Agent (personally or through an agent) is hereby authorized and
empowered to transfer and register in its name or in the name of its nominee the
whole or any part of the Pledged Collateral, to exercise all voting rights with
respect thereto, to collect and receive all cash dividends or distributions and
other distributions made thereon, the Pledgor hereby irrevocably constituting
and appointing the Agent as the proxy and attorney-in-fact of the Pledgor, with
full power of substitution to do so; provided, however, that the Agent shall
have no duty to exercise any such right or to preserve the same and shall not be
liable for any failure to do so or for any delay in doing so; provided, further,
however, that the Agent agrees to exercise such proxy and powers only so long as
a Default shall have occurred and is continuing and following written notice
thereof. In addition, after the occurrence of a Default, the Agent shall have
such powers of sale and other powers as may be conferred by applicable law. With
respect to the Pledged Collateral or any part thereof which shall then be in or
shall thereafter come into the possession or custody of the Agent or which the
Agent shall otherwise have the ability to transfer under applicable law, the
Agent may, in its sole discretion, without notice except as specified below,
after the occurrence and during the continuation of a Default, sell or cause the
same to be sold at any exchange, broker's board or at public or private sale, in
one or more sales or lots, at such price as the Agent may deem best, for cash or
on credit or for future delivery, without assumption of any credit risk, and the
purchaser of any or all of the Pledged Collateral so sold shall thereafter own
the same, absolutely free from any claim, encumbrance or right of any kind
whatsoever. The Agent and each of the Holders of Secured Obligations may, in its
own name, or in the name of a designee or nominee, buy the Pledged Collateral at
any public sale and, if permitted by applicable law, buy the Pledged Collateral
at any private sale. The Pledgor will pay to the Agent all reasonable expenses
(including, without limitation, court costs and reasonable attorneys' and
paralegals' fees and expenses) of, or incidental to, the enforcement of any of
the provisions hereof. The Agent agrees to distribute any proceeds of the sale
of the Pledged Collateral in accordance with the Credit Agreement and the
Pledgor shall remain liable for any deficiency following the sale of the Pledged
Collateral.
(b) Unless any of the Pledged Collateral threatens to decline speedily in
value or is or becomes of a type sold on a recognized market, the Agent will
give the Pledgor reasonable notice of the time and place of any public sale
thereof, or of the time after which any private sale or other intended
disposition is to be made. Any sale of the Pledged Collateral conducted in
conformity with reasonable commercial practices of banks, commercial finance
companies, insurance companies or other financial institutions disposing of
property similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Notwithstanding any provision to the contrary contained herein, the
Pledgor agrees that any requirements of reasonable notice shall be met if such
notice is received by the Pledgor as provided in Section 21 below at least ten
(10) days before the time of the sale or disposition; provided, however, that
Agent may give any shorter notice that is commercially reasonable under the
circumstances. Any other requirement of notice, demand or advertisement for sale
is waived, to the extent permitted by law.
(c) In view of the fact that federal and state securities laws may impose
certain restrictions on the method by which a sale of the Pledged Collateral may
be effected after a Default, the Pledgor agrees that after the occurrence and
during the continuation of a Default, the Agent may, from time to time, attempt
to sell all or any part of the Pledged Collateral by means of a private
placement restricting the bidders and prospective purchasers to those who are
qualified and will represent and agree that they are purchasing for investment
only and not for distribution. In so doing, the Agent may solicit offers to buy
the Pledged Collateral, or any part of it, from a limited number of investors
deemed by the Agent, in its reasonable judgment, to be financially responsible
parties who might be interested in purchasing the Pledged Collateral. If the
Agent solicits such offers from not less than four (4) such investors, then the
acceptance by the Agent of the highest offer obtained therefrom shall be deemed
to be a commercially reasonable method of disposing of such Pledged Collateral;
provided, however, that this Section does not impose a requirement that the
Agent solicit offers from four or more investors in order for the sale to be
commercially reasonable.
Section 10. Agent Appointed Attorney-in-Fact. The Pledgor hereby appoints
the Agent its attorney-in-fact, coupled with an interest, with full authority,
in the name of the Pledgor or otherwise, from time to time in the Agent's sole
discretion, to take any action and to execute any instrument which the Agent may
deem necessary or advisable to accomplish the purposes of this Pledge Agreement,
including, without limitation, to receive, endorse and collect all instruments
made payable to the Pledgor representing any dividend, distribution, interest
payment or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same and to arrange for the transfer
of all or any part of the Pledged Collateral on the books of the Pledged
Subsidiaries to the name of the Agent or the Agent's nominee; provided, however
that the Agent agrees to exercise such powers only so long as a Default shall
have occurred and is continuing.
Section 11. Waivers. The Pledgor waives presentment and demand for payment
of any of the Secured Obligations, protest and notice of dishonor or Default
with respect to any of the Secured Obligations and all other notices to which
the Pledgor might otherwise be entitled except as otherwise expressly provided
herein or in the Credit Agreement.
Section 12. Term. This Pledge Agreement shall remain in full force and
effect until the Secured Obligations have been fully and indefeasibly paid in
cash and the Commitments and Letters of Credit issued under the Credit Agreement
shall be terminated or expired. Upon the termination of this Pledge Agreement as
provided above (other than as a result of the sale of the Pledged Collateral),
the Agent will release the security interest created hereunder and, if it then
has possession of the Pledged Stock, will deliver the Pledged Stock and the
Powers to the Pledgor.
Section 13. Definitions. The singular shall include the plural and vice
versa and any gender shall include any other gender as the context may require.
Section 14. Successors and Assigns. This Pledge Agreement shall be binding
upon and inure to the benefit of the Pledgor, the Agent, for the benefit of
itself and the Holders of Secured Obligations, and their respective successors
and assigns. The Pledgor's successors and assigns shall include, without
limitation, a receiver, trustee or debtor-in-possession of or for the Pledgor.
Section 15. GOVERNING LAW. THE PARTIES HAVE VOLUNTARILY ELECTED THAT THIS
PLEDGE AGREEMENT AND ALL LOANS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS (WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS) OF THE STATE OF
NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. ANY
DISPUTE BETWEEN THE PLEDGOR AND THE AGENT OR ANY LENDER, OR ANY OTHER HOLDER OF
SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS PLEDGE
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE LAWS (WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS (EXCEPT TO THE EXTENT THAT THE UCC PROVIDES FOR THE
APPLICATION OF LAWS OF ANOTHER STATE), WHICH IS THE PRINCIPAL PLACE OF BUSINESS
OF THE AGENT.
Section 16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES
HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS PLEDGE AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
Section 17. Severability. Whenever possible, each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but, if any provision of this Pledge Agreement shall be held to
be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Pledge Agreement.
Section 18. Further Assurances. The Pledgor agrees that it will cooperate
with the Agent and will execute and deliver, or cause to be executed and
delivered, all such other stock powers, proxies, instruments and documents, and
will take all such other actions, including, without limitation, the execution
and filing of financing statements, as the Agent may reasonably request from
time to time in order to carry out the provisions and purposes of this Pledge
Agreement.
Section 19. The Agent's Duty of Care. The Agent shall not be liable for
any acts, omissions, errors of judgment or mistakes of fact or law including,
without limitation, acts, omissions, errors or mistakes with respect to the
Pledged Collateral, except for those arising out of or in connection with the
Agent's (i) gross negligence or willful misconduct, or (ii) failure to use
reasonable care with respect to the safe custody of the Pledged Collateral in
the Agent's possession. Without limiting the generality of the foregoing, the
Agent shall be under no obligation to take any steps necessary to preserve
rights in the Pledged Collateral against any other parties but may do so at its
option. All expenses incurred in connection therewith shall be for the sole
account of the Pledgor, and shall constitute part of the Secured Obligations
secured hereby.
Section 20. Notices. All notices and other communications required or
desired to be served, given or delivered hereunder shall be given in the manner
and to the addresses set forth in the Credit Agreement.
Section 21. Amendments, Waivers and Consents. No amendment or waiver of
any provision of this Pledge Agreement nor consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent pursuant to the terms of the Credit Agreement,
and then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 22. Section Headings. The section headings herein are for convenience of
reference only, and shall not affect in any way the interpretation of any of the
provisions hereof.
Section 23. Execution in Counterparts. This Pledge Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement.
Section 24. Merger. This Pledge Agreement and the other Loan Documents
embody the final and entire agreement and understanding among the Pledgor, the
Agent and the Holders of Secured Obligations and supersede all prior agreements
and understandings among the Pledgor, the Agent and the Holders of Secured
Obligations relating to the subject matter thereof. This Pledge Agreement and
the other Loan Documents may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties hereto.
The remainder of this page is intentionally blank.
IN WITNESS WHEREOF, the Pledgor and the Agent have executed
this Pledge Agreement as of the date set forth above.
CTS CORPORATION
By:__________________________
Name:
Title:
BANK ONE, NA, as Agent for itself and the Holders of
Secured Obligations
By:
-------------------------------------------------------
Name:
Title:
DEED OF PLEDGE OF SHARES
IN THE CAPITAL OF
CTS INTERNATIONAL B.V.
----------------------
On this, the twenty-eighth day of February two thousand and two, appeared before
me, Wijnand Xxxxxxx Xxxxxxxxxxx, assistant civil law notary, hereinafter to be
referred to as civil law notary, acting as deputy of Frits Xxxxxx Xxxxxxxxx,
civil law notary in Amsterdam:
1. Froukje Elsje Xxxx Xxxxxx, employed at my office at 1077 WV Amsterdam,
Xxxxxxx Xxxxxxxxxxx 00, born in Nijmegen on the sixth day of September
nineteen hundred seventy-six, acting for the purposes hereof as attorney -
duly authorised in writing - of CTS Corporation (Delaware), a company under
the laws of the State of Delaware, United States of America, having its
registered office at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, Xxxxxx
Xxxxxx of America and its principal place of business at 000 Xxxx Xxxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx Xxxxxx of America, hereinafter referred to
as the "Pledgor";
2. Xxxxxx Xxxx Xxxxxx Xxxxx, employed at my office at 1077 WV Amsterdam,
Xxxxxxx Xxxxxxxxxxx 00, born in Hazerswoude on the fifth day of October
nineteen hundred and sixty-five, acting for the purposes hereof as attorney
- duly authorised in writing - of Bank One NA, a national banking
association incorporated under the laws of the United States of America,
having its principal office at 0 Xxxx Xxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
Xxxxxx Xxxxxx of America, hereinafter referred to as the "Pledgee";
3. Adrianus Christiaan van der Weyden, employed at my office at 1077 WV
Amsterdam, Xxxxxxx Xxxxxxxxxxx 00, born in Zevenhoven on the twenty-eighth
day of October nineteen hundred and seventy-five, acting for the purposes
hereof as attorney - duly authorised in writing - of CTS International
B.V., a private company with limited liability incorporated under the laws
of the Netherlands, having its corporate seat in Amsterdam, the Netherlands
(address: 1043 EJ Xxxxxxxxx, Xxxxxxxxxxxxxxxxx 000, xxx Xxxxxxxxxxx, trade
register number 34127542), hereinafter referred to as the "Company"; and
4. Joost Xxxxxx Xxxxx ter Xxxx, employed at my office at 1077 WV Amsterdam,
Xxxxxxx Xxxxxxxxxxx 00, born in Zeist on the twenty-third day of December
nineteen hundred and seventy-five, acting for the purposes hereof as
attorney - duly authorised in writing - of CTS Corporation, a company under
the laws of the State of Indiana, United States of America, having its
registered office at 000 Xxxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx
Xxxxxx of America, hereinafter referred to as the "Borrower".
The persons appearing declared as follows:
- that the Lenders (as defined in the Credit Agreement as defined
hereinafter), the Pledgee, ABN AMRO Bank N.V., as documentation agent,
Xxxxxx Trust and Savings Bank, as syndication agent, and Bank One Capital
Markets, Inc., as lead arranger for the transaction and the Borrower have
entered into a Third Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of the twentieth day of December two thousand and one.
A photocopy of the Credit Agreement will be attached to this Deed;
- that the Pledgor is the holder of the Company's entire issued share
capital, consisting of thirty (30) shares, with a nominal value of one
thousand euros (EUR 1,000) each, numbered 1 up to and including 30;
- that except where the context otherwise requires or when
otherwise defined herein, words and expressions defined in article 1 of
the Credit Agreement have the same meanings when used herein (including in
the recitals hereto);
- that according to article 7.1 (G) of the Credit Agreement the
Borrower is - inter alia - obliged to execute or cause its Domestic
Subsidiaries to execute a pledge agreement with respect to sixty-five
percent (65%) of the issued share capital of the Company held by third
parties;
- the Pledgor - which is a Domestic Subsidiary - hereby wishes to fulfil the
Borrower's obligations described above;
- all conditions precedent, which have been included in the Credit Agreement,
have been fulfilled;
- the Company's articles of association permit the creation of a pledge on
the shares in the capital of the Company.
COVENANT TO PAY IN RELATION TO DUTCH PLEDGE
-------------------------------------------
Article 1
---------
1. The Borrower hereby agrees and covenants vis-a-vis the Pledgee that it
shall pay to the Pledgee amounts equal to the Secured Obligations, if and
when such amounts become due and payable, such payment undertaking and the
obligations and liabilities resulting thereof are hereinafter referred to
as the "Covenant to Pay Obligations". Any payment to the Pledgee in
satisfaction of the Covenant to Pay Obligations shall - conditionally upon
such payment not subsequently being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency, preference,
liquidation or similar laws of general application - be deemed a
satisfaction of the corresponding amount of the Secured Obligations and any
payment to the Lenders in satisfaction of the Secured Obligations shall -
conditionally upon such payment not subsequently being avoided or reduced
by virtue of any provisions or enactments relating to bankruptcy,
insolvency, preference, liquidation or similar laws of general application
- be deemed as satisfaction of the corresponding amount of the Covenant to
Pay Obligations.
2. The Borrower and the Pledgee agree and acknowledge that the Covenant to Pay
Obligations consists of obligations and liabilities of the Borrower to the
Pledgee separate and independent from and without prejudice to the Secured
Obligations, and is not a claim of the Pledgee which is held jointly with
the Lenders. The laws of the Netherlands governing the joint holding
("gemeenschap") of claims are not applicable to the Covenant to Pay
Obligations or the claims of the Lenders pursuant to the Secured
Obligations. To the extent they or any of the provisions of Netherlands law
governing the joint holding of claims would otherwise apply to the Covenant
to Pay Obligations or to any claims of the Lenders in respect of the
Secured Obligations, the applicability of such provisions is hereby
expressly waived to the extent possible and permitted under laws and
regulations applicable hereto.
PLEDGE AGREEMENT
----------------
Article 2
---------
Giving effect to article 7.1.(G) of the Credit Agreement, the Pledgor and the
Pledgee hereby agree that the Pledgor shall pledge to the Pledgee nineteen (19)
shares in the capital of the Company, with a nominal value of one thousand euros
(EUR 1,000) each, numbered 1 up to and including 19, hereinafter referred to as
the "Shares", as security for the fulfilment of (i) the Secured Obligations and
(ii) the Covenant to Pay Obligations, in so far as (i) and (ii) consists of
obligations to pay a monetary claim ("verbintenis tot betaling van een
geldsom"), and with respect to (i) in so far as the Secured Obligations are
capable of being secured by this pledge, the obligations referred to in this
article hereinafter collectively also referred to as the "Secured Indebtedness".
ACQUISITION OF THE SHARES BY PLEDGOR
------------------------------------
Article 3
---------
The Shares were issued by the Company and acquired by the Pledgor by virtue of
the Company's deed of incorporation executed before Xx. X.X. Xxxxxxx, civil law
notary in Amsterdam, on the eleventh day of January two thousand.
CREATION OF PLEDGE
Article 4
4.1 Pursuant to article 2 of this Deed the Pledgor hereby grants to
the Pledgee a first ranking right of pledge (eerste pandrecht) on the
Shares, as security for the fulfilment of the Secured Indebtedness, and
the Pledgee hereby accepts this pledge and the Pledgor hereby
undertakes to pledge - to the extent such shares together with the
Shares do not constitute more than sixty-five percent (65%) of the
total issued capital of the Company - to the Pledgee under the same
terms and conditions set forth in this Deed any shares in the capital
of the Company it shall acquire after the date of this Deed - (the "New
Shares") and the rights related thereto as soon as such New Shares
shall be capable of being so pledged, as long as the Secured
Indebtedness is outstanding.
4.2 The Shares are pledged, and any New Shares shall be pledged, to
the extent permitted by law, together with all present and future
rights related thereto, including but not limited to rights of dividend
or of conversion, redemption, bonus, stock dividend, liquidation or
dissolution proceeds, warrants, claims, options or otherwise and all
proceeds thereof, additions thereto and substitutions thereof, to which
the Pledgor may be entitled.
In respect of this pledge, the Pledgor and the Pledgee have furthermore agreed
upon the following terms:
WARRANTIES AND REPRESENTATIONS
------------------------------
Article 5
---------
The Pledgor acknowledges that the Pledgee has entered into this Deed in full
reliance on the following statements and represents and warrants to the Pledgee
that:
a. it has full, unencumbered legal title to the Shares, and will have full,
unencumbered legal title to the New Shares, if any;
b. the Shares have all been validly issued and fully paid-up and no depository
receipts have been issued in respect of the Shares or of the New Shares, if
any;
c. it has - or in as far as it regards the New Shares will have - the power
and authority to create a first ranking right of pledge on the Shares and
on the New Shares, if any;
d. there are no outstanding options or other rights entitling the holder
thereof to the transfer of any of the Shares and/or any of the New Shares
and no rights to receive future dividends with respect to any of the Shares
and/or of the New Shares have been granted to any party other than to the
Pledgee pursuant to this Deed;
e. except as pursuant hereto, the Shares and the New Shares, if any, are not
subject to any limited rights ("beperkte rechten") for the benefit of third
parties, nor has such Pledgor prior to this Deed created limited rights or
other rights on or against the Shares and/or New Shares, nor has such
Pledgor made any promise or any undertaking to that effect, nor has any
attachment ("beslag") been levied to date on any of the Shares and,
therefore, the right of pledge created pursuant to this Deed is a first
ranking right of pledge;
f. the execution and performance of this Deed does not violate any agreement
to which such Pledgor is a party;
g. the execution and performance of this Deed does not violate any agreement
to which the Company is a party;
h. no resolution to dissolve the Company has been adopted;
i. the Company may only issue shares by virtue of a resolution of its general
meeting of shareholders, if and so far as its authority has at the date of
execution of this Deed not been transferred to any other corporate body of
the Company, which at the date of execution of this Deed is not the case;
j. no resolution or other action has been adopted or taken by the Company or
by its shareholders to amend the articles of association of the Company;
k. the Shares constitute sixty-three and thirty-three/one hundredth of one
percent (63.33%) of the issued share capital of the Company;
l. there are no outstanding claims on the Company for the issue of any shares
in the capital of the Company.
COVENANTS
---------
Article 6
---------
(I) The Pledgor covenants and undertakes that it shall:
a. pay to the Pledgee, upon demand, the amount of all reasonable expenses
which the Pledgee may incur in connection with perfecting or enforcing its
rights over the Shares and/or the New Shares under this Deed, including the
costs of drawing up a notarial deed, as well as all costs (including
reasonable attorney's fees) which may arise in connection with the creation
and enforcement of the right of pledge over the Shares and/or the New
Shares created by this Deed;
b. forthwith sign and complete all documents and do all acts and things which
the Pledgee may, to the extent permitted by applicable law, in the
Pledgee's discretion, at any time and from time to time specify and/or
require:
(i) for enabling or assisting the Pledgee to perfect
or improve its security interest over the Shares
and/or over the New Shares, including but not limited
to its ability (and the ability of its successors and
assignees) to exercise the voting and other rights
attached to the Shares and the New Shares, if any;
(ii) subject to articles 7 and 8 of this Deed, to
exercise any rights or powers relating to the Shares
and/or to the New Shares;
(iii) on and after the occurrence of an Event of Default,
which is continuing, to enforce the right of pledge
over the Shares and the New Shares, if any, granted
hereby to the Pledgee, including, without limitation,
the right of the Pledgee to sell or dispose of the
Shares and/or of the New Shares; or
(iv) otherwise to enforce any of the rights of the Pledgee
under or in connection with this Deed;
c. not create or permit to exist any other pledge or security right or any
other limited right ("beperkt recht") whatsoever on or with respect to any
of the Shares and/or New Shares, except in favour of the Pledgee, pursuant
to this Deed;
d. not sell, transfer, lend, or otherwise dispose of or grant any option or
any other right in relation to any of the Shares and/or New Shares;
e. forward to the Pledgee all notices, reports, accounts, circulars and other
documents relating to the Shares and to the New Shares, if any, which are
sent to the Pledgor as soon as these are received by the Pledgor;
f. forthwith inform the Pledgee of any fact relevant to this Deed, including
but not limited to any attachment on or seizure of the Shares or any filing
or request for bankruptcy or any other proceedings in furtherance of forced
or voluntary liquidation, dissolution or winding-up of the Pledgor;
g. not without the prior written approval of the Pledgee, vote in favour of:
(i) the issuance, redemption, or transfer of any shares by the
Company;
(ii) any proposal to the general meeting of shareholders to transfer
its authority to issue shares to any other corporate body;
(iii) a resolution to amend the articles of association of the
Company;
(iv) a resolution consenting to the acquisition by the Company of
its own shares;
(v) a resolution for the winding-up, liquidation or dissolution of
the Company or for the sale of all or substantially all of its
assets and;
(vi) a resolution for any merger or division of the Company;
h. notify the Pledgee in writing of any proposed or actual issue of shares by
the Company;
i. in general, not do or cause or permit to be done
anything which will, or could be reasonably expected to,
materially adversely affect the pledge over the Shares and/or
the New Shares, if any, or the rights of the Pledgee
thereunder or which in any way is inconsistent with or
materially depreciates, jeopardises or otherwise prejudices
the right of pledge over the Shares and/or the New Shares, if
any.
VOTING RIGHTS AND DIVIDENDS
---------------------------
Article 7
---------
7.1 The Pledgee shall be entitled to the voting rights attached to
the Shares, and the rights to give consents, waivers and ratifications
with respect to the Shares, provided (i) the Company's articles of
association have been amended in accordance with the attached draft in
order to permit a pledgee holding the voting rights attached to shares
in the capital of the Company and (ii) an Event of Default has occurred
and the Pledgee has notified the Pledgor of such occurrence in writing.
7.2 The Pledgor undertakes not to revoke the resolution it has taken
in its capacity as shareholder of the Company on the twenty-seventh day
of February two thousand and two to amend the Company's articles of
association in accordance with the attached draft.
7.3 The Pledgor undertakes not to vote the Shares or the New Shares,
or exercise any rights to give consents, waivers and ratifications with
respect to the Shares and the New Shares in such a manner as would
violate or be inconsistent with the provisions or the purpose of this
Deed or of the Credit Agreement or may have the effect of impairing the
position or interests of the Pledgee.
7.4 As long as the Pledgee is not entitled to voting rights pursuant
to Article 7.1, the Pledgee shall not have the rights that Netherlands
law confers to a holder of depository receipts that are issued with the
co-operation of a company.
7.5 The Pledgor, acting in its capacity as sole shareholder of the
Company, hereby - in accordance with article 7 paragraph 4 of the
Company's articles of association - approves of the creation of a right
of pledge over the Shares and the New Shares and the transfer of the
voting rights attached to the Shares and the New Shares to the Pledgee
upon (i) the Company's articles of association being amended in such a
way that they permit a pledgee holding the voting rights attached to
shares in the capital of the Company and (ii) the occurrence of an
Event of Default. The Company's managing directors have been granted
the opportunity to render advice on the above resolution.
7.6 As from the date of this deed, the Pledgee shall be entitled to
collect dividends and other payments on the Shares.
POWER OF ATTORNEY
-----------------
Article 8
---------
The Pledgor hereby irrevocably and by way of security for the payment by the
Company of the Secured Indebtedness and the performance of its obligations under
this Deed, appoints the Pledgee as its true and lawful attorney, with full power
to appoint substitutes and to sub-delegate, to act on behalf of the Pledgor
and/or in the Pledgor's own name or otherwise, at any time and from time to
time, and to sign and complete all deeds and documents and to perform all acts
and things which the Pledgee may, in its sole discretion, consider to be
necessary or advisable to perfect or improve the Pledgee's (and its successors
and assignees) security over the Shares and/or over the New Shares or to give
proper effect to the intent and purposes of this Deed or to enable or to assist
in any way in the exercise of any power of sale of the Shares and/or of the New
Shares, whether arising under this Deed or implied by law or otherwise.
The Pledgor and the Pledgee hereby in accordance with article 3:68 of the
Netherlands Civil Code agree that the Pledgee shall also be authorized to
represent the Pledgor under the said power of attorney in case of a conflict of
interests between the interest of the Pledgor and the Pledgee.
IMMEDIATE EXECUTION
-------------------
Article 9
---------
9.1 On or at any time after an Event of Default and such Event of
Default is continuing, the Pledgee shall be entitled to sell or cause
the Shares and/or New Shares to be sold in the manner and on such terms
and conditions as the Pledgee may, in its sole and absolute discretion,
deem necessary and appropriate, subject, however, to mandatory
provisions of Netherlands law and the articles of association of the
Company.
9.2 The Pledgee shall be under no obligation to inform the Pledgor,
the Company or any other persons who has any limited property rights
("beperkte rechten") or has levied an attachment on or against all or
any (part of) the Shares and/or the New Shares of its intention to sell
the Shares and/or the New Shares, nor is the Pledgee required to make
such communication while or at any time after selling. The Pledgor
hereby waives its rights to apply to the President of the District
Court for an order that the Shares and/or the New Shares are to be sold
in a manner different from that provided for in Article 3:250 of the
Netherlands Civil Code and, if applicable, its rights under Article
3:234 of the Netherlands Civil Code.
9.3 The Pledgee shall apply the proceeds from the sale of the Shares
and/or of the New Shares, after deduction of all reasonable costs, to
the settlement of the Secured Indebtedness, in such manner and such
order to be determined by the Pledgee in its sole and absolute
discretion.
TERMINATION OF PLEDGE
---------------------
Article 10
----------
The pledge created under this Deed and all the related rights thereto shall
terminate if (i) all obligations under the Secured Indebtedness towards the
Pledgee have been duly and indefeasibly fulfilled or (ii) any and all
obligations under the Secured Indebtedness have been otherwise terminated or
cancelled.
NO LIABILITY
------------
Article 11
----------
The Pledgee shall not be liable for any shortfall in the proceeds of sale and/or
any loss or damage resulting from any sale or disposal of the Shares and/or of
the New Shares, or any interest therein, or arising out of the exercise of or
failure to exercise any of its powers under this Deed or for any other loss of
any nature whatsoever in connection with the Shares and/or with the New Shares.
SUBORDINATION
-------------
Article 12
----------
The Pledgor shall subordinate in favour of the Pledgee any rights which it may
acquire by way of recourse or subrogation in connection with any rights related
to the Shares, until the Secured Indebtedness shall have been fully fulfilled.
If any amount shall be paid to the Pledgor on account of such recourse or
subrogation rights at any time when the Secured Indebtedness or part thereof is
still outstanding, the Pledgor shall forthwith pay such amount to the Pledgee to
be credited and applied against the Secured Indebtedness, whether actual or
contingent.
SET-OFF AND WAIVER OF SUSPENSION
--------------------------------
Article 13
----------
The Pledgor's claims, if any, against the Pledgee under or in connection with
this Deed may not be set-off against the Secured Indebtedness. The Pledgor
hereby waives (in relation to any breach by the Pledgee of any obligation to the
Pledgor hereunder) its right of suspension under Articles 6:52 up to and
including 6:57 of the Netherlands Civil Code.
EVIDENCE OF DEBT
----------------
Article 14
----------
The entries made in the accounts, books and/or records maintained by the Pledgee
in accordance with its usual practice and signed by the Pledgee, shall be prima
facie evidence of the existence and of the extent and amounts of the Secured
Indebtedness.
NOTICES
-------
Article 15
----------
All notices, demands, instructions and other communications required or
permitted to be given to or made upon any of the parties hereto shall (i) be
given in accordance with the provisions of the Credit Agreement and (ii) as it
regards the Pledgor, shall be sent to the address mentioned in the beginning of
this Deed.
GOVERNING LAW/JURISDICTION
--------------------------
Article 16
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This Deed shall be governed by and construed in accordance with the laws of the
Netherlands. All disputes arising out of this Deed shall be submitted to the
competent court in Amsterdam, the Netherlands. However, nothing in the preceding
sentence shall limit the Pledgee's right to bring proceedings against the
Pledgor in any other court of competent jurisdiction.
PARTIAL INVALIDITY/AMENDMENT
----------------------------
Article 17
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The illegality, invalidity or unenforceability of any provision of this Deed or
any part thereof under the laws of any jurisdiction shall not affect its
legality, validity or enforceability under the laws of any other jurisdiction
nor the legality, validity or enforceability of any other provision or part
thereof. Any illegal, invalid or unenforceable provision shall have the effect
of an alternative provision that would be valid and the purpose of which
conforms with the first mentioned provision and that would presumably have been
included in this Deed in order to carry out the intentions of the parties if the
first mentioned provision had been omitted in view of its illegality, invalidity
or unenforceability.
RESCISSION
----------
Article 18
----------
The parties hereto expressly waive their right to demand the rescission of the
creation of the right of pledge over the Shares. ACKNOWLEDGEMENTS The third
person appearing, acting in the capacity stated, declared:
- that the Company has at all times and without interruption accepted
as valid the transfers by which the Pledgor obtained the Shares and
all previous transfers of the Shares;
- that the Company acknowledges the pledge of the Shares by this Deed;
- that the Company acknowledges that it has received notice of
the right of pledge to the extent consisting of claims against the
Company in accordance with Article 3:236 paragraph 2 and Article 3:94
paragraph 1 of the Netherlands Civil Code; and
- that the Company will cause this pledge as well as any pledge on New
Shares to be duly entered in the shareholders' register without delay.
AUTHORITY AND POWER OF ATTORNEY
-------------------------------
The persons appearing have been granted power of attorney by means of four
non-notarial instruments of attorney, photocopies of which will be attached to
this Deed.
FINAL PART
----------
The persons appearing are known to me, civil law notary. This Deed was executed
in Amsterdam on the date mentioned in its heading.
After I, civil law notary, had conveyed and explained the contents of the Deed
in substance to the persons appearing, they declared that they had taken note of
the contents of the Deed, were in agreement with the contents and did not wish
them to be read out in full.
Following a partial reading, the Deed was signed by the persons appearing and
me, civil law notary.
(Signed:) F.E.A. Daamen, M.D.P. Xxxxx, X.X. van der Weyden, J.W.F. ter Burg,
X.X. Xxxxxxxxxxx.
ISSUED FOR TRUE COPY
by me, Xxxxxxxxx Xxxxxxxxx Heck,
candidate civil law notary, acting as
deputy of Frits Xxxxxx Xxxxxxxxx,
civil law notary in Amsterdam. This
day, 6 March 2002 at 15.00 hours.
