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EXHIBIT 10(ai)
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 20, 0000
XXXXX
XXXX XXXXXXXXXXX
XXXX XX XXXXXXX NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
[Bank of America Logo]
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TABLE OF CONTENTS
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Page
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SECTION 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . 1
1.2 Use of Defined Terms . . . . . . . . . . . . . . . . 15
1.3 Accounting Terms . . . . . . . . . . . . . . . . . . 15
1.4 Exhibits and Schedules . . . . . . . . . . . . . . . 15
SECTION 2 COMMITMENTS OF THE BANKS; TYPES OF LOANS; LETTER
OF CREDIT, BORROWING AND CONVERSION PROCEDURES . . . 16
2.1 Commitments. . . . . . . . . . . . . . . . . . . . . 16
2.1.1 Letters of Credit . . . . . . . . . . . . . . 16
2.1.2 Loans . . . . . . . . . . . . . . . . . . . . 16
2.1.3 Commitment Limits . . . . . . . . . . . . . . 17
2.2 Evidence of Indebtedness . . . . . . . . . . . . . . 17
2.2.1 Loan Accounts . . . . . . . . . . . . . . . . 17
2.2.2 Notes . . . . . . . . . . . . . . . . . . . . 17
2.2.3 Recordkeeping . . . . . . . . . . . . . . . . 17
2.3 Borrowing Procedures . . . . . . . . . . . . . . . . 18
2.4 Conversion and Continuation Procedures . . . . . . . 19
2.5 Reduction or Termination of Commitments. . . . . . . 20
2.6 Voluntary Prepayments. . . . . . . . . . . . . . . . 20
2.7 Letters of Credit. . . . . . . . . . . . . . . . . . 21
2.7.1 Letter of Credit Procedures . . . . . . . . . 21
2.7.2 Determination of Issuing Bank: Replacement
of Credit . . . . . . . . . . . . . . . . . . 22
2.7.3 Participations in Letters of Credit . . . . . 22
2.7.4 Reimbursement Obligations . . . . . . . . . . 22
2.7.5 Limitation on the Issuing Bank's
Obligations . . . . . . . . . . . . . . . . . 23
2.7.6 Reimbursement Obligations Deemed to be
Loans; Funding by Banks to an Issuing Bank. . 24
2.7.7 Letter of Credit Fees . . . . . . . . . . . . 25
2.8 Interest . . . . . . . . . . . . . . . . . . . . . . 26
2.8.1 Interest Rates. . . . . . . . . . . . . . . . 26
2.8.2 Interest Payment Dates. . . . . . . . . . . . 26
2.8.3 Setting and Notice of Eurodollar Rates. . . . 27
2.8.4 Computation of Interest . . . . . . . . . . . 27
2.9 Fees . . . . . . . . . . . . . . . . . . . . . . . . 27
2.9.1 Facility Fee. . . . . . . . . . . . . . . . . 27
2.9.2 Agent's Fee . . . . . . . . . . . . . . . . . 27
2.9.3 Interest on Fees. . . . . . . . . . . . . . . 27
2.10 Payment Instructions . . . . . . . . . . . . . . . . 27
2.11 Making of Payments . . . . . . . . . . . . . . . . . 28
2.12 Application of Certain Payments . . . . . . . . . . 28
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2.13 Due Date Extension: Payments Due on Business
Days . . . . . . . . . . . . . . . . . . . . . . . . 29
2.14 Pro Rata Treatment . . . . . . . . . . . . . . . . . 29
2.15 Proration of Payments. . . . . . . . . . . . . . . . 29
2.16 Extension of Termination Date. . . . . . . . . . . . 30
2.17 Increase in Commitments. . . . . . . . . . . . . . . 30
SECTION 3 TAXES. YIELD PROTECTION AND ILLEGALITY . . . . . . . 31
3.1 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 31
3.2 Increased Costs. . . . . . . . . . . . . . . . . . . 32
3.3 Basis for Determining Interest Rate Inadequate or
Unfair . . . . . . . . . . . . . . . . . . . . . . . 34
3.4 Changes in Law Rendering Eurodollar Loans
Unlawful . . . . . . . . . . . . . . . . . . . . . . 34
3.5 Funding Losses . . . . . . . . . . . . . . . . . . . 35
3.6 Right of Banks to Fund through Other Offices . . . . 35
3.7 Discretion of Banks as to Manner of Funding. . . . . 36
3.8 Conclusiveness of Statements; Survival of
Provisions . . . . . . . . . . . . . . . . . . . . . 36
3.9 Banks' Obligation to Mitigate. . . . . . . . . . . . 36
SECTION 4 CONDITIONS OF LENDING . . . . . . . . . . . . . . . 37
4.1 Initial Letter of Credit or Loan . . . . . . . . . . 37
4.1.1 Loan Documents. . . . . . . . . . . . . . . . 37
4.1.2 Consents, etc . . . . . . . . . . . . . . . . 37
4.1.3 Secretary's Certificate . . . . . . . . . . . 38
4.1.4 Officer's Certificate . . . . . . . . . . . . 38
4.1.5 Opinion of Counsel for the Company. . . . . . 38
4.1.6 Notice of Borrowing or Notice of
Conversion/Continuation . . . . . . . . . . . 38
4.1.7 Compliance Certificate. . . . . . . . . . . . 38
4.1.8 Other . . . . . . . . . . . . . . . . . . . . 38
4.2 All Loans and Letters of Credit . . . . . . . . . . 39
4.2.1 No Default. . . . . . . . . . . . . . . . . . 39
4.2.2 Confirmatory Certificate. . . . . . . . . . . 39
SECTION 5 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 39
5.1 Organization, Etc. . . . . . . . . . . . . . . . . . 39
5.2 Authorization: No Conflict . . . . . . . . . . . . . 40
5.3 Validity and Binding Nature . . . . . . . . . . . . 41
5.4 Financial Information . . . . . . . . . . . . . . . 41
5.5 No Material Adverse Change; Conduct of Business . . 42
5.6 Litigation . . . . . . . . . . . . . . . . . . . 42
5.7 Ownership of Properties; Liens . . . . . . . . . 42
5.8 Subsidiaries . . . . . . . . . . . . . . . . . . . . 42
5.9 Compliance with ERISA . . . . . . . . . . . . . . . 42
5.10 Investment Company Act . . . . . . . . . . . . . . . 43
5.11 Public Utility Holding Company Act . . . . . . . . . 43
5.12 Regulation U; Other Governmental Regulation . . . . 43
5.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 44
5.14 Solvency, etc. . . . . . . . . . . . . . . . . . . . 44
5.15 Hazardous Materials. . . . . . . . . . . . . . . . . 44
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5.15.1 Release and Disposal. . . . . . . . . . . . 44
5.15.2 Treatment and Storage. . . . . . . . . . . . 45
5.16 Ownership . . . . . . . . . . . . . . . . . . . . . 45
5.17 Information . . . . . . . . . . . . . . . . . . . . 45
SECTION 6 AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . 46
6.1 Reports, Certificates and Other Information . . . . 46
6.1.1 Audit Report. . . . . . . . . . . . . . . . . 46
6.1.2 Monthly Reports; Quarterly Cash Flow
Statement . . . . . . . . . . . . . . . . . . 46
6.1.3 Compliance Certificates . . . . . . . . . . . 47
6.1.4 Reports to SEC, to the Public and to
Stockholders: Press Releases. . . . . . . . . 47
6.1.5 Notice of Default, Litigation, Material
Adverse Change. . . . . . . . . . . . . . . . 47
6.1.6 Subsidiaries. . . . . . . . . . . . . . . . . 48
6.1.7 Management Reports. . . . . . . . . . . . . . 48
6.1.8 Projections . . . . . . . . . . . . . . . . . 48
6.1.9 ERISA . . . . . . . . . . . . . . . . . . . . 48
6.1.10 Other Information . . . . . . . . . . . . . . 49
6.2 Books, Records and Inspections . . . . . . . . . . . 49
6.3 Insurance. . . . . . . . . . . . . . . . . . . . . . 50
6.4 Compliance with Laws: Payment of Taxes and
Liabilities. . . . . . . . . . . . . . . . . . . . . 50
6.5 Maintenance of Existence, Etc. . . . . . . . . . . . 50
6.6 Use of Proceeds. . . . . . . . . . . . . . . . . . . 51
6.7 Employee Benefit Plans . . . . . . . . . . . . . . . 51
6.8 Environmental Covenants. . . . . . . . . . . . . . . 51
6.8.1 Environmental Response Obligation . . . . . . 51
6.8.2 Environmental Liabilities . . . . . . . . . . 51
6.9 Material Agreements. . . . . . . . . . . . . . . . . 52
6.10 Maintenance of Properties. . . . . . . . . . . . . . 52
6.11 Subsidiary Guaranties. . . . . . . . . . . . . . . . 52
SECTION 7 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 52
7.1 Liens. . . . . . . . . . . . . . . . . . . . . . . . 52
7.2 Restricted Payments. . . . . . . . . . . . . . . . . 54
7.3 Mergers, Consolidations, Sales . . . . . . . . . . . 54
7.4 Modification of Nature of Business; Modification
of Organizational Documents. . . . . . . . . . . . . 55
7.5 Investments. . . . . . . . . . . . . . . . . . . . . 55
7.6 No Negative Pledge . . . . . . . . . . . . . . . . . 56
7.7 Funded Debt of Subsidiaries. . . . . . . . . . . . . 56
7.8 Capital Expenditures . . . . . . . . . . . . . . . . 56
7.9 Financial Covenants. . . . . . . . . . . . . . . . . 57
7.9.1 Minimum Tangible Net Worth. . . . . . . . . . 57
7.9.2 Maximum Leverage. . . . . . . . . . . . . . . 57
7.9.3 Minimum Fixed Charge Coverage . . . . . . . . 57
7.9.4 Current Ratio . . . . . . . . . . . . . . . . 57
SECTION 8 EVENTS OF DEFAULT AND THEIR EFFECT . . . . . . . . . 57
8.1 Events of Default. . . . . . . . . . . . . . . . . . 57
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8.1.1 Non-Payment of the Loans, etc. . . . . . . . 58
8.1.2 Non-Payment of Other Debt . . . . . . . . . 58
8.1.3 Bankruptcy, Insolvency, etc. . . . . . . . . 58
8.1.4 Non-Compliance with Provisions of This
Agreement or Any Other Loan Document . . . . 58
8.1.5 Warranties . . . . . . . . . . . . . . . . . 59
8.1.6 ERISA. . . . . . . . . . . . . . . . . . . . 59
8.1.7 Judgments . . . . . . . . . . . . . . . . . 60
8.1.8 Guaranties . . . . . . . . . . . . . . . . . 60
8.1.9 Change of Control . . . . . . . . . . . . . 60
8.2 Effect of Event of Default . . . . . . . . . . . . 60
SECTION 9 THE AGENT . . . . . . . . . . . . . . . . . . . . . 61
9.1 Appointment and Authorization; "Agent". . . . . . . 61
9.2 Delegation of Duties. . . . . . . . . . . . . . . . 61
9.3 Liability of Agent. . . . . . . . . . . . . . . . . 62
9.4 Reliance by Agent . . . . . . . . . . . . . . . . . 62
9.5 Notice of Default . . . . . . . . . . . . . . . . . 63
9.6 Credit Decision . . . . . . . . . . . . . . . . . . 63
9.7 Indemnification of Agent. . . . . . . . . . . . . . 64
9.8 Agent in Individual Capacity. . . . . . . . . . . . 64
9.9 Successor Agent . . . . . . . . . . . . . . . . . . 64
9.10 Withholding Tax . . . . . . . . . . . . . . . . . . 65
SECTION 10 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 67
10.1 Waiver: Amendments. . . . . . . . . . . . . . . . . 67
10.2 Confirmations. . . . . . . . . . . . . . . . . . . 67
10.3 Notices . . . . . . . . . . . . . . . . . . . . . . 67
10.4 Computations . . . . . . . . . . . . . . . . . . . 68
10.5 Regulation U . . . . . . . . . . . . . . . . . . . 68
10.6 Costs, Expenses and Taxes . . . . . . . . . . . . . 69
10.7 Captions . . . . . . . . . . . . . . . . . . . . . 69
10.8 Assignments; Participations . . . . . . . . . . . . 69
10.8.1 Assignments . . . . . . . . . . . . . . . . 69
10.8.2 Participations. . . . . . . . . . . . . . . 71
10.9 Governing Law . . . . . . . . . . . . . . . . . . . 72
10.10 Counterparts . . . . . . . . . . . . . . . . . . . 72
10.11 Successors and Assigns . . . . . . . . . . . . . . 72
10.12 Indemnification by the Company . . . . . . . . . . 73
10.13 Forum Selection and Consent to Jurisdiction . . . . 73
10.14 Waiver of Jury Trial . . . . . . . . . . . . . . . 74
10.15 Setoff . . . . . . . . . . . . . . . . . . . . . . 74
10.16 Further Assurances . . . . . . . . . . . . . . . . 74
10.17 Reinstatement. . . . . . . . . . . . . . . . . . . 74
10.18 Waivers. . . . . . . . . . . . . . . . . . . . . . 75
10.19 Confidentiality. . . . . . . . . . . . . . . . . . 75
10.20 Amendment and Restatement. . . . . . . . . . . . . 75
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EXHIBITS
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A Form of Note
B-1 Notice of Borrowing
B-2 Notice of Conversion/Continuation
C Compliance Certificate
D Subsidiary Guaranty
E Form of Notice of Assignment
F Opinion of Counsel
SCHEDULES
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2.1 Commitments
5.6 Litigation
5.8 Subsidiaries
5.9 ERISA Plans
7.1 Existing Liens
7.5 Existing Investments
10.3 Addresses and Agent's Payment Office
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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This SECOND AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of December 20, 1996 (as amended or otherwise modified
from time to time, this "Agreement"), is entered into among WYLE
ELECTRONICS, a California corporation (the "Company"), the
undersigned financial institutions (together with their
respective successors and assigns, collectively the "Banks" and
individually each a "Bank") and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION (in its individual capacity and as agent
("Agent") for the Banks), and amends and restates that certain
Credit Agreement dated as of December 9, 1993 among the Company,
the financial institutions party thereto and the Agent, as
further amended and restated by the First Amended and Restated
Credit Agreement dated as of December 29, 1995, as amended, among
the Company, the Banks and the Agent (collectively, the "Existing
Credit Agreement").
AGREEMENT:
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In consideration of the premises and the mutual
agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms
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shall have the following meaning (such definitions to be
applicable to both the singular and plural forms of such terms):
"Accounting Changes" - see Section 10.4.
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"Affected Loan" - see Section 3.4.
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"Affiliate" of any Person means any other Person which,
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directly or indirectly, controls or is controlled by or is under
common control with such Person.
"Agent" means BofA in its capacity as agent for the
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Banks hereunder, and any successor agent arising under Section
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9.9.
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"Agent-Related Persons" means BofA and any successor
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agent arising under Section 9.9, together with their respective
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Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
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"Agent's Payment Office" means the address for payments
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set forth on Schedule 10.3 or such other address as the Agent may
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from time to time specify.
"Agreement" - see the Preamble.
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"Applicable Margin" means, (a) for the Pricing Period
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from the Effective Date through February 24, 1997, the per annum
rate, expressed in basis points, indicated by the Compliance
Certificate delivered on the Effective Date, and (b) for each
Pricing Period thereafter, the applicable per annum rate in basis
points set forth below opposite the indicated ratios as of the
last day of the Fiscal Quarter most recently ended prior to the
commencement of that Pricing Period, as set forth in the most
recently delivered Compliance Certificate:
Applicable Margin
(in basis points per annum)
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Eurodollar
Leverage Ratio Facility Loans
Fee ----------
Letter of
Credit Fee
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less than 1.00:1 12.50 25.00
greater than or
equal to 1.00:1
but less than 1.50:1 15.00 30.00
greater than or
equal to 1.50:1
but less than 2.00:1 17.50 37.50
greater than or
equal to 2.00:1 20.00 55.00
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The Applicable Margin shall be based on the Leverage Ratio as set
forth in the most recent Compliance Certificate; provided,
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however, that if Agent does not receive a Compliance Certificate
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by the date required by Section 6.1.3 the Applicable Margin
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shall, effective as of such date, increase to the highest level
to but excluding the date the Agent receives such Compliance
Certificate.
"Arranger" means BA Securities, Inc.
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"Bank" - see the Preamble.
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"Bank Party" - see Section 10.12.
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"Base Rate" means at any time the higher of (a) the
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Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by
BofA in San Francisco, California, as its "reference rate." (The
"reference rate" is a rate set by BofA based upon various factors
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including BofA's costs and desired return, general economic
conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below
such announced rate.) Any change in the reference rate announced
by BofA shall take effect at the opening of business on the day
specified in the public announcement of such change. The Agent
will give notice promptly to the Company and the Banks of changes
in the Base Rate.
"Base Rate Loan" means any Loan which bears interest at
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or by reference to the Base Rate.
"BofA" - Bank of America National Trust and Savings
Association, in its individual capacity.
"BofA Illinois" means Bank of America Illinois, an
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Illinois banking corporation.
"Business Day" means any day other than a Saturday,
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Sunday or other day on which commercial banks in New York City or
San Francisco are authorized or required by law to close and, if
the applicable Business Day relates to any Eurodollar Loan, means
such a day on which dealings are carried on in the applicable
offshore dollar interbank market.
"Capital Expenditures" means, for any period and with
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respect to any Person, the aggregate of all expenditures and
commitments for expenditures by such Person and its Subsidiaries,
including the capitalized portion of obligations under Capital
Leases, which, in conformity with Generally Accepted Accounting
Principles, is or should be accounted for as property, plant or
equipment on the consolidated balance sheet of such Person.
"Capital Lease" means, with respect to any Person, any
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lease of (or other agreement conveying the right to use) any real
or personal property which, in conformity with Generally Accepted
Accounting Principles, is or should be accounted for as a capital
lease on the balance sheet of such Person.
"Cash Equivalent Investment" means, at any time:
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(a) any evidence of debt, maturing not more than one
year after such time, issued or guaranteed by the United
States Government (provided that the full faith and credit
of the United States is pledged in support thereof), or by
any of the following United States federal agencies: Federal
National Mortgage Association, Federal Home Loan Bank Board,
or Federal Home Loan Mortgage Corporation;
(b) marketable direct obligations issued by any state
of the United States of America or the District of Columbia
or any political subdivision thereof or any public
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instrumentality thereof (including without limitation tax-
exempt and tax-advantaged municipal bond investments)
maturing not more than one year after such time and rated at
least A or better by both S&P and Xxxxx'x;
(c) commercial paper, variable rate demand notes or
other short-term obligations issued by
(i) a corporation (except an Affiliate of the
Company) organized under the laws of any state of the
United States of America or of the District of Columbia
and rated at least A-2 by S&P and P-2 by Xxxxx'x, or
(ii) any Bank (or its holding company) as of the
date hereof;
(d) any certificate of deposit or bankers' acceptance
or eurodollar time deposit, maturing not more than one year
after the date of issue, which is issued by either
(i) a financial institution that is a member of
the Federal Reserve System and has a combined capital
and surplus and undivided profits of not less than
$500,000,000 or an international bank that has a
combined capital and surplus and undivided profits of
not less than $1,000,000,000 (or the equivalent), or
(ii) any Bank as of the date hereof;
(e) shares of money market funds that invest
substantially in instruments described in subsections (a)
through (d) above;
(f) participations in loans made to a borrower (other
than an Affiliate of the Company) which borrower has a debt
rating of at least A-2 from S&P and P-2 from Xxxxx'x;
provided, however, that such loans must mature within six
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months from the date such participation is purchased;
(g) short-term asset management accounts offered by
any Bank, brokerage house or other investment manager for
the purpose of investing in notes issued by a corporation
(other than an Affiliate of the Company) organized under the
laws of any state of the United States or of the District of
Columbia and rated at least A-2 by S&P and P-2 by Xxxxx'x;
and
(h) auction preferred securities which are either (x)
issued by a corporation (other than an Affiliate of the
Company) organized under the laws of any state of the United
States or of the District of Columbia and rated at least A
by S&P and Xxxxx'x or (y) issued by a corporation (other
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than an Affiliate of the Company) not organized under the
laws of any state of the United States or of the District of
Columbia and rated at least AA by S&P and Xxxxx'x;
provided that all Cash Equivalent Investments must be
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denominated solely for payment in Dollars, and provided, further,
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that if any Investment which is required to carry at least a
specified rating by both S&P and Xxxxx'x in order to constitute a
Cash Equivalent Investment hereunder is only rated by one but not
both of S&P and Xxxxx'x, such Investment shall nonetheless
qualify as a Cash Equivalent Investment if such Investment
carries the required rating from either S&P or Xxxxx'x.
"Code" means the Internal Revenue Code of 1986, as
----
amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from
time to time. References to sections of the Code also refer to
any successor sections.
"Commitment" means each commitment of any Issuing Bank
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to issue, and of each Bank to participate in, Letters of Credit
pursuant to Section 2.1.1 and the commitment of the Banks to make
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Loans pursuant to Section 2.1.2. The initial amount of each
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Commitment is set forth on Schedule 2.1 hereto.
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"Company" - see the Preamble.
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"Compliance Certificate" - see Section 6.1.3.
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"Computation Period" means any period of four
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consecutive Fiscal Quarters ending on the last day of a Fiscal
Quarter.
"Consolidated EBITDA" means, for any period for the
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Company and its consolidated Subsidiaries, an amount equal to the
(a) Consolidated Net Income plus (b) Interest Expense plus
---- ----
(c) the amount of taxes, based on or measured by income, used or
included in the determination of Consolidated Net Income plus
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(d) the amount of depreciation and amortization expense deducted
in determining Consolidated Net Income less (e) interest income,
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all determined in conformity with Generally Accepted Accounting
Principles; provided, however, that Consolidated Net Income shall
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be computed for these purposes without giving effect to
extraordinary losses or extraordinary gains.
"Consolidated Net Income" means, with respect to the
-----------------------
Company and its consolidated Subsidiaries for any period, the net
income (or loss) of the Company and its consolidated Subsidiaries
for such period; provided that there shall be excluded therefrom
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the income of any Subsidiary to the extent that the declaration
or payment of dividends or similar distributions by such
Subsidiary of such income is not at the time permitted by
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operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary.
"Contingent Liability" means any agreement,
--------------------
undertaking or arrangement by which any Person guarantees,
endorses or otherwise becomes or is contingently liable upon (by
direct or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any
indebtedness, lease payment or other obligation of any other
Person (other than by endorsements of negotiable instruments for
collection in the course of business), or guarantees the payment
of dividends or other distributions upon the shares of any other
Person, including without limitation contingent reimbursement
obligations with respect to undrawn letters of credit issued for
the account of such Person. The amount of any Person's
obligation in respect of any Contingent Liability shall be deemed
to be the stated or determinable amount of the primary obligation
in respect of which such Contingent Liability arises (subject to
any stated or determinable limitation set forth therein), or if
such amount is not stated or determinable, the maximum liability
in respect thereof.
"Debt" of any Person means, without duplication, (a)
----
all indebtedness of such Person for borrowed money, whether or
not evidenced by bonds, debentures, notes or similar instruments,
(b) all obligations of such Person as lessee under Capital
Leases, (c) all indebtedness created or arising under any
conditional sale, deferred purchase price or other title
retention agreement with respect to property or services owned or
acquired by such Person other than trade accounts payable in the
ordinary course of business (whether or not the rights and
remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such
property), (d) all indebtedness secured by a Lien on the property
of such Person, whether or not such indebtedness shall have been
assumed by such Person, (e) all unpaid reimbursement obligations
under letters of credit issued for the account of such Person and
(f) all Contingent Liabilities of such Person.
"Designated Employee" means any of the (a) Executive
-------------------
Vice President-Finance and Treasurer, Chief Financial Officer,
(b) Vice President and Controller or (c) Senior Vice
President-Administration, General Counsel and Secretary.
"Dollar" and the sign "$" mean lawful money of the
------ -
United States of America.
"Effective Date" - see Section 4.1.
-------------- -----------
-6-
"Eligible Assignee" means (a) a commercial bank
-----------------
organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least
$100,000,000; (b) a commercial bank organized under the laws of
any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political
subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is
acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the
OECD; and (c) a Person that is primarily engaged in the business
of commercial banking and that is (i) a Subsidiary of a Bank,
(ii) a Subsidiary of a Person of which a Bank is a Subsidiary, or
(iii) a Person of which a Bank is a Subsidiary.
"ERISA" means the Employee Retirement Income Security
-----
Act of 1974, as amended, and any successor statute of similar
import, together with the regulations thereunder, in each case as
in effect from time to time. References to sections of ERISA
also refer to any successor sections.
"ERISA Controlled Group" means, when used with respect
----------------------
to a Plan, ERISA, the PBGC or a provision of the Code, pertaining
to employee benefit plans, a group consisting of any Person and
all members of a controlled group of corporations and all trades
or businesses (whether or not incorporated) under common control
with such Person that, together with such Person, are treated as
a single employer under regulations of the PBGC, which are
consistent and coextensive with regulations prescribed for
similar purposes by the Secretary of the Treasury under
subsections (b) and (c) of Section 414 of the Code.
"ERISA Plan" means (a) any Plan which is subject to
----------
Title IV of ERISA (i) that is not a Multiemployer Plan and (ii)
the fair market value of the assets of which is less than the
present value of all benefits under such Plan, including all
benefit liabilities as defined in Section 4001(a)(16) of ERISA,
all determined as of the then most recent valuation date for such
Plan (on the basis of assumptions prescribed by the PBGC for the
purpose of Section 4044 of ERISA), and (b) any Plan that is a
Multiemployer Plan.
"Eurocurrency Reserve Percentage" means, with respect
-------------------------------
to any Eurodollar Loan for any Interest Period, a percentage
(expressed as a decimal) equal to the daily average during such
Interest Period of the percentage in effect on each day of such
Interest Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the
aggregate maximum reserve requirements applicable to
"Eurocurrency Liabilities" pursuant to Regulation D or any other
then applicable regulation of such Board of Governors which
-7-
prescribes reserve requirements applicable to "Eurocurrency
Liabilities" as presently defined in Regulation D.
"Eurodollar Loan" means any Loan which bears interest
---------------
at a rate determined by reference to the Eurodollar Rate (Reserve
Adjusted).
"Eurodollar Office" means with respect to any Bank the
-----------------
office or offices of such Bank which shall be making or
maintaining the Eurodollar Loans of such Bank hereunder or such
other office or offices through which such Bank determines its
Eurodollar Rate. A Eurodollar Office of any Bank may be, at the
option of such Bank, either a domestic or foreign office.
"Eurodollar Rate" means, with respect to any Eurodollar
---------------
Loan for any Interest Period, the rate per annum at which Dollar
deposits in immediately available funds are offered to BofA two
Business Days prior to the beginning of such Interest Period by
major banks in the London eurodollar market at approximately
11:00 a.m., London time, for delivery on the first day of such
Interest Period, for the number of days comprised therein and in
an amount equal or comparable to the amount of the Eurodollar
Loan of BofA Illinois for such Interest Period.
"Eurodollar Rate (Reserve Adjusted)" means, with
----------------------------------
respect to any Eurodollar Loan for any Interest Period, a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) determined pursuant to the following formula:
Eurodollar Rate Eurodollar Rate
---------------
(Reserve Adjusted) = l-Eurocurrency
Reserve Percentage
"Event of Default" means any of the events described in
----------------
Section 8.1.
"Existing Credit Agreement" - see the Preamble.
------------------------- --------
"Extension Date" means the date four years prior to the
--------------
Termination Date.
"Federal Funds Rate" means, for any day, the rate set
------------------
forth in the weekly statistical release designated as H.15(519),
or any successor publication, published by the Federal Reserve
Bank of New York (including any such successor, "H.15(519)") on
the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such
day will be the arithmetic mean as determined by the Agent of the
rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by
-8-
each of three leading brokers of Federal funds transactions in
New York City selected by the Agent.
"Fiscal Quarter" means a fiscal quarter of a Fiscal
--------------
Year.
"Fiscal Year" means the fiscal year of the Company and
-----------
its Subsidiaries, which period shall be the year ended
December 31 of each year. References to a Fiscal Year with a
number corresponding to any calendar year (e.g., "Fiscal Year
1996") refer to the Fiscal Year ending on December 31 of such
calendar year.
"Generally Accepted Accounting Principles" means, as of
----------------------------------------
any date of determination, and subject to Section 10.4,
------------
accounting principles referenced as "generally accepted" in then
currently effective Statements of the Auditing Standards Board of
the American Institute of Certified Public Accountants, or if
such statements are not then in effect, accounting principles
that are then approved by a significant segment of the accounting
profession in the United States of America, including in each
case, the materiality standards as generally accepted. The term
"consistently applied," as used in connection therewith, means
that the accounting principles are applied on a basis consistent
with the audited financial statements certified by Xxxxxx
Xxxxxxxx LLP for Fiscal Year 1995.
"Ginsbury Acquisition" means the acquisition of the
--------------------
assets or stock of certain companies comprising The Ginsbury
Group.
"Hazardous Material" means any hazardous, toxic or
------------------
dangerous substance or material defined as such in (or for
purposes of) the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund" or
"Superliens" law or any other Federal, state or local statute,
law, ordinance, code, regulation or order, or any other
requirement of any governmental authority regulating, relating
to, or imposing liability for, or standards of conduct
concerning, any hazardous, toxic or dangerous waste, substance or
material as now or any time hereafter in effect.
"Inactive Subsidiary" means any Subsidiary of the
-------------------
Company which, on a consolidated basis with its Subsidiaries, has
total assets of less than $50,000, total liabilities of less than
$50,000, and conducts no business or operations of any kind.
"Indemnified Liabilities" - see Section 10.12.
----------------------- -------------
"Interest Expense" means for any period the
----------------
consolidated interest expense of the Company and its Subsidiaries
-9-
for such period (including, without limitation, all imputed
interest on Capital Leases).
"Interest Period" means, for each Eurodollar Loan, the
---------------
period commencing on the date such Eurodollar Loan is made or
converted from a Base Rate Loan, or on the date of expiration of
the immediately preceding Interest Period for such Eurodollar
Loan, and ending on the date which is one, two, three or six
months thereafter, as the Company may specify; provided, that
--------
each Interest Period for a Eurodollar Loan which would otherwise
end on a day which is not a Business Day shall end on the
immediately succeeding Business Day (unless such immediately
succeeding Business Day is the first Business Day of a calendar
month, in which case such Interest Period shall end on the
immediately preceding Business Day), and the Company may not
select any Interest Period which would end after the Termination
Date.
"Investment" means, with respect to any Person, any
----------
direct or indirect loan, advance or other extension of credit or
capital contribution made by such Person to any other Person and
any ownership or similar interest held by such Person in any
other Person.
"Issuing Bank" means BofA Illinois or with respect to
------------
any Letter of Credit issued by any other Bank designated by BofA
Illinois, such other Bank.
"Letter of Credit" - see Section 2.1.1.
---------------- -------------
"Letter of Credit Application" means a letter of credit
----------------------------
application in the form then used by the Issuing Bank for the
type of letter of credit requested (with appropriate adjustments
to indicate that any letter of credit issued thereunder is to be
issued pursuant to, and subject to the terms and conditions of,
this Agreement).
"Letter of Credit Commitment" means $30,000,000.
---------------------------
"Leverage Ratio" means, at any time, the ratio of (a)
--------------
consolidated Debt at the end of the Computation Period to (b)
Consolidated EBITDA for the Computation Period.
"Lien" means, when used with respect to any Person, any
----
interest granted by such Person or otherwise created in any real
or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or
performance of any obligation and shall include any, mortgage,
lien, encumbrance, charge or other security interest of any kind,
and shall include the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title
-10-
retention document, whether such Lien is arising by contract, as
a matter of law, by judicial process or otherwise.
"Loan Documents" means this Agreement, the Notes, the
--------------
Letter of Credit Applications, the Subsidiary Guaranties and all
other documents, instruments, certificates, and agreements
entered into in connection herewith and therewith by the Company
or any of its Subsidiaries, as amended or otherwise modified from
time to time.
"Loan Parties" means the Company and each of its
------------
Subsidiaries party to a Subsidiary Guaranty (individually, a
"Loan Party").
"Loans" - see Section 2.1.2.
----- -------------
"Margin Stock" means any "margin stock" as defined in
------------
Regulation U of the Board of Governors of the Federal Reserve
System.
"Material Subsidiary" means a Subsidiary of the
-------------------
Company, including its Subsidiaries, which either (a) is
irrevocably designated by the Company by notice to the Agent and
each Bank as a "Material Subsidiary" or (b) at any time on or
after the Effective Date meets any of the following conditions:
(i) The Company's and its other Subsidiaries'
investments in and advances to the Subsidiary exceed five percent
of the total assets of the Company and its Subsidiaries
consolidated as of the end of the most recently completed Fiscal
Year (for a proposed business combination to be accounted for as
a pooling of interests, this condition is also met when the
number of common shares exchanged or to be exchanged by the
Company exceeds five percent of its total common shares
outstanding at the date the combination is initiated);
(ii) The Company's and its other Subsidiaries'
proportionate share of the total assets (after intercompany
eliminations) of the Subsidiary exceeds five percent of the total
assets of the Company and its Subsidiaries consolidated as of the
end of the most recently completed Fiscal Year;
(iii) The Company's and its other Subsidiaries'
equity in the income from continuing operations before income
taxes, extraordinary items and cumulative effect of a change in
accounting principles of the Subsidiary exceeds five percent of
such income of the Company and its Subsidiaries consolidated for
the most recently completed Fiscal Year; or
(iv) The Company's and its other Subsidiaries' equity
in the revenue from continuing operations of the Subsidiary
exceeds five percent of such revenue of the Company and its
-11-
Subsidiaries consolidated for the most recently completed Fiscal
Year;
provided, however, that for purposes of calculating the income or
-------- -------
revenue test above, the following shall be applied:
(x) When a loss has been incurred by either the
Company and its consolidated Subsidiaries or the tested
Subsidiary, but not both, the equity in the income or revenue, as
applicable, or loss of the tested Subsidiary should be excluded
from the income or revenue, as applicable, of the Company and its
consolidated Subsidiaries for purposes of the computation.
(y) If income or revenue of the Company and its
Subsidiaries consolidated for the most recent Fiscal Year is at
least five percent lower than the average of the income or
revenue, as applicable, for the last five Fiscal Years, such
average income or revenue, as applicable, should be substituted
for purposes of the computation. Any loss years should be
omitted for purposes of computing average income or revenue, as
applicable.
"Moody's" means Xxxxx'x Investors Services, Inc.
-------
"Multiemployer Plan" shall have the meaning set forth
------------------
in Section 4001(a)(3) of ERISA.
"Net Worth" means the Company's consolidated
---------
shareholders' equity.
"Note" - see Section 2.2.2.
---- -------------
"Notice of Borrowing" means a Notice of Borrowing,
-------------------
substantially in the form attached hereto as Exhibit B-1.
-----------
"Notice of Conversion/Continuation" means a Notice of
---------------------------------
Conversion/Continuation, substantially in the form attached
hereto as Exhibit B-2.
-----------
"Operating Lease" means any lease of (or other
---------------
agreement conveying the right to use) any real or personal
property by the Company or any Subsidiary, as lessee, other than
a Capital Lease.
"PBGC" means the Pension Benefit Guaranty corporation
----
and any entity succeeding to any or all of its functions under
ERISA.
"Percentage" means as to any Bank the percentage which
----------
the aggregate amount of such Bank's Commitment is of the
aggregate amount of all Commitments. The Percentage for each
Bank is set forth on Schedule 2.1 hereto.
------------
-12-
"Person" means any natural person, corporation,
------
partnership, trust, association, firm, governmental authority or
unit, or any other entity, whether acting in an individual,
fiduciary or other capacity.
"Plan" means (a) any employee benefit plan as defined
----
in Section 3(3) of ERISA which is maintained by or contributed to
by the Company or a member of its ERISA Controlled Group on or
after the Effective Date and (b) any employee pension benefit
plan which is subject to the minimum funding standards under
Section 412 of the Code and any multi-employer or single-employer
plan covered by Title IV of ERISA, the funding requirements of
which: (i) were the responsibility of the Company or a member of
its ERISA Controlled Group at any time within the five calendar
years immediately preceding the date hereof, (ii) are currently
the responsibility of the Company or a member of its ERISA
Controlled Group, or (iii) hereafter become the responsibility of
the Company or a member of its ERISA Controlled Group, including
any such plans as may have been, or may hereafter be, terminated
for any reason. Notwithstanding the foregoing, any plan
described in clause (ii) of the foregoing definition shall not be
considered to be a Plan after it ceases to be maintained by the
Company or any member of its ERISA Controlled Group, except with
respect to any representation or covenant, the breach of which
with respect to such plan would result in any liability of the
Company or any member of its ERISA Controlled Group.
"Pricing Period" means (a) the period commencing on the
--------------
Effective Date and ending on February 24, 1997, and (b) the
period commencing on each February 25 and ending on the next
following May 24, (c) the period commencing on each May 25 and
ending on the next following August 24, (d) the period commencing
on each August 25 and ending on the next following November 24
and (e) the period commencing on each November 25 and ending on
the next following February 24.
"Prudential Note Purchase Agreement" means that certain
----------------------------------
Note Purchase Agreement dated on April 26, 1996 between the
Company, Prudential and certain affiliates of Prudential pursuant
to which the Company issued (a) its unsecured 6.98% Notes due
April 26, 2001 in an aggregate principal amount of $30,000,000
and (b) its unsecured 7.18% Notes due October 26, 2006 in an
aggregate principal amount of $20,000,000, in each case as
amended, supplemented, modified, but not increased, from time to
time.
"Replaced Bank" - see Section 10.8.1.
------------- --------------
"Reportable Event" has the meaning set forth in Section
----------------
4043(b) of ERISA (other than a Reportable Event as to which the
provision of 30 days' notice to the PBGC is waived under
-13-
applicable regulations), or is the occurrence of the events
described in Section 4063(a) of ERISA.
"Reportable Quantity" has the meaning given such term
-------------------
in 40 C.F.R. (S)(S)302.3.
"Required Banks" means Banks having an aggregate
--------------
Percentage of 66 2/3% or more.
"Requested Increase Amount" - see Section 2.17.
------------------------- ------------
"S&P" means Standard & Poor's Ratings Group.
---
"SEC" means the Securities and Exchange Commission.
---
"Stated Amount" means with respect to any Letter of
-------------
Credit at any date of determination, the maximum aggregate amount
available thereunder at any time during the then ensuing term of
such Letter of Credit under any and all circumstances, plus the
aggregate amount of all unreimbursed payments and disbursements
under such Letter of Credit.
"Subsidiary" means, with respect to any Person, any
----------
corporation, association or other business entity of which more
than 50% of the total voting power of shares of stock (or
equivalent ownership or controlling interest) entitled (without
regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by that Person
or one or more of the other Subsidiaries of that Person or a
combination thereof. Unless the context otherwise requires, each
reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Company.
"Subsidiary Guaranty" means a Subsidiary Guaranty,
-------------------
substantially in the form attached hereto as Exhibit D, to be
---------
executed and delivered by each Material Subsidiary, as such
Subsidiary Guaranty may be amended, supplemented or modified from
time to time.
"Tangible Net Worth" means the Net Worth of the Company
------------------
after subtracting all intangible assets of the Company and its
consolidated Subsidiaries. For purposes of the foregoing,
"intangible assets" means goodwill, patents, trade names,
trademarks, copyrights, franchises, organization expenses and any
other assets that are properly classified as intangible assets in
accordance with Generally Accepted Accounting Principles.
"Taxes" - see Section 3.1.
----- -----------
"Termination Date" means December 31, 2001, as such
----------------
date may be extended from time to time pursuant to Section 2.16,
------------
-14-
or such other date on which the Commitments shall terminate
pursuant to Section 2.5 or 8.2.
----------- ---
"Termination Event" means (a) a Reportable Event,
-----------------
(b) the withdrawal by the Company or by any member of its ERISA
Controlled Group from an ERISA Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, (c) the initiation of an action by the Company, any
member of its ERISA Controlled Group or any ERISA Plan fiduciary
to terminate an ERISA Plan or the treatment of an amendment to an
ERISA Plan as a termination under ERISA, or (d) the institution
of proceedings by the PBGC under Section 4042 of ERISA to
terminate an ERISA Plan or to appoint a trustee to administer any
ERISA Plan.
"Total Liabilities" means all liabilities, including
-----------------
all Debt and Contingent Liabilities, of the Company and its
consolidated Subsidiaries (excluding any intercompany Debt).
"Type of Loan or Borrowing" means Base Rate Loans or
-------------------------
borrowings and Eurodollar Loans or borrowings.
"Unfunded Benefits" means with respect to any Plan
-----------------
which is subject to Title IV of ERISA, other than a Multiemployer
Plan, at any time, the amount (if any) by which (a) the present
value of all benefits under such Plan, including all benefit
liabilities as defined in Section 4001(a) (16) of ERISA, exceeds
(b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation
date for such Plan (on the basis of assumptions prescribed by the
PBGC for the purpose of Section 4044 of ERISA).
"Unmatured Event of Default" means any event which if
--------------------------
it continues uncured will, with lapse of time or notice or lapse
of time and notice, constitute an Event of Default.
1.2 Use of Defined Terms. Any defined term used in
--------------------
the plural shall refer to all members of the relevant class, and
any defined term used in the singular shall refer to any one or
more of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not
----------------
specifically defined in this Agreement shall be construed in
conformity with, and all financial data required to be submitted
by this Agreement shall be prepared in conformity with Generally
Accepted Accounting Principles consistently applied.
1.4 Exhibits and Schedules. All Exhibits and
----------------------
Schedules to this Agreement, either as originally existing or as
the same may from time to time be supplemented, modified, or
amended, are incorporated herein by reference. A matter
-15-
disclosed on any Schedule shall be deemed disclosed on all
Schedules.
SECTION 2 COMMITMENTS OF THE BANKS; TYPES OF LOANS;
LETTER OF CREDIT, BORROWING AND CONVERSION
PROCEDURES.
2.1 Commitments. On and subject to the terms and
-----------
conditions of this Agreement, each of the Banks, severally and
for itself alone, agrees to issue or participate in the issuance
of Letters of Credit for the account of the Company, and to make
Loans to the Company, as follows:
2.1.1 Letters of Credit. (a) The Issuing Bank
-----------------
will issue non-financial (as determined by the Issuing Bank
consistent with Federal Reserve Regulation Y, Appendix A),
standby letters of credit, including without limitation standby
letters of credit to support the Company's performance
obligations under operating contracts and to support bids by the
Company for operating contracts, in each case containing such
terms and conditions as are permitted by this Agreement and are
reasonably satisfactory to the Issuing Bank (collectively the
"Letters of Credit" and individually each a "Letter of Credit"),
at the request of and for the account of the Company from time to
time before the Termination Date, and (b) as more fully set forth
in Section 2.7.3, each Bank agrees to purchase a participation in
-------------
each such Letter of Credit; provided, further, that no Bank shall
-------- -------
be obligated to issue any Letter of Credit or purchase a
participation, as applicable, if (w) such issuance or purchase
would cause such Bank's portion of the aggregate Stated Amount
outstanding plus the aggregate amount of such Bank's Loans
outstanding to exceed such Bank's Commitment; (x) such issuance
or purchase would cause such Bank's portion of the aggregate
Stated Amount outstanding to exceed such Bank's Percentage times
the Letter of Credit Commitment; (y) such issuance or purchase
would cause the aggregate Stated Amount outstanding plus the
aggregate amount of all Loans outstanding to exceed the aggregate
Commitments; or (z) such issuance or purchase would cause the
aggregate Stated Amount outstanding to exceed the Letter of
Credit Commitment.
2.1.2 Loans. Each Bank will make loans to the
-----
Company on a revolving basis ("Loans") from time to time before
the Termination Date in such Bank's Percentage of such aggregate
amounts as the Company may from time to time request from all
Banks; provided, however, that no Bank shall be obligated to make
-------- -------
any Loan if such Loan would cause the aggregate principal amount
of such Bank's Loans outstanding plus such Bank's portion of the
Aggregate Stated Amount outstanding to exceed such Bank's
Commitment, or the aggregate principal amount of all Loans
outstanding plus the aggregate Stated Amount outstanding to
-16-
exceed the aggregate Commitments. Any bid loans made from time
to time to the Company outside this Agreement shall not count as
usage under the Commitments.
2.1.3 Commitment Limits. Notwithstanding any
-----------------
other provision of this Agreement, the sum of (a) the aggregate
outstanding principal amount of all Loans plus (b) the aggregate
Stated Amount shall not at any time exceed the aggregate
Commitments. In the event the aggregate amount of all
outstanding Loans plus the aggregate Stated Amount exceeds the
aggregate Commitments at any time, the Company shall immediately
repay any Loans, or provide cash collateralization with respect
to any outstanding Letters of Credit pursuant to documentation in
form and substance satisfactory to the Issuing Bank and the
Required Banks, in an amount necessary to eliminate any such
overadvance.
2.2 Evidence of Indebtedness.
------------------------
2.2.1 Loan Accounts. The Loans made by each Bank
-------------
shall be evidenced by one or more accounts or records maintained
by such Bank in the ordinary course of business. The accounts or
records maintained by each Bank shall be conclusive evidence,
absent demonstrable error, of the amount of the Loans made by the
Banks to the Company, and the interest and payments thereon. The
failure to so record any such amount or any error in so recording
any such amount shall not, however, limit or otherwise affect the
obligations of the Company hereunder to repay the principal
amount of the Loans made by such Bank together with all interest
accruing thereon.
2.2.2 Notes. Upon the request of any Bank made
-----
through the Agent, the Loans of each Bank shall be evidenced by a
promissory note (as amended, supplemented, replaced or otherwise
modified from time to time, individually each a "Note" and
collectively for all Banks the "Notes") substantially in the form
set forth in Exhibit A, with appropriate insertions, dated the
---------
Effective Date (or such earlier date as shall be satisfactory to
the Agent and the Company), payable to the order of such Bank in
an amount equal to such Bank's Percentage of the Commitments (or,
if less, in the aggregate unpaid principal amount of such Bank's
Loans).
2.2.3 Recordkeeping. Each Bank shall record in
-------------
its records, or at its option on the schedule attached to its
Note, the date and amount of each Loan made by such Bank, each
repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such
Loan shall begin and end. The aggregate unpaid principal amount
so recorded shall be conclusive evidence, absent demonstrable
error, of the principal amount owing and unpaid on such Note.
The failure to so record any such amount or any error in so
-17-
recording any such amount shall not, however, limit or otherwise
affect the obligations of the Company hereunder or under any Note
to repay the principal amount of the Loans evidenced by such Note
together with all interest accruing thereon.
2.3 Borrowing Procedures. (a) The Company shall give
--------------------
written, facsimile or telephonic notice (which shall, in the case
of telephonic notice, be immediately confirmed by facsimile in
the form of Notice of Borrowing) to the Agent of each proposed
borrowing not later than (i) in the case of a Base Rate
borrowing, 10:00 a.m., San Francisco time, on the proposed date
of such borrowing, and (ii) in the case of a Eurodollar
borrowing, 10:00 a.m., San Francisco time, at least three
Business Days prior to the proposed date of such borrowing. Each
such Notice of Borrowing shall be substantially in the form of
Exhibit B-1 (with appropriate insertions), shall be effective
-----------
upon receipt by the Agent and shall specify the date, amount and
type of borrowing and, in the case of a Eurodollar borrowing, the
initial Interest Period therefor. Each borrowing shall be on a
Business Day and shall be in an aggregate amount of at least
$3,000,000 and an integral multiple of $1,000,000 in excess
thereof (in the case of borrowings of Eurodollar Loans) or in an
aggregate amount of at least $1,000,000 and an integral multiple
of $500,000 in excess thereof (in the case of borrowings of Base
Rate Loans); provided, however, that the Company may borrow the
-------- -------
total amount available for borrowings under this Agreement as
Base Rate Loans if, at the time of such borrowing, such amount
was less than $1,000,000.
(b) Promptly upon receipt of such notice, the Agent
shall advise each Bank thereof. Not later than 12:00 Noon San
Francisco time, on the date of a proposed borrowing, each Bank
shall provide the Agent at the principal office of the Agent in
San Francisco with immediately available funds covering such
Bank's Percentage of such borrowing and, subject to the
satisfaction of the conditions precedent set forth in Section 4
---------
with respect to such borrowing, the Agent shall pay over the
requested amount to the Company on the requested borrowing date,
subject to the obligation of the Company to repay all or a
portion of the requested amount to the Agent pursuant to Section
-------
9.7.
---
(c) Unless the Agent receives notice from a Bank by
11:00 a.m., San Francisco time, on the day of a proposed
borrowing that such Bank will not make available to the Agent the
amount which would constitute its Percentage of such borrowing in
accordance with Section 2.3(b), the Agent may assume that such
--------------
Bank has made such amount available to the Agent and, in reliance
upon such assumption, make a corresponding amount available to
the Company. If and to the extent any Bank shall not have made
its full amount available to the Agent in immediately available
funds and the Agent in such circumstances has made available to
-18-
the Company such amount, that Bank shall on the Business Day
following such borrowing date make such amount available to the
Agent, together with interest at the Federal Funds Rate for each
day during such period. A notice of the Agent submitted to any
Bank with respect to amounts owing under this subsection (c)
shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such
Bank's Loan on the date of borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent on
the Business Day following the borrowing date, the Agent will
notify the Company of such failure to fund and, upon demand by
the Agent, the Company shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day
elapsed since the date of such borrowing, at a rate per annum
equal to the interest rate applicable at the time to the Loans
comprising such borrowing. Nothing set forth in this subsection
(c) shall relieve any Bank of any obligation it may have to make
any Loan hereunder.
(d) The failure of any Bank to make a requested
Loan or to purchase a participation in any Letter of Credit on
any date shall not relieve any other Bank of its obligation to
make a Loan or purchase a participation in any Letter of Credit
on such date, but no Bank shall be responsible for the failure of
any other Bank to make any Loan or purchase any participation in
any Letter of Credit to be made by such other Bank.
(e) Not more than five different Interest Periods
for Eurodollar Loans shall be outstanding at any one time.
2.4 Conversion and Continuation Procedures.
--------------------------------------
(a) Subject to the provisions of Section 4.2, the Company may convert
-----------
all or any part of any outstanding Loan into a Loan of a
different type or continue any Eurodollar Loan as a Eurodollar
Loan by giving written, facsimile or telephonic notice (which
shall, in the case of telephonic notice, be immediately confirmed
by facsimile in the form of Notice of Conversion/Continuation) to
the Agent not later than (a) in the case of a conversion into a
Base Rate Loan, 10:00 a.m., San Francisco time, on the proposed
date of such conversion, and (b) in the case of a conversion into
or continuation of a Eurodollar Loan, 10:00 a.m., San Francisco
time, at least three Business Days prior to the proposed date of
such conversion or continuation. Each such Notice of
Conversion/Continuation shall be effective upon receipt by the
Agent and shall specify the date and amount of such conversion or
continuation, the Loan to be so converted or continued, the type
of Loan to be converted or continued into and, in the case of a
conversion into or continuation of a Eurodollar Loan, the initial
Interest Period therefor. Promptly upon receipt of such Notice
of Conversion/Continuation, the Agent shall advise each Bank
thereof. Subject to Sections 2.4(b) and 4.2, such Loan shall be
-------------- ---
so converted or continued on the requested date of conversion or
-19-
continuation. Each conversion or continuation shall be on a
Business Day and, after giving effect to any conversion or
continuation, the aggregate principal amount of Eurodollar Loans
shall be at least $3,000,000 and an integral multiple of
$1,000,000. If the Company fails to give such notice, such Loan
shall automatically become a Base Rate Loan at the end of the
then-current Interest Period.
(b) After giving effect to any conversion or
continuation, not more than five different Interest Periods for
Eurodollar Loans shall be outstanding.
2.5 Reduction or Termination of Commitments. The
---------------------------------------
Company may from time to time on at least five Business Days,
prior written notice received by the Agent (which shall promptly
advise each Bank thereof) permanently reduce the amount of the
Commitments to an amount not less than the sum of (a) the
aggregate unpaid principal amount of the Loans plus (b) the
aggregate Stated Amount of all outstanding Letters of Credit.
Any such reduction shall be in an amount not less than $5,000,000
and an integral multiple of $1,000,000. The Company may at any
time on like notice terminate the Commitments upon payment in
full in cash of all Loans and all other obligations of the
Company hereunder, and, with respect to each outstanding Letter
of Credit, (x) cash collateralization in full, pursuant to
documentation in form and substance satisfactory to the Agent,
the Issuing Bank and the Required Banks, of all obligations
arising with respect to any applicable Letter of Credit, (y)
delivery to the applicable Issuing Bank, with a copy to the
Agent, of any applicable Letter of Credit for cancellation, or
(z) delivery to the applicable Issuing Bank, with a copy to each
Bank and the Agent, of evidence satisfactory to the Banks that a
replacement letter of credit has been issued to replace any
applicable Letter of Credit and that such applicable Letter of
Credit is to be returned promptly for cancellation. All
reductions of the Commitments shall be pro rata among the Banks
according to their respective Percentages.
2.6 Voluntary Prepayments. The Company may from time
---------------------
to time prepay the Loans in whole or in part; provided that (a)
--------
the Company shall give the Agent (which shall promptly advise
each Bank) written notice thereof (i) on or before 10:00 a.m.,
San Francisco time, not less than three Business Days prior
thereto in the case of Eurodollar Loans and (ii) on or before
10:00 a.m., San Francisco time, on the date of such prepayment in
the case of Base Rate Loans, specifying the Loans to be prepaid
and the date and amount of prepayment, (b) any prepayment of a
Eurodollar Loan prior to the end of an Interest Period therefor
shall be subject to Section 3.5, (c) each partial prepayment of a
-----------
Eurodollar Loan shall be in a principal amount of at least
$3,000,000 and an integral multiple of $1,000,000, (d) each
partial prepayment of a Base Rate Loan shall be in a principal
-20-
amount of at least $1,000,000 and an integral multiple of
$500,000 and (e) any prepayment of a Eurodollar Loan shall
include accrued interest to the date of prepayment on the
principal amount being repaid.
2.7 Letters of Credit.
-----------------
2.7.1 Letter of Credit Procedures. The Company
---------------------------
shall give notice to the Issuing Bank, with a copy to the Agent,
of the proposed issuance of each Letter of Credit on a Business
Day which is at least five Business Days (or fewer Business Days
if agreed to by the Issuing Bank) prior to the proposed date of
issuance of such Letter of Credit. Each such notice shall be
accompanied by a Letter of Credit Application, duly executed by
the Company and in all respects satisfactory to the Issuing Bank,
together with such other documentation as the Issuing Bank may
reasonably request in support thereof, it being understood that
each Letter of Credit Application shall specify, among other
things, the date on which the proposed Letter of Credit is to be
issued and the expiration date of such Letter of Credit (which
shall not extend beyond the earlier of (a) one year from the date
of issuance or (b) 30 days prior to the Termination Date). Such
notice and Letter of Credit Application may be delivered to the
Issuing Bank and the Agent by facsimile; provided, however, that
-------- -------
the original notice and Letter of Credit Application are promptly
delivered to the Issuing Bank thereafter, but in any event prior
to the issuance of such Letter of Credit. Subject to the
satisfaction of the conditions precedent set forth in Section 4
---------
with respect to the issuance or extension of such Letter of
Credit, the Issuing Bank shall issue such Letter of Credit on the
requested issuance date. In the event the Company requests that
the expiration date of any Letter of Credit be extended, the
Company shall notify the Issuing Bank, with a copy to the Agent,
in accordance with the applicable notice provision set forth in
the Letter of Credit with respect to extensions, or, in the event
the Letter of Credit contains no such notice provision, on a
Business Day which is at least five Business Days (or fewer
Business Days if agreed to by the Issuing Bank) prior to the
existing expiration date under the Letter of Credit. Such notice
shall be duly executed by the Company and in all respects
satisfactory to the Issuing Bank, together with such other
documentation as the Issuing Bank may reasonably request in
support thereof, and shall state the proposed extended expiration
date (which date shall not extend beyond the earlier of (x) one
year from the date of such extension or (y) 30 days prior to the
Termination Date). Such notice may be delivered to the Issuing
Bank and the Agent by facsimile; provided, however, that the
-------- -------
original notice is promptly delivered to the Issuing Bank
thereafter, but in any event prior to the expiration of the
applicable Letter of Credit. Subject to the satisfaction of the
conditions precedent set forth in Section 4 with respect to the
---------
issuance of Letters of Credit, the issuing Bank shall extend the
-21-
expiration date of such Letter of Credit to the requested
expiration date.
2.7.2 Determination of Issuing Bank: Replacement
------------------------------------------
of Credit. BofA Illinois shall be the Issuing Bank with respect
---------
to each Letter of Credit, unless each of the Company, BofA
Illinois, the Agent and another Bank designate such other Bank to
be the Issuing Bank with respect to any Letter of Credit, in
which case such other Bank shall be the Issuing Bank with respect
to such Letter of Credit. A Letter of Credit may be replaced by
a Letter of Credit issued by another Issuing Bank selected
pursuant to the terms of this Section 2.7.2, upon receipt of the
-------------
existing Letter of Credit for cancellation by the issuer thereof.
2.7.3 Participations in Letters of Credit.
-----------------------------------
Concurrently with the issuance of each Letter of Credit, the
Issuing Bank shall be deemed to have sold and transferred to each
other Bank, and each other Bank shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such other Bank's Percentage, in
such Letter of Credit and the Company's reimbursement obligations
with respect thereto. For the purposes of this Agreement, the
unparticipated portion of each Letter of Credit shall be deemed
to be the Issuing Bank's "participation" therein. The Issuing
Bank hereby agrees, upon request of the Agent or any Bank, to
deliver to such Bank and the Agent a list of all outstanding
Letters of Credit issued by such Issuing Bank, together with such
information related thereto as such other Bank may reasonably
request.
2.7.4 Reimbursement Obligations. The Company
-------------------------
hereby unconditionally and irrevocably agrees to reimburse the
Issuing Bank for each payment or disbursement made by the Issuing
Bank under any Letter of Credit honoring any demand for payment
made by the beneficiary thereunder, in each case on the date that
such payment or disbursement is made, including, without
limitation, under the following circumstances:
(a) any lack of validity or enforceability of any
Letter of Credit;
(b) the existence of any claim, set-off, defense or
other right which the Company or any other account party may
have at any time against a beneficiary or any transferee of
any Letter of Credit (or any persons or entities for whom
any such transferee may be acting), the Issuing Bank, any
Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction
between the account party or one of the other Loan Parties
-22-
and the beneficiary for which the Letter of Credit was
procured);
(c) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect;
(d) payment by the Issuing Bank under any Letter of
Credit against presentation of a demand, draft or
certificate or other document which does not comply with the
terms of such Letter of Credit;
(e) any other circumstances or happening whatsoever,
which is similar to any of the foregoing; or
(f) the fact that an Event of Default or Unmatured
Event of Default shall have occurred and be continuing;
provided that the obligation of the Company to so reimburse the
--------
Issuing Bank shall be reduced to the extent of any direct losses
suffered by the Company as the result of any event set forth in
subsections (c), (d) or (e) above which is finally judicially
determined to constitute gross negligence or wilful misconduct of
the Issuing Bank. To the extent that any obligation of the
Company to reimburse the issuing Bank is reduced pursuant to the
immediately preceding sentence, the Issuing Bank shall reimburse
the Banks for any such amounts which the Banks have paid on
account of such unreimbursed obligations.
Any amount not reimbursed on the date of such payment or
disbursement (by the making or deemed making of Base Rate Loans
pursuant to Section 2.7.6 or otherwise, notwithstanding if any
-------------
such Loans would cause a default under Section 2.1.3 or any other
-------------
provision hereunder) shall bear interest from and including the
date of such payment or disbursement to but not including the
date that the issuing Bank is reimbursed by the Company therefor,
payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect plus two percent per annum. The
Issuing Bank shall notify the Company and the Agent whenever any
demand for payment is made under any Letter of Credit by the
beneficiary thereunder within five Business Days of receiving
such demand; provided, however, that the failure of the Issuing
-------- -------
Bank to so notify the Company or the Agent shall not affect the
rights of the Issuing Bank or the Banks in any manner whatsoever.
2.7.5 Limitation on the Issuing Bank's
--------------------------------
Obligations. As between the Company, any Issuing Bank and the
-----------
Banks, the Company assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit issued by such Issuing
Bank by, the respective beneficiaries of such Letters of Credit,
-23-
except to the extent of the gross negligence or willful
misconduct of such Issuing Bank. In furtherance and not in
limitation of the foregoing, neither any Issuing Bank nor any
Bank shall be responsible, except to the extent of its own gross
negligence or willful misconduct:
(a) 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 such
Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or
forged;
(b) for the validity or insufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason;
(c) for failure of the beneficiary of any such Letter
of Credit to comply fully with conditions required in order to
draw upon such Letter of Credit;
(d) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(e) for errors in interpretation of technical terms;
(f) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; and
(g) for the misapplication by the beneficiary of any
such Letter of Credit of the proceeds of any drawing under such
Letter of Credit.
None of the above shall affect, impair, or prevent the vesting of
any of the Issuing Bank's or any Banks' rights or powers
hereunder. In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken
or omitted by any Issuing Bank under or in connection with the
Letters of Credit issued by it, if taken or omitted in good
faith, shall not put such Issuing Bank under any resulting
liability to the Company or the Banks, except to the extent of
the gross negligence or willful misconduct of such Issuing Bank.
2.7.6 Reimbursement Obligations Deemed to be
--------------------------------------
Loans; Funding by Banks to an Issuing Bank. An Issuing Bank
------------------------------------------
shall immediately notify the Agent upon making any payment or
disbursement under any Letter of Credit and upon receipt of any
reimbursements with respect thereto. If an Issuing Bank makes
-24-
any payment or disbursement under any Letter of Credit and the
Company has not reimbursed such Issuing Bank in full in cash for
such payment or disbursement by 11:00 a.m., San Francisco time,
such Issuing Bank shall notify the Agent accordingly, and on the
date of such payment or disbursement (a) if such payment or
disbursement is made prior to the Termination Date, the Banks
shall be deemed to have made Base Rate Loans (pro rata according
to their respective Percentages) (notwithstanding if any such
Loans would cause a default under Section 2.1.3 or any other
-------------
provision hereunder) to the Company in an aggregate amount equal
to the amount of such payment or disbursement, or (b) if such
payment or disbursement is made on or after the Termination Date,
or if any reimbursement received by such Issuing Bank from the
Company is or must be returned or rescinded upon or during any
bankruptcy or reorganization of the Company or otherwise, each
other Bank shall be obligated to pay to such Issuing Bank, in
full or partial payment of the purchase price of its
participation in such Letter of Credit, its pro rata share
(according to its Percentage) of such payment or disbursement
(but no such payment shall diminish the obligations of the
Company under Section 2.7.4, and in either of the cases described
-------------
in subsections (a) or (b) above, the Agent shall promptly notify
each other Bank thereof. Each other Bank irrevocably and
unconditionally agrees to so pay to the Agent in immediately
available funds for such Issuing Bank's account the amount of
such other Bank's Percentage of such payment or disbursement if
and to the extent any Bank shall not have made such amount
available to the Agent by 2:00 p.m., San Francisco time, on the
Business Day on which such Bank receives notice from the Agent of
such payment or disbursement, such Bank agrees to pay interest on
such amount to the Agent for such Issuing Bank's account
forthwith on demand for each day from and including the date such
amount was to have been delivered to the Agent to but excluding
the date such amount is paid, at a rate per annum equal to (a)
for the first three days after demand, the Federal Funds Rate
from time to time in effect and (b) thereafter, the Base Rate
from time to time in effect. Any Bank's failure to make
available to the Agent its Percentage of any such payment or
disbursement shall not relieve any other Bank of its obligation
hereunder to make available to the Agent such other Bank's
Percentage of such payment, but no Bank shall be responsible for
the failure of any other Bank to make available to the Agent such
other Bank's Percentage of any such payment or disbursement.
2.7.7 Letter of Credit Fees. (a) The Company
---------------------
agrees to pay to the Agent for the account of the Banks pro rata
according to their respective Percentages a letter of credit fee
for each Letter of Credit in an amount equal to the Applicable
Margin for Letter of Credit fees per annum (computed for the
actual number of days elapsed on the basis of a year of 360 days,
which results in a higher fee than if a 365/366-day year were
used) of the face amount of such Letter of Credit, payable in
-25-
arrears on the last day of each calendar quarter and on the
Termination Date for the period from and including the date of
the issuance of such Letter of Credit to but excluding the date
such payment is due or, if earlier, the date on which such Letter
of Credit expired or was terminated.
(b) In addition, with respect to each Letter of
Credit, the Company agrees to pay to the Issuing Bank (i) such
fees and expenses as and when such Issuing Bank customarily
requires in connection with the issuance, negotiation,
processing, extension and/or administration of letters of credit
in similar situations and (ii) a letter of credit fee for each
Letter of Credit issued by such Issuing Bank in an amount equal
to 0.125% per annum (computed for the actual number of days
elapsed on the basis of a year of 360 days) of the face amount of
such Letter of Credit, payable in arrears on the last day of each
calendar quarter and on the Termination Date for the period from
and including the date of the issuance of such Letter of Credit
to but excluding the date such payment is due or, if earlier, the
date on which such Letter of Credit expired or was terminated.
2.8 Interest.
--------
2.8.1 Interest Rates. The Company agrees to pay
--------------
to the Agent for the account of each Bank interest on the unpaid
principal amount of each Loan for the period commencing on and
including the date of such Loan to but excluding the date such
Loan is paid in full in cash, which in no event shall be less
than one day, as follows:
(a) at all times while such Loan is a Base Rate
Loan, at a rate per annum equal to the Base Rate from
time to time in effect; and
(b) at all times while such Loan is a Eurodollar
Loan, at a rate per annum equal to the sum of the
Eurodollar Rate (Reserve Adjusted) applicable to each
Interest Period for such Eurodollar Loan plus the
Applicable Margin for Eurodollar Loans;
provided, however, that at any time an Event of Default exists,
-------- -------
the interest rate otherwise applicable to each Loan shall be
increased by two percent per annum.
2.8.2 Interest Payment Dates. Accrued interest
----------------------
on each Base Rate Loan shall be payable on the last day of each
calendar quarter and on the Termination Date, commencing with the
first of such dates to occur after the date of such Loan.
Accrued interest on each Eurodollar Loan shall be payable on the
last day of each Interest Period relating to such Loan (and, in
the case of each Eurodollar Loan with an Interest Period in
excess of three months, the date which falls three months after
-26-
the beginning of such Interest Period) and on the Termination
Date. After the Termination Date, accrued interest on all Loans
shall be payable on demand.
2.8.3 Setting and Notice of Eurodollar Rates.
--------------------------------------
The applicable Eurodollar Rate for each Interest Period shall be
determined by the Agent, and notice thereof shall be given by the
Agent promptly to the Company and each Bank. Each determination
of the applicable Eurodollar Rate by the Agent shall be
conclusive and binding upon the parties hereto, in the absence of
demonstrable error.
2.8.4 Computation of Interest. Interest shall be
-----------------------
computed for the actual number of days elapsed on the basis of a
year of 360 days, which results in more interest than if a
365/366-day year were used. The applicable interest rate for
each Base Rate Loan shall change simultaneously with each change
in the Base Rate.
2.9 Fees.
----
2.9.1 Facility Fee. The Company agrees to
------------
pay to the Agent for the account of each Bank a facility fee for
the period from and including the Effective Date, to but
excluding the Termination Date, equal to the Applicable Margin
for the facility fee on the average daily portion of each Bank's
Commitment. Such facility fee shall be payable in arrears on the
last day of each calendar quarter, commencing in March 1997 and
on the Termination Date for any period then ending for which such
facility fee shall not have been theretofore paid. The facility
fee shall be computed for the actual number of days elapsed on
the basis of a year of 360 days, which results in a higher fee
than if a 365/366-day year were used.
2.9.2 Agent's Fee. The Company agrees to pay to
-----------
the Agent, individually, an agent's fee in the amount agreed upon
in writing by the Company and the Agent pursuant to a fee letter
dated on or about December 29, 1995.
2.9.3 Interest on Fees. All fees provided for in
----------------
Section 2.7.7 and this Section 2.9 shall bear interest from and
------------- -----------
including the date such fees become payable to but not including
the date that such payments are made, payable on demand, at a
rate per annum equal to the reimbursement rate charged on Base
Rate Loans.
2.10 Payment Instructions. All funds to be delivered
--------------------
to Agent shall be wire transferred in immediately available funds
to the Agent's Payment Office re: Wyle Electronics, Attention:
Agency Administrative Services #5596, maintained at BofA, ABA No.
1210-00358, with the purpose of the payment indicated, or shall
-27-
be delivered as the Agent may otherwise request from time to
time.
2.11 Making of Payments. (a) All payments of principal
------------------
or interest on the Notes, of all fees, and of all other amounts
payable hereunder by the Company, shall be made by the Company to
the Agent in immediately available funds without offset or
counterclaim at its office in San Francisco not later than noon,
San Francisco time, on the date due; and funds received after
that hour shall be deemed to have been received by the Agent on
the next following Business Day. The Agent shall promptly remit
to each Bank or other holder of a Note its share of all such
payments received in collected funds by the Agent for the account
of such Bank or holder.
(b) Unless the Agent receives notice from the Company
prior to the due date for any payment hereunder that the Company
does not intend to make such payment, the Agent may assume that
the Company has made such payment and, in reliance upon such
assumption, make available to each Bank its share of such
payment. If and to the extent that the Company has not made any
such payment to the Agent, each Bank which received a share of
such payment shall repay such share (or the relevant portion
thereof) to the Agent forthwith on demand, together with interest
thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Bank until the date repaid by such
Bank. Nothing set forth in this subsection (b) shall relieve the
Company of any obligation it may have to make any payment
hereunder.
2.12 Application of Certain Payments. Each payment
-------------------------------
shall be applied to such Loans or other obligations of the
Company hereunder as the Company shall direct by notice to be
received by the Agent on or before the date of such payment or,
in the absence of such notice or during any Event of Default or
Unmatured Event of Default under Section 8.1.3, as follows:
-------------
(a) first, to pay all obligations hereunder or under
-----
any Loan Document in respect of any fees, expense
reimbursements or indemnities then due to the Agent (solely
in its capacity as the Agent and not as a Bank);
(b) second, to pay ratably interest due in respect of
------
(i) all Loans and (ii) (without duplication) reimbursement
obligations in connection with Letters of Credit;
(c) third, to pay or prepay ratably the principal
-----
amount of all Loans and (without duplication) reimbursement
obligations in connection with Letters of Credit (or to
provide collateral in respect of Letters of Credit to the
extent such reimbursement obligations are contingent);
-28-
(d) fourth, to pay ratably all obligations hereunder
------
or under any Loan Document in respect of any fees and
expenses and indemnities then due to the Banks (including
any issuing Bank); and
(e) fifth, to pay ratably all other obligations
-----
hereunder or under any Loan Document.
The order of priority set forth in this Section and the related
provisions of this Agreement are set forth solely to determine
the rights and priorities of the Agent and the Banks as among
themselves and may at any time or from time to time be changed,
and any application of funds hereunder may be reversed and
reapplied, by the Agent and the Banks in writing as they may
elect, without necessity of notice to or consent of or approval
by the Company or any other Person, provided that such change
shall not have the result of causing amounts not otherwise due
under this Agreement to become due. The Agent shall advise the
Banks as to the application of any payment upon request.
2.13 Due Date Extension: Payments Due on Business Days.
-------------------------------------------------
If any payment of principal or interest with respect to any of
the Notes, facility fees, Letter of Credit fees, or other
obligations of the Company hereunder falls due on a day which is
not a Business Day, then such due date shall be extended to the
next following Business Day (unless, in the case of a Eurodollar
Loan, such next following Business Day is the first Business Day
of a calendar month, in which case such due date shall be the
immediately preceding Business Day) and, in the case of principal
and any other amounts on which interest is payable hereunder,
additional interest shall accrue and be payable for the period of
any such extension.
2.14 Pro Rata Treatment. All borrowings, conversions
------------------
and repayments shall be effected so that after giving effect
thereto each Bank will have a pro rata share (according to its
Percentage) of all types (subject to Section 3.4) and borrowings
-----------
of Loans and Stated Amounts.
2.15 Proration of Payments. If any Bank shall obtain
---------------------
any payment or other recovery (whether voluntary, involuntary, by
application of set-off or banker's lien or otherwise) on account
of principal of or interest on any Note (or on account of its
participation in any Letter of Credit) or any other obligation
under any of the Loan Documents, whether from any Loan Party or
any other Person, in excess of its pro rata share of payments and
other recoveries obtained by all Banks on account of principal of
and interest on Notes and on such participations then held by
them (other than in respect of an Affected Loan to the extent
contemplated by Section 3.4 or indemnities or other obligations
-----------
owed solely to such Bank and not owed to the Banks generally
based upon their respective Percentages), such Bank shall
-29-
purchase from the other Banks such participations in the Notes
(or sub-participations in Letters of Credit) held by them as
shall be necessary to cause such purchasing Bank to share the
excess payment or other recovery ratably with each of them;
provided, however, that if all or any portion of the excess
-------- -------
payment or other recovery is thereafter recovered from such
purchasing Bank, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery.
2.16 Extension of Termination Date. The Termination
-----------------------------
Date shall be extended for an additional year on each Extension
Date upon satisfaction of each of the conditions set forth in
this Section 2.16:
------------
(a) The Company and each other Loan Party shall
have delivered a written request of such extension to
the Agent (who shall promptly notify the Banks) not
less than 45 nor more than 90 days prior to the
applicable Extension Date; and
(b) The Agent and each Bank, each in its sole and
absolute discretion, shall have agreed to such
extension by written notice to the Agent (which in turn
shall notify the Company and the Banks), no later than
45 days after delivery of the extension request
described in subsection (a) above (it being understood
that if the Agent or any Bank does not agree to such
extension (any failure by the Agent or any Bank to
respond within the required time period shall be deemed
to be a decision by such non-responding party not to
agree to such extension), then such extension shall not
be granted);
provided, that nothing in this Section 2.16 shall limit the right
-------- ------------
of the Company to request any extension of the Termination Date
at any time or the right of the Agent and the Banks, each in
their sole and absolute discretion, to grant or to not grant any
such extension.
2.17 Increase in Commitments. From time to time, but
-----------------------
not more often than once in any calendar year, and provided no
Unmatured Event of Default or Event of Default exists or would
result therefrom, the Company may request that the combined
Commitments be increased in $10,000,000 increments, up to a
maximum of $140,000,000 combined Commitments, upon satisfaction
of each of the conditions set forth in this Section 2.17:
------------
(a) The Company and each other Loan Party shall
have delivered a written request of such increase in
the Commitments (the amount of such increase in the
Commitments being hereinafter referred to as the
-30-
"Requested Increased Amount") to the Agent (who shall
promptly notify the Banks); and
(b) Each Bank, in its sole and absolute
discretion, may agree to increase its Commitment in an
amount equal to (but not less than, without the consent
of the Company) its Pro Rata Share of the Requested
Increased Amount by written notice to the Agent (which
in turn shall notify the Company and the Banks), no
later than 30 days after delivery of the increase
request described in subsection (a) above. Any Bank
not responding within the foregoing time period shall
be deemed to have declined to participate in such
Requested Increased Amount. If any Bank declines, or
is deemed to have declined, to increase its Commitment
by all or a portion of its Pro Rata Share of the
Requested Increased Amount, any Banks previously
agreeing to such increase may, in their sole and
absolute discretion, further increase their respective
Commitments by notice to the Agent by an amount equal
to all or a portion of the Requested Increased Amount
so declined. If, after giving effect to the foregoing
procedure, any portion of the Requested Increased
Amount still remains uncommitted by any Bank, the
Company may request that new Banks selected by it,
which qualify as Eligible Assignees that are otherwise
acceptable to the Agent and the Issuing Bank, be
offered all or part of such remaining portion;
provided, however, that the Commitment of any such new
-------- -------
Bank shall not be less than $10,000,000.
SECTION 3 TAXES. YIELD PROTECTION AND ILLEGALITY.
3.1 Taxes. All payments of principal of, and interest
-----
on, the Loans and all other amounts payable hereunder shall be
made free and clear of and (except to the extent required by law)
without deduction for any present or future income, excise, stamp
or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or
measured by any Bank's net income or receipts (all non-excluded
items being called "Taxes"). If any withholding or deduction
from any payment to be made by the company hereunder is required
in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Company will:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
-31-
(b) promptly forward to the Agent an official receipt
or other documentation satisfactory to the Agent evidencing
such payment to such authority; and
(c) pay to the Agent for the account of the Banks such
additional amount or amounts as is necessary to ensure that
the net amount actually received by each Bank will equal the
full amount such Bank would have received had no such
withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or
any Bank with respect to any payment received by the Agent or
such Bank hereunder, the Agent or such Bank may pay such Taxes
and the Company will promptly pay such additional amounts
(including any penalty, interest and expense) as is necessary in
order that the net amount received by such Person after the
payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount such Person would have received
had such Taxes not been asserted.
If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Agent, for
the account of the respective Banks, the required receipts or
other required documentary evidence, the Company shall indemnify
the Banks for any incremental Taxes, interest or penalties that
may become payable by any Bank as a result of any such failure.
Upon its execution of this Agreement, and thereafter on
each anniversary thereof, and in addition upon the request from
time to time of the Company or the Agent, each Bank that is
organized under the laws of a jurisdiction other than the United
States of America shall, pursuant to Section 9.10, execute and
------------
deliver to the Company and the Agent one or more (as the Company
or the Agent may reasonably request) United States Internal
Revenue Service Forms 4224 or Forms 1001 or such other forms or
documents, appropriately completed, as may be applicable to
establish that any payment to such Bank is exempt from
withholding or deduction of Taxes. The Company shall not be
required to pay any additional amount to any Bank under this
Section 3.1 if such Bank shall have failed to satisfy the
-----------
requirements of the immediately preceding sentence; provided that
--------
if a Bank shall have satisfied such requirements on or about the
date that it became a party to this Agreement, nothing in this
paragraph shall relieve the Company of its obligation to pay any
amounts pursuant to this Section 3.1 in the event that such Bank
-----------
is no longer properly entitled to deliver certificates, documents
or other evidence at a subsequent date establishing the fact that
such Bank is not subject to withholding as described in the
immediately preceding sentence.
3.2 Increased Costs. (a) If, after the date hereof,
---------------
(i) Regulation D of the Board of Governors of the Federal Reserve
-32-
System, or (ii) any applicable law, rule or regulation, or any
change therein, or the interpretation or administration thereof
by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Bank (or any Eurodollar Office of such Bank)
with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency:
(A) shall subject any Bank (or any Eurodollar Office
of such Bank) to any tax, duty or other charge with respect
to its Eurodollar Loans, its Note or its obligation to make
Eurodollar Loans, or shall change the basis of taxation of
payments to any Bank of the principal of or interest on its
Eurodollar Loans or any other amounts due under this
Agreement in respect of its Eurodollar Loans or its
obligation to make Eurodollar Loans (except for changes in
the rate of tax on the overall net income of such Bank or
its Eurodollar Office imposed by the jurisdiction in which
such Bank's principal executive office or Eurodollar Office
is located); or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed
by the Board of Governors of the Federal Reserve System, but
excluding any Eurocurrency Reserve Percentage), special
deposit or similar requirement Against assets of, deposits
with or for the account of, or credit extended by any Bank
(or any Eurodollar Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar
Office) any other condition affecting its Eurodollar Loans,
its Note or its obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to
(or in the case of Regulation D referred to above, to impose a
cost on) such Bank (or any Eurodollar Office of such Bank) of
making or maintaining any Eurodollar Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its
Eurodollar Office) under this Agreement or under its Note with
respect thereto, then within 10 days after written demand by such
Bank (a copy of which shall be furnished to the Agent), the
Company shall pay to such Bank, such additional amount or amounts
as will compensate such Bank for such increased cost or such
reduction.
(b) If any Bank shall reasonably determine that, after
the date hereof, the adoption or phase-in of any applicable law,
rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Eurodollar Office) or any
-33-
Person controlling such Bank with any request or directive
regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on
such Bank's or such controlling Person's capital as a consequence
of such Bank's obligations hereunder (including, without
limitation, such Bank's obligations under the Commitment) to a
level below that which such Bank or such controlling Person could
have achieved but for such adoption, change or compliance (taking
into consideration such Bank's or such controlling Person's
policies with respect to capital adequacy), then from time to
time, within 10 days after written demand by such Bank (a copy of
which shall be furnished to the Agent), the Company shall pay to
such Bank, such additional amount or amounts as will compensate
such Bank or such controlling Person for such reduction.
(c) Any demand under this Section 3.2 shall be
-----------
accompanied by a certificate setting forth the calculation of any
additional amount payable under this Section 3.2, which
-----------
certificate shall be conclusive for all purposes absent manifest
error.
3.3 Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If with respect to any Interest Period:
------
(a) deposits in Dollars (in the applicable amounts)
are not being offered to one or more Banks in the relevant market
for such Interest Period, or the Agent otherwise reasonably
determines (which determination shall be binding and conclusive
on the Company) that by reason of circumstances affecting the
interbank eurodollar market adequate and reasonable means do not
exist for ascertaining the applicable Eurodollar Rate; or
(b) Banks having an aggregate Percentage of 33 1/3% or
more advise the Agent that the Eurodollar Rate (Reserve Adjusted)
as determined by the Agent will not adequately and fairly reflect
the cost to such Banks of maintaining or funding such Loans for
such Interest Period, or that the making or funding of Eurodollar
Loans has become impracticable in the opinion of such Banks, then
the Agent shall promptly notify the other parties thereof and, so
long as such circumstances shall continue, (i) no Bank shall be
under any obligation to make, or convert Loans into, Eurodollar
Loans and (ii) on the last day of the current Interest Period for
each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Base Rate Loan.
3.4 Changes in Law Rendering Eurodollar Loans
-----------------------------------------
Unlawful. In the event that any change in (including the
--------
adoption of any new) applicable laws or regulations, or any
change in the interpretation of applicable laws or regulations by
any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for any Bank (or
-34-
in the good faith judgment of any Bank cause a substantial
question as to whether it is unlawful for such Bank) to make,
maintain or fund Eurodollar Loans, then such Bank shall promptly
notify each of the other parties hereto and, so long as such
circumstances shall continue, (a) such Bank shall have no
obligation to make or convert into Eurodollar Loans (but shall
make Base Rate Loans concurrently with the making of or
conversion into Eurodollar Loans by the Banks which are not so
affected in each case in an amount equal to such Bank's
Percentage of all Eurodollar Loans which would be made or
converted into at such time in the absence of such circumstances)
and (b) on the last day of the current Interest Period for each
Eurodollar Loan of such Bank (or, in any event, if such Bank so
requests, on such earlier date as such Bank determines may be
required by the relevant law, regulation or interpretation), such
Eurodollar Loan shall, unless then repaid in full, automatically
convert to a Base Rate Loan. Each Base Rate Loan made by a Bank
which, but for the circumstances described in the foregoing
sentence, would be a Eurodollar Loan (an "Affected Loan") shall,
notwithstanding any other provision of this Agreement, remain
outstanding for the same period as the borrowing of Eurodollar
Loans of which such Affected Loan would be a part absent such
circumstances.
3.5 Funding Losses. The Company hereby agrees that
--------------
upon demand by any Bank (a copy of which shall be furnished to
the Agent) the Company will indemnify such Bank against any net
loss or expense which such Bank may sustain or incur (including,
without limitation, any net loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund or maintain any Eurodollar Loan and
any amounts which such Bank would have received had such
Eurodollar Loan remained outstanding to the last day of the
applicable Interest Period, net of any amounts actually received
by such Bank in connection with the redeployment of such funds
for such period as such Bank elects consistent with its business
practices), as reasonably determined by such Bank, as a result of
(a) any payment or, prepayment or conversion of any Eurodollar
Loan of such Bank on a date other than the last day of an
Interest Period for such Loan (including, without limitation, any
conversion pursuant to Section 3.4) or (b) any failure of the
-----------
Company to borrow or convert or continue any Loans on a date
specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation pursuant to this Agreement. For this
purpose, all notices to the Agent pursuant to this Agreement
shall be deemed to be irrevocable.
3.6 Right of Banks to Fund through Other Offices.
--------------------------------------------
Each Bank may, if it so elects, fulfill its commitment as to any
Eurodollar Loan by causing a foreign branch or affiliate of such
Bank to make such Loan; provided that in such event for the
--------
purposes of this Agreement such Loan shall be deemed to have been
-35-
made by such Bank and the obligation of the Company to repay such
Loan shall nevertheless be to such Bank and shall be deemed held
by it, to the extent of such Loan, for the account of such branch
or affiliate.
3.7 Discretion of Banks as to Manner of Funding.
-------------------------------------------
Notwithstanding any provision of this Agreement to the contrary,
each Bank shall be entitled to fund and maintain its funding of
all or any part of its Loans in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had
actually funded and maintained each Eurodollar Loan during each
Interest Period for such Loan through the purchase of deposits
having a maturity corresponding to such Interest Period and
bearing an interest rate equal to the Eurodollar Rate for such
Interest Period.
3.8 Conclusiveness of Statements; Survival of
-----------------------------------------
Provisions. Determinations and statements of any Bank pursuant
----------
to Section 3.2, 3.3, 3.4 or 3.5 shall be conclusive absent
----------- --- --- ---
manifest error. The provisions of such Sections shall survive
repayment of the Loans, cancellation of the Notes, cancellation
or expiration of the Letters of Credit and any termination of
this Agreement, with respect to all Loans and other obligations
made or incurred hereunder or under the other Loan Documents, and
the Notes, Letters of Credit and the other Loan Documents entered
into in connection herewith.
3.9 Banks' Obligation to Mitigate. Each Bank agrees
-----------------------------
that, as promptly as practicable after the officer of such Bank
responsible for administering Loans under this Agreement becomes
aware of the occurrence of an event or the existence of a
condition that would cause such Bank to have Affected Loans or
that would entitle such Bank to receive payments (other than
insubstantial amounts) under Section 3.2, it will, to the extent
-----------
not inconsistent with such Bank's internal policies and
practices, use reasonable efforts (a) to make, fund or maintain
the Commitments of such Bank or the Affected Loans of such Bank
through another lending office of such Bank, or (b) take such
other measures as such Bank may deem reasonable, if as a result
thereof the circumstances which would cause such Bank to have
Affected Loans would cease to exist or the additional amounts
which would otherwise be required to be paid to such Bank
pursuant to Section 3.2 would not be required to be paid to such
-----------
Bank or would be substantially reduced and if, as determined by
such Bank in its reasonable discretion, the making, funding,or
maintaining of such Commitments or Loans through such other
lending office or in accordance with such other measures, as the
case may be, would not adversely affect such Commitments or Loans
or the interests of such Bank. The Company hereby agrees to pay
all reasonable costs and expenses incurred by any Bank to the
extent allocable to such Bank's Commitments (including reasonable
-36-
fees and expenses of outside counsel and allocated costs of in-
house counsel) incurred in connection with this Section 3.9.
-----------
SECTION 4 CONDITIONS OF LENDING.
The obligation of each Bank to make or continue its
Loans (other than any Loans deemed to have been made pursuant to
Section 2.7.4 and 2.7.6) and of each Issuing Bank to issue
------------- -----
Letters of Credit is subject to the following conditions
precedent:
4.1 Initial Letter of Credit or Loan. The obligation
--------------------------------
of each Bank to continue and make Loans and of each Issuing Bank
to issue any Letter of Credit, whichever first occurs, is, in
addition to the conditions precedent specified in Section 4.2,
-----------
subject to the conditions precedent (and the date on which all
such conditions precedent have been satisfied or waived in
writing by the Banks is called the "Effective Date") that (a)
since December 31, 1995, (i) no material adverse change has
occurred in, or development reasonably likely to have a material
adverse effect on, the financial condition, operations, assets,
business, properties or, to the knowledge of the Company,
prospects of the Company and its Subsidiaries taken as a whole,
(ii) no occurrence or event which is reasonably likely to have a
material adverse effect on the rights and remedies of the Agent
or the Banks or on the ability of any party to any Loan Document
to perform its obligations to the Agent or the Banks shall have
occurred, and (iii) there shall not have occurred a substantial
impairment of the financial markets generally which, in the
opinion of the Required Banks, has materially and adversely
affected the transactions contemplated hereby, and (b) the Agent
shall have received (i) all fees which are then due and payable
pursuant to Section 2.9, and (ii) all of the following, each duly
-----------
executed and dated the Effective Date (or such earlier date as
shall be satisfactory to the Agent), in form and substance
satisfactory to the Agent, and each (except for the Notes, of
which only the originals shall be signed) in sufficient number of
signed counterparts to provide one for each Bank:
4.1.1 Loan Documents. This Agreement, the Notes,
--------------
any Letter of Credit Applications, the Subsidiary Guaranties and
any other Loan Documents required to be delivered on or before
the Effective Date (other than the letter referred to in Section
-------
2.9.2, which has been delivered to the Agent).
-----
4.1.2 Consents, etc. Certified copies of all
-------------
documents evidencing any necessary corporate action, consents and
governmental approvals (if any) required for the execution,
delivery and performance of the Loan Documents by the Company or
any other Loan Party.
-37-
4.1.3 Secretary's Certificate. To the extent not
-----------------------
received in connection with the Existing Credit Agreement, a
certificate of the Secretary or an Assistant Secretary of each
Loan Party, certifying (a) a copy (attached thereto) of such Loan
Party's Articles or Certificate of Incorporation (certified by
the Secretary of State of the state of such Loan Party's
incorporation) and Bylaws, as amended and in effect on the other
matters reasonably requested by any Bank dated as of the
Effective Date, (b) copies (attached thereto) of resolutions of
the Board of Directors of each Loan Party, authorizing or
ratifying the execution, delivery and performance by such Loan
Party of the Loan Documents to which such Loan Party is a party,
and (c) the names of the officer or officers of such Loan Party
authorized to sign the Loan Documents to which such Loan Party is
a party, together with a sample of the true signature of each
such officer (it being understood that the Agent and each Bank
may conclusively rely on each such certificate until formally
advised by a like certificate of any changes therein).
4.1.4 Officer's Certificate. A certificate of a
---------------------
Designated Employee of each Loan Party, certifying (a) that all
of the representations and warranties made by such Loan Party in
any Loan Document are true, correct and complete in all material
respects as of the Effective Date, (b) that no Events of Default
or Unmatured Events of Default exist or will exist after giving
effect to any Loans to be made and Letters of Credit to be issued
on the Effective Date, (c) that all conditions to make Loans or
to issue Letters of Credit have been satisfied, and (d) to all
other matters reasonably requested by any Bank.
4.1.5 Opinion of Counsel for the Company. The
----------------------------------
opinion of Xxxxxxx Xxxxxxx, Senior Vice President-Administration,
General Counsel and Secretary of the Company substantially in the
form attached hereto as Exhibit F.
---------
4.1.6 Notice of Borrowing or Notice of
--------------------------------
Conversion/Continuation. A Notice of Borrowing or a Notice of
-----------------------
Conversion/Continuation duly completed for any borrowing on the
Effective Date.
4.1.7 Compliance Certificate. A Compliance
----------------------
Certificate dated as of September 30, 1996 for purposes of
calculating the Applicable Margin.
4.1.8 Other. Such other documents as the Agent
-----
or any Bank may reasonably request.
Upon satisfaction or written waiver of each of the conditions set
forth in this Section 4.1 and in Section 4.2 on the Effective
----------- -----------
Date, the Company shall have satisfied the requirements for the
initial Loan or the initial Letter of Credit, whichever first
occurs, and if no such Loan is made or Letter of Credit issued on
-38-
the Effective Date, the conditions applicable to the initial Loan
and the initial Letter of Credit when made or issued after the
Effective Date shall be as set forth in Section 4.2 hereof.
-----------
4.2 All Loans and Letters of Credit. The obligation
-------------------------------
of each Bank to make each Loan (other than any Loans deemed to
have been made pursuant to Section 2.7.4 and 2.7.6), to convert
------------- -----
into or permit the continuation at the end of the applicable
Interest Period of any Eurodollar Loan and of each Issuing Bank
to issue or extend any Letter of Credit is subject to the
following further conditions precedent that:
4.2.1 No Default. (a) No Event of Default or
----------
Unmatured Event of Default has occurred and is continuing or
will result from the making of such Loan or the issuance or
extension of such Letter of Credit and (b) the warranties of the
Company contained in Section 5 are true and correct as of the
---------
date of such requested Loan or issuance or extension of such
Letter of Credit, with the same effect as though made on such
date.
4.2.2 Confirmatory Certificate. If requested by
------------------------
the Agent or by any Bank through the Agent, the Agent shall have
received (in sufficient counterparts to provide one to each Bank)
a certificate dated the date of such requested Loan or issuance
or extension of such Letter of Credit and signed by a duly
authorized representative of the Company as to the matters set
out in Section 4.2.1 (it being understood that each request by
-------------
the Company for the making of a Loan or the issuance of a Letter
of Credit shall be deemed to constitute a warranty by the Company
that the conditions precedent set forth in Section 4.2.1 will be
-------------
satisfied at the time of the making of such Loan or the issuance
of such Letter of Credit).
SECTION 5 REPRESENTATIONS AND WARRANTIES.
To induce each Issuing Bank to issue Letters of Credit
and to induce the Agent and the Banks to enter into this
Agreement and to induce the Banks to make Loans and purchase
participations in Letters of Credit hereunder, the Company
warrants to the Agent and the Banks that:
5.1 Organization, Etc. (a) The Company is a
-----------------
corporation duly organized, validly existing and in good standing
under the laws of the State of California; each Loan Party other
than the Company is a corporation duly organized, validly
existing and in good standing in the jurisdiction of its
incorporation; the Company and each other Loan Party is duly
qualified to do business in each jurisdiction where the nature of
its business makes such qualification necessary (except in those
instances in which the failure to be qualified would not be
-39-
reasonably expected to materially adversely affect either (i) the
financial condition, operations, assets, business, properties or,
to the knowledge of the Company, prospects of the Company and its
Subsidiaries taken as a whole or (ii) the ability of the Loan
Parties to perform their obligations under the Loan Documents)
and the Company and each other Loan Party has full power and
authority, and has all material licenses, permits and
authorizations required, to own its property and conduct its
business as presently conducted and as proposed to be conducted
by it.
(b) The Company and the other Loan Parties are in
compliance with their respective Articles or Certificates of
Incorporation, Bylaws and other organizational documents, all
material agreements, indentures, instruments and other documents
which are binding on the Company or the other Loan Parties,
respectively, and all laws, rules, regulations and orders,
decrees and judgments of any court or other government authority
or agency which are binding on the Company or any of the other
Loan Parties and the Company and the other Loan Parties have and
are in compliance with all permits, licenses and other
authorizations required by law, rule or regulation (except in
those instances in which the failure to be in compliance would
not be reasonably expected to materially adversely affect either
(i) the financial condition, operations, assets, business,
properties or, to the knowledge of the Company, prospects of the
Company and its Subsidiaries taken as a whole or (ii) the ability
of the Loan Parties to perform their obligations under the Loan
Documents).
5.2 Authorization: No Conflict. (a) The execution and
--------------------------
delivery by the Company of this Agreement and each other Loan
Document to which it is a party, the borrowings hereunder, and
the performance by the Company of its obligations under each Loan
Document to which it is a party are within the corporate powers
of the Company, have been duly authorized by all necessary
corporate action on the part of the Company (including any
necessary stockholder action), have received all necessary
governmental approval (if any shall be required), and do not and
will not (i) violate any provision of law or any order, decree or
judgment of any court or other government authority or agency
which is binding on the Company, (ii) contravene or conflict
with, or result in a breach of, any provision of the Articles of
Incorporation, Bylaws or other organizational documents of the
Company or of any material agreement, indenture, instrument or
other document which is binding on the Company or any other Loan
Party (copies of which, including any amendments, supplements or
modifications thereof, have been delivered to the Agent) or (iii)
result in, or require, the creation or imposition of any Lien on
any property of the Company or any other Loan Party (except Liens
in favor of the Agent and the Banks as provided in this
Agreement), except in those instances in which such violation or
-40-
breach would not be reasonably expected to materially adversely
affect either (i) the financial condition, operations, assets,
business, properties or, to the knowledge of the Company,
prospects of the Company and its Subsidiaries taken as a whole or
(ii) the ability of the Loan Parties to perform their obligations
under the Loan Documents.
(b) The execution and delivery by each Loan Party
other than the Company of each Loan Document to which it is a
party and the performance by such Loan Party of its obligations
under each Loan Document to which it is a party are within the
corporate powers of such Loan Party, have been duly authorized by
all necessary corporate action on the part of such Loan Party
(including any necessary stockholder action), have received all
necessary governmental approval (if any shall be required), and
do not and will not (i) violate any provision of law or any
order, decree or judgment of any court or other government
authority or agency which is binding on such Loan Party, (ii)
contravene or conflict with, or result in a breach of, any
provision of the Articles or Certificate of Incorporation, Bylaws
or other organizational documents of such Loan Party or of any
material agreement, indenture, instrument or other document which
is binding on the Company or any other Loan Party (copies of
which, including any amendments, supplements or modifications
thereof, have been delivered to the Agent) or (iii) result in, or
require, the creation or imposition of any Lien on any property
of the Company or any other Loan Party (except Liens in favor of
the Agent and the Banks as provided in this Agreement), except in
those instances in which such violation or breach would not be
reasonably expected to materially adversely affect either (A) the
financial condition, operations, assets, business, properties or,
to the knowledge of the Company, prospects of the Company and its
Subsidiaries taken as a whole or (B) the ability of the Loan
Parties to perform their obligations under the Loan Documents.
5.3 Validity and Binding Nature. This Agreement is,
---------------------------
and upon the execution and delivery thereof each other Loan
Document to which the Company or any other Loan Party is a party
will be, the legal, valid and binding obligation of the Company
or any such Loan Party, respectively, enforceable against the
Company or such Loan Party in accordance with its terms, except
as such enforceability may be limited by the effect of
bankruptcy, insolvency, reorganization, moratorium or other
similar laws limiting creditors, rights generally or by equitable
principles.
5.4 Financial Information. The audited consolidated
---------------------
financial statements of the Company and its Subsidiaries as of
and for the Fiscal Year ended December 31, 1995, copies of which
have been delivered to each Bank, have been prepared in
accordance with Generally Accepted Accounting Principles and
present fairly the consolidated financial condition of the
-41-
Company and its Subsidiaries taken as a whole as at such date and
the results of their operations for the period then ended.
5.5 No Material Adverse Change; Conduct of Business.
-----------------------------------------------
Since December 31, 1995, there has been no material adverse
change in either (a) the financial condition, operations, assets,
business, properties or, to the knowledge of the Company,
prospects of the Company and its Subsidiaries taken as a whole or
(b) the ability of the Loan Parties to perform their obligations
under the Loan Documents.
5.6 Litigation. Except for matters listed in Schedule
---------- --------
5.6, no litigation (including, without limitation, derivative
---
actions), arbitration proceeding or governmental proceeding is
pending or, to the Company's knowledge, threatened against the
Company or any of its Subsidiaries which could reasonably be
expected to materially and adversely affect either (a) the
financial condition, operations, assets, business, properties or,
to the knowledge of the Company, prospects of the Company and its
Subsidiaries taken as a whole or (b) the ability of the Loan
Parties to perform their obligations under the Loan Documents.
5.7 Ownership of Properties; Liens. Each of the
------------------------------
Company and its Subsidiaries owns good and marketable title to
all of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and
clear of all Liens, charges and claims (including infringement
claims with respect to patents, trademarks, copyrights and the
like) except as permitted pursuant to Section 7.1.
-----------
5.8 Subsidiaries. The Company has no Subsidiaries,
------------
except those listed in Schedule 5.8, as such schedule may be
------------
updated from time to time.
5.9 Compliance with ERISA. Schedule 5.9 contains a
--------------------- ------------
list of all Plans as of the Effective Date. Each Plan (other
than a Multiemployer Plan) is in compliance with ERISA and the
applicable provisions of the Code in all material respects with
respect to each Plan other than a Multiemployer Plan, all reports
required under ERISA or any other applicable law or regulation to
be filed by the Company or a member of its ERISA Controlled Group
with the relevant governmental authority the failure of which to
file could reasonably result in a material liability of the
Company or a member of its ERISA Controlled Group have been duly
filed and all such reports are true and correct in all material
respects as of the date given. Neither the Company nor a member
of its ERISA Controlled Group has engaged in a "prohibited
transaction," as such term is defined in Section 4975 of the Code
or in a transaction subject to the prohibitions of Section 406 of
ERISA, in connection with any Plan which would subject the
Company or a member of its ERISA Controlled Group (after giving
-42-
effect to any exemption) to the tax or penalty on prohibited
transactions imposed by Section 4975 of the Code, Section 502 of
ERISA or any other liability under ERISA which tax, penalty or
other liability would involve more than $100,000. There are no
claims (other than claims for benefits in the normal course),
actions or lawsuits asserted or instituted against, and neither
the Company nor a member of its ERISA Controlled Group has
knowledge of any threatened litigation or claims against, the
assets of any Plan (other than a Multiemployer Plan) or against
any fiduciary of such Plan (other than a Multiemployer Plan) with
respect to the operation of such Plan (other than a Multiemployer
Plan). The aggregate present value of all Unfunded Benefits
under the ERISA Plans, excluding any Multiemployer Plan, does not
exceed $20,000,000. The Company and the members of its ERISA
Controlled Group are currently obligated to make contributions
only to the Multiemployer Plans set forth in Schedule 5.9. With
------------
respect to all Multiemployer Plans to which the Company and the
members of its ERISA Controlled Group now contribute, have ever
contributed or have ever had an obligation to contribute, all
obligations of the Company and the members of its ERISA
Controlled Group have been satisfied in full. The aggregate
potential withdrawal liability of the Company and the members of
its ERISA Controlled Group with respect to all Multiemployer
Plans to which the Company and the members of its ERISA
Controlled Group currently contribute does not exceed $1,000,000.
The obligation of the Company and its ERISA Controlled Group to
provide post-retirement welfare benefits (other than as required
by Sections 601 through 608 of ERISA and Section 4980B of the
Code) is fairly presented according to applicable financial
reporting standards in the financial statements of the Company
and its Subsidiaries.
5.10 Investment Company Act. Neither the Company nor
----------------------
any of its Subsidiaries is an "investment company" or a company
"Controlled" by an "investment company," within the meaning of
the Investment Company Act of 1940, as amended.
5.11 Public Utility Holding Company Act. Neither the
----------------------------------
Company nor any of its Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
5.12 Regulation U; Other Governmental Regulation.
-------------------------------------------
Neither the Company nor any of its Subsidiaries is (a) engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying Margin Stock, or (b) subject to other laws, regulations
or orders which would have a material adverse effect on the
Company's ability to borrow money or the ability of the Company
-43-
or any other Loan Party to perform its respective obligations
under any Loan Document.
5.13 Taxes. Each of the Company and its Subsidiaries
-----
has filed all tax returns and reports required by law to have
been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which
are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with
Generally Accepted Accounting Principles shall have been set
aside on its books.
5.14 Solvency, etc. (a) On the Effective Date, and
-------------
immediately prior to and after giving effect to the issuance of
each Letter of Credit and each borrowing hereunder and the use of
the proceeds thereof, (i) the Company's assets will exceed its
liabilities and (ii) the Company will be solvent, will be able to
pay its debts as they mature, will own property with fair
saleable value greater than the amount required to pay its debts
and will have capital sufficient to carry on its business as then
constituted.
(b) On the Effective Date and for 90 days prior
thereto, and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each borrowing hereunder
and the use of the proceeds thereof, (a) the assets of each Loan
Party (other than the Company and any Subsidiary which is not a
Material Subsidiary) will exceed its respective liabilities and
(b) each Loan Party (other than the Company and any Subsidiary
which is not a Material Subsidiary) will be solvent, will be able
to pay its debts as they mature, will own property with fair
saleable value greater than the amount required to pay its debts
and will have capital sufficient to carry on its business as then
constituted.
5.15 Hazardous Materials.
-------------------
5.15.1 Release and Disposal. To the best
--------------------
knowledge of the Company, except in compliance with applicable
law, (a) none of the Company, any of its Subsidiaries or any
other Person has ever caused or permitted any Hazardous Material
to be treated or stored on, under or at any real property owned,
leased or operated by the Company or any of its Subsidiaries, (b)
such real property has never been used (by the Company, any of
its Subsidiaries or by any other Person) as a temporary storage
site for any Hazardous Material, and (c) none of the Company, any
of its Subsidiaries or any of their respective predecessors has
ever caused or permitted any Hazardous Material (except for any
which may have been present in raw materials or any products) to
be transported to, treated, or stored at any locations other than
those identified pursuant to subsection (a), except where such
treatment, storage or transport could not reasonably be expected
-44-
to materially and adversely affect either (i) the financial
condition, operations, assets, business, properties or, to the
knowledge of the Company, prospects of the Company and its
Subsidiaries taken as a whole or (ii) the ability of the Loan
Parties to perform their obligations under the Loan Documents.
5.15.2 Treatment and Storage. To the best
---------------------
knowledge of the Company, except in compliance with applicable
law, (a) none of the Company, any of its Subsidiaries or any
other Person has ever caused or permitted any Hazardous Material
to be treated or stored on, under or at any real property owned,
leased or operated by the Company or any of its Subsidiaries, (b)
such real property has never been used (by the Company, any of
its Subsidiaries or by any other Person) as a temporary storage
site for any Hazardous Material, and (c) none of the Company, any
of its Subsidiaries or any of their respective predecessors has
ever caused or permitted any Hazardous Material (except for any
which may have been present in raw materials or any products) to
be transported to, treated, or stored at any locations other than
those identified pursuant to subsection (a), except where such
treatment, storage or transport could not reasonably be expected
to materially and adversely affect either (i) the financial
condition, operations, assets, business, properties or, to the
knowledge of the Company, prospects of the Company and its
Subsidiaries taken as a whole or (ii) the ability of the Loan
Parties to perform their obligations under the Loan Documents.
5.16 Ownership. The Company is the legal and
---------
beneficial owner of 100% of the capital stock of each of its
Subsidiaries. All of the outstanding shares of capital stock of
the Company and each of its Subsidiaries have been duly
authorized and validly issued and are fully paid and
non-assessable.
5.17 Information. All information heretofore or
-----------
contemporaneously herewith furnished by or on behalf of the
Company or any of its Subsidiaries to any Bank for purposes of or
in connection with this Agreement and the transactions
contemplated hereby is, and all information hereafter furnished
by or on behalf of the Company or any of its Subsidiaries
pursuant hereto or in connection herewith will be, true and
accurate in every material respect on the date as of which such
information is dated or certified, and none of such information
is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading (it being
recognized by the Agent and each Bank that projections and
forecasts provided by the Company or any of its Subsidiaries are
not to be viewed as facts and that actual results during the
period or periods covered by any such projections and forecasts
may differ from projected or forecasted results).
-45-
SECTION 6 AFFIRMATIVE COVENANTS.
Until the expiration or termination of the Commitments
and thereafter until all obligations of the Company hereunder and
under the other Loan Documents are paid in full in cash and all
Letters of Credit have been terminated, the Company agrees that,
unless at any time the Required Banks shall otherwise expressly
consent in writing, it will:
6.1 Reports, Certificates and Other Information.
-------------------------------------------
Furnish to the Agent and each Bank:
6.1.1 Audit Report. Promptly when available and
------------
in any event within 100 days after the close of each Fiscal Year,
(a) a copy of the annual audit report of the Company and its
Subsidiaries for such Fiscal Year, including therein consolidated
balance sheets of the Company and its Subsidiaries as of the end
of such Fiscal Year and consolidated statements of earnings and
cash flow of the Company and its Subsidiaries for such Fiscal
Year certified without qualification as to going concern or scope
by Xxxxxx Xxxxxxxx LLP or other independent auditors of
nationally recognized standing selected by the Company, together
with a written statement from such accountants to the effect that
in making the examination necessary for the signing of such
annual audit report by such accountants, they have not become
aware of any Event of Default or Unmatured Event of Default that
has occurred and is continuing or, if they have become aware of
any such event, describing it in reasonable detail; and (b)
consolidating balance sheets of the Company and its Subsidiaries
as of the end of such Fiscal Year and a consolidating statement
of earnings for the Company and its Subsidiaries for such Fiscal
Year, certified by the Executive Vice President--Finance and
Treasurer, CFO or Vice President and Controller of the Company.
The Company may satisfy a portion of its obligations under this
Section 6.1.1 by delivery of copies of the Annual Report on Form
-------------
10-K of the Company for such Fiscal Year filed with the
Securities and Exchange Commission.
6.1.2 Monthly Reports; Quarterly Cash Flow
------------------------------------
Statement. Promptly when available and in any event within 30
---------
days after the end of each month, consolidated and consolidating
balance sheets of the Company and its Subsidiaries as of the end
of such month and consolidated and consolidating statements of
earnings for such month and for the period beginning with the
first day of such Fiscal Year and ending on the last day of such
month, and for each month-end which is also the end of a Fiscal
Quarter, promptly when available and in any event within 55 days
after the end of such Fiscal Quarter, a consolidated statement of
cash flow for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day
of such Fiscal Quarter, in each case certified by the Executive
Vice President-Finance and Treasurer, CFO or Vice President and
-46-
Controller of the Company. The Company may satisfy a portion of
its obligations under this Section 6.1.2 by delivery of copies of
-------------
the Quarterly Report on Form 10-Q of the Company for any
applicable period filed with the Securities and Exchange
Commission.
6.1.3 Compliance Certificates. Contemporaneously
-----------------------
with the furnishing of a copy of each annual audit report
pursuant to Section 6.1.1 and of each set of monthly statements
-------------
pursuant to Section 6.1.2 for any month which is the last month
-------------
of a Fiscal Quarter, a duly completed certificate in the form of
Exhibit C (herein called a "Compliance Certificate"), with
---------
appropriate insertions, dated the date of such annual report or
such monthly statements and signed by the Executive Vice
President-Finance and Treasurer, CFO or Vice President and
Controller of the Company, containing a computation of each of
the financial ratios and restrictions set forth in Section 6 and
---------
stating that such officer has not become aware of any Event of
Default or Unmatured Event of Default that has occurred and is
continuing after undertaking due inquiry in respect thereof or,
if there is any such event, describing it and the steps, if any,
being taken to cure it.
6.1.4 Reports to SEC, to the Public and to
------------------------------------
Stockholders: Press Releases. Promptly upon the filing or
----------------------------
distribution thereof, a copy of any annual, periodic or special
report or registration statement (inclusive of exhibits thereto)
filed with the SEC or any securities exchange by the Company, or
otherwise publicly available; any report, proxy statement or
other communication to the stockholders of the Company or any
other Loan Party in their capacity as stockholders; and any press
releases of the Company or any other Loan Party.
6.1.5 Notice of Default, Litigation, Material
---------------------------------------
Adverse Change. Immediately upon becoming aware of any of the
--------------
following, written notice describing the same and the steps being
taken by the Company or any of its Subsidiaries affected thereby
with respect thereto: (a) the occurrence of an Event of Default
or an Unmatured Event of Default; (b) any litigation (including,
without limitation, derivative actions), arbitration or
governmental investigation or proceeding not previously disclosed
by the Company to the Banks which has been instituted or, to the
knowledge of the Company, is threatened against the Company or
any of its Subsidiaries or to which any of the properties of any
thereof is subject which, if adversely determined, could
reasonably be expected to materially adversely affect either (i)
the financial condition, operations, assets, business, properties
or, to the knowledge of the Company, prospects of the Company and
its Subsidiaries, taken as a whole or (ii) the ability of the
Loan Parties to perform their obligations under the Loan
Documents; (c) any material adverse change in the financial
condition, operations, assets, business, properties or, to the
-47-
knowledge of the Company, prospects of the Company and its
Subsidiaries taken as a whole or (d) termination of any material
franchise agreement with any supplier.
6.1.6 Subsidiaries. Promptly upon any Person
------------
becoming a Subsidiary of the Company, notification thereof
together with a certificate from a Designated Employee stating
whether such Subsidiary is a Material Subsidiary or an Inactive
Subsidiary.
6.1.7 Management Reports. Promptly upon receipt
------------------
thereof, copies of all detailed financial and management reports
submitted to the Board of Directors of the Company by independent
auditors in connection with each annual or interim audit made by
such auditors of the financial statements of the Company.
6.1.8 Projections. As soon as available, and in
-----------
accordance with the Company's customary planning procedures,
copies of all forecasted statements of income, statements of
financial position and statements of cash flows for the Company
and its Subsidiaries for the forthcoming three Fiscal Years,
quarter-by-quarter for the first Fiscal Year therein forecasted
and annually thereafter, together with any changes thereto deemed
by the Company, in its reasonable discretion, to be significant
or substantial.
6.1.9 ERISA. As soon as possible and in any
-----
event within ten days after the Company or a member of its ERISA
Controlled Group knows, or has reason to know, that: (a) any
Termination Event with respect to a Plan has occurred or is
likely to occur; (b) any condition exists with respect to a Plan
which presents or is likely to present a material risk of
termination of the Plan or imposition of a material excise tax or
other liability on the Company or a member of its ERISA
Controlled Group or the imposition of a Lien on any assets of the
Company or a member of its ERISA Controlled Group in favor of the
PBGC or a Plan; (c) the Company or a member of its ERISA
Controlled Group has applied for a waiver of the minimum funding
standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the
Code and Section 302 of ERISA, or has committed a failure
sufficient to give rise to a Lien under Section 302(f) of ERISA;
(d) the Company or a member of its ERISA Controlled Group has
engaged in a "prohibited transaction," as defined in Section 4975
of the Code or in a transaction subject to the prohibitions of
Section 406 of ERISA, that is not exempt under Section 4975 of
the Code and Section 408 of ERISA or under an applicable
individual or class exemption and which presents or is likely to
present the possibility of the imposition of a material liability
or material excise tax on the Company or a member of its ERISA
Controlled Group; (e) the aggregate present value of the Unfunded
Benefits under all ERISA Plans has increased to an amount in
-48-
excess of $20,000,000; (f) any Reportable Event with respect to a
Plan has occurred; a certificate of a Designated Employee setting
forth the details of such event described in subsections (a)
through (f) above, as applicable, and the action which the
Company or such member of its ERISA Controlled Group proposes to
take with respect thereto, together with a copy of any notice of
filing from the PBGC or which may be required by the PBGC or
other agency of the United States government with respect
thereto. As soon as possible, and in any event within three
Business Days after the receipt by either the Company or a member
of its ERISA Controlled Group, of (i) a demand letter from the
PBGC notifying the Company or member of its ERISA Controlled
Group of the final decision finding liability under Sections
4062, 4063 or 4064 of ERISA with respect to a Plan and the date
by which such liability must be paid or (ii) a notice from the
PBGC that a Lien has been or is to be imposed on any assets of
the Company or a member of its ERISA Controlled Group in favor of
the PBGC or a Plan, a copy of such letter or notice, together
with a certificate of a Designated Employee setting forth the
action which the Company or such member of its ERISA Controlled
Group proposes to take with respect thereto.
6.1.10 Other Information. From time to time such
-----------------
other information concerning the Company and its Subsidiaries as
any Bank or the Agent may reasonably request.
6.2 Books, Records and Inspections. Keep, and cause
------------------------------
each of its Subsidiaries to keep, its books and records in
accordance with sound business practices sufficient to allow the
preparation of financial statements in accordance with Generally
Accepted Accounting Principles; permit, and cause each of its
Subsidiaries to permit, on reasonable notice and at reasonable
times (or without notice and at any time during the existence of
an Event of Default or an Unmatured Event of Default) any Bank or
the Agent or any representative thereof to inspect the properties
and operations of the Company and its Subsidiaries; and permit,
and cause each of its Subsidiaries to permit, on reasonable
notice and at reasonable times (or without notice and at any time
during the existence of an Event of Default or an Unmatured Event
of Default) any Bank or the Agent or any representative thereof
to visit any or all of its offices to discuss its financial
matters with its officers and its independent auditors, and to
examine (and, at the expense of the Company or the applicable
Subsidiary, photocopy extracts from) any of its books or other
corporate records. The Company shall authorize its auditors to
discuss the financial matters of the Company and its Subsidiaries
with any Bank or the Agent, or any representative thereof, and
acknowledges the Agent's and the Banks, reliance on past, present
and future financial statements, which authorization and
acknowledgement shall be delivered in writing by the Company to
its auditors upon request by the Agent or the Required Banks.
The Company agrees to pay the fees of the Company's auditors
-49-
incurred in connection with any reasonable exercise of the rights
of the Agent and the Banks pursuant to this Section. So long as
no Event of Default or Unmatured Event of Default shall have
occurred and be continuing, the Company may, in its sole
discretion, elect to have one or more of its executive officers
present at and participate in any discussions conducted pursuant
to this Section 6.2.
-----------
6.3 Insurance. Maintain, and cause each of its
---------
Subsidiaries to maintain, with financially responsible insurance
companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it
and such other insurance, to such extent and against such hazards
and liabilities, as is customarily maintained by companies
similarly situated; and, upon request of the Agent or any Bank,
furnish to the Agent or such Bank a certificate of the Company
setting forth in reasonable detail the nature and extent of all
insurance maintained by the Company and each of its Subsidiaries.
6.4 Compliance with Laws: Payment of Taxes and
------------------------------------------
Liabilities. (a) Comply, and cause each of its Subsidiaries to
-----------
comply, with all applicable laws, rules, regulations, judgments,
decrees and orders and maintain and comply with all permits,
licenses and other authorizations required by law, rule or
regulation, except where the failure to do so would not be
reasonably expected to materially adversely affect either (i) the
financial condition, operations, assets, business, properties or,
to the knowledge of the Company, prospects of the Company and its
Subsidiaries, taken as a whole or (ii) the ability of its
Subsidiaries to perform their obligations under the Loan
Documents; and (b) pay, and cause each of its Subsidiaries to
pay, prior to delinquency, all taxes and other governmental
charges against it or any of its property, as well as claims of
any kind which, if unpaid, might become a material Lien on any of
its property; provided, however, that the foregoing shall not
-------- -------
require the Company or any of its Subsidiaries to pay any such
tax or charge so long as it shall contest the validity thereof in
good faith by appropriate proceedings and shall set aside on its
books adequate reserves with respect thereto in accordance with
Generally Accepted Accounting Principles and such Lien, if any,
is effectively stayed.
6.5 Maintenance of Existence, Etc. Maintain and
------------------------------
preserve, and (subject to Section 7.3) cause each of its
-----------
Subsidiaries to maintain and preserve, (a) its existence and good
standing in the jurisdiction of its incorporation and (b) its
qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such
qualification necessary (except in those instances in which the
failure to be qualified or in good standing does not materially
adversely affect either (a) the financial condition, operations,
assets, business, properties or, to the knowledge of the Company,
-50-
prospects of the Company and its Subsidiaries taken as a whole or
(b) the ability of its Subsidiaries to perform their obligations
under the Loan Documents).
6.6 Use of Proceeds. Use the proceeds of the Loans
---------------
solely for general corporate purposes; and not use or permit any
proceeds of any Loan to be used, either directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of
"purchasing or carrying" any Margin Stock.
6.7 Employee Benefit Plans. Maintain, and cause each
----------------------
other Subsidiary to maintain, each Plan in material compliance
with all applicable requirements of law and regulations.
6.8 Environmental Covenants.
-----------------------
6.8.1 Environmental Response Obligation. (a)
---------------------------------
Comply, and cause each of its Subsidiaries to comply, with any
valid Federal or state judicial or administrative order requiring
the performance at any real property owned, operated, or leased
by the Company or any of its Subsidiaries of activities in
response to the release or threatened release of a Hazardous
Material, except where such failure to comply could not
reasonably be expected to materially and adversely affect either
(i) the financial condition, operations, assets, business,
properties or, to the knowledge of the Company, prospects of the
Company and its Subsidiaries taken as a whole or (ii) the ability
of the Company or any of its Subsidiaries to perform their
obligations under the Loan Documents; (b) notify the Agent within
ten days of the receipt of any written claim, demand, proceeding,
Action, or notice of liability by any Person arising out of or
relating to the release or threatened release of a Hazardous
Material on, under or from any property owned, operated or leased
by the Company or any of its Subsidiaries; and (c) notify the
Agent within ten days of any release, threat of release, or
disposal of Hazardous Material reported to any governmental
regulatory authority at any real property owned, operated, or
leased by the Company or any of its Subsidiaries.
6.8.2 Environmental Liabilities. Not, and not
-------------------------
permit any of its Subsidiaries to, violate any requirement of law
regarding Hazardous Materials; and, without limiting the
foregoing, not commence disposal of any Hazardous Material into
or onto any real property owned, operated, or leased by the
Company or any of its Subsidiaries nor allow any lien imposed
pursuant to any law, regulation or order relating to Hazardous
Materials or the disposal thereof to remain on such real
property, except as could not reasonably be expected to
materially and adversely affect either (a) the financial
condition, operations, assets, business, properties or, to the
knowledge of the Company, prospects of the Company and its
Subsidiaries taken as a whole or (b) the ability of the Company
-51-
or any of its Subsidiaries to perform their obligations under the
Loan Documents.
6.9 Material Agreements. Comply with and perform, and
-------------------
cause each of its Subsidiaries to comply with and perform, every
covenant, term, condition and other provision of every agreement
indenture, instrument and other document which is binding on the
Company or any of its Subsidiaries Party (except in those
instances in which the failure to so comply and perform could not
reasonably be expected to materially adversely affect either (a)
the financial condition, operations, assets, business, properties
or, to the knowledge of the Company, prospects of the Company and
its Subsidiaries taken as a whole or (b) the ability of the
Company and its Subsidiaries to perform their obligations under
the Loan Documents).
6.10 Maintenance of Properties. Maintain, and cause
-------------------------
each of its Subsidiaries to maintain, its material equipment,
improvements and other property in good repair, working order and
condition, ordinary wear and tear excepted, and will make, and
cause each of its Subsidiaries to make, such repairs,
replacements and additions as may be necessary to maintain such
condition.
6.11 Subsidiary Guaranties. Immediately upon the
---------------------
formation or acquisition of any Material Subsidiary or upon any
Person becoming a Material Subsidiary or upon any Person becoming
a Material Subsidiary, the Company shall cause such Subsidiary to
execute and deliver to the Agent a Subsidiary Guaranty
substantially in the form of Exhibit D.
---------
SECTION 7 NEGATIVE COVENANTS.
Until the expiration or termination of the Commitments
and thereafter until all obligations of the Company hereunder and
under the other Loan Documents are paid in full in cash and all
Letters of Credit have been terminated, the Company agrees that,
unless at any time the Required Banks shall otherwise expressly
consent in writing, it will not:
7.1 Liens. Permit, or permit any of its Subsidiaries
-----
to, create or permit to exist any Lien on any of its real or
personal properties, assets or rights of whatsoever nature
(whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges the
payment of which is not at the time required pursuant to Section
-------
6.4;
---
(b) (i) Liens of carriers, warehousemen, mechanics and
materialmen and other similar Liens imposed by law and (ii) Liens
-52-
incurred in connection with worker's compensation, unemployment
compensation and other types of social security (excluding Liens
arising under ERISA), in each case for sums not overdue or being
contested in good faith by appropriate proceedings and such Lien
is effectively stayed and not involving any deposits or advances
or borrowed money or the deferred purchase price of property or
services, and, in each case, for which it maintains adequate
reserves;
(c) Liens identified on Schedule 7.1;
------------
(d) Liens in connection with Capital Leases (to the
extent permitted hereunder);
(e) easements, rights of way, restrictions, minor
defects or irregularities in title and other similar Liens not
interfering in any material respect with the ordinary conduct of
the business of the Company or any of its Subsidiaries;
(f) Liens to secure the performance of statutory
obligations, surety and appeal bonds, government contracts and
trade contracts;
(g) any interest or title of a lessor or lessee under
any lease permitted by this Agreement;
(h) Liens granted in the ordinary course of business in
favor of Intel Corporation, a Delaware corporation, to secure
accounts payable owed to Intel Corporation with respect to, and
covering only, inventory purchased from Intel Corporation,
pursuant to agreements between the Company and Intel Corporation
as in effect on the Effective Date and as subsequently amended,
restated or modified;
(i) Liens granted in the ordinary course of business in
favor of suppliers of inventory other than Intel Corporation, a
Delaware corporation, to secure trade payables owed to such
suppliers with respect to, and covering only, inventory purchased
from such suppliers, pursuant to such suppliers' standard terms
and conditions for sale of such inventory and securing trade
payables owed to such suppliers not to exceed $5,000,000 at any
one time outstanding;
(j) Liens applicable to the property, plant and
equipment comprising the new warehouse facility described in
Section 7.8 securing indebtedness for borrowed money incurred to
-----------
finance the cost of acquisition and/or construction of such
facility;
(k) Liens securing purchase money indebtedness incurred
in the ordinary course of business (excluding purchase money
indebtedness incurred in connection with the purchase of
-53-
inventory) and/or Industrial Revenue Bond financings, provided
--------
that the aggregate amount of indebtedness secured by such Liens
does not exceed $7,500,000 at any one time outstanding and, in
the case of purchase money indebtedness, at least 75% of the
purchase price of such assets is provided by the proceeds of such
purchase money indebtedness and the Lien is applicable only to
the assets acquired with such purchase money indebtedness; and
(l) Liens not otherwise permitted by this Section 7.1
-----------
applicable to assets with a fair market value not to exceed
$5,000,000 (measured at the time each such Lien attaches)
securing obligations not to exceed $2,500,000 at any one time
outstanding.
7.2 Restricted Payments. (a) Declare or pay any
-------------------
dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any of its capital stock or
any warrants, options or other rights in respect of its capital
stock, (c) make any other distribution to stockholders, (d)
prepay, purchase or redeem any subordinated debt, (e) pay any
management fees or similar payments of any kind or description to
any holder of common stock of the Company or any Affiliate of
such holder, (f) make any payments under any "earn-out"
provisions in connection with any acquisition or otherwise in
excess of $5,000,000 for the Ginsbury Acquisition, or (g) set
aside funds for any of the foregoing; provided that the Company
--------
may purchase or redeem its capital stock for not more than fair
market value and may pay dividends on its common stock so long as
the aggregate amount paid by the Company for such purchases,
redemptions and dividends after September 30, 1996 shall not
exceed the sum of (i) $43,450,000 plus (ii) 50% of Consolidated
----
Net Income for each Fiscal Quarter (beginning with the Fiscal
Quarter ended December 31, 1996) in which such Consolidated Net
Income is greater than zero minus (iii) 100% of Consolidated Net
-----
Income for each Fiscal Quarter (beginning with the Fiscal Quarter
ended December 31, 1996) in which such Consolidated Net Income is
less than zero, in each case so long as no Event of Default or
Unmatured Event of Default has occurred and is continuing or
would occur as a result thereof.
7.3 Mergers, Consolidations, Sales. Permit, or
------------------------------
permit any of its Subsidiaries to, be a party to any merger or
consolidation, or purchase or otherwise acquire all or
substantially all of the assets or stock of any class of, or any
partnership or joint venture interest in, any other Person or
sell, transfer, convey or lease all or any substantial part of
its assets, or sell or assign with or without recourse any
receivables, except for:
(a) any such merger or consolidation, sale, transfer,
conveyance, lease or assignment of or by any wholly owned
-54-
Subsidiary of the Company into, with or to the Company or any
other wholly owned Subsidiary of the Company;
(b) any such purchase or other acquisition by the
Company or any wholly owned Subsidiary of the assets or stock of
any wholly owned Subsidiary of the Company;
(c) the sale (for not less than fair market value) of
the Company's presently-owned facility located in Santa Clara,
California in connection with the relocation of all or a portion
of the operations taking place at that location or the sale and
leaseback of all or a portion of such facility;
(d) the sale (for not less than fair market value) and
lease-back of the new warehouse facility to be acquired by the
Company as set forth in the proviso to Section 7.8;
-----------
(e) any sale by the Company or any of its Subsidiaries
in the ordinary course of business of assets which are obsolete
or are no longer used or useful in the business of the Company or
any of its Subsidiaries;
(f) the purchase or other acquisition of all or
substantially all of the assets or stock of any other Person in
the same line of business as the Company (or one related thereto)
provided that the purchase price of such assets or stock,
--------
including therein the amount of any liabilities assumed in
connection therewith, shall not exceed $10,000,000 in the
aggregate in any Fiscal Year; and
(g) sales, transfers, conveyances or leases of assets,
or contributions of assets to joint ventures or partnerships,
provided that the fair market value of the assets sold,
--------
transferred, conveyed, leased or contributed pursuant to this
subsection (g) in any Fiscal Year shall not exceed five percent
of Tangible Net Worth as of the last day of the immediately
preceding Fiscal Year.
7.4 Modification of Nature of Business; Modification
------------------------------------------------
of Organizational Documents. Make or permit any material change
---------------------------
in the nature of its business; provided that this Section shall
--------
not prevent the Company from engaging in businesses engaged in as
of the Effective Date and similar or related businesses; and not
permit the Articles of Incorporation, Bylaws or other
organizational documents of the Company or any of its
Subsidiaries to be amended or modified in any way that would
adversely affect the interests of the Agent or the Banks
hereunder or under any of the other Loan Documents.
7.5 Investments. Permit, or permit any of its
-----------
Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
-55-
(a) Investments existing on the Effective Date and
identified in Schedule 7.5 and Investments made after the
------------
Effective Date expressly included in Schedule 7.5;
------------
(b) Cash Equivalent Investments;
(c) Investments by the Company in its wholly owned
Subsidiaries which are Material Subsidiaries;
(d) Investments by the Company in its wholly owned
Subsidiaries which are not Material Subsidiaries, provided
--------
that such Investments made after September 30, 1996 shall
not exceed $10,000,000 (without giving effect to any
increase or decrease in the value of any such Investment
after the date made);
(e) loans or advances made by any Subsidiary of the
Company to the Company;
(f) reasonable loans or advances to officers and
employees for travel and relocation expenses in the ordinary
course of business; and
(g) other Investments, provided that the net aggregate
--------
amount invested by the Company and its Subsidiaries pursuant
to this subsection (g) (without giving effect to any
increase or decrease in the value of any such Investment
after the date made) shall not exceed $2,000,000.
7.6 No Negative Pledge. Permit, or permit any of its
------------------
Subsidiaries to, enter into or become bound by any agreement
containing any provision which would restrict the ability of the
Company or any of its Subsidiaries to xxxxx x Xxxx on any of its
assets or which would be violated or breached by any borrowing by
the Company hereunder or issuance or payment of reimbursement
obligations under any Loan or by the performance by the Company
or any of its Subsidiaries of any of its obligations hereunder or
under any other Loan Document, other than the restrictions set
forth in the Prudential Note Purchase Agreement.
7.7 Funded Debt of Subsidiaries. Permit any
---------------------------
Subsidiary to incur any Debt for borrowed money, except:
(a) that a Material Subsidiary which has executed and
delivered a Subsidiary Guaranty may guaranty unsecured Debt of
the Company under the Prudential Note Purchase Agreement; and
(b) Unsecured Debt up to a maximum principal amount of
$10,000,000 in the aggregate for all Subsidiaries.
7.8 Capital Expenditures. Permit, or permit its
--------------------
Subsidiaries to, make or commit to make Capital Expenditures in
-56-
any Fiscal Year in excess of 225% of the amount expensed as
depreciation in determining Consolidated Net Income from
continuing operations for the immediately preceding Fiscal Year;
provided, however, that Capital Expenditures may exceed the
-------- -------
foregoing limit in the Fiscal Year ending December 31, 1996.
7.9 Financial Covenants.
-------------------
7.9.1 Minimum Tangible Net Worth. Permit
--------------------------
Tangible Net Worth at any time to be less than an amount equal to
(a) $184,695,000 plus (b) 75% of Consolidated Net Income (with no
----
deduction for losses) for each Fiscal Quarter ending on and after
December 31, 1996 in which such Consolidated Net Income is
greater than zero plus (c) 100% of the net proceeds of any equity
----
securities issued by the Company or any Subsidiary after
September 30, 1996 less (d) up to $5,000,000 in the aggregate
----
paid by the Company under any "earn out" provisions related to
the Ginsbury Acquisition less $25,000,000 in the aggregate paid
by the Company for the purchase or redemption of its common stock
after September 30, 1996.
7.9.2 Maximum Leverage. Permit the Leverage
----------------
Ratio for any Computation Period ending on the last day of any
Fiscal Quarter in the fiscal periods indicated below to exceed
the maximum ratio indicated:
Fiscal Quarters
ending in Fiscal Years Maximum Ratio
---------------------- -------------
Effective Date - 12/30/97 2.00 to 1.00
12/31/97 and thereafter 1.75 to 1.00
7.9.3 Minimum Fixed Charge Coverage. Permit the
-----------------------------
ratio of (a) Consolidated Net Income before deducting Interest
Expense, income taxes and lease payments for any Computation
Period less all interest income included in Consolidated Net
Income for such Computation Period, to (b) (i) all Interest
Expense for such Computation Period plus (ii) all lease payments
----
for such Computation Period, to be less than 2.25 to 1, for any
Computation Period.
7.9.4 Current Ratio. Permit the ratio of
-------------
consolidated current assets to current liabilities for the
Company and its consolidated Subsidiaries at any time to be less
than 2.0 to 1.
SECTION 8 EVENTS OF DEFAULT AND THEIR EFFECT.
8.1 Events of Default. Each of the following shall
-----------------
constitute an Event of Default under this Agreement:
-57-
8.1.1 Non-Payment of the Loans, etc. (a) Default
-----------------------------
in the payment when due of the principal of any Loan, including
without limitation any amount payable pursuant to Section 2.1.3,
-------------
or (b) default in the payment when due of the interest on any
Loan, fees, reimbursement obligations with respect to any Letter
of Credit or any other amounts payable or deliverable by the
Company hereunder or under any other Loan Document, and in the
case of this subsection (b), continuance of such failure for five
days.
8.1.2 Non-Payment of Other Debt. Any default
-------------------------
shall occur under the terms applicable to any Debt of the Company
or any of its Subsidiaries in an aggregate amount (for all Debt
so affected) exceeding $2,500,000 and such default shall (a)
consist of the failure to pay such Debt when due (subject to any
applicable grace period), whether by acceleration or otherwise,
or (b) accelerate the maturity of such Debt or permit the holder
or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable prior to
its expressed maturity.
8.1.3 Bankruptcy, Insolvency, etc. Any
---------------------------
Subsidiary (other than a Subsidiary which is not a Material
Subsidiary) becomes insolvent or generally fails to pay, or
admits in writing its inability or refusal to pay, its debts as
they become due; or applies for, consents to, or acquiesces in
the appointment of a trustee, receiver or other custodian for
such Person or any property thereof, or makes a general
assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for any Subsidiary or for a
substantial part of the property of any thereof and is not
discharged within 60 days; or any bankruptcy, reorganization,
debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation
proceeding is commenced in respect of any Subsidiary (other than
a Subsidiary which is not a Material Subsidiary), and if such
case or proceeding is not commenced by the Company and its
Subsidiaries, it is consented to or acquiesced in by the Company
and its Subsidiaries or any order for relief is entered in
connection therewith, or such case or proceeding remains for 60
days undismissed; or any Subsidiary (other than a Subsidiary
which is not a Material Subsidiary) takes any corporate action to
authorize, or in furtherance of, any of the foregoing.
8.1.4 Non-Compliance with Provisions of This
--------------------------------------
Agreement or Any Other Loan Document. Failure by the Company to
------------------------------------
comply with or to perform any covenant set forth in Sections
--------
6.1.5(a), 6.1.9, 6.5, 6.11 and Sections 7.1 through 7.9,
--------------------------------------------------------
inclusive; or failure by the Company to comply with or perform
---------
any covenant set forth in Section 6.1.5 (other than subsection
-------------
(a) thereof) and continuance of such failure for 5 days, or
-58-
failure by the Company or any of its Subsidiaries to comply with
or to perform any other provision of this Agreement or any
provision of any other Loan Document (and not constituting an
Event of Default under any of the other provisions of this
Section 8) and continuance of such failure for 30 days; provided
--------- --------
that in the event of any failure to comply with Section 6.4 or
-----------
Section 6.8 (to the extent such failure relates to Hazardous
-----------
Materials), such failure shall not be deemed to be an Event of
Default so long as the Company commences to cure such non-
compliance within such 30-day period and thereafter diligently
proceeds to cure in accordance with the rules, regulations and
procedures of the applicable federal, state and local agencies
regulating Hazardous Materials and completes such cure within 180
days of the date of such failure.
8.1.5 Warranties. Any warranty made herein or in
----------
any other Loan Document by the Company or any other Loan Party is
breached or is false or misleading in any material respect, any
schedule, certificate, financial statement, report, notice or
other writing furnished by or on behalf of the Company or any
Subsidiary of the Company to the Agent or any Bank is false or
misleading in any material respect, in each case on the date as
of which the facts therein set forth are stated or certified or
deemed stated or certified (it being recognized by the Agent and
each Bank that projections and forecasts provided by the Company
are not to be viewed as facts and that actual results during the
period or periods covered by any such projections and forecasts
may differ from projected or forecasted results).
8.1.6 ERISA. (a) Any Termination Event with
-----
respect to an ERISA Plan shall occur which could reasonably be
expected to result in the imposition of liability on the Company
or any member of its ERISA Controlled Group in excess of
$2,500,000 in the aggregate; (b) any Plan (other than a
Multiemployer Plan) shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302
of ERISA) for which a waiver shall not have been obtained in
accordance with the applicable provisions of the Code or ERISA or
for which a waiver shall have been obtained on the condition that
security be provided by the Company or any member of its ERISA
Controlled Group; (c) the Company or a member of its ERISA
Controlled Group shall have engaged in a transaction which is
prohibited under Section 4975 of the Code or Section 406 of ERISA
which could reasonably be expected to result in the imposition of
liability on the Company or any member of its ERISA Controlled
Group in excess of $2,500,000 in the aggregate; (d) the Company
or any member of its ERISA Controlled Group shall fail to pay
when due an amount in excess of $2,500,000 which it shall have
become liable to pay to the PBGC, a Plan or a trust established
under Title IV of ERISA; (e) a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating
that an ERISA Plan (other than a Multiemployer Plan) must be
-59-
terminated or have a trustee appointed to administer such Plan
(other than a Multiemployer Plan); or (f) a Lien shall be imposed
on any assets of the Company or a member of its ERISA Controlled
Group in favor of the PBGC or a Plan.
8.1.7 Judgments. Final judgments which exceed an
---------
aggregate of $2,500,000 (or the equivalent at the time in
question in any other currency) or any judgment which otherwise
could reasonably be expected to have a material adverse effect on
either (a) the financial condition, operations, assets, business,
properties or, to the knowledge of the Company, prospects of the
Company and its Subsidiaries taken as a whole or (b) the ability
of the Loan Parties to perform their obligations under the Loan
Documents shall be rendered against the Company or any Subsidiary
and shall not have been satisfied, paid, discharged or vacated or
had execution thereof stayed pending appeal within 60 days after
entry or filing of such judgments.
8.1.8 Guaranties. Any of the Subsidiary
----------
Guaranties shall, after the execution and delivery thereof, cease
to be in full force and effect or is declared to be null and
void, or the validity or enforceability thereof is contested in a
judicial proceeding, or any guarantor under any of the Subsidiary
Guaranties denies that it has any further liability thereunder.
8.1.9 Change of Control. Any Person or group of
-----------------
Persons shall become the beneficial owner, directly or
indirectly, of capital stock of the Company representing 30% or
more of the voting power of the Company or otherwise enabling
such Person or group of Persons to exercise effective control
over the management of the Company.
8.2 Effect of Event of Default. If any Event of
--------------------------
Default described in Section 8.1.3 with respect to the Company
-------------
shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Notes and all
other obligations hereunder shall become immediately due and
payable and the Company shall become immediately obligated to
deliver to the Agent cash collateral in an amount equal to the
outstanding Stated Amount of all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, in the
case of any other Event of Default, the Agent may (and upon
written request of the Required Banks shall) declare the
Commitments (if they have not theretofore terminated) to be
terminated and/or declare all Notes and all other obligations
hereunder to be due and payable and/or demand that the Company
immediately deliver to the Agent cash collateral in an amount
equal to the outstanding Stated Amount of all Letters of Credit,
whereupon the Commitments (if they have not theretofore
terminated) shall immediately terminate and/or all Notes and all
other obligations hereunder shall become immediately due and
payable and/or the Company shall immediately become obligated to
-60-
deliver to the Agent cash collateral in an amount equal to the
Stated Amount of all Letters of Credit, all without presentment,
demand, protest or notice of any kind. Notwithstanding the
foregoing, the effect of an Event of Default of any event
described in Section 8.1.1 or Section 8.1.3 with respect to the
------------- -------------
Company may be waived by the written concurrence of all of the
Banks, and the effect of an Event of Default of any other event
described in this Section 8 may be waived by the written
---------
concurrence of the Required Banks. Any cash collateral hereunder
shall be delivered to the Agent (without liability for interest
thereon), and the Agent may apply the Cash Collateral to
obligations arising in connection with any drawing under a Letter
of Credit. Upon the expiration or termination of any Letters of
Credit, such cash collateral in excess of the Stated Amount of
the remaining Letters of Credit may be applied by the Agent to
any remaining obligations hereunder and any excess (as determined
by the Agent or by a court of competent jurisdiction) shall be
delivered to the Company or as a court of competent jurisdiction
may direct.
SECTION 9 THE AGENT.
9.1 Appointment and Authorization; "Agent". Each
--------------------------------------
Bank hereby irrevocably (subject to Section 9.9) appoints,
-----------
designates and authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or
any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor
shall the Agent have or be deemed to have any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be
read into this Agreement or any other Loan Document or otherwise
exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement
with reference to the Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is
used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between
independent contracting parties.
9.2 Delegation of Duties. The Agent may execute any
--------------------
of its duties under this Agreement or any other Loan Document by
or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
-61-
negligence or misconduct of any agent or attorney-in-fact that it
selects with reasonable care.
9.3 Liability of Agent. None of the Agent-Related
------------------
Persons shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the
Banks for any recital, statement, representation or warranty made
by the Company or any Subsidiary or Affiliate of the Company, or
any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent
under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any
obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of the Company or any
of the Company's Subsidiaries or Affiliates.
9.4 Reliance by Agent. (a) The Agent shall be
-----------------
entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required
Banks as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Banks against any
and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Required
Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the
conditions specified in Section 4, each Bank that has executed
---------
this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter
-62-
either sent by the Agent to such Bank for consent, approval,
acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the
Bank.
9.5 Notice of Default. The Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or
Event of Default, except with respect to defaults in the payment
of principal, interest and fees required to be paid to the Agent
for the account of the Banks, unless the Agent shall have
received written notice from a Bank or the Company referring to
this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". The Agent
will notify the Banks of its receipt of any such notice. The
Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required Banks in
accordance with Section 10.1; provided, however, that unless and
------------ -------- -------
until the Agent has received any such request, the Agent may (but
shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the
Banks.
9.6 Credit Decision. Each Bank acknowledges that
---------------
none of the Agent-Related Persons has made any representation or
warranty to it, and that no act by the Agent hereinafter taken,
including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and credit
worthiness of the Company and its Subsidiaries, and all
applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Company hereunder. Each
Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and credit
worthiness of the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks
by the Agent, the Agent shall not have any duty or responsibility
to provide any Bank with any credit or other information
concerning the business, prospects, operations, property,
financial and other condition or credit worthiness of the Company
-63-
which may come into the possession of any of the Agent-Related
Persons.
9.7 Indemnification of Agent. Whether or not the
------------------------
transactions contemplated hereby are consummated, the Banks shall
indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from
and against any and all Indemnified Liabilities; provided,
--------
however, that no Bank shall be liable for the payment to the
-------
Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence
or willful misconduct. Without limitation of the foregoing, each
Bank shall reimburse the Agent upon demand for its ratable share
of any costs or out-of-pocket expenses (including the fees and
charges of counsel for the Agent, including, without limitation,
all allocated costs of the Agent's internal counsel, and of local
counsel, if any, who may be retained) incurred by the Agent in
connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated
by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf-of the Company. The
undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the
Agent.
9.8 Agent in Individual Capacity. BofA and its
----------------------------
Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent
hereunder and without notice to or consent of the Banks. The
Banks acknowledge that pursuant to such activities, BofA or its
Affiliates may receive information regarding the Company or its
Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such
Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to
its Loans, BofA shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though
it were not the Agent, and the terms "Bank" and "Banks" include
BofA in its individual capacity.
9.9 Successor Agent. The Agent may, and at the
---------------
request of the Required Banks shall, resign as Agent upon 30
days' notice to the Banks. If the Agent resigns under this
Agreement, the Required Banks shall appoint from among the Banks
a successor agent for the Banks which successor agent shall be
-64-
approved by the Company. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 9
---------
and Sections 10.6 and 10.12 shall inure to its benefit as to any
------------- -----
actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a
retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the
Banks shall perform all of the duties of the Agent hereunder
until such time, if any, as the Required Banks appoint a
successor agent as provided for above.
9.10 Withholding Tax. (a) If any Bank is a "foreign
---------------
corporation, partnership or trust" within the meaning of the Code
and such Bank claims exemption from, or a reduction of, U.S.
withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent, to deliver to the
Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, two properly completed and executed copies of IRS
Form 1001 before the payment of any interest in the first
calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be
paid under this Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax
because it is effectively connected with a United States
trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Bank and
in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a
condition to exemption from, or reduction of, united States
withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction.
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(b) If any Bank claims exemption from, or reduction
of, withholding tax under a United States tax treaty by providing
IRS Form 1001 and such Bank sells, assigns, grants a
participation in, or otherwise transfers all or part of the
Obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Company to such
Bank. To the extent of such percentage amount, the Agent will
treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells,
assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of the Company to such Bank, such Bank
agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of
the Code.
(d) If any Bank is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any
interest payment to such Bank an amount equivalent to the
applicable withholding tax after taking into account such
reduction. However, if the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent,
then the Agent may withhold from any interest payment to such
Bank not providing such forms or other documentation an amount
equivalent to the applicable withholding tax imposed by Sections
1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of
the United States or other jurisdiction asserts a claim that the
Agent did not properly withhold tax from amounts paid to or for
the account of any Bank (because the appropriate form was not
delivered or was not properly executed, or because such Bank
failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax
ineffective, or for any other reason) such Bank shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the
amounts payable to the Agent under this Section, together with
all costs and expenses (including the fees and charges of counsel
for the Agent, including, without limitation, all allocated costs
of the Agent's internal counsel, and of local counsel, if any,
who may be retained). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the
resignation or replacement of the Agent.
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SECTION 10 MISCELLANEOUS.
10.1 Waiver: Amendments. No delay on the part of the
------------------
Agent, any Bank or any other holder of a Note in the exercise of
any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial exercise by any of them of any right,
power or remedy preclude other or further exercise thereof, or
the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to, any
provision of this Agreement, the Notes or the other Loan
Documents shall in any event be effective unless the same shall
be in writing and signed and delivered by the Agent and signed
and delivered by Banks having an aggregate Percentage of not less
than the aggregate Percentage expressly designated herein with
respect thereto or, in the absence of such designation as to any
provision of this Agreement, the Notes or the other Loan
Documents, by the Required Banks, and then any such amendment,
modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
No amendment, modification, waiver or consent shall:
(a) extend or increase the amount of the
Commitments;
(b) extend the date for payment of any principal
of or interest on the Loans, any reimbursement obligation under
any Letter of Credit or any interest or any fees payable
hereunder;
(c) reduce the principal amount of any Loan or any
reimbursement obligation under any Letter of Credit, the rate of
interest thereon or any fees payable hereunder;
(d) reduce the aggregate Percentage required to
effect an amendment, modification, waiver or consent; or
(e) release any Subsidiary party to a Subsidiary
Guaranty from its obligations thereunder without, in each case,
the consent of all Banks.
No provisions of Section 9 shall be amended, modified or waived
---------
without the consent of the Agent.
10.2 Confirmations. The Company and each holder of a
-------------
Note agree from time to time, upon written request received by it
from the other, to confirm to the other in writing (with a copy
of each such confirmation to the Agent) the aggregate unpaid
principal amount of the Loans then outstanding under such Note.
10.3 Notices. Except as otherwise provided in
-------
Sections 2.3 and 2.4, all notices hereunder shall be in writing
------------ ---
(including, without limitation, facsimile transmission) and shall
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be sent to the applicable party at its address shown on Schedule
--------
10.3 hereto or at such other address as such party may, by
----
written notice received by the other party, have designated as
its address for such purpose. Notices sent by facsimile
transmission shall be deemed to have been given when sent;
notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified
mail, postage prepaid; notices sent by overnight courier shall be
deemed to have been given one Business Day after the date when
sent; and notices sent by hand delivery shall be deemed to have
been given when received. For purposes of Sections 2.3 and 2.4,
------------ ---
the Agent shall be entitled to rely on instructions from any
person that the Agent in good faith believes is a Designated
Employee of the Company. The Company shall be bound by such
instructions in the same manner as if such person were a
Designated Employee and shall indemnify and hold the Agent and
each Bank harmless from any loss, cost or expense resulting from
any such reliance.
10.4 Computations. Where the character or amount of
------------
any asset or liability or item of income or expense is required
to be determined, or any consolidation or other accounting
computation is required to be made, for the purpose of this
Agreement, such determination or calculation shall, to the extent
applicable and except as otherwise specified in this Agreement,
be made in accordance with Generally Accepted Accounting
Principles applicable at the time of such computation (or, if
"Accounting Changes" (as defined below) shall have occurred and
the affected provisions of this Agreement shall not have been
amended as contemplated by the next sentence, in accordance with
generally accepted accounting principles applicable immediately
prior to such Accounting Changes) and applied on a basis
consistent with the audited financial statements certified by
Xxxxxx Xxxxxxxx LLP for Fiscal Year 1995. In the event that any
"Accounting Changes" (as defined below) occur and such changes
result in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Company
and the Banks agree to enter into negotiations in order to amend
such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for
evaluating the Company's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had
not been made. "Accounting Changes" means: (a) changes in
accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public
Accountants (or successors thereto or agencies with similar
functions); and (b) changes in accounting principles recommended
and implemented by the Company's certified public accountants.
10.5 Regulation U. Each Bank represents that it in
------------
good faith is not relying, either directly or indirectly, upon
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any Margin Stock as collateral security for the extension or
maintenance by it of any credit provided for in this Agreement.
10.6 Costs, Expenses and Taxes. The Company agrees to
-------------------------
pay on demand all reasonable out-of-pocket costs and expenses of
the Agent (including the fees and charges of counsel for the
Agent, including, without limitation, all allocated costs of the
Agent's internal counsel, and of local counsel, if any, who may
be retained) in connection with the preparation, execution,
delivery and administration of this Agreement, the other Loan
Documents and all other documents provided for herein or
delivered or to be delivered hereunder or in connection herewith
(including, without limitation, any amendments, supplements or
waivers to any Loan Documents), and all out-of-pocket costs and
expenses (including reasonable attorneys' fees, court costs and
other legal expenses and allocated costs of staff counsel)
incurred by the Agent and each Bank after an Event of Default in
connection with the enforcement of this Agreement, the other Loan
Documents or any such other documents. Each Bank agrees to
reimburse the Agent for such Bank's pro rata share (based on its
respective Percentage) of any such costs and expenses of the
Agent not paid by the Company. In addition, the Company agrees
to pay, and to save the Agent and the Banks harmless from all
liability for, any stamp or other taxes which may be payable in
connection with the execution and delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes or the execution
and delivery of any other Loan Document or any other document
provided for herein or delivered or to be delivered hereunder or
in connection herewith. All obligations provided for in this
Section 10.6 shall bear interest from and including the date such
------------
obligations or fees become payable to but not including the date
that such payments are made, payable on demand, at a rate per
annum equal to the then applicable rate charged on Base Rate
Loans. All obligations provided for in this Section 10.6 shall
------------
survive repayment of the Loans and all reimbursement obligations
under Letters of Credit, cancellation of the Notes and any
termination of the Commitments and this Agreement.
10.7 Captions. Section captions used in this
--------
Agreement are for convenience only and shall not affect the
construction of this Agreement.
10.8 Assignments; Participations.
---------------------------
10.8.1 Assignments. Any Bank may, with the prior
-----------
consent of each Issuing Bank (provided that such Issuing Bank has
--------
any Letters of Credit then outstanding at the time of such
proposed assignment), the Agent and the Company (which consents
shall not be unreasonably delayed or withheld), at any time
assign and delegate to one or more Eligible Assignees (any Person
to whom such an assignment and delegation is to be made being
herein called an "Assignee"), all or any fraction of such Bank's
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Loans, Note, direct or participation interest in any Letter of
Credit, Commitment or any other interest of such Bank hereunder
(which assignment and delegation shall be of a constant, and not
a varying, percentage of all the assigning Bank's Loans, direct
or participation interest in Letters of Credit and Commitment),
subject to a minimum aggregate amount if the Assignee is not a
Bank equal to the lesser of (a) the assigning Bank's remaining
Commitment and (b) $5,000,000; provided, however, that the
-------- -------
Company and the Agent shall be entitled to continue to deal
solely and directly with such Bank in connection with the
interests so assigned and delegated to an Assignee until five
Business Days (or such lesser period of time as the Agent and the
assigning Bank shall agree) after the date when all of the
following conditions shall have been met:
(i) written notice of such assignment and delegation,
together with payment instructions, addresses and related
information with respect to such Assignee, shall have been
given to the Company and the Agent by such assigning Bank
and the Assignee,
(ii) the assigning Bank and the assignee shall have
executed and delivered to the Company and the Agent an
assignment agreement substantially in the form of Exhibit E
---------
(a "Notice of Assignment"), together with any documents
required to be delivered thereunder, including, without
limitation, United States Internal Revenue Service Form 4224
or Form 1001, which Notice of Assignment shall have been
accepted by the Agent, the Company and each such Issuing
Bank, and
(iii) the assigning Bank or the Assignee shall have
paid the Agent a processing fee of $2,500.
From and after the date on which the conditions described above
have been met, (x) such Assignee shall be deemed automatically to
have become a party hereto and, to the extent that rights and
obligations hereunder have been assigned and delegated to such
Assignee pursuant to such Notice of Assignment, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning
Bank, to the extent that rights and obligations hereunder have
been assigned and delegated by it pursuant to such Notice of
Assignment, shall be released from its obligations hereunder.
Within ten Business Days after effectiveness of any assignment
and delegation, the Company shall execute and deliver to the
Agent (for delivery to the Assignee and the Assignor, as
applicable) a new Note in the principal amount of the Assignee's
Percentage of the total amount of the Commitments and, if the
assigning Bank has retained a Percentage of the total amount of
the Commitments hereunder, a replacement Note in the principal
amount of the Percentage of the Loan retained by the assigning
Bank (such Note to be in exchange for, but not in payment of, the
-70-
predecessor Note held by such assigning Bank). Each such Note
shall be dated the date of the Note so assigned. The assigning
Bank shall xxxx the predecessor Note "exchanged" and deliver it
to the Company. Accrued interest on that part of the predecessor
Note being assigned shall be paid as provided in the Notice of
Assignment. Accrued interest and fees on that part of the
predecessor Note not being assigned shall be paid to the
assigning Bank. Accrued interest and accrued fees shall be paid
at the same time or times provided in the predecessor Note and in
this Agreement. Any attempted assignment and delegation not made
in accordance with this Section 10.8.1 shall be null and void.
--------------
In addition to the foregoing, at the request of the
Company, any Bank designated by the Company for replacement (a
"Replaced Bank") shall, upon five Business Days, (or such lesser
period of time as the Company, the Agent and the Replaced Bank
shall agree) prior notice, assign all (but not less than all) of
such Bank's Loans, Note, direct or participation interest in any
Letter of Credit, Commitment and all other interests of such Bank
hereunder and under the other Loan Documents (other than
contingent rights which survive such transfer) to an Assignee
designated by the Company and approved by the Agent and each
other Bank (each in their sole discretion) at par value. Such
assignment shall be effected as set forth in this Section 10.8.1.
--------------
Notwithstanding the foregoing provisions of this
Section 10.8.1 or any other provision of this Agreement, any Bank
--------------
may at any time assign all or any portion of its Loans and its
Note to a Federal Reserve Bank (but no such assignment shall
release any Bank from any of its obligations hereunder).
10.8.2 Participations. Any Bank may at any time
--------------
sell to one or more commercial banks or other Persons
participating interests in any Loan owing to such Bank, the Note
held by such Bank, the Commitment of such Bank, the direct or
participation interest of such Bank in any Letter of Credit or
any other interest of such Bank hereunder (any Person purchasing
any such participating interest being herein called a
"Participant"). In the event of a sale by a Bank of a
participating interest to a Participant, (x) such Bank shall
remain the holder of its Note for all purposes of this Agreement,
(y) the Company and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations hereunder and (z) all amounts payable by the Company
shall be determined as if such Bank had not sold such
participation and shall be paid directly to such Bank. No Bank
shall grant any Participant any voting rights with respect to
amendments or modifications of this Agreement or any of the other
Loan Documents, except with respect to any of the events
described in the penultimate sentence of Section 10.1. Each Bank
------------
agrees to incorporate the requirements of the preceding sentence
into each participation agreement which such Bank enters into
-71-
with any Participant. The Company agrees that if amounts
outstanding under this Agreement and the Notes are due and
payable (as a result of acceleration or otherwise), each
Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this
Agreement, any Note and with respect to any Letter of Credit to
the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement or such
Note; provided that such right of setoff shall be subject to the
--------
obligation of each Participant to share with the Banks, and the
Banks agree to share with each Participant, as provided in
Section 2.15. The Company also agrees that each Participant
------------
shall be entitled to the benefits of Section 3.1 and Sections 3.2
----------- ------------
through 3.9, inclusive, as if it were a Bank (provided that no
----------------------
Participant shall receive any greater compensation pursuant to
Section 3.1 and Sections 3.2 through 3.9, inclusive, than would
----------- -----------------------------------
have been paid to the participating Bank if no participation had
been sold).
10.9 Governing Law. This Agreement and each Note
-------------
shall be a contract made under and governed by the internal laws
of the State of California. Whenever possible each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
All obligations of the Company and rights of the Agent, the Banks
and any other holder of a Note expressed herein or in any other
Loan Document shall be in addition to and not in limitation of
those provided by applicable law.
10.10 Counterparts. This Agreement may be executed in
------------
any number of counterparts and by the different parties hereto on
separate counterparts and each such counterpart shall be deemed
to be an original, but all such counterparts shall together
constitute but one and the same Agreement. When counterparts
executed by all of the parties hereto shall have been lodged with
the Agent (or, in the case of any Bank as to which an executed
counterpart shall not have been so lodged, the Agent shall have
received confirmation from such Bank of execution of a
counterpart hereof by such Bank), this Agreement shall become
effective as of the date hereof, and at such time the Agent shall
notify the Company and each Bank.
10.11 Successors and Assigns. This Agreement shall be
----------------------
binding upon the Company, the Banks and the Agent and their
respective successors and assigns, and shall inure to the benefit
of the Company, the Banks and the Agent and the successors and
assigns of the Banks and the Agent. The Company may not assign
-72-
its rights or obligations hereunder or under any other Loan
Document without the consent of each of the Banks.
10.12 Indemnification by the Company. In
------------------------------
consideration of the execution and delivery of this Agreement by
the Agent and the Banks and the agreement to extend the
Commitments provided hereunder, the Company hereby agrees to
indemnify and hold the Agent, each Bank and each of the officers,
directors, employees and agents of the Agent and each Bank
(collectively the "Bank Parties" and individually each a "Bank
Party") harmless from and against any and all actions, causes of
action, suits, losses, liabilities, damages and expenses,
including, without limitation, reasonable attorneys' fees and
charges and allocated costs of staff counsel (collectively
therein called the "Indemnified Liabilities"), incurred by the
-----------------------
Bank Parties or any of them as a result of, or arising out of, or
relating to the execution, delivery, performance or enforcement
of this Agreement or any other Loan Document by any of the Bank
Parties, or the exercise of rights or remedies with respect
hereto or thereto, except that no Bank Party shall be entitled to
such indemnification to the extent of any such Indemnified
Liabilities arising on account of such Bank Party's gross
negligence or willful misconduct. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the
Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law. Nothing set forth
above shall be construed to relieve any Bank Party from any
obligation it may have under this Agreement. All obligations
provided for in this Section 10.12 shall survive repayment of the
-------------
Loans and reimbursement obligations under Letters of Credit,
cancellation of the Notes, termination of the Letters of Credit,
termination of the Commitments and any termination of this
Agreement. Nothing in this Section 10.12 shall obligate the
-------------
Company to reimburse any Bank for any costs or expenses incurred
by such Bank prior to the Effective Date in connection with the
preparation of this Agreement or the other Loan Documents.
10.13 Forum Selection and Consent to Jurisdiction.
-------------------------------------------
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL
BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF CALIFORNIA OR IN THE UNITED STATES DISTRICT COURT FOR THE
CENTRAL DISTRICT OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA AND OF
THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF
CALIFORNIA FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
-73-
OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF CALIFORNIA. THE COMPANY
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THIS
COMPANY HAS OR MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY,
THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
10.14 Waiver of Jury Trial. EACH OF THE COMPANY, THE
--------------------
AGENT AND EACH BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
10.15 Setoff. The Company agrees that the Agent,
------
each Bank and each other holder of a Note have all rights of
set-off and bankers' lien provided by applicable law, and in
addition thereto, the Company agrees that at any time any
Unmatured Event of Default under Section 8.1.3 or any Event of
-------------
Default exists, the Agent, each Bank and each such holder may
apply to the payment of such payment or other amount (or, in the
case of subsection (b) thereof, to any obligations of the Company
hereunder, whether or not then due) any and all balances,
credits, deposits, accounts or moneys of the Company then or
thereafter with the Agent, such Bank or such holder.
10.16 Further Assurances. The Company shall, and
------------------
shall cause each of the other Loan Parties to, take all further
actions and execute all further documents and instruments as the
Agent or any Bank may at any time reasonably determine in its
sole discretion to be necessary or advisable to carry out and
consummate the transactions contemplated by the Loan Documents.
10.17 Reinstatement. This Agreement shall remain in
-------------
full force and effect until payment in full in cash of all
obligations under, and Performance of all provisions of, the Loan
Documents. If, at any time, all or part of any payment of such
obligations made by the Company or any other Person is rescinded
or otherwise returned by the Agent or any Bank for any reason
whatsoever (including, without limitation, the insolvency,
-74-
bankruptcy or reorganization of the Company or any other Person),
this Agreement shall continue to be effective or shall be
reinstated, as the case may be, as to such obligations which were
satisfied by the payment to be rescinded or returned, all as
though such payment had not been made.
10.18 Waivers. The Company waives diligence,
-------
presentment, demand of payment, protest, notice of dishonor or
nonpayment of any liability, suit or taking of other action by
the Agent or any of the Banks against, and any other notice to,
any Loan Party (other than the Company) liable with respect to
any Letter of Credit Application or any other Loan Document. The
Company further waives any requirement on the part of the Agent
or any of the Banks to mitigate damages resulting from any
default under any Letter of Credit Application or any other Loan
Document.
10.19 Confidentiality. The Agent and each Bank hereby
---------------
agrees to hold all non-public information about the Company and
its Subsidiaries obtained from the Company or its Subsidiaries or
their respective officers, auditors or counsel pursuant to the
requirements of this Agreement confidential and not to disclose
any such information, except for disclosure of such information
(a) to another Bank or to the Agent, (b) to any prospective
Assignee or Participant (provided that such prospective Assignee
--------
or Participant agrees to maintain the confidentiality of such
information as if such Person were bound by this Section 10.19,
-------------
(c) to its legal counsel, accountants, appraisers and other
professional advisers, (d) to regulatory officials having
jurisdiction over Agent or such Bank, (e) as Agent or Bank
determines, in its sole discretion, is required by law or
regulation or to honor subpoenas or other legal process, or (f)
with the consent of the Company.
10.20 Amendment and Restatement. (a) This Agreement
-------------------------
amends and restates the Existing Credit Agreement effective as of
the Effective Date. Loans and letters of credit outstanding
under the Existing Credit Agreement shall be deemed continued as
the Loans and Letters of Credit hereunder as of the Effective
Date. From and after the Effective Date, such Loans and Letters
of Credit shall bear interest and fees as set forth herein.
(b) The parties hereto agree that all references in
the Loan Documents to the Existing Credit Agreement shall be
deemed a reference to this Agreement, as it may be amended,
restated or otherwise modified from time to time.
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IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.
WYLE ELECTRONICS
By /s/ X. XXX XXXX XXXXXXX, JR.
--------------------------------------
Title: Executive Vice President-Finance
--------------------------------------
and Treasurer, Chief Financial Officer
S-1
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By /s/ XXXX X. XXXX
----------------
Xxxx X. Xxxx
Vice President
BANK OF AMERICA ILLINOIS
By /s/ XXXX X. XXXX
----------------
Xxxx X. Xxxx
Vice President
S-2
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ L. XXXX XXXXX
---------------------
Title: Senior Vice President
---------------------
S-3
THE BANK OF NEW YORK
By /s/ XXXXXXX X. XXXXXX
------------------------
Title: Assistant Vice President
------------------------
S-4
BANQUE NATIONALE DE PARIS
By /s/ XXXXX XXXXXXX
-------------------------------
Title: Senior Vice President & Manager
-------------------------------
By /s/ XXXXXXXX X. XXXXX
------------------------------
Title: Vice President
------------------------------
S-5
