1
Exhibit 10.1
CREDIT AND SECURITY AGREEMENT
(U.S. $80,000,000)
Dated as of September 29, 1999
among
INSTRON CORPORATION
INSTRON, LTD.
INSTRON XXXXXXX TESTING SYSTEMS, GMBH
and
INSTRON XXXXXXX GMBH
AS BORROWERS
and
THE BANKS WHICH ARE SIGNATORIES HERETO
and
NATIONAL CITY BANK
as Administrative Agent
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TABLE OF CONTENTS
Section Page
------- ----
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS........................................................................1
1.1 CERTAIN DEFINED TERMS................................................................................1
1.2 COMPUTATION OF TIME PERIODS..........................................................................1
1.3 ACCOUNTING TERMS; CALCULATIONS.......................................................................1
1.4 ADDITION OF BORROWERS................................................................................2
1.5 AUTHORIZATION OF BORROWER REPRESENTATIVE.............................................................2
1.6 CONSTRUCTION OF TERMS GENERALLY......................................................................2
1.7 CURRENCY EQUIVALENTS.................................................................................3
1.8 LIABILITY OF BORROWERS...............................................................................4
SECTION 2 STATEMENT OF TERMS......................................................................................4
2.1 REVOLVING CREDIT FACILITY............................................................................4
(a) REVOLVING CREDIT LOANS......................................................................4
(b) REVOLVING CREDIT BORROWINGS.................................................................4
(c) REVOLVING CREDIT NOTES; LOAN ACCOUNT........................................................5
2.2 REQUESTS FOR REVOLVING CREDIT BORROWINGS.............................................................5
(a) CREDIT REQUESTS EXECUTED BY BORROWER REPRESENTATIVE.........................................5
(b) DEEMED CREDIT REQUESTS......................................................................7
2.3 FUNDING OF REVOLVING CREDIT LOANS....................................................................8
2.4 AVAILABILITY OF FUNDS................................................................................9
2.5 FAILURES TO FUND LOANS OR PARTICIPATING INTERESTS....................................................9
(a) CONTINUING OBLIGATION OF BORROWERS.........................................................10
(b) PAYMENT CONSTITUTING RATABLE PORTION.......................................................10
(c) TREATMENT OF BANK FAILING TO FUND..........................................................10
(D) CONTINUING OBLIGATION OF BANKS TO FUND.....................................................11
(e) DEFAULTING LENDER; OBLIGATIONS OF DESIGNATED SWING LINE LENDERS AND LETTER
OF CREDIT ISSUERS.....................................................................11
2.6 AFFILIATED FUNDING THROUGH, ON BEHALF OF, OR BY BANKS...............................................11
(a) SPC FUNDING ON BEHALF OF BANKS.............................................................11
(b) FUNDING BY BANKS, DESIGNATED SWING LINE LENDERS, AND DESIGNATED LETTER OF
CREDIT ISSUERS THROUGH OR ON BEHALF OF LENDING INSTALLATIONS..........................12
2.7 SWING LINE LOAN FACILITY............................................................................13
(a) SWING LINE LOANS...........................................................................13
(b) CONDITIONS TO SWING LINE LOANS.............................................................13
(c) SWING LINE BORROWINGS......................................................................14
(d) SWING LINE LOAN REQUESTS...................................................................14
(e) NOTICE OF REQUESTS; OUTSTANDINGS...........................................................15
(f) PROCEDURE FOR OBTAINING QUOTED MONEY MARKET RATE...........................................15
(g) SWING LINE NOTES; SWING LINE LOAN ACCOUNT..................................................16
(h) FUNDING OF SWING LINE LOANS................................................................16
(i) AVAILABILITY OF FUNDS......................................................................17
(j) REFUNDING SWING LINE LOANS; SETTLEMENT BY BANKS............................................17
(k) PARTICIPATING INTEREST.....................................................................18
2.8 TERM FACILITY.......................................................................................19
(a) TERM LOANS.................................................................................19
(b) TERM BORROWINGS............................................................................19
(c) TERM NOTES; LOAN ACCOUNT RECORD OF TERM LOANS..............................................19
(d) AMORTIZATION AND MATURITY OF TERM LOANS....................................................20
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2.9 FUNDING OF TERM LOANS BY BANKS......................................................................20
(a) DISBURSEMENT OF TERM FUNDS RECEIVED........................................................21
(b) AVAILABILITY OF TERM LOAN FUNDS............................................................21
2.10 REPAYMENTS; PREPAYMENTS; REDUCTIONS OF COMMITMENTS.................................................21
(a) SCHEDULED REPAYMENTS; DENOMINATIONS OF REPAYMENTS..........................................21
(b) MANDATORY PREPAYMENT OF LOANS..............................................................21
(c) MANDATORY APPLICATION OF NET PROCEEDS AND EXCESS CASH FLOW; RESULTING
MANDATORY REDUCTION IN REVOLVING CREDIT COMMITMENTS AND TERM LOANS....................22
(d) PERMITTED PREPAYMENTS......................................................................23
(e) REDUCTION OF REVOLVING CREDIT COMMITMENTS..................................................24
2.11 RATE CONVERSION AND RATE CONTINUATION..............................................................24
2.12 LETTERS OF CREDIT..................................................................................27
(a) DESIGNATED LETTER OF CREDIT ISSUER AND DESIGNATED EUROPEAN ADMINISTRATIVE
AGENT.................................................................................27
(b) TERM; FORM; REQUESTS AND CONDITIONS OF LETTERS OF CREDIT...................................28
(c) EXISTING LETTERS OF CREDIT.................................................................29
(d) PARTICIPATION BY BANKS IN LETTERS OF CREDIT................................................29
(e) REIMBURSEMENT; INTEREST....................................................................30
(f) FAILURE TO REIMBURSE DRAWINGS..............................................................30
(g) OBLIGATIONS ABSOLUTE.......................................................................32
(h) LIABILITY OF DESIGNATED LETTER OF CREDIT ISSUER............................................32
(i) DESIGNATED LETTER OF CREDIT ISSUER INDEMNITY...............................................33
(j) EFFECT OF APPLICABLE LAW OR CUSTOM.........................................................33
(k) TERMINATION OF LETTER OF CREDIT COMMITMENT.................................................34
(l) GUARANTY OF OTHER LETTER OF CREDIT OBLIGOR'S LETTER OF CREDIT OBLIGATIONS..................34
2.13 INTEREST ON LOANS..................................................................................37
(a) INTEREST RATE..............................................................................37
(b) APPLICABLE MARGIN; TERMS OF ADJUSTMENT.....................................................38
2.14 DEFAULT INTEREST...................................................................................39
2.15 INTEREST RATE DETERMINATION........................................................................39
(a) ADMINISTRATIVE AGENT DETERMINATION; NOTICE.................................................39
(b) FAILURE OF BORROWERS TO ELECT..............................................................40
2.16 FEES...............................................................................................40
(a) UNDERWRITING, ARRANGEMENT AND STRUCTURING FEE..............................................40
(b) ANNUAL ADMINISTRATIVE AGENT'S FEE..........................................................40
(c) UNUSED COMMITMENT FEE......................................................................40
(d) LETTER OF CREDIT FEES......................................................................41
(e) APPLICABLE FEE PERCENTAGES.................................................................41
(f) PAYMENT OF FEES; NONREFUNDABLE.............................................................42
2.17 MANNER AND APPLICATION OF PAYMENTS; CONTROL ACCOUNT MAINTENANCE; COMPUTATIONS......................42
(a) MANNER OF PAYMENT..........................................................................42
(b) APPLICATION OF PAYMENTS....................................................................43
(c) ADMINISTRATIVE AGENT MAINTENANCE OF CONTROL ACCOUNT........................................43
(d) DESIGNATED EUROPEAN ADMINISTRATIVE AGENT MAINTENANCE OF DESIGNATED EUROPEAN
CONTROL ACCOUNT.......................................................................43
(e) CONTROL ACCOUNT CHARGES AND CREDITS; ADMINISTRATIVE AGENT REPORTS..........................44
(f) AUTHORIZATION TO CHARGE BANKING ACCOUNTS...................................................44
(g) COMPUTATIONS OF INTEREST AND FEES..........................................................45
(h) PAYMENT NOT ON BUSINESS DAY................................................................45
(i) FAILURE TO PAY IN ALTERNATE CURRENCY.......................................................45
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(j) ALTERNATE CURRENCY AMOUNTS.................................................................45
(k) PRESUMPTION OF PAYMENT IN FULL BY THE BORROWERS............................................46
2.18 LIBOR RATE LOANS: UNASCERTAINABLE RATE; ILLEGALITY; INCREASED COSTS................................46
(a) UNASCERTAINABLE RATE; ILLEGALITY; INCREASED COSTS..........................................46
(b) CANCELLATION OF REQUESTS; CONVERSION OF OUTSTANDINGS.......................................48
2.19 PRO RATA TREATMENT OF BANKS........................................................................48
2.20 EUROPEAN ECONOMIC AND MONETARY UNION...............................................................48
(a) EFFECTIVENESS OF PROVISIONS................................................................48
(b) REDENOMINATION OF ALTERNATIVE CURRENCIES...................................................49
(c) PAYMENTS BY THE ADMINISTRATIVE AGENT GENERALLY.............................................49
(d) BASIS OF ACCRUAL...........................................................................49
(e) ROUNDING...................................................................................49
(f) OTHER CONSEQUENTIAL CHANGES................................................................50
SECTION 3 CONDITIONS OF LENDING..................................................................................50
3.1 CONDITIONS PRECEDENT TO INITIAL LOANS...............................................................50
3.2 CONDITIONS PRECEDENT TO ALL LOANS...................................................................50
(a) REPRESENTATION BRINGDOWN...................................................................50
(b) NO DEFAULT; COMPLIANCE WITH TERMS..........................................................50
(c) NO MATERIAL ADVERSE CHANGE.................................................................51
(d) CONFIRMATION OF BORROWING BASE.............................................................51
(e) OTHER DELIVERIES...........................................................................51
SECTION 4 SECURITY INTEREST IN COLLATERAL; COLLATERAL REQUIREMENTS...............................................51
4.1 GRANT OF SECURITY INTEREST..........................................................................51
(a) DOMESTIC BORROWER COLLATERAL...............................................................51
(b) U.K. COLLATERAL............................................................................52
(c) GERMAN COLLATERAL..........................................................................52
4.2 PERFECTION..........................................................................................53
4.3 CHANGES AFFECTING PERFECTION........................................................................53
4.4 INSPECTION; VERIFICATION............................................................................54
4.5 REINSTATEMENT.......................................................................................54
4.6 TERMINATION OF SECURITY INTEREST; RELEASE OF COLLATERAL.............................................54
SECTION 5 REPRESENTATIONS, WARRANTIES AND COVENANTS RELATING TO COLLATERAL.......................................56
5.1 GENERAL REPRESENTATIONS AS TO COLLATERAL............................................................56
5.2 REPRESENTATIONS AND WARRANTIES REGARDING ACCOUNTS...................................................57
5.3 TREATMENT OF ACCOUNTS AND GENERAL INTANGIBLES.......................................................57
5.4 LIEN PRIORITY.......................................................................................57
5.5 LIEN WAIVERS, LANDLORD WAIVERS, WAREHOUSE RECEIPTS..................................................58
5.6 MAINTENANCE OF INSURANCE............................................................................58
SECTION 6 GENERAL REPRESENTATIONS AND WARRANTIES.................................................................58
6.1 EXISTENCE...........................................................................................59
6.2 AUTHORIZATION; ENFORCEABILITY.......................................................................59
6.3 NO VIOLATION........................................................................................59
6.4 LITIGATION; PROCEEDINGS.............................................................................60
6.5 TAXES...............................................................................................60
6.6 TITLE...............................................................................................60
6.7 CONSENTS; APPROVALS.................................................................................60
6.8 LAWFUL OPERATIONS...................................................................................61
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6.9 ENVIRONMENTAL COMPLIANCE............................................................................61
6.10 ENVIRONMENTAL LAWS AND PERMITS.....................................................................62
6.11 ERISA..............................................................................................62
6.12 AGREEMENTS; ADVERSE OBLIGATIONS; LABOR DISPUTES....................................................62
6.13 FINANCIAL STATEMENTS; PROJECTIONS..................................................................63
(a) FINANCIAL STATEMENTS.......................................................................63
(b) FINANCIAL PROJECTIONS......................................................................63
6.14 INTELLECTUAL PROPERTY..............................................................................64
6.15 MERGER; OFFERING...................................................................................64
6.16 MERGER DOCUMENTS...................................................................................64
6.17 STRUCTURE; CAPITALIZATION..........................................................................64
6.18 VALUE; SOLVENCY....................................................................................65
6.19 INVESTMENT COMPANY ACT STATUS......................................................................65
6.20 REGULATION U/REGULATION X COMPLIANCE...............................................................65
6.21 YEAR 2000 COMPLIANCE...............................................................................65
6.22 FULL DISCLOSURE....................................................................................66
SECTION 7 COVENANTS OF THE BORROWERS.............................................................................66
7.1 REPORTING AND NOTICE COVENANTS......................................................................66
(a) QUARTERLY FINANCIAL STATEMENTS.............................................................66
(b) ANNUAL FINANCIAL STATEMENTS................................................................67
(c) OFFICER'S CERTIFICATE; MANAGEMENT DISCUSSION; STATEMENTS OF OPERATIONS.....................67
(d) ANNUAL BUSINESS PLAN.......................................................................68
(e) OTHER INFORMATION..........................................................................68
(f) NOTICES....................................................................................68
(g) NOTICE OF DEFAULT UNDER ERISA..............................................................69
(h) ENVIRONMENTAL REPORTING....................................................................69
(i) MULTIEMPLOYER PLAN WITHDRAWAL LIABILITY....................................................69
(j) SEC REPORTS AND REGISTRATION STATEMENTS....................................................69
(k) ANNUAL, QUARTERLY AND OTHER REPORTS TO SENIOR SUBORDINATED NOTEHOLDERS
PURSUANT TO SENIOR SUBORDINATED NOTE INDENTURE........................................69
(l) PRESS RELEASES.............................................................................70
7.2 AFFIRMATIVE COVENANTS...............................................................................70
(a) CORPORATE EXISTENCE........................................................................70
(b) FINANCIAL RECORDS..........................................................................70
(c) FINANCIAL EXAMINATION AND REVIEW...........................................................70
(d) COMPLIANCE WITH LAW........................................................................70
(e) COMPLIANCE WITH ENVIRONMENTAL LAWS.........................................................71
(f) PROPERTIES.................................................................................71
(g) USE OF PROCEEDS............................................................................71
(h) COMPLIANCE WITH TERMS OF ALL MATERIAL CONTRACTS............................................72
(i) TAXES......................................................................................72
(j) INSURANCE..................................................................................72
(k) LICENSE TO THIRD PARTIES AND SUBSIDIARIES..................................................72
(l) CERTAIN SUBSIDIARIES TO JOIN IN SUBSIDIARY GUARANTY AND STOCK PLEDGE.......................73
(m) MOST FAVORED COVENANT STATUS...............................................................74
(n) HEDGE AGREEMENTS...........................................................................74
7.3 NEGATIVE COVENANTS..................................................................................75
(a) CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS .........................................75
(b) CREDIT EXTENSIONS; PREPAYMENTS; PAYMENTS OF SUBORDINATED DEBT..............................78
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(c) INDEBTEDNESS...............................................................................80
(d) LIENS......................................................................................82
(e) INVESTMENTS................................................................................84
(f) DISTRIBUTIONS; MANAGEMENT FEE..............................................................85
(g) CHANGE IN NATURE OF BUSINESS...............................................................86
(h) CHARTER AMENDMENTS.........................................................................86
(i) COMPLIANCE WITH ERISA......................................................................86
(j) REGULATION U COMPLIANCE....................................................................87
(k) ACCOUNTING CHANGES.........................................................................87
(l) ARM'S-LENGTH TRANSACTIONS..................................................................87
7.4 FINANCIAL COVENANTS.................................................................................87
(a) MINIMUM CONSOLIDATED NET WORTH.............................................................87
(b) MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO...........................................88
(c) MINIMUM CONSOLIDATED EBIT TO CONSOLIDATED INTEREST EXPENSE RATIO...........................89
(d) CONSOLIDATED SENIOR FUNDED DEBT TO ADJUSTED EBITDA RATIO...................................89
(e) CONSOLIDATED TOTAL FUNDED DEBT TO ADJUSTED EBITDA RATIO....................................89
(f) MINIMUM CONSOLIDATED ADJUSTED EBITDA.......................................................90
(g) MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES..................................................90
SECTION 8 EVENTS OF DEFAULT......................................................................................90
8.1 PAYMENT.............................................................................................90
8.2 REPRESENTATIONS AND WARRANTIES......................................................................91
8.3 REPORTING AND NOTICE PROVISIONS; VIOLATION OF CERTAIN AFFIRMATIVE COVENANTS.........................91
8.4 VIOLATION OF NEGATIVE COVENANTS AND FINANCIAL COVENANTS.............................................91
8.5 CROSS-DEFAULT.......................................................................................91
8.6 FALSE OR MISLEADING REPORTS.........................................................................91
8.7 DESTRUCTION OF COLLATERAL...........................................................................91
8.8 CHANGE OF CONTROL...................................................................................92
8.9 TERMINATION OF EXISTENCE............................................................................92
8.10 FAILURE OF ENFORCEABILITY OF THIS AGREEMENT, CREDIT DOCUMENT; SECURITY.............................92
8.11 ERISA..............................................................................................92
8.12 JUDGMENTS..........................................................................................92
8.13 FORFEITURE PROCEEDINGS.............................................................................93
8.14 FINANCIAL IMPAIRMENT...............................................................................93
SECTION 9 REMEDIES...............................................................................................93
9.1 ACCELERATION; TERMINATION...........................................................................93
9.2 AUTOMATIC ACCELERATION AND TERMINATION..............................................................93
9.3 GENERAL RIGHTS AND REMEDIES OF ADMINISTRATIVE AGENT AND THE BANKS...................................94
9.4 ADDITIONAL REMEDIES.................................................................................94
(a) POSSESSION OF COLLATERAL...................................................................94
(b) FORECLOSURE OF LIENS.......................................................................95
(c) DISPOSITION OF COLLATERAL..................................................................95
(d) APPLICATION OF COLLATERAL; APPLICATION OF LIQUIDATION PROCEEDS.............................95
9.5 APPOINTMENT OF ATTORNEY-IN-FACt.....................................................................96
9.6 SET-OFF.............................................................................................97
9.7 TERMINATION; EFFECT ON BORROWER OBLIGATIONS.........................................................97
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9.8 ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT............................................98
9.9 LETTER OF CREDIT COLLATERAL ACCOUNT.................................................................98
(a) APPLICATION................................................................................98
(b) NO BORROWER OR THIRD PARTY CLAIMS..........................................................98
(c) NO LIENS OR TRANSFERS OF ACCOUNT...........................................................99
9.10 AUTHORITY TO EXECUTE TRANSFERS.....................................................................99
9.11 LIMITED LICENSE TO LIQUIDATE.......................................................................99
9.12 EQUALIZATION.......................................................................................99
9.13 REMEDIES CUMULATIVE...............................................................................100
SECTION 10 BORROWER GUARANTY....................................................................................100
10.1 DOMESTIC BORROWER CROSS-GUARANTY..................................................................100
10.2 MAXIMUM LIABILITY.................................................................................100
10.3 GUARANTY UNCONDITIONAL............................................................................100
10.4 DISCHARGE; REINSTATEMENT..........................................................................101
10.5 WAIVER............................................................................................101
10.6 STAY OF ACCELERATION..............................................................................102
10.7 SUBROGATION AND CONTRIBUTION RIGHTS...............................................................102
(a) GUARANTEED OBLIGATION AND CONTRIBUTION PAYMENTS...........................................102
(b) JOINDER; WAIVER...........................................................................103
SECTION 11 THE AGENTS...........................................................................................103
11.1 THE ADMINISTRATIVE AGENT..........................................................................103
11.2 DESIGNATED EUROPEAN ADMINISTRATIVE AGENTS.........................................................103
11.3 SYNDICATION AGENT.................................................................................104
11.4 NATURE OF APPOINTMENT.............................................................................104
11.5 AGENTS AS BANKS; OTHER TRANSACTIONS...............................................................104
11.6 INSTRUCTIONS FROM BANKS...........................................................................104
11.7 BANK'S DILIGENCE..................................................................................105
11.8 NO IMPLIED REPRESENTATIONS........................................................................105
11.9 SUB-AGENTS........................................................................................105
11.10 AGENTS' DILIGENCE................................................................................105
11.11 NOTICE OF DEFAULT................................................................................105
11.12 LIABILITY OF AGENTS..............................................................................106
11.13 INDEMNITY OF AGENTS..............................................................................106
11.14 RESIGNATION OF AGENT.............................................................................107
11.15 RESIGNATION OF DESIGNATED EUROPEAN ADMINISTRATIVE AGENTS.........................................107
SECTION 12 TRANSFERS AND ASSIGNMENTS............................................................................108
12.1 TRANSFER OF COMMITMENTS...........................................................................108
(a) PRIOR CONSENT.............................................................................108
(b) AGREEMENT; TRANSFER FEE...................................................................108
(c) NO PROHIBITED TRANSACTION.................................................................108
(d) NOTES.....................................................................................109
(e) PARTIES...................................................................................109
12.2 SALE OF PARTICIPATIONS............................................................................109
(a) BENEFITS OF PARTICIPANT...................................................................109
(b) RIGHTS RESERVED...........................................................................109
(c) NO DELEGATION.............................................................................110
(d) NO PROHIBITED TRANSACTION.................................................................110
12.3 CHANGE OF LENDING OFFICE; REPLACEMENT OF BANKS....................................................110
(a) CHANGE OF LENDING OFFICE..................................................................110
(b) REPLACEMENT OF BANKS......................................................................110
(c) EFFECT ON RIGHTS AND OBLIGATIONS..........................................................111
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12.4 CONFIDENTIALITY...................................................................................111
SECTION 13 INDEMNITIES..........................................................................................112
13.1 INCREASED COSTS...................................................................................112
13.2 RISK-BASED CAPITAL................................................................................112
13.3 TAXES.............................................................................................113
(a) TAXES; WITHHOLDING........................................................................113
(b) STAMP TAXES...............................................................................114
(c) OTHER TAXES...............................................................................114
(d) REQUEST FOR REFUND........................................................................114
(e) EXEMPTION CERTIFICATE.....................................................................114
(f) FURNISHING OF CERTIFICATE.................................................................115
(g) FILINGS TO CLAIM U.K. WITHHOLDING EXEMPTION OR REDUCTION..................................115
(h) RELATED TAX EXEMPTION FILINGS.............................................................116
(i) U.K. TAX CREDITS..........................................................................116
(j) SURVIVAL OF PROVISION.....................................................................117
13.4 LOSSES............................................................................................117
13.5 INDEMNIFICATION FOR REQUESTS......................................................................117
13.6 GENERAL INDEMNITY.................................................................................118
13.7 ENVIRONMENTAL INDEMNITY...........................................................................118
13.8 CERTIFICATE FOR INDEMNIFICATION...................................................................118
13.9 DUTY TO MITIGATE; STANDARD TREATMENT; REIMBURSEMENT LIMITATION PERIOD.............................119
SECTION 14 GENERAL..............................................................................................119
14.1 AMENDMENTS AND WAIVERS............................................................................119
14.2 GENERAL APPOINTMENT AS ATTORNEY-IN-FACT...........................................................120
(a) ADMINISTRATIVE AGENT NOT LIABLE...........................................................120
(b) PERFORMANCE BY ADMINISTRATIVE AGENT OF THE BORROWERS' OBLIGATIONS.........................121
14.3 JUDGMENT CURRENCY.................................................................................121
(a) CONVERSION................................................................................121
(b) DISCHARGE.................................................................................121
(c) COSTS OF CONVERSION.......................................................................121
14.4 CUMULATIVE PROVISIONS.............................................................................121
14.5 EFFECTIVE AGREEMENT; BINDING EFFECT...............................................................122
14.6 COSTS AND EXPENSES................................................................................122
14.7 SURVIVAL OF PROVISIONS............................................................................122
14.8 CAPTIONS..........................................................................................123
14.9 SHARING OF INFORMATION............................................................................123
14.10 INTEREST RATE LIMITATION.........................................................................123
14.11 LIMITATION OF LIABILITY..........................................................................124
14.12 ILLEGALITY.......................................................................................124
14.13 NOTICES..........................................................................................124
14.14 GOVERNING LAW....................................................................................125
14.15 ENTIRE AGREEMENT.................................................................................125
14.16 JURY TRIAL WAIVER................................................................................125
14.17 JURISDICTION.....................................................................................125
14.18 VENUE; INCONVENIENT FORUM........................................................................126
14.19 EXECUTION IN COUNTERPARTS; EXECUTION BY FACSIMILE................................................126
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EXHIBITS AND ANNEXES
Exhibit A-1 (Form of Revolving Credit Note)
Exhibit A-2 (Form of Swing Line Note)
Exhibit A-3 (Form of Term Note)
Exhibit B-1 (Form of Credit Request)
Exhibit B-2 (Form of Swing Line Request)
Exhibit B-3 (Form of Letter of Credit Request)
Exhibit C (Form of Rate Conversion/Continuation Request)
Exhibit D-1 (Form of Stock Pledge -- Instron Corporation for Domestic Subsidiaries)
Exhibit D-2 (Form of Share Charge -- Instron Corporation for Instron, Holdings, Ltd.)
Exhibit D-3 (Form of Share Pledge -- Instron Corporation for Instron, GmbH)
Exhibit D-4 (Form of Third Party Charge of Shares -- Instron Holdings, Ltd. for Instron Ltd.)
Exhibit E-1 (Form of Collateral Assignment of Security Interest in Patents and Patent Applications)
Exhibit E-2 (Form of Collateral Assignment of Security Interest in Trademarks and Licenses)
Exhibit E-3 (Form of Collateral Assignment of Security Interest Copyrights)
Exhibit F-1 (Form of Mortgage--Massachusetts)
Exhibit F-2 (Form of Debenture --United Kingdom -- Instron, Ltd.)
Exhibit F-3 (Form of Security Transfer Agreement -- German)
Exhibit G (Form of Existing Lender Payout Letter)
Exhibit H (Form of Advertising Permission Letter)
Exhibit I (Form of Bank Assignment Agreement)
Exhibit J (Form of Landlord Waiver)
Exhibit K-1 (Form of Limited License Agreement -- Borrower)
Exhibit K-2 (Form of Limited License Agreement -- Third Party)
Exhibit L-1 (Form of Guaranty Agreement -- Domestic Subsidiaries)
Exhibit L-2 (Form of Security Agreement -- Domestic Subsidiaries)
Exhibit M (Form of Borrowing Base Certificate)
Annex I Commitments
Annex II Definitions
Annex III Conditions Precedent to Initial Loans
Annex IV Supplemental Schedule
Annex V Additional Borrower Addendum
Annex VI Interim Waiver of Certain Closing Conditions
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CREDIT AND SECURITY AGREEMENT
U.S. $80,000,000
Dated as of September 29, 1999
INSTRON CORPORATION, a Massachusetts corporation, INSTRON,
LTD., a corporation organized under the laws of the United Kingdom, and INSTRON
XXXXXXX TESTING SYSTEMS, GMBH, a corporation organized under the laws of the
Federal Republic of Germany, and INSTRON XXXXXXX GMBH, a corporation organized
under the laws of the Federal Republic of Germany, the BANKS listed on the
signature pages of this Agreement, and NATIONAL CITY BANK, a national banking
association, as Administrative Agent for the Banks under this Agreement, each
DESIGNATED EUROPEAN ADMINISTRATIVE AGENT designated pursuant to the terms
hereof, each DESIGNATED SWING LINE LENDER designated pursuant to the terms
hereof, and each DESIGNATED LETTER OF CREDIT ISSUER designated pursuant to the
terms hereof, hereby agree as follows:
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS.
1.1 CERTAIN DEFINED TERMS.
Certain capitalized terms used in this Agreement are defined
on Annex II attached hereto and incorporated herein by reference.
1.2 COMPUTATION OF TIME PERIODS.
In this Agreement, for the purpose of computing periods of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 ACCOUNTING TERMS; CALCULATIONS.
All accounting and financial terms not specifically defined
herein shall be construed in accordance with GAAP as in effect from time to
time. In all cases, such accounting and financial terms shall be applied on a
basis consistent with those applied in the preparation of Instron Corporation's
audited financial statements for its fiscal year ending December 31, 1998;
provided, however, (a) that all financial statements shall reflect Instron
Corporation's adoption of FAS 106 and (b) if any change in GAAP in itself
affects the calculation of any financial covenant in Section 7.4 of this
Agreement, the Borrower Representative may by written notice to the
Administrative Agent, or the Administrative Agent may, or upon request by the
Required Banks shall, by written notice to the Borrower Representative, require
that such covenant thereafter be calculated in accordance with GAAP as in effect
(and applied by Instron Corporation) immediately before such change in GAAP
occurs. If any such notice is given, the compliance certificates delivered
pursuant to Section 7.1(c) of this Agreement after such change occurs shall be
accompanied by reconciliations of the difference between the calculation set
forth therein and a calculation made in accordance with GAAP as in effect from
time to time after such change occurs. The financial statements to be furnished
to the Administrative Agent on behalf of the Banks pursuant hereto shall be made
and prepared in accordance with GAAP consistently applied throughout the periods
involved, except as set forth in the notes thereto or as otherwise disclosed in
writing by the Borrower to the Administrative Agent and, in each case, consented
to by the Administrative Agent; provided that, if at any time the computations
determining compliance with Section 7.4 utilize accounting principles different
from those
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utilized in the financial statements furnished to the Administrative Agent on
behalf of the Banks, such computations shall set forth in reasonable detail a
description of the differences and the effect thereof on such computations.
1.4 ADDITION OF BORROWERS.
By execution of an Additional Borrower Addendum by a signatory
thereof, and upon acceptance of such Additional Borrower Addendum by the
Administrative Agent and the Required Banks and, to the extent applicable, the
applicable Designated Swing Line Lender and Designated Letter of Credit Issuer,
each in its sole discretion, and such signatory's satisfaction of all conditions
and completion of all deliveries specified in such Additional Borrower Addendum,
this Agreement shall be deemed amended so that such signatory shall become for
all purposes a party to this Agreement as if an original signatory hereto and
shall be admitted as a Borrower hereunder. Except to the extent this Agreement
is expressly amended by the Additional Borrower Addendum in respect to such
signatory Borrower, this Agreement shall be binding for all purposes upon such
signatory Borrower as if an original signatory thereto.
1.5 AUTHORIZATION OF BORROWER REPRESENTATIVE.
For purposes of this Agreement including, without limitation,
Sections 1.3, 2.2, 2.10 and 2.11 of this Agreement, each of the Borrowers
hereby: (i) authorizes the Borrower Representative to make such requests, give
such notices or furnish such certificates to the Administrative Agent, the Banks
or any Designated Swing Line Lender or Designated Letter of Credit Issuers as
may be required or permitted by this Agreement for the benefit of such Borrower
and to give any consents on behalf of such Borrower required by Section 12.1(a)
of this Agreement in connection with assignments by Banks pursuant thereto and
(ii) authorizes the Administrative Agent to treat such requests, notices,
certificates or consents made, given or furnished by the Borrower Representative
as having been made, given or furnished by such Borrower for purposes of this
Agreement. Unless otherwise agreed to by the Administrative Agent, the Borrower
Representative shall be the only Person entitled to make, give or furnish such
requests, notices, certificates or requests directly to the Administrative
Agent, the Banks or any Designated Swing Line Lender or Designated Letter of
Credit Issuer for purposes of this Agreement. Each of the Borrowers agrees to be
bound by all such requests, notices, certificates and consents and other such
actions by the Borrower Representative and agrees that all notices to and
demands upon the Borrower Representative in respect of any Borrower shall
constitute effective notice to and demand upon such Borrower for all purposes
hereof. In each case, the Administrative Agent, the Banks, the Designated Swing
Line Lenders and the Designated Letter of Credit Issuers shall be entitled to
rely upon all such requests, notice, certificates and consents made, given or
furnished by the Borrower Representative pursuant to the provisions of this
Agreement or any other Loan Documents as being made or furnished on behalf of,
and with the effect of irrevocably binding, such Borrower.
1.6 CONSTRUCTION OF TERMS GENERALLY.
The definitions of terms in this Agreement shall apply equally
to the singular and plural forms of the terms defined. Whenever the context
requires, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes," and "including," shall be deemed
to be followed by the phrase "without limitation." The word "will" shall be
construed to have the same meaning as the word "shall." Unless the context
otherwise requires, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument, or other document as from time to time amended,
supplemented or otherwise modified (subject to any restriction on such
amendments, supplements or modifications as may be set forth herein), (b) any
reference herein
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to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein," "hereof," and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
any particular provision hereof, (d) all references to sections, Annexes and
Exhibits shall be construed to refer to sections of, and Annexes and Exhibits
to, this Agreement, and (e) unless the context or the provisions of this
Agreement otherwise indicate, the words "assets" and "property" shall be
construed to have the same meaning and effect and to refer to any and all real
property, and tangible and intangible assets and properties, including cash,
securities, accounts and contract rights and interests in any of the foregoing.
1.7 CURRENCY EQUIVALENTS.
For purposes of this Agreement, except as otherwise specified
herein, (i) the equivalent in Dollars of any Alternate Currency shall be
determined by using the applicable Exchange Rate at which the Administrative
Agent offers to exchange Dollars for such Alternate Currency at its Payment
Office at 9:00 A.M. (local time at the Payment Office of the Administrative
Agent) two Business Days prior to the date on which such equivalent is to be
determined, (ii) the equivalent in any Alternate Currency of any other Alternate
Currency shall be determined by using the applicable Exchange Rate at which the
Administrative Agent offers to exchange such Alternate Currency for the
equivalent in Dollars of such other Alternate Currency at its Payment Office at
9:00 A.M. (local time at the Payment Office of the Administrative Agent) two
Business Days prior to the date on which such equivalent is to be determined,
and (iii) the equivalent in any Alternate Currency of Dollars shall be
determined by using the applicable Exchange Rate at which the Administrative
Agent offers to exchange such Alternate Currency for Dollars at its Payment
Office at 9:00 A.M. (local time at the Payment Office of the Administrative
Agent) two Business Days prior to the date on which such equivalent is to be
determined; provided, that (A) the equivalent in Dollars of each LIBOR Rate Loan
made in an Alternate Currency shall be recalculated hereunder on each date that
it shall be necessary (or the Administrative Agent shall elect) to determine the
unused portion of each Bank's Commitment, or the amount of any Loan outstanding
on such date; (B) for purposes of Sections 2.7(a), 2.12(e) and 2.10(b), the
equivalent in Dollars of any Swing Line Loan denominated in an Alternate
Currency shall be calculated by the applicable Designated European
Administrative Agent: (x) on the date of the making of such Swing Line Loan or
the Rate Continuation or Rate Conversion of such Swing Line Loan (y) on the
first Business Day of each calendar month thereafter and (z) in any other case
where the same is required or permitted to be calculated, on such other day as
the such Designated European Administrative Agent may, in its sole discretion,
consider appropriate; (C) the equivalent in Dollars of any unreimbursed drawing
in respect of any Letter of Credit denominated in an Alternate Currency shall be
determined at the time the drawing under such Letter of Credit was paid or
disbursed by the applicable Designated Letter of Credit Issuer or the applicable
Lending Installation thereof; (D) for purposes of Sections 2.1(a), 2.12(e) and
2.10(b), the equivalent in Dollars of any Revolving Credit Loan denominated in
an Alternate Currency or the face amount of any Letter of Credit denominated in
an Alternate Currency shall be calculated by the Administrative Agent (x) on the
date of the making of such Loan, the Rate Continuation or Rate Conversion of
such Loan, or the issuance of the respective Letter of Credit, as the case may
be, (y) on the first Business Day of each calendar month thereafter and (z) in
any other case where the same is required or permitted to be calculated, on such
other day as the Administrative Agent may, in its sole discretion, consider
appropriate; and (E) for purposes of Sections 2.16(c), 2.16(d)(i) and
2.16(d)(ii), the equivalent in Dollars of any Loan denominated in an Alternate
Currency or the face amount of any Letter of Credit denominated in an Alternate
Currency shall be calculated on the first day of each calendar month in the
quarterly period in which the respective payment is due pursuant to said
Sections.
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1.8 LIABILITY OF BORROWERS.
The parties intend that this Agreement shall in all
circumstances be interpreted to provide that each Foreign Borrower is liable
only for Loans made to such Borrower, interest on such Loans, such Foreign
Borrower's guaranty pursuant to Section 2.12(l)(ii) of reimbursement obligations
owing to the Designated Letter of Credit Issuer by its Foreign Subsidiaries, and
its Ratable Borrower Share of otherwise unallocated general fees, reimbursements
and charges hereunder and under any other Loan Document. The parties likewise
intend that this Agreement shall in all circumstances be interpreted to provide,
unless otherwise expressly stated to the contrary, that each Domestic Borrowers
and each Domestic Subsidiary which is a party to a Subsidiary Guaranty is liable
for all Obligations of all of the Borrowers.
SECTION 2 STATEMENT OF TERMS.
2.1 REVOLVING CREDIT FACILITY.
(a) REVOLVING CREDIT LOANS.
Subject to the terms and conditions set forth in this
Agreement, each Bank severally agrees to make, from time to time from
and after the Closing Date until the Business Day immediately preceding
the Revolving Credit Termination Date, Loans, denominated in Dollars or
Alternate Currency, to or for the account of each of the Borrowers on a
revolving credit basis (each a "Revolving Credit Loan"); provided,
however, that (i) the outstanding principal amount of Revolving Credit
Loans by or on behalf of such Bank to such Borrower, when taken
together with the outstanding principal amount of Revolving Credit
Loans made by or on behalf of such Bank to all other Borrowers, shall
not at any time exceed the lesser of: (x) an amount equal to such
Bank's Ratable Portion of the Borrowing Base at such time minus the sum
of the LC Exposure of such Bank at such time and the Swing Line
Exposure of such Bank at such time or (y) such Bank's Revolving Credit
Commitment in effect at such time minus the sum of the LC Exposure of
such Bank at such time and the Swing Line Exposure of such Bank at such
time, and (ii) in any event, no Revolving Credit Loans may be made in
an Alternate Currency if after giving effect thereto the Dollar
equivalent of the aggregate outstanding principal amount of all
Revolving Credit Loans denominated in all Alternate Currencies,
together with the Dollar equivalent of the aggregate Alternate Currency
LC Exposure and the aggregate Alternate Currency Swing Line Exposure of
all Banks, would exceed Thirty Million Dollars ($30,000,000) (the
"Alternate Currency Sublimit"). Within the limits set forth in this
Agreement, a Borrower may borrow, prepay and reborrow Revolving Credit
Loans made to such Borrower.
(b) REVOLVING CREDIT BORROWINGS.
Each Revolving Credit Borrowing to a Borrower shall
be: (i) if comprised of Alternate Base Rate Loans, in an amount of not
less than Five Hundred Thousand Dollars ($500,000), or an integral
multiple of Fifty Thousand Dollars ($50,000) in excess thereof, (ii) if
comprised of LIBOR Rate Loans denominated in Dollars, in an aggregate
amount of not less than One Million Dollars ($1,000,000) or an integral
multiple of One Hundred Thousand Dollars ($100,000) in excess thereof,
and (iii) if comprised of LIBOR Rate Loans denominated in an Alternate
Currency, in an aggregate amount of not less than the Alternate
Currency equivalent of One Million Dollars ($1,000,000) or an integral
multiple of the Alternate Currency equivalent of One Hundred Thousand
Dollars ($100,000) in excess thereof. Each Borrowing denominated in an
Alternate Currency may only be a LIBOR Rate Borrowing and not an
Alternate Base Rate Borrowing. Each
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Borrower shall be entitled to have more than one Revolving Credit
Borrowing outstanding at one time; provided, however, that no Borrower
shall be entitled to request a Revolving Credit Borrowing which,
together with all outstanding Revolving Credit Borrowings, Term
Borrowings and Swing Line Loans to all Borrowers, would result in an
aggregate of more than twenty-five (25) Borrowings (for purposes of
determining the number of outstanding Borrowings, outstanding Alternate
Base Rate Loans of all of the Domestic Borrowers shall be treated as a
separate Borrowing and all outstanding Swing Line Loans to each
Borrower shall be treated as a separate Borrowing by such Borrower)
outstanding at any one time to all of the Borrowers.
(c) REVOLVING CREDIT NOTES; LOAN ACCOUNT.
Each Bank's Revolving Credit Loans to a Borrower
shall be evidenced at all times by a Revolving Credit Note which shall
(i) be executed and delivered by the Borrower and payable to the order
of such Bank and (ii) be in a stated principal amount equal to the
Revolving Credit Commitment of such Bank and be payable to the order of
such Bank in an amount equal to the unpaid principal amount of such
Bank's Revolving Credit Loans evidenced thereby, (iii) mature on the
Revolving Credit Termination Date, (iv) bear interest as provided in
this Agreement, (v) be subject to mandatory prepayment as provided in
Section 2.10, and (vi) be entitled to the benefits of this Agreement
and the other Loan Documents. Whenever a Borrower obtains a Revolving
Credit Borrowing, each Bank shall endorse an appropriate entry in
respect of the Revolving Credit Loan of such Bank comprising such
Borrowing on such Bank's Revolving Credit Note or make an appropriate
entry in a loan account (the "Loan Account") maintained in such Bank's
books and records, or both, to evidence such Bank's Revolving Credit
Loans to such Borrower. The Loan Account shall also evidence: (i)
accrued interest on the Revolving Credit Loans of such Bank to each
Borrower, (ii) all other amounts due to the Bank in respect of such
Revolving Credit Loans, and (iii) all payments made by each Borrower in
respect of such Revolving Credit Loans. Each entry on a Bank's
Revolving Credit Note, books and records or Loan Account shall be prima
facie evidence of the data entered. Such entries by a Bank shall not be
a condition to any Borrower's obligation to repay the Obligations.
2.2 REQUESTS FOR REVOLVING CREDIT BORROWINGS.
Revolving Credit Loans comprising a Revolving Credit Borrowing
shall be made upon request of a Borrower in accordance with clause (a) below or
upon a request deemed to be made by a Borrower pursuant to clause (b) below.
(a) CREDIT REQUESTS EXECUTED BY BORROWER REPRESENTATIVE.
(i) Requests from a Borrower for Revolving Credit
Loans shall be given by the Borrower Representative to the
Administrative Agent or, to the extent that a Designated
European Administrative Agent has been designated for any
Borrower, the Designated European Administrative Agent
designated for such Borrower, as the case may be, not later
than 12:00 noon (local time at the Notice Office of the
Administrative Agent or such Designated European
Administrative Agent): (i) on the Business Day which is the
requested date of a proposed Revolving Credit Borrowing
comprised of Alternate Base Rate Loans, (ii) on the Business
Day which is two (2) Business Days before the requested date
of a proposed Revolving Credit Borrowing comprised of LIBOR
Rate Loans
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denominated in Dollars (provided that any Revolving Credit
Borrowing comprised of LIBOR Rate Loans being requested to be
advanced on the Closing Date shall not require such two (2)
Business Day prior notice), and (iii) on the Business Day
which is four (4) Business Days before the requested date of a
proposed Revolving Credit Borrowing comprised of LIBOR Rate
Loans denominated in an Alternate Currency. Each such request
(a "Credit Request") for a Revolving Credit Loan shall be a
written or telephonic notice (in the case of a telephonic
notice, promptly confirmed in writing if so requested by the
Administrative Agent or such Designated European
Administrative Agent, as the case may be). Each written Credit
Request or written confirmation thereof shall be substantially
in the form of Exhibit B-1 attached hereto, signed by the
Borrower Representative and transmitted by the Borrower
Representative to the Administrative Agent or such Designated
European Administrative Agent, as the case may be, by
telecopier. Each written and telephonic Credit Request and
each confirmation thereof shall specify: (A) the Borrower
which is to receive the proceeds of the Loans, (B) the
requested date of advance of the Loans comprising such
Borrowing, (C) the aggregate amount of such Loans, (D) whether
such Borrowing is to be comprised of Alternate Base Rate Loans
or LIBOR Rate Loans, (E) in the case of a proposed Borrowing
comprised of LIBOR Rate Loans, the initial Interest Period for
such LIBOR Rate Loans, and (F) in the case of a proposed
Borrowing comprised of LIBOR Rate Loans, the currency, if
other than Dollars, in which such LIBOR Rate Loans are being
requested. Each Credit Request by or on behalf of a Borrower
shall be irrevocable and binding on such Borrower and be
subject to the indemnification provisions of Section 13 of
this Agreement. The Administrative Agent and such Designated
European Administrative Agent may rely on such telephonic
Credit Request to the same extent that such Agents may rely on
a written Credit Request. The Borrower for which a Credit
Request was made shall bear all risks related to the giving of
such Credit Request by the Borrower Representative whether
given telephonically or by such other method of transmission
as the Borrower Representative shall elect.
(ii) In the case of a proposed Revolving Credit
Borrowing comprised of LIBOR Rate Loans denominated in an
Alternate Currency, the obligation of each Bank to make its
LIBOR Rate Loan in the requested Alternate Currency as part of
such Revolving Credit Borrowing is subject to:
(A) if such requested Alternate Currency is
an Alternate Currency described in clause (i) of the
definition of the term Alternate Currency,
confirmation to the Borrower Representative by the
Administrative Agent or the Designated European
Administrative Agent designated for the Borrower for
which the Credit Request is made, as the case may be,
not later than four (4) Business Days before the
requested date of such Revolving Credit Borrowing
that such Alternate Currency is readily and freely
transferable and convertible into Dollars, or
(B) if such requested Alternate Currency is
not an Alternate Currency described in clause (i) of
the definition of the term Alternate
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Currency, confirmation to the Notice Office of the
Administrative Agent or such Designated European
Administrative Agent, as the case may be, by each
Bank not later than four (4) Business Days before the
requested date of such Revolving Credit Borrowing
that such Alternate Currency is acceptable to such
Bank.
The Administrative Agent or such Designated European
Administrative Agent shall promptly notify the Borrower
Representative and each of the Banks in the event that: (x)
all of the Banks affirmatively confirm such Alternate Currency
is acceptable as required by clause (B) above and (y) one or
more of the Banks do not affirmatively confirm such Alternate
Currency is acceptable as required by clause (B) above. If the
Administrative Agent or such Designated European
Administrative Agent has not provided the affirmative
confirmation referred to in clause (A) above or has notified
the Borrower Representative that not all of the Banks have
affirmatively confirmed acceptability of the Alternate
Currency as required by clause (B), the Borrower
Representative may, by notice to the Administrative Agent at
the Notice Office thereof not later than three (3) Business
Days before the requested date of such Revolving Credit
Borrowing, withdraw the Credit Request relating to such
requested Revolving Credit Borrowing. If the Borrower
Representative withdraws such Credit Request, the Revolving
Credit Borrowing requested in such Credit Request shall not
occur and the Administrative Agent or such Designated European
Administrative Agent shall promptly notify each of the Banks
of such withdrawal. If the Borrower Representative does not
withdraw such Credit Request, the Administrative Agent or such
Designated European Administrative Agent, as the case may be,
shall promptly notify each of the Banks, and such Credit
Request shall be deemed to be a Credit Request which requests
a Revolving Credit Borrowing comprised of LIBOR Rate Loans
denominated in Dollars in an aggregate amount equal to the
Dollar equivalent, on the date the Administrative Agent or
such Designated European Administrative Agent notifies each of
the Banks, of the amount of the originally requested Revolving
Credit Borrowing denominated in the Alternate Currency. Such
notice of continued Credit Request by the Administrative Agent
or such Designated European Administrative Agent to each of
the Banks shall state such aggregate amount of such Revolving
Credit Borrowing in Dollars and such Bank's ratable portion of
such Revolving Credit Borrowing.
(b) DEEMED CREDIT REQUESTS.
A Borrower shall be deemed to have made a request for
a Borrowing (a "Deemed Credit Request"), which Deemed Credit Request
shall be deemed to be irrevocable, upon the occurrence of any of the
following
(i) LETTER OF CREDIT DRAWING. As specified in Section
2.12(f) of this Agreement, upon a failure of a Borrower to
reimburse any Designated letter of Credit Issuer with respect
to a drawing under a Letter of Credit, the applicable
Borrower, or, in the case of a Letter of Credit issued for the
account of a Letter of Credit Obligor that is not a Borrower,
the Borrower guarantying reimbursement of such Letter of
Credit Obligor pursuant to Section 2.12(l) of this Agreement,
shall be deemed to have made a Deemed Credit Request for a
Revolving Credit Borrowing comprised of Alternate Base Rate
Loans denominated in Dollars in an
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amount equal to the amount necessary to reimburse the
applicable Designated Letter of Credit Issuer for such
drawing.
(ii) SWING LINE LOAN REFUNDING. As specified in
Section 2.7(j) of this Agreement, upon a demand by a
Designated Swing Line Lender for a refunding of outstanding
Swing Line Loans advanced to a Borrower, such Borrower shall
be deemed to have made a Deemed Credit Request for a Revolving
Credit Borrowing comprised of LIBOR Rate Loans denominated in
Dollars in an amount equal to the amount necessary to refund
the applicable Designated Swing Line Lender for such
outstanding Swing Line Loans.
(iii) PAYMENT OF INTEREST AND OBLIGATIONS. Upon the
occurrence of any interest, fee or other payment Obligation of
a Borrower hereunder becoming due without payment, such
Borrower shall be deemed to have made a Deemed Credit Request
for a Revolving Credit Borrowing comprised of Alternate Base
Rate Loans in an amount equal to the amount necessary to pay
such interest, fee or payment Obligation.
Each Bank acknowledges and agrees that its obligation to participate in
and make Loans comprising a Borrowing pursuant to a Deemed Credit
Request is absolute and unconditional and shall not be affected by any
event or circumstance whatsoever, including the occurrence of any
Potential Default or Event of Default hereunder or the failure of any
condition precedent set forth in Section 3 of this Agreement to be
satisfied at the time of the making of such Deemed Credit Request, and
each Loan made by a Bank in satisfaction of its obligation shall be
made without any offset, abatement, withholding or reduction
whatsoever.
2.3 FUNDING OF REVOLVING CREDIT LOANS.
The Administrative Agent or the Designated European
Administrative Agent designated for the Borrower for which a Credit Request is
made, as the case may be, shall notify each Bank of a Credit Request or Deemed
Credit Request not later than 1:00 p.m. (local time at the Payment Office of the
Administrative Agent or such Designated European Administrative Agent, as the
case may be) on the date received by telecopier, telephone or similar form of
transmission. Each Bank shall, before 2:00 p.m. (local time at the Payment
Office of the Administrative Agent or such Designated European Administrative
Agent, as the case may be) on the date of each Revolving Credit Borrowing
requested for a Borrower, make available to the Administrative Agent or such
Designated European Administrative Agent, as the case may be, in Dollars or,
subject to Section 2.2(a)(ii), the applicable Alternate Currency, in immediately
available funds at the account of the Administrative Agent or such Designated
European Administrative Agent, as the case may be, maintained at the Payment
Office of the Administrative Agent or such Designated European Administrative
Agent, as the case may be, as shall have been notified by the Administrative
Agent or such Designated European Administrative Agent, as the case may be, to
the Banks prior to such date, such Bank's Ratable Portion of the Revolving
Credit Loans comprising such Revolving Credit Borrowing. On the date specified
for a Revolving Credit Borrowing in such Credit Request (or, in the case of a
Deemed Credit Request, on the earliest dated permitted after the receipt of
Credit Request hereunder), after receipt by the Administrative Agent or such
Designated European Administrative Agent, as the case may be, of the funds
representing a Bank's Ratable Portion of such Revolving Credit Borrowing and
subject to the terms of this Agreement and the fulfillment of the conditions set
forth in Section 3 of this Agreement, the Administrative Agent or such
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Designated European Administrative Agent shall promptly make such Revolving
Credit Loan of such Bank available to the Borrower specified in the Credit
Request or with respect to which the Deemed Credit Request is applicable, in
immediately available funds, by wire transfer or intrabank transfer to: (A) the
Operating Account of such Borrower or (B) such other account of such Borrower as
the Administrative Agent or such Designated European Administrative Agent, as
the case may be, and the Borrower Representative shall have agreed upon from
time to time for this purpose; provided, however, that, if a Borrowing shall not
occur on such date because any condition precedent herein specified shall not
have been met, the Administrative Agent or such Designated European
Administrative Agent, as the case may be, shall return the amounts so received
to the respective Banks.
2.4 AVAILABILITY OF FUNDS.
Subject to Section 2.2(a)(ii) of this Agreement, unless the
Administrative Agent or the applicable Designated European Administrative Agent
shall have received notice from a Bank prior to the date (or, in the case of
Alternate Base Rate Loans, prior to the time) of any Revolving Credit Borrowing
that such Bank will not make available to the Administrative Agent or such
Designated European Administrative Agent, such Bank's Ratable Portion of the
Revolving Credit Borrowing, the Administrative Agent or such Designated European
Administrative Agent may assume that such Bank has made its Ratable Portion of
the Revolving Credit Borrowing available to the Administrative Agent or such
Designated European Administrative Agent on the date of the Revolving Credit
Borrowing in accordance with Section 2.3 of this Agreement. In reliance upon
such assumption, the Administrative Agent or such Designated European
Administrative Agent may, but shall not be obligated to, make available on such
date to the Borrower, specified in the Credit Request or to which the Deemed
Credit Request is applicable, a corresponding portion of the Revolving Credit
Borrowing. Any disbursement by the Administrative Agent or such Designated
European Administrative Agent in reliance on such assumption shall be deemed to
be a Revolving Credit Loan by such Bank.
2.5 FAILURES TO FUND LOANS OR PARTICIPATING INTERESTS.
If, and to the extent that, any Bank fails to make available
to the Administrative Agent or the applicable Designated European Administrative
Agent, as the case may be, the amount of such Bank's Ratable Portion of any
Revolving Credit Borrowing pursuant to Section 2.3 hereof (or pursuant to
Section 2.7(j) or 2.12(f) hereof in connection with Deemed Credit Requests for
Revolving Credit Loan refunding of Swing Line Loans or payment of unpaid
reimbursement obligations hereunder) or Term Borrowing pursuant to Section
2.8(d) made available to a Borrower by the Administrative Agent or such
Designated European Administrative Agent pursuant to Section 2.4 hereof or fails
to make available to the Administrative Agent or such Designated European
Administrative Agent the amount of such Bank's participation purchase price
payable for its participating interest in outstanding Swing Line Loans to such
Borrower or unpaid reimbursement obligations owing by such Borrower (pursuant to
Section 2.7(k) or 2.12(f) hereof), such Bank shall pay such amount to the
Administrative Agent or such Designated European Administrative Agent, as the
case may be, for application pursuant to this Section immediately upon demand by
the Administrative Agent or such Designated European Administrative Agent
therefor. To the extent such Bank does not pay such amount to the Administrative
Agent or such Designated European Administrative Agent, as the case may be,
forthwith upon such demand by the Administrative Agent or such Designated
European Administrative Agent, the Administrative Agent or such Designated
European Administrative Agent, as the case may be, shall promptly request
payment thereof from such Borrower, and such Borrower shall immediately pay such
amount to the Administrative Agent or such Designated European Administrative
Agent for application pursuant to this Section. Such Bank and such Borrower
shall be severally liable to pay interest to
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the Administrative Agent or such Designated European Administrative Agent, as
the case may be, for application pursuant to this Section on such amount for
each day from the date such amount should otherwise have been made available to
the Administrative Agent or such Designated European Administrative Agent until
the date any such amount is paid to the Administrative Agent or such Designated
European Administrative Agent, as the case may be, by such Bank or such
Borrower, as the case may be, at a per annum rate of interest equal to: (x) if
paid by such Bank, the Federal Funds Effective Rate in the case of the
Administrative Agent or Cost of Funds Rate in the case of such Designated
European Administrative Agent or (y) if paid by such Borrower, the interest rate
applicable to such Revolving Credit Borrowings or Term Borrowings.
(a) CONTINUING OBLIGATION OF BORROWERS.
Failure of any Bank to fund its Ratable Portion of
any Revolving Credit Borrowing or Term Borrowing or to pay the
participation purchase price for its participating interests hereunder
shall not relieve or excuse the performance by any Borrower of any of
such Borrower's duties or obligations hereunder.
(b) PAYMENT CONSTITUTING RATABLE PORTION.
If such Bank pays to the Administrative Agent or the
applicable Designated European Administrative Agent, as the case may
be, the Bank's Ratable Portion of such Revolving Credit Borrowing, Term
Borrowing or participation purchase price for its participating
interests hereunder prior to repayment of such amount by the applicable
Borrower, the amount so repaid shall constitute such Bank's Ratable
Portion of such Revolving Credit Borrowing, Term Borrowing or
participation purchase price for its participating interest. Such
payment shall be applied as if paid when otherwise required hereunder
and shall be applied as provided in Section 2.3, 2.7(j), 2.12(f),
2.7(k) or 2.12(f) hereof, as the case may be. In such circumstances,
such Borrower shall have no further obligation to make the payment
required by this Section.
(c) TREATMENT OF BANK FAILING TO FUND.
To the extent any Bank fails to make available to the
Administrative Agent or the applicable Designated European
Administrative Agent, as the case may be, such Bank's Ratable Portion
of Revolving Credit Borrowings or Term Borrowings hereunder or such
Bank's participation purchase price for its participating interests
hereunder, the Administrative Agent or such Designated European
Administrative Agent shall not be obligated to transfer to such Bank
any payments made by a Borrower to the Administrative Agent or such
Designated European Administrative Agent for the benefit of such Bank
until such Bank's cure of such failure. Until the earlier of such
Bank's cure of such failure or the termination of the Commitments of
the Banks and the Aggregate Swing Line Commitment of the Designated
Swing Line Lenders, all amounts repaid to the Administrative Agent or
such Designated European Administrative Agent, as the case may be, by a
Borrower which would otherwise be required to be applied to such Bank's
Ratable Portion of the Obligations shall be advanced to such Borrower,
the affected Designated Swing Line Lender or Designated Letter of
Credit Issuer, as applicable, by the Administrative Agent or such
Designated European Administrative Agent, as the case may be, on behalf
such Bank to cure, in full or in part, the failure by such Bank, but
shall nevertheless be deemed to have been paid to such Bank in
satisfaction of the Obligations to which such payment would otherwise
have been applied.
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(d) CONTINUING OBLIGATION OF BANKS TO FUND.
It is understood that: (i) a Bank shall not be
responsible for any failure by any other Bank to perform its obligation
to make any Loans hereunder or make payments of any participation
purchase price for its participating interest hereunder, (ii) the
Commitment of a Bank shall not be increased or decreased as a result of
any failure by any other Bank to perform its obligation to make any
Loans hereunder or pay any participation purchase price, (iii) failure
by any Bank to perform its obligation to make any Loans hereunder or
pay the participation purchase price for its participating interests
hereunder shall not excuse any other Bank from its obligation to make
any Loans hereunder or pay any participation purchase price for its
participating interests hereunder, and (iv) the obligations of each
Bank hereunder shall be individual and several, not joint and several.
(e) DEFAULTING LENDER; OBLIGATIONS OF DESIGNATED SWING
LINE LENDERS AND LETTER OF CREDIT ISSUERS.
In the circumstance that any Defaulting Lenders
exist, no Designated Swing Line Lender or Designated Letter of Credit
Issuer shall be required to make or issue, as the case may be, any
Swing Line Loan or Letter of Credit unless such Designated Swing Line
Lender or Designated Letter of Credit Issuer have entered into
arrangements with the applicable Borrowers satisfactory to such
Designated Swing Line Lender or Designated Letter of Credit Issuer and
the Borrower Representative which either (i) eliminate such Designated
Swing Line Lender's or Designated Letter of Credit Issuer's risk with
respect to the refunding of or participation in Swing Line Loans and
Letters of Credit by such Defaulting Lender, including creation of a
cash collateral account to assure payment of such Defaulting Lender's
Ratable Portion of outstanding Swing Line Obligations and Letter of
Credit Obligations or (ii) provide that the making of such Swing Line
Loan or the issuance of the Letter of Credit, taking into account the
potential failure of such Defaulting Lender to refund or purchase
participating interests therein, will not cause the Designated Swing
Line Lender or Designated Letter of Credit Issuer, as the case may be,
to incur aggregate credit exposure hereunder with respect to Revolving
Credit Loans made thereby and Swing Line Obligations and Letter of
Credit Obligations owing thereto to be in excess of its Revolving
Credit Commitment (such applicable Borrower agreeing not to thereafter
incur Revolving Credit Loans or Swing Line Obligations and Letter of
Credit Obligations hereunder which would cause such aggregate excess
exposure).
2.6 AFFILIATED FUNDING THROUGH, ON BEHALF OF, OR BY BANKS.
(a) SPC FUNDING ON BEHALF OF BANKS.
Notwithstanding anything to the contrary contained
herein, all or any part of a Loan that any Bank or Designated Swing
Line Lender (an "Obligated Bank") may be obligated to fund pursuant to
this Agreement may be funded on such Bank's behalf by a special purpose
funding vehicle (an "SPC"); provided, however, that, (a) if any SPC
fails to fund all or any part of such Loan, the Obligated Bank shall be
obligated to fund such Loan pursuant to the terms hereof, (b) in no
event shall any such funding by any SPC increase the costs or expenses
for which any Borrower is liable under this Agreement and (c) in no
event shall any such funding through any SPC subject any Borrower to
any Taxes or other Taxes without such Obligated Bank's being subject to
the exercise by the Borrowers of their rights under Section 12.3 of
this Agreement. The funding of a Loan by an SPC hereunder shall utilize
the Commitment of the Obligated Bank to the same
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extent, and as if, such Loan were funded by such Obligated Bank, and
for purposes of this Agreement, such Loan shall be deemed to have been
made by such Obligated Bank. Each party hereto hereby agrees that: (i)
no SPC shall be liable for any indemnity or payment under this
Agreement for which such Obligated Bank would otherwise be liable and
(ii) the SPC shall act only on behalf of and through the Obligated Bank
and shall have no rights hereunder or otherwise with respect to any
Borrower independent of those of such Obligated Bank hereunder.
Notwithstanding anything to the contrary contained in this Agreement,
any SPC may disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper
dealer or provider of any surety or guarantee for such SPC's
obligations which has agreed in writing to be bound by the provisions
of Section 12.4 hereof. This Section 2.6 may not be amended without the
prior written consent of each Obligated Bank which has notified
Borrower Representative and the Administrative Agent that all or any
part of any of its Loans is being funded by an SPC at the time of such
amendment.
(b) FUNDING BY BANKS, DESIGNATED SWING LINE LENDERS, AND
DESIGNATED LETTER OF CREDIT ISSUERS THROUGH OR ON
BEHALF OF LENDING INSTALLATIONS.
Notwithstanding anything to the contrary contained
herein, all or any part of a Loan that any Obligated Bank may be
obligated to fund pursuant to this Agreement (i) may be funded by such
Bank on behalf of such Bank's Lending Installation or (ii) may be
funded on such Bank's behalf by such Bank by and through any such
Lending Installation; provided that, (a) if any Lending Installation
fails to fund all or any part of such Loan, the Obligated Bank shall be
obligated to fund such Loan pursuant to the terms hereof, (b) in no
event shall any such funding by any Lending Installation increase the
costs or expenses for which any Borrower is liable under this Agreement
and (c) in no event shall any such funding on behalf of or through any
such Lending Installation subject any Borrower to any Taxes or other
Taxes without such Obligated Bank's being subject to the exercise by
the Borrowers of their rights under Section 12.3 of this Agreement. The
funding of a Loan by a Lending Installation hereunder shall utilize the
Commitment of the Obligated Bank to the same extent, and as if, such
Loan were funded by such Obligated Bank, and for purposes of this
Agreement, such Loan shall be deemed to have been made directly by such
Obligated Bank. The funding of a Loan by such Lending Installation on
behalf of its Obligated Bank hereunder shall utilize the Commitment of
the Obligated Bank to the same extent, and as if, such Loan were funded
by such Obligated Bank for its own account, and for purposes of this
Agreement, such Loan shall be deemed to have been made by such
Obligated Bank for the account of the Obligated Bank. Any payments made
by any Borrower to the Obligated Bank or its Lending Installation shall
be applied in reduction of the Obligations owing by such Borrower to
the Obligated Bank and shall automatically reduce on dollars for dollar
any related account of the Lending Installation with respect to such
Obligations to the Obligated Bank. Each party hereto hereby agrees that
the Lending Installation shall have no rights hereunder or otherwise
with respect to any Borrower independent of those of such Obligated
Bank hereunder but shall by reason of its acceptance of its selection
as a Lending Installation, otherwise be deemed subject to the terms and
conditions hereof. This Section 2.6 may not be amended without the
prior written consent of each Obligated Bank which has notified
Borrower Representative and the Administrative Agent that all or any
part of any of its Loans is being funded on such Bank's behalf through
a Lending Installation at the time of such amendment.
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2.7 SWING LINE LOAN FACILITY.
(a) SWING LINE LOANS.
Subject to the terms and conditions set forth in this
Agreement, each Foreign Borrower having a Designated Swing Line Lender
designated for such Borrower hereunder may request such Designated
Swing Line Lender to make, and each such Designated Swing Line Lender
is irrevocably authorized by the Administrative Agent, the Designated
European Administrative Agent designated for such Borrower and the
Banks to make and severally agrees to make directly or through its
Lending Installation, from time to time from and after the Closing Date
until the Business Day immediately preceding the Swing Line Termination
Date, Loans denominated in Dollars or Alternate Currency to or for the
account of such Borrower on a revolving credit basis (each a "Swing
Line Loan"); provided, however, that the aggregate principal amount of
Swing Line Loans advanced by all Designated Swing Line Lenders
outstanding at any time shall not exceed the lesser of: (i) Five
Million Dollars ($5,000,000) or the Alternate Currency equivalent
thereof (the "Aggregate Swing Line Commitment") or (ii) the lesser of
the aggregate Revolving Credit Commitments of the Banks in effect at
such time or the Borrowing Base minus the sum of the aggregate
principal amount of the Revolving Credit Loans of the Banks outstanding
at such time and the aggregate LC Exposure of the Banks at such time.
Within the limits set forth herein, a Borrower may borrow, pay or
prepay and reborrow Swing Line Loans advanced to such Borrower.
(b) CONDITIONS TO SWING LINE LOANS.
(i) CONDITION PRECEDENT TO SWING LINE LOANS. The
Foreign Borrowers shall be entitled to request Swing Line
Loans only from and after the time during or upon expiration
of the Syndication Period to the extent that the
Administrative Agent has designated a Designated European
Administrative Agent which Designated European Administrative
Agent has been assigned a minimum of at least $5,000,000 of an
initial Bank's rights and obligations under this Agreement and
of the Revolving Credit Commitment of such initial Bank
hereunder.
(ii) CONDITIONS TO CESSATION OF ADVANCE OF SWING LINE
LOANS. If the conditions to borrowing Swing Line Loans
pursuant to Section 3.2 hereof cannot be satisfied with
respect to one or more of the Borrowers, the Borrower
Representative shall, and any Bank, Designated Swing Line
Lender or Lending Installation may, give immediate written
notice (a "Non-Compliance Notice") of such failure to the
Designated European Administrative Agent and each Designated
Swing Line Lender, as the case may be, and the Designated
European Administrative Agent shall promptly provide each Bank
and the Administrative Agent at the Notice Office of such Bank
and the Administrative Agent with a copy of such
Non-Compliance Notice. If the conditions for borrowing under
Section 3.2 hereof cannot be satisfied, the Required Banks may
by telephonic or written notice to the Designated European
Administrative Agent instruct the Designated European
Administrative Agent to direct the Designated Swing Line
Lenders to cease, and the Designated European Administrative
Agent shall by telephonic or written notice to the Designated
Swing Line Lenders promptly
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direct the Designated Swing Line Lenders to cease, and
thereupon the Designated Swing Line Lenders shall immediately
cease, making Swing Line Loans to the Borrowers for which such
Designated Swing Line Lender is designated until the
conditions to borrowing are satisfied or waived in accordance
with Section 14.1 hereof. Unless the Designated European
Administrative Agent so directs the Designated Swing Line
Lenders to cease making Swing Line Loans, each Designated
Swing Line Lender may, but is not obligated to, continue to
make (subject to the limitations of Section 2.7(a) hereof)
Swing Line Loans one (1) Business Day after the Non-Compliance
Notice is furnished to the Banks by the applicable Designated
European Administrative Agent.
(c) SWING LINE BORROWINGS.
The Swing Line Loans to a Borrower shall be comprised
of one or more Swing Line Borrowings from the Designated Swing Line
Lender designated for such Borrower as such Borrower may elect from
time to time. Each Swing Line Borrowing advanced to a Borrower by the
Designated Swing Line Lender designated for such Borrower shall be: (i)
if denominated in Dollars, in an aggregate amount of not less than Two
Hundred and Fifty Thousand Dollars ($250,000) or an integral multiple
of One Hundred Thousand Dollars ($100,000) in excess thereof, and (ii)
if denominated in an Alternate Currency, in an aggregate amount of not
less than the Alternate Currency equivalent of Two Hundred and Fifty
Thousand Dollars ($250,000) or an integral multiple of the Alternate
Currency equivalent of One Hundred Thousand Dollars ($100,000) in
excess thereof. Each Borrower shall be entitled to have more than one
Swing Line Borrowing outstanding at one time; provided, however, that
no Borrower shall be entitled to request a Swing Line Borrowing which
would result in an aggregate of more than ten (10) Swing Line
Borrowings from the applicable Designated Swing Line Lender for such
Borrower outstanding at any one time to such Borrower.
(d) SWING LINE LOAN REQUESTS.
Requests for Swing Line Loans for a Borrower shall be
given by the Borrower Representative to the Designated European
Administrative Agent designated for such Borrower not later than 2:00
p.m. (local time at the Notice Office of such Designated European
Administrative Agent): (i) on the Business Day which is the same
Business Day as the requested date of a proposed Swing Line Loan which
is to be a Money Market Rate Loan or (ii) on the Business Day which is
three (3) Business Days prior to or, to the extent acceptable the
applicable Designated Swing Line Lender, in its sole discretion, the
same Business Day as the requested date of a proposed Swing Line Loan
which is to be a LIBOR Rate Loan. Each such request (a "Swing Line
Request") for a Swing Line Loan shall be a written or telephonic notice
(in the case of a telephonic notice, promptly confirmed in writing if
so requested by the Designated European Administrative Agent). Each
written Swing Line Request or written confirmation thereof be shall be
substantially in the form of Exhibit B-2 attached hereto, signed by the
Borrower Representative and transmitted by the Borrower Representative
to the Designated European Administrative Agent by telecopier. Each
written and telephonic Swing Line Request and each confirmation thereof
shall specify: (i) the requested date of the proposed Swing Line Loan,
(ii) the aggregate amount of such Swing Line Loan, (iii) confirmation
that such Swing Line Loan is to be comprised of Swing Line Borrowing
denominated in Dollars or, if other than in Dollars, the Alternate
Currency in which such Swing Line Loan is to be denominated, (iv)
confirmation whether such Swing Line Loan is the be a Money Market Rate
Loan or a LIBOR Rate Loan and (v) if the Swing Line
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Loan is to be a Money Market Rate Loan, confirmation of the maturity
date of the requested Swing Line Loan (which shall not be more than
thirty (30) days in the case of Money Market Rate Loans) and the
Borrower's acceptance of the fixed or floating Quoted Money Market Rate
quoted to the Borrower Representative by the Designated European
Administrative Agent pursuant to Section 2.7(f) of this Agreement. Each
Swing Line Request shall be irrevocable and binding on the Borrower for
which the request was made and be subject to the indemnification
provisions of Section 13 of this Agreement. The Borrower for which a
Swing Line Request was made shall bear all risks related to the giving
of such Swing Line Request by the Borrower Representative on behalf of
such Borrower whether given telephonically or by such other method of
transmission as the Borrower Representative shall elect.
(e) NOTICE OF REQUESTS; OUTSTANDINGS.
Each Designated European Administrative Agent shall
give the Designated Swing Line Lender and the Administrative Agent,
which Administrative Agent shall in turn give each Bank, prompt written
or telecopy notice of any Swing Line Request received from the Borrower
Representative pursuant to Section 2.7(d) and the amount of Swing Line
Loans funded by the Designated Swing Line Lender pursuant thereto. Such
Designated European Administrative Agent shall maintain the record of
such fundings of Swing Line Loans in the Control Account maintained by
such Designated European Administrative Agent pursuant to Section
2.17(d) hereof. Each Designated European Administrative Agent shall
provide to the Administrative Agent a quarterly (or monthly if
requested by the Administrative Agent) summary describing the Swing
Line Loans advanced during such period by the Designated Swing Line
Lender and then outstanding as well as an identification for the
relevant period of the daily aggregate principal of such Swing Line
Loans outstanding.
(f) PROCEDURE FOR OBTAINING QUOTED MONEY MARKET RATE.
Whenever the Borrower Representative proposes to
submit a Swing Line Request to the Designated European Administrative
Agent for a Swing Line Borrowing to a Borrower, requests for an
interest rate quote for such Swing Line Borrowing shall be given by the
Borrower Representative to such Designated European Administrative
Agent not later than 11:00 (local time at the Notice Office of such
Designated European Administrative Agent and Lending Installation
thereof) on the same Business Day as the Swing Line Request is required
to be given to such Designated European Administrative Agent pursuant
to Section 2.7(d) hereof. Each such request (a "Rate Quote Request")
for a quote shall be a written or telephonic notice requesting such
Designated European Administrative Agent to quote a fixed or floating
interest rate (the "Quoted Money Market Rate") which would be
applicable to the Money Market Rate Loan comprising such Swing Line
Borrowing if such Money Market Rate Loan were made on or prior to a
date specified in such Rate Quote Request and remained outstanding
until the maturity date specified in such Rate Quote Request. The
Designated European Administrative Agent will immediately so notify the
Designated Swing Line Lenders of such Rate Quote Request, and, if all
of such Designated Swing Line Lenders are agreeable to a particular
interest rate for the proposed maturity of such Money Market Rate
Loans, such Quoted Money Market Rate for such proposed Money Market
Rate Loan shall be quoted by the Designated European Administrative
Agent to the Borrower Representative on or before 1:00 p.m. (local time
at the Notice Office of such Designated European Administrative Agent)
on the day such Rate Quote Request is received by the Designated
European Administrative Agent. The parties contemplate that any Quoted
Money Market Rate will be a rate of interest which reflects a margin
corresponding to the Applicable Margin in
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effect at the time of quotation of any Quoted Money Market Rate over
the then prevailing: (i) Federal Funds Effective Rate or Cost of Funds
Rate or (ii) any other then prevailing commercial paper, call money,
overnight repurchase or similar commonly quoted interest rate, in each
case, to be selected as the basis for the quote by such Designated
European Administrative Agent.
(g) SWING LINE NOTES; SWING LINE LOAN ACCOUNT.
The Swing Line Loans from each Designated Swing Line
Lender shall be evidenced at all times by a Swing Line Note which shall
(i) be executed and delivered by such Borrower for which the Designated
Swing Line Lender is designated and payable to the order of such
Designated Swing Line Lender, (ii) be in a stated principal amount
equal to the Designated Swing Line Lender Commitment and be payable in
the principal amount of the Swing Line Loans evidenced thereby, (iii)
as to any Swing Line Loans advanced, mature on the selected maturity
date applicable to such Swing Line Loan and in no event later than the
Swing Line Termination Date, (iv) bear interest as provided in Section
2.13(a)(iii) in respect of each Money Market Rate Loan evidenced
thereby, (v) be subject to mandatory prepayment as provided in Section
2.10, and (vi) be entitled to the benefits of this Agreement and the
other Loan Documents. Whenever a Borrower obtains a Swing Line Loan,
the Designated Swing Line Lender advancing such Swing Line Loan shall
endorse an appropriate entry on such Swing Line Note or make an
appropriate entry in a loan account (the "Swing Line Loan Account")
maintained in such Designated Swing Line Lender's books and records, or
both, to evidence such Swing Line Loans. The Swing Line Loan Account
shall also evidence: (A) accrued interest on the Swing Line Loan, (B)
all other amounts due to the Designated Swing Line Lender in respect of
the Swing Line Note and (C) all payments made by the Borrower to the
Designated Swing Line Lender for application to such Swing Line Loans.
Each entry on the Swing Line Note, Designated Swing Line Lender's books
and records or the or in the Swing Line Loan Account shall be prima
facie evidence of the data entered. Such entries shall not be a
condition to a Borrower's obligation to repay the Obligations in
respect of Swing Line Loans.
(h) FUNDING OF SWING LINE LOANS.
The Designated European Administrative Agent
designated for the Borrower for which a Credit Request is made shall
notify the Designated Swing Line Lender for such Borrower of a Swing
Line Credit Request not later than 1:00 p.m. (local time at the Notice
Office of such Designated Swing Line Lender) on the date received by
telecopier, telephone or similar form of transmission. Each Designated
Swing Line Lender shall, before 2:00 p.m. (local time at the Payment
Office of the Designated European Administrative Agent) on the date of
each Swing Line Loan requested for a Borrower, make available such
Swing Line Loan to such Designated European Administrative Agent, in
Dollars or, subject to the Alternate Currency Sublimit specified in
Section 2.1(a) hereof and the provisions of Section 2.2(a)(ii) hereof,
the applicable Alternate Currency, in immediately available funds at
the account of such Designated European Administrative Agent,
maintained at the Payment Office of such Designated European
Administrative Agent as shall have been notified by such Designated
European Administrative Agent to the Designated Swing Line Lenders
prior to such date. On the date specified for a Swing Line Loan in such
Swing Line Credit Request, after such Designated European
Administrative Agent's receipt of the funds representing such
Designated Swing Line Lender's Swing Line Loan and subject to the terms
of this Agreement and the fulfillment of the conditions set forth in
Section 3 of this Agreement, such Designated European Administrative
Agent shall promptly make such Swing Line
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Loan of such Designated Swing Line Lender available to the Borrower
specified in the Swing Line Credit Request, in immediately available
funds, by wire transfer or intrabank transfer to: (A) the Operating
Account of such Borrower or (B) such other account of such Borrower as
such Designated European Administrative Agent and the Borrower
Representative shall have agreed upon from time to time for this
purpose; provided, however, that, if a Borrowing shall not occur on
such date because any condition precedent herein specified shall not
have been met, such Designated European Administrative Agent shall
return the amounts so received to the respective Banks.
(i) AVAILABILITY OF FUNDS.
Subject to Section 2.2(a)(ii) of this Agreement,
unless the applicable Designated European Administrative Agent shall
have received notice from the Designated Swing Line Lender designated
for a Borrower for which a Swing Line Credit Request has been made
prior to the date (or, in the case of Money Market Rate Loans, prior to
the time) requested for such Swing Line Loans that such Designated
Swing Line Lender will not make available to such Designated European
Administrative Agent, the proceeds of such Designated Swing Line
Lender's Swing Line Loan, such Designated European Administrative Agent
may assume that such Designated Swing Line Lender has made its Swing
Line Loan proceeds available to such Designated European Administrative
Agent on the date of the Swing Line Borrowing in accordance with
Section 2.7(h) of this Agreement. In reliance upon such assumption,
such Designated European Administrative Agent may, but shall not be
obligated to, make available on such date to such Borrower specified in
the Credit Request, the amount of such requested Swing Line Loan. Any
disbursement by such Designated European Administrative Agent in
reliance on such assumption shall be deemed to be a Swing Line Loan by
such Designated Swing Line Lender.
(j) REFUNDING SWING LINE LOANS; SETTLEMENT BY BANKS.
Each Designated Swing Line Lender may from time to
time by written or telecopy notice given to the Designated European
Administrative Agent designated for such Designated Swing Line Lender
not later 11:00 a.m. (local time at the Notice Office of such
Designated European Administrative Agent), in any case on a date
selected by the Designated Swing Line Lender in its sole discretion,
notify such Designated European Administrative Agent of the aggregate
principal amount of the Swing Line Loans advanced by such Designated
Swing Line Lender outstanding as of the close of business on the
Business Day immediately preceding the date of the notice and direct
that such aggregate principal amount of Swing Line Loans be refunded by
the Banks. Upon receipt of such notice (a "Refunding Notice"), such
Designated European Administrative Agent shall, not later than 1:00
p.m. (local time at the Notice Office of such Designated European
Administrative Agent) on such date of notice from such Designated Swing
Line Lender, give notice to each Bank at the Lending Office of each
such Bank specifying its Ratable Portion of such outstanding Swing Line
Loans. Upon receipt of such notice, each Bank shall make available to
such Designated European Administrative Agent for the benefit of such
Designated Swing Line Lender, in immediately available funds, at the
account of such Designated European Administrative Agent maintained at
the Payment Office of such Designated European Administrative Agent,
not later than 3:00 p.m.(local time at the Payment Office of such
Designated European Administrative Agent) on the date of such notice,
its Ratable Portion of such aggregate amount of Swing Line Loans
outstanding and being refunded. If such Designated European
Administrative Agent's notice to the Banks is received after 1:00 p.m.
(local time at the Lending Office of such Bank), each Bank shall make
its Ratable Portion available to such Designated
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European Administrative Agent for the benefit of the Designated Swing
Line Lender not later than 11:00 a.m. (local time at the Payment Office
of such Designated European Administrative Agent) on the next
succeeding Business Day. Upon making such payment, each Bank shall be
deemed to have made a LIBOR Rate Loan having a one month interest
period to the Borrower whose Swing Line Loans are being refunded in the
amount of its Ratable Portion of any such Swing Line Loan. Promptly
upon the same day as receipt of such proceeds, the proceeds of such
Loans shall be applied directly by such Designated European
Administrative Agent to reimburse the Designated Swing Line Lender for
such outstanding Swing Line Loans. Each Bank's obligation to make such
refunding payment is absolute and unconditional and shall not be
affected by any event or circumstance whatsoever, including the
occurrence of any Potential Default or Event of Default hereunder or
the failure of any condition precedent set forth in Section 3 of this
Agreement to be satisfied, and each such payment shall be made without
any setoff, recoupment, counterclaim, abatement, withholding or
reduction whatsoever; except, however, that the Banks shall have no
obligation to make such payment if the Designated Swing Line Lender
made such Swing Line Loans being refunded after such Designated Swing
Line Lender was in receipt of telephonic or written notice from the
applicable Designated European Administrative Agent on behalf of the
Required Banks pursuant to Section 2.7(b) hereof directing such
Designated Swing Line Lender to cease making Swing Line Loans.
(k) PARTICIPATING INTEREST.
In the event that the obligation of the Banks to make
a Revolving Credit Loan pursuant to Subsection (i) to refund Swing Line
Loans of a Designated Swing Line Lender cannot be satisfied by the
Banks because any of the events specified in Section 8.14 shall have
occurred in respect to a Borrower or one or more of the Banks shall
determine that it is legally prohibited from making such a Revolving
Credit Loan, each Bank (other than the Designated Swing Line Lender) or
each such Bank so prohibited (other than the Designated Swing Line
Lender), as the case may be, shall be obligated to purchase on the date
the Revolving Credit Loan would have been made pursuant to Subsection
(i) hereof an undivided participating interest in the outstanding Swing
Line Loans in an amount equal to such Bank's Ratable Portion of the
Swing Line Loans. On the purchase date, each Bank or each such Bank so
prohibited shall pay to the applicable Designated European
Administrative Agent, for the benefit of such Designated Swing Line
Lender, in immediately available funds, at the account of such
Designated European Administrative Agent maintained at the Payment
Office of such Designated European Administrative Agent not later than
the time such Bank would have been obligated to fund a Loan pursuant to
Subsection (e) hereof, a participation purchase price in amount equal
to such Bank's Ratable Portion. The proceeds of purchases by the Banks
of such participating interests shall be applied directly by such
Designated European Administrative Agent to reimburse the Designated
Swing Line Lender for such outstanding Swing Line Loans. Upon receipt
of such participation purchase price, the Designated Swing Line Lender
shall, if requested by a Bank purchasing a participating interest,
issue a participation certificate, dated the date of the Designated
Swing Line Lender's receipt of such proceeds, and evidencing such
Bank's participating interest in such Swing Line Loans. Whenever, at
any time after a Designated Swing Line Lender has received from the
Designated European Administrative Agent designated therefor the
proceeds of any such participating interest by any other Bank, such
Designated Swing Line Lender receives any payment from or on behalf of
the Borrowers on account of the Swing Line Loans, such Designated Swing
Line Lender will promptly pay to such Designated European
Administrative Agent for distribution to such Bank its Ratable Portion
of such payments (appropriately adjusted, in the case of interest
payments, to
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reflect the period of time during which such Bank's participating
interest was outstanding); provided, however, in the event such payment
in respect of Swing Line Loans is required to be returned by the
Designated Swing Line Lender, such Bank will return to such Designated
European Administrative Agent for payment over the Designated Swing
Line Lender any portion of such payment previously distributed by such
Designated European Administrative Agent on behalf of the Designated
Swing Line Lender.
2.8 TERM FACILITY.
(a) TERM LOANS.
Subject to the terms and conditions of this
Agreement, each Bank having a Term Commitment hereunder severally
agrees to make, on a one time basis on the Closing Date hereof, a Loan,
denominated in Dollars, on a term basis (the "Term Loan") to Instron
Corporation, which Term Loan can be incurred only on the Closing Date
and only in the entire amount of the Term Commitment specified on Annex
I in respect to such Bank; provided, however, that the outstanding
principal amount of the Term Loan by each Bank shall not at any time
exceed such Bank's Term Commitment. The Term Loan of each Bank shall be
comprised of one or more Term Borrowings, as Instron Corporation may
elect from time to time by delivery to the Administrative Agent by the
Borrower Representative of a Rate Conversion/Continuation Request
pursuant to Section 2.11 of this Agreement; provided, however, that the
Term Loan of each Bank made on the Closing Date may, at the election of
the Borrower Representative which shall not require any prior notice,
consist of Alternate Base Rate Loans or LIBOR Rate Loans or some
combination thereof.
(b) TERM BORROWINGS.
Each Term Borrowing shall be: (i) if comprised of
Alternate Base Rate Loans, in an aggregate amount of not less than Five
Hundred Thousand Dollars ($500,000) or an integral multiple of Fifty
Thousand Dollars ($50,000) in excess thereof and (ii) if comprised of
LIBOR Rate Loans, in an aggregate amount of not less than One Million
Dollars ($1,000,000) or an integral multiple of One Hundred Thousand
Dollars ($100,000) in excess thereof. Instron Corporation shall be
entitled to have more than one Term Borrowing outstanding at one time;
provided, however, that the Borrowers shall not be entitled to request
any Term Borrowing which, together with all outstanding Revolving
Credit Borrowings and Swing Line Loans to all Borrowers and Term
Borrowings to Instron Corporation, would result in any Bank's having an
aggregate of more than twenty-five (25) Borrowings (for purposes of
determining the number of outstanding Borrowings, outstanding Alternate
Base Rate Loans to all of the Borrowers shall be treated as a separate
Borrowing and all outstanding Swing Line Loans to each Borrower shall
be treated as a separate Borrowing by such Borrower) outstanding at any
one time to all of the Borrowers.
(c) TERM NOTES; LOAN ACCOUNT RECORD OF TERM LOANS.
Each Bank's Term Loan to Instron Corporation shall be
evidenced at all times by and repayable in accordance with a Term Note,
as the case may be, each of which Term Notes shall: (i) be executed and
delivered by Instron Corporation and payable to the order of such Bank
and (ii) be in a stated principal amount equal to the Term Commitment,
as applicable, of such Bank and be payable to the order of such Bank in
an amount equal to the unpaid principal amount of such Bank's Term Loan
evidenced
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thereby, (iii) be payable in installments as provided therein and in
Section 2.8(d) hereof and mature on the Term Loan Maturity Date
applicable to such Term Loan, (iv) bear interest as provided in this
Agreement, (v) be subject to mandatory prepayment as provided in
Section 2.10 hereof, and (vi) be entitled to the benefits of this
Agreement and the other Loan Documents. Each Bank shall endorse an
appropriate entry in respect of disbursements and repayments of the
Term Loans of such Bank comprising such Borrowing on such Bank's Term
Note with respect to such Term Loan or make an appropriate entry in the
Loan Account maintained in such Bank's books and records, or both, to
evidence such Bank's Term Loan to Instron Corporation. The Loan Account
shall also evidence: (i) accrued interest on the Term Loans of such
Bank to Instron Corporation, (ii) all other amounts due to the Bank in
respect of such Term Loan, and (iii) all payments made by Instron
Corporation in respect of such Term Loan. Each entry on a Bank's Term
Note, books and records or Loan Account shall be prima facie evidence
of the data entered. Such entries by a Bank shall not be a condition to
Instron Corporation's obligation to repay the Obligations.
(d) AMORTIZATION AND MATURITY OF TERM LOANS.
(i) TERM LOAN AMORTIZATION. The Term Loan of each
Bank shall be repaid by Instron Corporation to the
Administrative Agent for the benefit of the Banks in twenty
two (22) quarterly installments of principal payable on the
first day of each January, April, July and October of each
calendar year as follows: (i) during the period commencing
with January 1, 2000 and continuing until and including
October 1, 2000, each installment shall be in a principal
amount equal to such Bank's Ratable Portion of Seven Hundred
and Fifty Thousand Dollars ($750,000), payable together with
interest thereon, (ii) during the period commencing with
January 1, 2001 and continuing until and including October 1,
2001, each installment shall be in a principal amount equal to
such Bank's Ratable Portion of One Million Dollars
($1,000,000), payable together with interest thereon, (iii)
during the period commencing with January 1, 2002 and
continuing until and including October 1, 2002, each
installment shall be in a principal amount equal to such
Bank's Ratable Portion of One Million Two Hundred and Fifty
Thousand Dollars ($1,250,000), payable together with interest
thereon, (iv) during the period commencing with January 1,
2003 and continuing until and including April 1, 2005, each
installment shall be in a principal amount equal to such
Bank's Ratable Portion of One Million Five Hundred Thousand
Dollars ($1,500,000), payable together with interest thereon
(with the final installment payable on April 1, 2005 also
including any other amount required to bring the principal of
the Term Loan of such Bank to zero) (with each of such
referenced repayment dates being a "Term Loan Repayment Date"
and such April 1, 2005 Term Loan Repayment Date being the
"Term Loan Maturity Date"). Amounts repaid with respect to a
Term Loan may not be reborrowed.
2.9 FUNDING OF TERM LOANS BY BANKS.
Each Bank shall, prior to 1:00 P.M. (local time at the Payment
Office of the Administrative Agent) on the Closing Date, make available to the
Administrative Agent, in immediately available funds at the account of the
Administrative Agent maintained at the Payment Office thereof as shall have been
notified by the Administrative Agent to the Banks prior to such date, the amount
of Term Loans specified in Annex I in respect of such Bank.
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(a) DISBURSEMENT OF TERM FUNDS RECEIVED.
Upon the Administrative Agent's receipt of funds on
the Closing Date representing a Bank's Term Loan, and subject to the
terms of this Agreement and the fulfillment of the conditions set forth
in Section 3 of this Agreement, the Administrative Agent shall make the
Term Loan of such Bank available to the Borrowers (by advancing such
funds to Instron Corporation) in immediately available funds, by wire
transfer or intrabank transfer: to the Operating Account of Instron
Corporation; provided, however, that, if the Term Loans shall not occur
on such date because any condition precedent herein specified shall not
have been met, the Administrative Agent shall return the amounts so
received to the respective Banks.
(b) AVAILABILITY OF TERM LOAN FUNDS.
Unless the Administrative Agent shall have received
notice from a Bank on the Closing Date that such Bank will not make
available to the Administrative Agent such Bank's Term Loan being
advanced to the Borrowers, the Administrative Agent may assume prior to
receipt of funds from such Bank that such Bank has made its Term Loans
available to the Administrative Agent on the Closing Date. In reliance
upon such assumption, the Administrative Agent may, but shall not be
obligated to, make available to the Borrowers funds in the amount of
such Bank's Term Loan. Any disbursement by the Administrative Agent in
reliance on such assumption shall be deemed to be the advance by such
Bank of its Term Loan.
2.10 REPAYMENTS; PREPAYMENTS; REDUCTIONS OF COMMITMENTS.
(a) SCHEDULED REPAYMENTS; DENOMINATIONS OF REPAYMENTS.
Each Borrower shall repay to the Administrative
Agent, or the applicable Designated European Administrative Agent, in
immediately available funds, for the account of the Banks the
outstanding principal amount of its aggregate Revolving Credit Loans on
the Revolving Credit Termination Date. Instron Corporation shall repay
to the Administrative Agent, in immediately available funds, for the
account of the applicable Banks, the Term Loans advanced by such Bank
in accordance with Section 2.8(d) hereof and the applicable Term Note.
Each of the Borrowers shall repay to the applicable Designated European
Administrative Agent for the benefit of the applicable Designated Swing
Line Lender the Swing Line Loans advanced to such Borrower in
accordance with Section 2.7(g) of this Agreement and the Swing Line
Note. Repayments of Revolving Credit Loans denominated in Dollars shall
be made in Dollars. Repayments of Revolving Credit Loans denominated in
an Alternate Currency shall be made in such Alternate Currency.
Repayments of Swing Line Loans denominated in Dollars shall be made in
Dollars. Repayments of Swing Line Loans denominated in an Alternate
Currency shall be made in such Alternate Currency. Reimbursements of
drawings on Letters of Credit whether denominated in Dollars or in an
Alternate Currency shall be made in Dollars.
(b) MANDATORY PREPAYMENT OF LOANS.
(i) PREPAYMENT OF EXCESS REVOLVING CREDIT LOANS. If,
on any Business Day, the aggregate Revolving Credit Loans then
outstanding exceed an amount equal to the aggregate Revolving
Credit Commitments of all of the Banks then applicable minus
the then aggregate LC Exposure and aggregate Swing Line
Exposure of all of the Banks, then the Borrowers shall on such
day prepay to the
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Administrative Agent or the applicable Designated European
Administrative Agent for the account of the Banks an amount at
least equal to such excess.
(ii) PREPAYMENT OF EXCESS REVOLVING CREDIT LOANS
DENOMINATED IN ALTERNATE CURRENCIES. If, on any Business Day,
the Dollar equivalent of the aggregate principal amount of
Revolving Credit Loans denominated in Alternate Currencies
then outstanding, together with the Dollar equivalent of the
then aggregate Alternate Currency LC Exposure and aggregate
Alternate Currency Swing Line Exposure of all Banks, exceeds
the Alternate Currency Sublimit, then the Borrowers shall on
such day prepay to the Administrative Agent or the applicable
Designated European Administrative Agent for the account of
the Banks an amount at least equal to such excess.
(iii) PREPAYMENT OF EXCESS SWING LINE LOANS. If, on
any Business Day, (x) the aggregate principal amount of Swing
Line Loans then outstanding exceeds the Aggregate Swing Line
Commitment of the Designated Swing Line Lenders then in
effect, or (y) the aggregate Swing Line Loans then outstanding
from a Designated Swing Line Lender to a Borrower exceeds the
Designated Swing Line Commitment of such Designated Swing Line
Lender, each affected Borrower shall on such day prepay to the
applicable Designated European Administrative Agent for the
account of such Designated Swing Line Lender such principal
amount of Swing Line Loans outstanding to such Borrower as
shall eliminate such excess.
(c) MANDATORY APPLICATION OF NET PROCEEDS AND EXCESS CASH FLOW;
RESULTING MANDATORY REDUCTION IN REVOLVING CREDIT COMMITMENTS
AND TERM LOANS.
(i) APPLICATION OF NET PROCEEDS. From and after the
Closing Date, each Borrower shall apply, subject to the extent
otherwise provided in Section 7.3(c), 100% of all of the Net
Proceeds relating to such Borrower or the Subsidiaries thereof
promptly upon receipt thereof to prepay its Term Loans and
Revolving Credit Loans outstanding at the time of such receipt
with such prepayments being applied:(A) first, to outstanding
Term Loans, in the inverse order of maturity, (B) second, to
outstanding Revolving Credit Loans and (C) third, to
outstanding Swing Line Loans; provided, however, that nothing
in this Subsection 2.10(c)(i) hereof or in the definition of
"Net Proceeds" shall constitute authorization not otherwise
permitted by this Agreement for any Borrower or any
Subsidiaries thereof to enter into any transaction that would
generate Net Proceeds.
(ii) EXCESS CASH FLOW RECAPTURE. Not later than ten
(10) days after the ninetieth (90th) day following each Fiscal
Year end of Instron Corporation, commencing with Fiscal Year
ending December 31, 2000, if the Consolidated Senior Funded
Debt to Adjusted EBITDA Ratio of Instron Corporation and its
consolidated Subsidiaries measured as of such Fiscal Year end
exceeds 2.00 to 1.00, Instron Corporation shall prepay the
Term Loans, and the Borrowers shall
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prepay the Revolving Credit Loans and Swing Line Loans
outstanding at the time in an aggregate amount equal to 50.00%
of the Consolidated Excess Cash Flow of Instron Corporation
and its consolidated Subsidiaries for such immediately
preceding Fiscal Year with such prepayments being applied: (A)
first, to outstanding Term Loans, in the inverse order of
maturity, (B) second, after no Term Loans are outstanding, to
outstanding Revolving Credit Loans and (C) last, to
outstanding Swing Line Loans; provided, however, that any
voluntary prepayments of outstanding Term Loans pursuant to
Section 2.10(d) hereof during any Fiscal Year shall be
credited against the prepayment of Loans otherwise required
under this clause (ii) with respect to Consolidated Excess
Cash Flow with respect to such Fiscal Year.
(iii) POSTPONEMENT OF PREPAYMENT; EFFECT OF
PREPAYMENT. Unless an Event of Default has occurred which is
continuing and has not been waived in accordance with Section
14.1 hereof, in the event that the making of any prepayment of
Term Loans, Revolving Credit Loans or Swing Line Loans
required by this Section 2.10(c) would result in an obligation
on the part of a Borrower to make a breakage payment in
respect thereof under Section 13.4 of this Agreement (unless
waived in accordance with Section 14.1 hereof), such Borrower
may upon notice by the Borrower Representative to the
Administrative Agent postpone making such prepayment for a
period of up to 30 days or such shorter period as will result
in no such breakage payment being payable. Each prepayment
required by this Section 2.10(c) shall constitute (A) with
respect to each prepayment of Revolving Credit Loans required
hereby, only a prepayment and not a permanent reduction in the
amount of the Revolving Credit Commitments of the Banks and
(B) with respect to each prepayment of Term Loans required
hereby, not only a prepayment but also a permanent reduction
in the amount of the applicable Term Commitments of the
Lenders hereunder. Amounts prepaid with respect to Term Loans
may not be reborrowed.
(d) PERMITTED PREPAYMENTS.
A Borrower may prepay all or any part of the Term
Loans or the Revolving Credit Loans for the account of the Banks by
having the Borrower Representative give notice to the Administrative
Agent or the applicable Designated European Administrative Agent, as
the case may be, stating the proposed date of prepayment, the Type of
Borrowing being prepaid and the aggregate principal amount of the
prepayment: (i) not later than 12:00 noon (local time at the Notice
Office of the Administrative Agent) on any Business Day, with respect
to Alternate Base Rate Loans, (ii) not later than 12:00 noon (local
time at the Notice Office of the Administrative Agent or the applicable
Designated European Administrative Agent) on the fourth Business Day
prior to such prepayment, with respect to LIBOR Rate Loans (whether
denominated in Dollars or an Alternate Currency). Thereafter, on the
date of such prepayment, such Borrower shall: (A) prepay the aggregate
outstanding principal amount of the Alternate Base Rate Loans in whole
or ratably in part as specified in such notice and (B) prepay the
outstanding aggregate principal amount of the LIBOR Rate Loans
comprising part of the same Borrowing in whole or ratably in part as
specified in such notice, together with prepayment of interest on the
principal amount of the LIBOR Rate Loans comprising such Borrowing so
prepaid accrued to the date of such prepayment; provided, however,
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that: (I) each partial prepayment of Alternate Base Rate Loan shall be
in the aggregate principal amount of not less than One Hundred Thousand
Dollars ($100,000), (II) each partial prepayment of LIBOR Rate Loans
denominated in an Alternate Currency shall be in an aggregate principal
amount of not less than the Dollar equivalent of Five Hundred Thousand
Dollars ($500,000), or an integral multiple of the Dollar equivalent of
Two Hundred and Fifty Thousand Dollars ($250,000) in excess thereof,
(III) each partial prepayment of LIBOR Rate Loans denominated in
Dollars shall be in an aggregate principal amount of not less than Five
Hundred Thousand Dollars ($500,000), or an integral multiple of Two
Hundred and Fifty Thousand Dollars ($250,000) in excess thereof, and
(IV) any prepayment of any LIBOR Rate Loans made on other than the last
day of an Interest Period shall obligate the Borrowers to reimburse the
Banks in respect thereof pursuant to Section 13.4 of this Agreement.
(e) REDUCTION OF REVOLVING CREDIT COMMITMENTS.
Upon three (3) Business Days prior written notice from the
Borrower Representative to the Administrative Agent or the applicable
Designated European Administrative Agent, as the case may be, the
Borrowers may request that the Banks permanently reduce, in whole or in
part, the aggregate Revolving Credit Commitments, whereupon the
aggregate Revolving Credit Commitments shall be so reduced. Each
reduction in the aggregate Revolving Credit Commitments hereunder shall
be made among the Banks ratably in accordance with their Revolving
Credit Commitments. Each reduction shall be subject to the following:
(i) each such reduction shall be in an aggregate principal amount of
not less than Five Million Dollars ($5,000,000) or a multiple of One
Million Dollars ($1,000,000) in excess thereof, and (ii) the Borrowers
shall not be permitted to reduce the aggregate Revolving Credit
Commitments unless, concurrently with any reduction, one or more of the
Borrowers shall make principal payments, ratable among the Banks, on
each Bank's then outstanding Revolving Credit Loans to such Borrower in
an amount which, when aggregated with such ratable payments to the
Banks by the other Borrowers, will result in the aggregate Revolving
Credit Loans of the Banks to the Borrowers outstanding after such
payments, when taken together with the aggregate LC Exposure and Swing
Line Exposure of the Banks to the Borrowers then outstanding, not
exceeding the aggregate Revolving Credit Commitments of the Banks as so
reduced. On the date of each reduction, each of the Borrowers shall pay
to the Administrative Agent for the account of the Banks its Ratable
Borrower Share of: (x) the commitment fees and interest accrued through
the date of such reduction in respect of the aggregate Revolving Credit
Commitment of the Banks so reduced and (y) any amounts required
pursuant to the provisions of Section 13.4 of this Agreement. Each
reduction in the Revolving Credit Commitments hereunder, if any, shall
be a permanent reduction and no amount in excess of such reduced
commitment may be borrowed or reborrowed.
2.11 RATE CONVERSION AND RATE CONTINUATION.
Each Borrower shall have the right to convert all or any
portion of the Revolving Credit Loans or Term Loans comprising any Borrowing or
any Swing Line Loan into, or continue all or any portion of the Revolving Credit
Loans or Term Loans comprising any Borrowing or any Swing Line Loan as, LIBOR
Rate Loans or Alternate Base Rate Loans, as the case may be, in the case of
Revolving Credit Loans or Term Loans, and a LIBOR Rate Loan or Money Market Rate
Loan, as the case may be, in the case of any Swing Line Loan, upon request
delivered by the Borrower Representative to the Administrative Agent or the
applicable Designated European Administrative Agent designated for such
Borrower, as the case may be, not later than 12:00 noon (local time at the
Notice Office of the Administrative Agent or such
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Designated European Administrative Agent) to the following extent: (a) on the
Business Day that a Borrower desires to convert all or a portion of the LIBOR
Rate Loans denominated in Dollars comprising a Revolving Credit Borrowing or a
Term Loan Borrowing into Alternate Base Rate Loans, (b) three (3) Business Days
prior to the Business Day on which a Borrower desires to convert any Alternate
Base Rate Loans comprising a Revolving Credit Borrowing or a Term Loan Borrowing
into LIBOR Rate Loans for a given permissible Interest Period, (c) three (3)
Business Days prior to the Business Day on which a Borrower desires to continue
any LIBOR Rate Loans comprising a Revolving Credit Borrowing or a Term Loan
Borrowing, as LIBOR Rate Loans for an additional Interest Period of the same
duration, (d) three (3) Business Days prior to the Business Day on which, or, to
the extent acceptable the applicable Designated Swing Line Lender, in its sole
discretion, the same Business Day as a Borrower desires to continue any LIBOR
Rate Loan comprising a Swing Line Loan, as a LIBOR Rate Loan for an additional
Interest Period of the same duration, (d) three (3) Business Days prior to the
Business Day on which a Borrower desires to convert any LIBOR Rate Loans having
a particular Interest Period comprising a Revolving Credit Borrowing or a Term
Loan Borrowing into LIBOR Rate Loans having a different permissible Interest
Period, (e) three (3) Business Days prior to the Business Day on which, or, to
the extent acceptable the applicable Designated Swing Line Lender, in its sole
discretion, the same Business Day as, a Borrower desires to convert any LIBOR
Rate Loan having a particular Interest Period comprising a Swing Line Loan into
LIBOR Rate Loan having a different permissible Interest Period, (f) three (3)
Business Days prior to the Business Day on which, or, to the extent acceptable
the applicable Designated Swing Line Lender, in its sole discretion, the same
Business Day as, a Borrower desires to convert any Money Market Rate Loan
comprising a Swing Line Loan into LIBOR Rate Loan for a given permissible
Interest Period, or (f) three (3) Business Days prior to the Business Day on
which, or, to the extent acceptable the applicable Designated Swing Line Lender,
in its sole discretion, the same Business Day as, a Borrower desires to convert
any LIBOR Rate Loan comprising a Swing Line Loan into Money Market Rate Loan;
provided, however, that each such Rate Conversion or Rate Continuation shall be
subject to the following:
(i) each Rate Conversion or Rate Continuation of
Loans comprising a Borrowing shall be made ratably among the
Banks based upon each Bank's Ratable Portion of such converted
or continued Borrowing;
(ii) if less than all of the outstanding principal
amount of Loans comprising a Revolving Credit Borrowing or a
Term Loan Borrowing are converted or continued, the aggregate
principal amount of such Loans comprising a Borrowing
converted or continued shall be: (A) in the case of LIBOR Rate
Loans, not less than Five Hundred Thousand Dollars ($500,000)
or, in the case of Alternate Currency Loans, the Alternate
Currency equivalent thereof, or an integral multiple of Two
Hundred and Fifty Thousand Dollars ($250,000) or, in the case
of Alternate Currency Loans, the Alternate Currency equivalent
thereof, in excess thereof, (B) in the case of Alternate Base
Rate Loans, not less than Five Hundred Thousand Dollars
($500,000), or an integral multiple of Fifty Thousand Dollars
($50,000) in excess thereof, and (C) in the case of Money
Market Rate Loans, not less than Two Hundred Fifty Thousand
Dollars ($250,000), or an integral multiple of One Hundred
Thousand Dollars ($100,000) in excess thereof;
(iii) each Rate Conversion or Rate Continuation shall
be effected as if each Bank were applying the proceeds of the
Loans resulting from such Rate Conversion or Rate Continuation
to the Loans being converted or continued, as the case may be,
and the accrued interest on any such Loans (or portion
thereof) being converted or continued
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shall be paid to the Administrative Agent on behalf of each
Bank by the Borrowers at the time of such Rate Conversion or
Rate Continuation;
(iv) LIBOR Rate Loans shall not be converted or
continued at a time other than the end of an Interest Period
applicable thereto unless the Borrowers shall pay, upon
demand, any amounts due to the Administrative Agent for the
benefit of the Banks pursuant to Section 13.4 of this
Agreement;
(v) Loans may not be converted into or continued as
LIBOR Rate Loans comprising a Revolving Credit Borrowing
unless the Interest Period applicable thereto expires on or
prior to the applicable Revolving Credit Termination Date;
(vi) Loans may not be converted into or continued as
LIBOR Rate Loans comprising a Term Borrowing unless the
Interest Period applicable thereto expires on or prior to the
Term Loan Maturity Date applicable to the Loans comprising
such Term Borrowing;
(vii) after and during the continuance of a Potential
Default, and after the occurrence of an Event of Default which
is continuing and has not been waived in accordance with
Section 14.1 hereof, Loans may not be converted into or
continued (at the expiration of the Interest Period applicable
thereto) as LIBOR Rate Loans;
(viii) with respect to LIBOR Rate Loans comprising a
Term Borrowing, no Interest Period can be selected which ends
after any Term Loan Repayment Date, unless, after giving
effect to such selection, the aggregate unpaid principal
amount of Alternate Base Rate Loans, together with the
aggregate unpaid principal amount of all Term Borrowings which
are comprised of LIBOR Rate Loans with Interest Periods ending
on or prior to such Term Loan Repayment Date shall be at least
equal to that portion of the aggregate principal amount of the
Term A Loan and the Term B Loan due and payable on and prior
to such Term Loan Repayment Date; and
(ix) Loans that cannot be converted into or continued
as LIBOR Rate Loans by reason of clause (v), (vi), (vii) or
(viii) of this Section shall be automatically converted at the
end of the Interest Period in effect for such LIBOR Rate Loans
into Alternate Base Rate Loans, except that LIBOR Rate Loans
denominated in an Alternate Currency that cannot be converted
or continued by reason of clause (v) or (vii) of this Section
shall become due and payable upon the last day of the
applicable Interest Period with respect thereto.
Each such request for a conversion or continuation (a "Rate
Conversion/Continuation Request") in respect of Loans comprising a Borrowing
shall be a written or telephonic notice (in the case of a telephonic notice,
promptly confirmed in writing if so requested by the Administrative Agent or the
applicable Designated European Administrative Agent). Each written Rate
Conversion/Continuation Request or written confirmation thereof shall be
substantially in the form of Exhibit C attached hereto, signed by the Borrower
Representative and transmitted by the Borrower Representative to the
Administrative Agent or such Designated European Administrative Agent, as
applicable, by telecopier. Each written and telephonic Rate
Conversion/Continuation Request and each confirmation thereof shall specify: (A)
the identity and amount of the Loans that the Borrower requests be converted or
continued, (B) the Type of
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Loans into which such Loans are to be converted or continued, (C) if such notice
requests a Rate Conversion, the date of the Rate Conversion (which shall be a
Business Day), (D) in the case of a Borrowing being converted into or continued
as a LIBOR Rate Borrowing, the currency in which such LIBOR Borrowing is
denominated, (E) in the case of Loans comprising a Borrowing being converted
into or continued as LIBOR Rate Loans, the Interest Period for such LIBOR Rate
Loans and (F) in the case of LIBOR Rate Loan comprising a Swing Line Loan being
converted into a Money Market Rate Loan, the Quoted Money Market Rate therefor
and the maturity date thereof determined as provide in Section 2.7(f) hereof.
The Administrative Agent and each Designated European Administrative Agent may
rely on such telephonic Rate Conversion/Continuation Request to the same extent
that the Administrative Agent and the applicable Designated European
Administrative Agent may rely on a written Rate Conversion/Continuation Request.
Each Rate Conversion/Continuation Request, whether telephonic or written, shall
be irrevocable and binding on the Borrower for which the request was made and
subject such Borrower to the indemnification provisions of Section 13 of this
Agreement. The Borrower for which a Rate Conversion/Continuation Request was
made shall bear all risks related to the giving of such Rate
Conversion/Continuation Request by the Borrower Representative on behalf of such
Borrower whether given telephonically or by such other method of transmission as
the Borrower Representative shall elect.
2.12 LETTERS OF CREDIT.
Subject to the terms and conditions set forth in this
Agreement, each Designated Letter of Credit Issuer designated for a Borrower and
the Subsidiaries thereof agrees, at any time and from time to time, from and
including the Closing Date but in no event after the thirtieth (30th) calendar
day immediately preceding the Revolving Credit Termination Date, directly or
through its Lending Installation to issue and deliver, or to extend the
expiration of, Letters of Credit, denominated in Dollars or any Alternate
Currency, for the account of such Borrower or such Subsidiaries (each such
Borrower and any such Subsidiaries being herein referred to as "Letter of Credit
Obligors"); provided, however, that, the aggregate LC Exposure of the Banks
shall not at any time exceed the lesser of: (x) Twenty Million Dollars
($20,000,000) or (y) an amount equal to the Borrowing Base at such time minus
the aggregate Revolving Credit Loans of the Banks to all of the Borrowers
outstanding at such time and the aggregate Swing Line Exposure of the Banks to
all of the Borrowers at such time or (z) the sum of the aggregate Revolving
Credit Commitments of the Banks at such time minus the sum of the aggregate
outstanding Revolving Credit Loans of the Banks to all of the Borrowers
outstanding at such time and the aggregate Swing Line Exposure of the Banks to
all of the Borrowers at such time.
(a) DESIGNATED LETTER OF CREDIT ISSUER AND DESIGNATED EUROPEAN
ADMINISTRATIVE AGENT.
Subject to the terms and conditions set
forth in this Agreement, the applicable Designated Letter of
Credit Issuer shall issue Letters of Credit for the account of
any of the Borrowers, provided, however, Letters of Credit
consisting of Demand Guarantees or Contract Guarantees will
only be issued to the extent that the Administrative Agent has
designated a Designated European Administrative Agent which
Designated European Administrative Agent has been assigned a
minimum of at least $5,000,000 of an initial Bank's rights and
obligations under this Agreement and of the Revolving Credit
Commitment of such initial Bank hereunder.
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(b) TERM; FORM; REQUESTS AND CONDITIONS OF LETTERS OF CREDIT.
Each Letter of Credit shall be issued in such form as the
applicable Designated Letter of Credit Issuer may reasonably require
subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, and any
subsequent revisions thereof or (x) in the case of a Letter of Credit
constituting a Demand Guarantee, the Uniform Rules for Demand Guarantees
(1992 Revision), International Chamber of Commerce Publication No. 458,
and any subsequent revisions thereof or (y) in the case of a Letter of
Credit constituting a Contract Guarantee, the Uniform Rules for Contract
Guarantees (1978), International Chamber of Commerce Publication No. 325,
and any subsequent revisions thereof. Each Letter of Credit shall: (x)
permit drawings upon presentation of one or more sight drafts and such
other documents as specified by the Borrower Representative in the Credit
Request delivered pursuant to Section 2.12(b)(i) of this Agreement and
agreed to by such Designated Letter of Credit Issuer, which drawings shall
occur on or prior to the applicable expiration date of such Letter of
Credit, (y) by its terms expire not later than the earlier of one (1) year
after the date of issuance of such Letter of Credit or the fifteenth
(15th) Business Day prior to the Revolving Credit Termination Date and (z)
by its terms provide for payment of drawings in Dollars or an Alternate
Currency.
(i) Requests for Letters of Credit for the account of a
Borrower or any Subsidiaries thereof shall be given by the Borrower
Representative to the Designated Letter of Credit Issuer, to the
extent applicable, the Lending Installation thereof, and the
Administrative Agent and Designated European Administrative Agent
designated for such Borrower not later than 12:00 noon (local time
at the Notice Office of the Designated Letter of Credit Issuer and,
to the extent applicable, the Lending Installation thereof) three
(3) Business Days prior to the specified date for the issuance of
the requested Letter of Credit. Each such request (a "Letter of
Credit Request") for a Letter of Credit shall be a written or
telephonic notice (in the case of a telephonic notice, promptly
confirmed in writing if so requested by the Designated Letter of
Credit Issuer). Each written Letter of Credit Request or written
confirmation thereof shall be substantially in the form of Exhibit
B-3 attached hereto, signed by the Borrower Representative and
transmitted by the Borrower Representative to the Designated Letter
of Credit Issuer, such Lending Installation and the Administrative
Agent and such Designated European Administrative Agent by
telecopier. Each written and telephonic Letter of Credit Request and
each confirmation thereof shall specify with respect to each Letter
of Credit requested: (i) the account party for whose benefit the
Letter of Credit is being requested, (ii) the face amount thereof
and the currency in which the face amount will be denominated, (iii)
the beneficiary, (iv) the intended date of issuance and (v) the
terms of the Letter of Credit, and shall be promptly forwarded by
the Administrative Agent or the applicable Designated European
Administrative Agent to the applicable Designated Letter of Credit
Issuer. Concurrently with each Credit Request requesting a Letter of
Credit, the applicable Letter of Credit Obligor shall execute and
deliver to the Designated Letter of Credit Issuer in respect of such
requested Letter of Credit a reimbursement or similar agreement, in
the Designated Letter of Credit Issuer's then standard form of
application for and reimbursement agreement with respect to letters
of credit, Demand Guarantees and Contract Guarantees (such
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documents being hereinafter collectively referred to as a
"Reimbursement Agreement"); provided, however, that in the event of
any conflict between the provisions of any such Reimbursement
Agreement and this Agreement, the provisions of this Agreement shall
govern. The Designated Letter of Credit Issuer may rely on such
telephonic Letter of Credit Request to the same extent that the
Administrative Agent or the applicable Designated European
Administrative Agent may rely on a written Credit Request. The
Borrower for which a Letter of Credit request was made shall bear
all risks related to the giving of such Letter of Credit Request by
the Borrower Representative on behalf of such Borrower whether given
telephonically or by such other method of transmission as the
Borrowers shall elect.
(ii) Each Designated Letter of Credit Issuer shall, on the
date of each issuance of a Letter of Credit by it or through its
Lending Installation, give the Administrative Agent and such
Designated European Administrative Agent, if applicable, written
notice of the issuance of such Letter of Credit, accompanied by a
copy to the Administrative Agent of the Letter of Credit or Letters
of Credit issued by it. Each Designated Letter of Credit Issuer
shall provide to the Administrative Agent a quarterly (or monthly if
requested by any Bank) summary describing each Letter of Credit
issued by such Designated Letter of Credit Issuer and then
outstanding as well as an identification for the relevant period of
the daily aggregate Letter of Credit outstandings represented by
Letters of Credit issued by such Designated Letter of Credit Issuer.
(c) EXISTING LETTERS OF CREDIT.
The Supplemental Schedule contains a description of all
Existing Letters of Credit. With respect to Existing Letters of Credit
issued by a bank that is a Designated Letter of Credit Issuer on the
Effective Date as to which such Designated Letter of Credit Issuer makes a
written request to the Administrative Agent and the Designated European
Administrative Agent, if applicable, and the Borrower Representative on
the Closing Date requesting that such Existing Letter of Credit be treated
as a "Letter of Credit" hereunder, such Existing Letter of Credit shall
thereupon constitute a "Letter of Credit" (and no longer an "Existing
Letter of Credit") for all purposes hereof, and shall be deemed to have
been issued, for purposes of Section 3.4(a), on the Closing Date. From and
after the Closing Date, the terms of this Agreement shall apply to such
Existing Letters of Credit, superseding any other agreement otherwise
applicable to them to the extent inconsistent with the terms hereof.
Absent such election by such Designated Letter of Credit Bank, Existing
Letters of Credit shall not constitute "Letters of Credit" hereunder for
any purpose including Sections 2.12(d) and 4.1 hereof.
(d) PARTICIPATION BY BANKS IN LETTERS OF CREDIT.
By its issuance of a Letter of Credit and without further
action on its part, each Designated Letter of Credit Issuer hereby grants
to each Bank, and each Bank hereby acquires from such Designated Letter of
Credit Issuer, a participation in such Letter of Credit equal to such
Bank's Ratable Portion of the Letter of Credit's face amount, effective on
the date of the issuance of such Letter of Credit. In consideration, each
Bank hereby absolutely and unconditionally agrees to pay to the
Administrative Agent or the applicable Designated European Administrative
Agent, as the case may be,
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for the account of each Designated Letter of Credit Issuer such Bank's
Ratable Portion of each disbursement made by such Designated Letter of
Credit Issuer in respect of such Letter of Credit and not reimbursed by
the applicable Letter of Credit Obligor or Borrower guarantying such
reimbursement obligation as hereinafter provided for any reason including
the illegality of such reimbursement or as to which any reimbursement
payment is required to be refunded to a Borrower or applicable Letter of
Credit Obligor for any reason. Each Bank acknowledges and agrees that its
obligation to acquire risk participations pursuant to this Section 2.12(d)
is absolute and unconditional and shall not be affected by any event or
circumstance whatsoever, including the occurrence of any Potential Default
or Event of Default hereunder or the failure of any condition precedent
set forth in Section 3 of this Agreement to be satisfied and each payment
in satisfaction thereof shall be made without any offset, abatement,
withholding or reduction whatsoever; provided, however, that the foregoing
shall not be construed to excuse any Designated Letter of Credit Issuer
from liability to any Bank to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by
each of the Banks to the fullest extent permitted by applicable Law)
suffered by such Bank that are caused by such Designated Letter of Credit
Issuer's gross negligence or willful misconduct.
(e) REIMBURSEMENT; INTEREST.
Each Borrower agrees that (x) whenever there is a drawing on a
Letter of Credit issued by a Designated Letter of Credit Issuer for the
account of such Borrower, the Borrower shall pay, and (y) whenever there
is a drawing on a Letter of Credit issued by a Designated Letter of Credit
Issuer for the account of another Letter of Credit Obligor whose
reimbursement obligation such Borrower is guarantying pursuant to Section
2.12(l) of this Agreement, the Borrower shall cause such Letter of Credit
Obligor to pay, to the Administrative Agent or the Designated European
Administrative Agent, as the case may be, on the date of such drawing an
amount equal to such drawing, such payment to be made in immediately
available funds and in Dollars (and in the amount which is the Dollar
equivalent of the payment or disbursement made by such Designated Letter
of Credit Issuer under such Letter of Credit in an Alternate Currency).
The Administrative Agent or the Designated European Administrative Agent,
as the case may be, shall promptly remit any such payment to such
Designated Letter of Credit Issuer. If there is a drawing on a Letter of
Credit, then, unless the Letter of Credit Obligor (or the Borrower
guarantying the reimbursement obligation of such Letter of Credit Obligor)
shall reimburse such amount in full on the date of such drawing, the
unpaid amount thereof shall bear interest for the account of the
applicable Designated Letter of Credit Issuer for each day from and
including the date of such drawing until the earlier of the date of
reimbursement by the applicable Letter of Credit Obligor (or the Borrower
guarantying the reimbursement obligation of such Letter of Credit Obligor)
or the date on which such drawing is reimbursed by Revolving Credit Loans,
at the rate per annum that would apply to such amount if such amount were
a Revolving Credit Borrowing comprised of Alternate Base Rate Loans.
(f) FAILURE TO REIMBURSE DRAWINGS.
In the event that the applicable Letter of Credit Obligor (or
the Borrower guarantying the reimbursement obligation of such Letter of
Credit Obligor) fails to make a timely reimbursement, together with any
interest thereon, to the Administrative Agent or the Designated European
Administrative Agent, as the case may be, on the date of any drawing on a
Letter of Credit, such failure shall constitute a Deemed Credit Request
requesting an Alternate Base Rate Loan to be made to such Letter of Credit
Obligor if
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such Letter of Credit Obligor is a Borrower or, if such Letter of Credit
Obligor is not a Borrower, to the Borrower which is guarantying the
reimbursement obligation of such Letter of Credit Obligor, in an aggregate
amount equal to the amount reimbursable to the applicable Designated
Letter of Credit Issuer plus any interest thereon (the Administrative
Agent having determined in the case of any payment by a Designated Letter
of Credit Issuer made in an Alternate Currency the equivalent thereof in
Dollars). The Administrative Agent or such Designated European
Administrative Agent, as the case may be, shall disburse all such loan
proceeds directly to the Designated Letter of Credit Issuer to satisfy the
aforesaid reimbursement liability. The obligations of the Banks to the
Administrative Agent and such Designated European Administrative Agent
under this Section 2.12 are in addition to and not in limitation of the
obligations of the Banks under Section 11 of this Agreement. In the event
that the obligation of the Banks to make a Revolving Credit Loan pursuant
to this Section 2.12(f) cannot be satisfied by the Banks because any of
the events specified in Section 8.14 shall have occurred with respect to
the Borrower for whose account the Letter of Credit has been issued (or
which is guarantying the reimbursement obligations of the Letter of Credit
Obligor for whose account the Letter of Credit was issued) or one or more
of the Banks shall determine that such Banks are legally prohibited from
making such a Revolving Credit Loan, each Bank (other than the applicable
Designated Letter of Credit Issuer) or each such Bank so prohibited (other
than the applicable Designated Letter of Credit Issuer), as the case may
be, shall be obligated to purchase on the date the Revolving Credit Loan
would have been made pursuant to this Section (e) an undivided
participating interest in the outstanding unpaid reimbursement obligation
owing to such Designated Letter of Credit Issuer in an amount equal to the
Revolving Credit Loan that such Bank would otherwise have been obligated
to fund. On the purchase date, each Bank or each such Bank so prohibited
shall pay to the Administrative Agent or such Designated European
Administrative Agent, as the case may be, for the benefit of the
Designated Letter of Credit Issuer, in immediately available funds, at the
account of the Administrative Agent or Designated European Administrative
Agent, as the case may be, maintained at the Payment Office of the
Administrative Agent or Designated European Administrative Agent, as the
case may be, not later than the time such Bank would have been obligated
to fund such Revolving Credit Loan pursuant to this Section (e), a
participation purchase price in amount equal to such Revolving Credit
Loan. The proceeds of purchases by the Banks of such participating
interests shall be applied directly by the Administrative Agent or such
Designated European Administrative Agent, as the case may be, to reimburse
the Designated Letter of Credit Issuer for such unpaid reimbursed
obligation. Upon receipt of such participation purchase price, the
Designated Letter of Credit Issuer shall, if requested by a Bank
purchasing a participating interest, issue a participation certificate,
dated the date of the Designated Letter of Credit Issuer's receipt of such
proceeds, and evidencing such Bank's participating interest in such unpaid
reimbursement obligation. Whenever, at any time after a Designated Letter
of Credit Issuer has received from the Administrative Agent the proceeds
of any such participating interest by any other Bank, such Designated
Letter of Credit Issuer receives any payment from or on behalf of
applicable Borrower on account of such unpaid reimbursed obligation, such
Designated Letter of Credit will promptly pay to the Administrative Agent
or such Designated European Administrative Agent, as the case may be, for
distribution to such Bank its Ratable Portion of such payments
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Bank's participating interest was
outstanding); provided, however, in the event such payment in respect of
unpaid reimbursement obligations is required to be returned by the
Designated Letter of Credit Issuer, such Bank will return to the
Administrative Agent or such Designated European Administrative Agent for
payment over the Designated Letter of Credit Issuer any portion of such
payment previously distributed by the Administrative Agent or such
Designated European Administrative Agent on behalf of the Designated
Letter of Credit Issuer.
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(g) OBLIGATIONS ABSOLUTE.
The obligation of each Borrower for whose account a Letter of
Credit was issued to reimburse, and to cause each other Letter of Credit
Obligor whose reimbursement obligation such Borrower is guarantying
pursuant to Section 2.12(l) of this Agreement to reimburse, the Designated
Letter of Credit Issuer shall be absolute and unconditional and shall be
performed under all circumstances including, without limitation: (i) any
lack of validity or enforceability of any Letter of Credit, (ii) the
existence of any claim, offset, defense or other right that such Borrower
or any other Letter of Credit Obligor may have against the beneficiary of
any Letter of Credit or any successor in interest thereto, (iii) the
existence of any claim, offset, defense or other right that any Bank or
the Administrative Agent or Designated European Administrative Agent may
have against any Borrower or other Letter of Credit Obligor or against the
beneficiary of any Letter of Credit or against any successor in interest
thereto, (iv) the existence of any fraud or misrepresentation in the
presentment of any draft or other item drawn and paid under any Letter of
Credit by any person other than the Designated Letter of Credit Issuer,
(v) any payment of any draft or other item by a Designated Letter of
Credit Issuer which does not strictly comply with the terms of any Letter
of Credit issued by such Designated Letter of Credit Issuer, so long as,
in each case, such payment shall not have constituted gross negligence or
willful misconduct on the part of such Designated Letter of Credit Issuer,
(vi) any improper use which may be made of the Letter of Credit or any
improper acts or omissions of any beneficiary or transferee of the Letter
of Credit in connection therewith, (vii) any statement or any other
documents presented under any Letter of Credit proving to be insufficient,
forged, fraudulent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever, (viii) the
insolvency of any Person issuing any documents in connection with the
Letter of Credit, (ix) any irregularity in the transaction with respect to
which a Letter of Credit is issued, including any fraud by the beneficiary
or any transferee of such Letter of Credit, (x) any errors, omissions,
interruptions or delays in transmission or delivery of any messages, (xi)
any act, error, neglect or default, omission, insolvency or failure of
business of any of the correspondents of the Designated Letter of Credit
Issuer, or (xii) any other circumstances arising from causes beyond the
control of the Designated Letter of Credit Issuer.
(h) LIABILITY OF DESIGNATED LETTER OF CREDIT ISSUER.
It is expressly understood and agreed that the absolute and
unconditional obligation of a Borrower hereunder to reimburse, and to
cause the other Letter of Credit Obligors whose reimbursement obligation
such Borrower is responsible to reimburse, disbursements in respect of
Letters of Credit issued by a Designated Letter of Credit Issuer shall not
be construed to excuse such Designated Letter of Credit Issuer from
liability to such Borrower or any Letter of Credit Obligor to the extent
of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrowers to the extent
permitted by applicable Law) suffered by such Borrower or any other Letter
of Credit Obligor of the foregoing that are caused by the gross negligence
or willful misconduct of such Designated Letter of Credit Issuer in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties agree that each
Designated Letter of Credit Issuer may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary,
and may make payment upon presentation of documents that appear on their
face to be in substantial compliance with the terms of such Letter of
Credit; provided, however, that each Designated Letter of Credit Issuer
shall have the right in its sole
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discretion to decline to accept such documents and to decline to make such
payment if such documents are not in strict compliance with the terms of
such Letter of Credit. In making any payment under any Letter of Credit,
the Designated Letter of Credit Issuer's (i) exclusive reliance as to any
and all matters set forth therein on documents, signatures and
endorsements presented to it under such Letter of Credit which on their
face appear to be in order, whether not the amount due to the beneficiary
thereunder equals the amount of such draft, whether any document presented
pursuant to such Letter of Credit proves to be in order, and whether any
other statement or any other document or any signature or endorsement with
respect thereto presented pursuant to such Letter of Credit proves to be
forged or invalid or any statement therein proves to be inaccurate or
untrue in any respect whatsoever and (ii) making payment upon presentation
of documents not complying in any immaterial respect with the terms of the
Letter of Credit shall, in each case, not be deemed to constitute willful
misconduct or gross negligence of the Designated Letter of Credit Issuer.
Any action, inaction or omission on the part of the Designated Letter of
Credit Issuer or any of its correspondents, under or in connection with
any Letter of Credit issued by the Designated Letter of Credit Issuer or
any renewal or extension thereof or the related instruments or documents,
if taken in good faith and in conformity with applicable Laws and
regulations governing Letters of Credit generally and the terms of this
Section 2.12(h), shall be binding upon the Borrowers and the other
applicable Letter of Credit Obligors and shall not place the Designated
Letter of Credit Issuer or any of its correspondents under any liability
to the Borrowers or any other Letter of Credit Obligors. The Designated
Letter of Credit Issuer's rights, powers, privileges and immunities
specified in or arising under this Agreement are in addition to any
heretofore or at any time hereafter otherwise created or arising rights,
powers, privileges and immunities, whether by statute or rule of Law or
contract.
(i) DESIGNATED LETTER OF CREDIT ISSUER INDEMNITY.
Each Borrower for whose account a Letter of Credit is issued
or which is guarantying the reimbursement obligation of another Letter of
Credit Obligor for whose account a Letter of Credit has been issued shall
indemnify the Designated Letter of Credit Issuer issuing such Letter of
Credit from and against: (i) any loss or liability (other than any caused
by the Designated Letter of Credit Issuer's gross negligence or willful
misconduct as determined by the final judgment of a court of competent
jurisdiction) incurred by the Designated Letter of Credit Issuer in
respect of this Agreement and the Letters of Credit issued by the
Designated Letter of Credit Issuer for the account of such Borrower or
such Letter of Credit Obligor and (ii) any out-of-pocket expenses incurred
by such Designated Letter of Credit Issuer in defending itself or
otherwise related to this Agreement or any such Letter of Credit issued by
such Designated Letter of Credit Issuer (other than any caused by the
Designated Letter of Credit Issuer's gross negligence or willful
misconduct as determined by the final judgment of a court of competent
jurisdiction) including, without limitation, reasonable fees and expenses
of legal counsel incurred by such Designated Letter of Credit Issuer in
the defense of any claim against it or in the prosecution of its rights
and remedies.
(j) EFFECT OF APPLICABLE LAW OR CUSTOM.
All Letters of Credit issued hereunder, all reimbursement
obligations hereunder and all reimbursement obligations under any
Reimbursement Agreement will, except to the extent otherwise expressly
provided in this Agreement, the Reimbursement Agreements or such Letters
of Credit, be governed by the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, and any subsequent revisions thereof, or (x) in the case of a Letter
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of Credit constituting a Demand Guarantee, the Uniform Rules for Demand
Guarantees (1992 Revision), International Chamber of Commerce Publication
No. 458, and any subsequent revisions thereof or (y) in the case of a
Letter of Credit constituting a Contract Guarantee, the Uniform Rules for
Contract Guarantees (1978), International Chamber of Commerce Publication
No. 325, and any subsequent revisions thereof.
(k) TERMINATION OF LETTER OF CREDIT COMMITMENT.
In the event that: (i) any restriction is imposed on any
Designated Letter of Credit Issuer (including, without limitation, any
legal lending or acceptance limits imposed by the United States of America
or any political subdivision thereof or of any foreign government or
central bank) which in the judgment of such Designated Letter of Credit
Issuer would prevent such Designated Letter of Credit Issuer from issuing
Letters of Credit or maintaining its commitment to issue Letters of Credit
or (ii) there shall have occurred, at any time during the term of this
Agreement: (A) any outbreak of hostilities or other national or
international crisis or change in economic conditions if the effect of
such outbreak, crisis or change would make the issuance of Letters of
Credit impracticable, (B) the enactment, publication, decree or other
promulgation of any statute, regulation, rule or order of any court or
other governmental authority which would materially and adversely affect
the ability of the Borrowers to perform their obligations under this
Agreement or the ability of any Letter of Credit Obligor to perform its
obligations under this Agreement or any Reimbursement Agreement, or (C)
the taking of any action by any government or agency in respect of its
monetary or fiscal affairs which would have a material adverse effect on
the issuance of Letters of Credit, then such Designated Letter of Credit
Issuer, in the case of the occurrence of any event described hereinabove,
shall give written notice of the occurrence of such event to the Borrower
Representative and the Administrative Agent and Designated European
Administrative Agent, if applicable, whereupon the commitment of such
Designated Letter of Credit Issuer to issue or extend any Letter of Credit
shall be suspended on the effective date of such notice and shall continue
to be suspended until the effect of such event shall cease to exist.
(l) GUARANTY OF OTHER LETTER OF CREDIT OBLIGOR'S LETTER OF CREDIT
OBLIGATIONS.
(i) Each Domestic Borrower hereby unconditionally guarantees,
jointly and severally, for the benefit of the Administrative Agent,
each Designated European Administrative Agent, to the extent
applicable, the Banks and each Designated Letter of Credit Issuer,
the full and punctual payment of the obligations of each Letter of
Credit Obligor under each Letter of Credit Document to which such
Letter of Credit Obligor is now or hereafter becomes a party. Upon
failure by any such Letter of Credit Obligor to pay punctually any
such amount, each Domestic Borrower shall be jointly and severally
obligated to forthwith on demand by the Administrative Agent pay the
amount not so paid at the place and in the currency and otherwise in
the manner specified in this Agreement or any applicable Letter of
Credit Document. As a separate, additional and continuing
obligation, each Domestic Borrower unconditionally and irrevocably
undertakes and agrees, for the benefit of the Administrative Agent
or the Designated European Administrative Agent, if applicable, and
the Banks, that, should any of the foregoing amounts not be
recoverable from the Domestic Borrowers for any reason whatsoever
(including, without limitation, by reason of any provision of
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any Loan Document or any other agreement or instrument executed in
connection therewith being or becoming void, unenforceable, or
otherwise invalid under any applicable law) then, notwithstanding
any notice or knowledge thereof by any Bank, the Administrative
Agent or the Designated European Administrative Agent, if
applicable, any of their respective Affiliates, or any other Person,
at any time, each Domestic Borrower as sole, original and
independent obligor, upon demand by the Administrative Agent or such
Designated European Administrative Agent, will make payment to the
Administrative Agent or such Designated European Administrative
Agent, for the account of the Banks and the Administrative Agent or
such Designated European Administrative Agent, of all such
obligations not so recoverable by way of full indemnity, in such
currency and otherwise in such manner as is provided in the Loan
Documents.
(ii) Each Foreign Borrower hereby unconditionally guarantees,
severally, for the benefit of the Administrative Agent, each
Designated European Administrative Agent, if applicable, the
Banks and each Designated Letter of Credit Issuer applicable
thereto, the full and punctual payment of the obligations of each
Letter of Credit Obligor that is a Subsidiary of such Foreign
Borrower under each Letter of Credit Document to which such
Letter of Credit Obligor is now or hereafter becomes a party.
Upon failure by any such Letter of Credit Obligor to pay
punctually any such amount, such Foreign Borrower shall forthwith
on demand by the Administrative Agent or such applicable
Designated European Administrative Agent pay the amount not so
paid at the place and in the currency and otherwise in the manner
specified in this Agreement or any applicable Letter of Credit
Document. As a separate, additional and continuing obligation,
each such Foreign Borrower unconditionally and irrevocably
undertakes and agrees, for the benefit of the Administrative
Agent, such applicable Designated European Administrative Agent
and the Banks, that, should any of the foregoing amounts not be
recoverable from such Foreign Borrower for any reason whatsoever
(including, without limitation, by reason of any provision of any
Loan Document or any other agreement or instrument executed in
connection therewith being or becoming void, unenforceable, or
otherwise invalid under any applicable law) then, notwithstanding
any notice or knowledge thereof by any Bank, the Administrative
Agent, such applicable Designated European Administrative Agent
any of their respective Affiliates, or any other Person, at any
time, such Foreign Borrower as sole, original and independent
obligor, upon demand by the Administrative Agent or such
applicable Designated European Administrative Agent, will make
payment to the Administrative Agent or such applicable Designated
European Administrative Agent, for the account of the Banks, the
Administrative Agent or such or such Designated European
Administrative Agent, as the case may be, of all such obligations
not so recoverable by way of full indemnity, in such currency and
otherwise in such manner as is provided in the Loan Documents.
(iii) The obligations of each Borrower under this Section
2.12(l) shall be unconditional and absolute and, without limiting
the generality of the
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foregoing shall not be released, discharged or otherwise affected by
the occurrence, one or more times, of any of the following:
(A) any extension, renewal, settlement, compromise,
waiver or release in respect to any obligation of any Letter
of Credit Obligor under any Letter of Credit Document, by
operation of law or otherwise;
(B) any modification or amendment of or supplement to
this Agreement, any Note or any other Loan Document;
(C) any release, non-perfection or invalidity of any
direct or indirect security for any obligation of any of the
Borrowers under this Agreement, any Note or any other Loan
Document or of any other Letter of Credit Obligor under any
Letter of Credit Document;
(D) any change in the corporate existence, structure or
ownership of any Letter of Credit Obligor or any insolvency,
bankruptcy, reorganization or other similar proceeding
affecting any Letter of Credit Obligor or its assets or any
resulting release or discharge of any obligation of any Letter
of Credit Obligor contained in any Letter of Credit Document;
(E) the existence of any claim, set-off or other rights
which a Borrower may have at any time against any Letter of
Credit Obligor, the Administrative Agent or applicable
Designated European Administrative Agent, any Bank or any
other person, whether in connection herewith or any unrelated
transactions;
(F) any invalidity or unenforceability relating to or
against any other Letter of Credit Obligor for any reason or
any Letter of Credit Document, or any provision of applicable
law or regulation purporting to prohibit the payment by any
other Letter of Credit Obligor of any Obligations in respect
of any Letter of Credit; or
(G) any other act or omission to act or delay of any
kind by any other Letter of Credit Obligor, the Administrative
Agent or applicable Designated European Administrative Agent,
any Bank or any other person or any other circumstance
whatsoever which might, but for the provisions of this
section, constitute a legal or equitable discharge of any
Borrower's obligations under this section.
(iv) Each Borrower's obligations under this Section 2.12(l)
shall remain in full force and effect until the Commitments shall
have terminated and the principal of and interest on the Notes and
all other amounts payable by such Borrower under the Loan Documents
and by any other Letter of Credit Obligor under the Letter of Credit
Documents shall have been paid in full. If at any time any payment
of any of the Obligations of any Letter of Credit Obligor in respect
of any Letter of Credit Documents is rescinded or must be otherwise
restored or
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returned upon the insolvency, bankruptcy or reorganization of such
Letter of Credit Obligor, the applicable Borrower's obligations
under this section with respect to such payment shall be reinstated
at such time as though such payment had been due but not made at
such time.
(v) Each of the Borrowers irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be
taken by any person against any Letter of Credit Obligor or any
other person, or against any collateral or guaranty of any other
person.
(vi) Until the indefeasible payment in full of all of the
Obligations and the termination of the Commitments of the Banks
hereunder, none of the Borrowers shall have any rights, by operation
of law or otherwise, upon making any payment under this section, to
be subrogated to the rights of the payee against any Letter of
Credit Obligor with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by any Letter of Credit
Obligor in respect thereof.
(vii) In the event that acceleration of the time for payment
of any amount payable by any Letter of Credit Obligor under any
Letter of Credit Document is stayed upon insolvency, bankruptcy or
reorganization of such Letter of Credit Obligor, all such amounts
otherwise subject to acceleration under the terms of any applicable
Letter of Credit Document shall nonetheless be payable by the
applicable Borrower or Borrowers under this Section 2.12(l)
forthwith on demand by the Administrative Agent.
2.13 INTEREST ON LOANS.
(a) INTEREST RATE.
Each Borrower shall pay interest on the unpaid principal
amount of each Revolving Credit Loan or Term Loan made by the Banks to
such Borrower and each Swing Line Loan made by a Designated Swing Line
Lender to such Borrower from the date of such Loan until the principal
amount thereof shall have been paid in full as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as any
Alternate Base Rate Loans comprising a Revolving Credit Borrowing or
Term Loan Borrowing are outstanding, such Borrower shall pay
interest on such Alternate Base Rate Loans at a rate per annum equal
to the sum of the Alternate Base Rate plus the Applicable Margin
which is then in effect and applicable to Borrowings comprised of
Alternate Base Rate Loans, payable quarterly, in arrears, on the
first day of each January, April, July and October of each calendar
year and on the date such Alternate Base Rate Loans comprising such
Borrowing shall be converted or paid in full (whether at maturity,
by reason of acceleration or otherwise) and, after maturity, on
demand.
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(ii) LIBOR RATE LOANS. During such periods as any LIBOR Rate
Loans comprising a Revolving Credit Borrowing or Term Loan Borrowing
are outstanding or any LIBOR Rate Loan comprising a Swing Line
Borrowing is outstanding, such Borrower shall pay interest on such
LIBOR Rate Loans at a rate per annum equal to the sum of the London
Interbank Offered Rate plus the Applicable Margin which is then in
effect and applicable to Borrowings comprised of LIBOR Rate Loans as
of the most recently preceding Margin Adjustment Date occurring
prior to the date of the making of such LIBOR Rate Loans, or the
conversion or continuation of such LIBOR Rate Loans in accordance
with Section 2.11, payable: (A) on the last day of each Interest
Period and (B) if such Interest Period has a duration of more than
three months, three months after the first day of such Interest
Period and (C) on the date such LIBOR Rate Loans comprising such
Borrowing shall be converted to Base Rate Loans, or paid in full
(whether at maturity, by reason of acceleration or otherwise) and
(D) after maturity, on demand.
(iii) QUOTED MONEY MARKET RATE LOANS. During such periods as
any Money Market Rate Loan comprising a Swing Line Borrowing is
outstanding, such Borrower to which such Swing Line Loan is
outstanding shall pay interest on such Money Market Rate Loan at a
rate per annum equal to the Quoted Money Market Rate applicable to
such Money Market Loan, payable upon prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise), and,
after maturity, on demand.
(b) APPLICABLE MARGIN; TERMS OF ADJUSTMENT.
(i) COMMENCEMENT; CONDITIONS. So long as no Event of Default
shall have occurred which is continuing and has not been waived in
accordance with Section 14.1 hereof, the Applicable Margin shall be
calculated as herein specified as of the Closing Date and as of the
first day of the calendar month of each Fiscal Year commencing on
April 1, 2000 (each such date, a "Margin Adjustment Date"), if at
least three (3) Business Days prior to such Margin Adjustment Date,
the Administrative Agent shall have received: (A) the financial
statements required by Section 7.1(a) for the Fiscal Quarter ending
immediately prior to such Margin Adjustment Date or, where the
Fiscal Quarter ending prior to such Margin Adjustment Date is a
Fiscal Year end, the financial statements required by Section 7.1(b)
for such Fiscal Year ending immediately prior to such Margin
Adjustment Date (each such Fiscal Quarter end and Fiscal Year end, a
"Margin Determination Date") and (B) in each case, a certificate
complying with Section 7.1(c) certifying Consolidated Total Funded
Debt to Adjusted EBITDA Ratio of Instron Corporation and its
consolidated Subsidiaries for the applicable Testing Period ending
as of such Margin Determination Date.
(ii) CALCULATION AND DURATION OF ADJUSTMENT. On each Margin
Adjustment Date, the Applicable Margin shall be the Applicable
Margin set forth in the definition of "Applicable Margin" for
Alternate Base Rate Loans or the LIBOR Rate Loans, as the case
may be, comprising Revolving Credit Borrowings
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which corresponds to the Borrowers' Consolidated Total Funded Debt
to Adjusted EBITDA Ratio as measured for the applicable Testing
Period ending as of the Margin Determination Date applicable to such
Margin Adjustment Date. The Applicable Margin effective as of a
particular Margin Adjustment Date shall remain effective only until
the next succeeding Margin Adjustment Date at which time the
Applicable Margin shall be recalculated pursuant to this Subsection
(b); provided, however, that:
(A) if (x) an Event of Default shall have occurred which
is continuing and has not been waived in accordance with Section
14.1 hereof or (y) even if such Event of Default has been so waived
by the Banks, if the Borrowers shall not have delivered as of any
Margin Adjustment Date the financial statements required to have
been delivered previously thereto under Section 7.1(a) and 7.1(b) of
this Agreement, then, at the election of the Required Banks, the
Applicable Margin shall be: (a) with respect to Revolving Credit
Borrowings comprised of Alternate Base Rate Loans, the Alternate
Base Rate plus one and one half percent (1.50%) per annum, and (b)
with respect to Revolving Credit Borrowings comprised of LIBOR Rate
Loans, the London Interbank Offered Rate plus three percent (3.00%)
per annum, and
(B) if an Event of Default shall have occurred which is
continuing and has not been waived in accordance with Section 14.1
hereof, the interest rate shall be, upon the election of the
Required Banks, the default interest rate applicable pursuant to
Section 2.14 of this Agreement.
2.14 DEFAULT INTEREST.
If any principal, interest or fees due under this Agreement shall
not be paid when due or if any Note or any amounts due under any Note shall not
be paid at maturity, whether such maturity occurs by reason of lapse of time or
by operation of any provision of acceleration of maturity therein contained, or
if there shall otherwise occur an Event of Default which is continuing and has
not been waived in accordance with Section 14.1 hereof, then, at the election of
the Required Banks, (a) the principal of each outstanding Loan and, to the
extent permitted by law, the unpaid interest thereon shall bear interest,
payable on demand, at a rate per annum equal at all times to two percent (2%)
per annum in excess of the interest rate otherwise then payable (including, if
imposed, the interest rate reflecting the increased Applicable Margin set forth
in Section 2.13(b)(ii)) pursuant to the terms of this Agreement and (b) the
Applicable Fee Percentage shall be two percent (2%) in excess of the Applicable
Fee Percentage per annum otherwise applicable pursuant to the proviso to Section
2.16(e) of this Agreement.
2.15 INTEREST RATE DETERMINATION.
(a) ADMINISTRATIVE AGENT DETERMINATION; NOTICE.
The Administrative Agent or the applicable Designated European
Administrative Agent, as the case may be, shall determine the London
Interbank Offered Rate in accordance with the definition of "London
Interbank Offered Rate" set forth in Annex II of this Agreement. The
Administrative Agent or such applicable Designated European Administrative
Agent shall give prompt notice to each of the Banks and the Borrower
Representative of the applicable interest rate determined by the
Administrative
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Agent or the applicable Designated European Administrative Agent, as the
case may be, for purposes of Sections 2.11 and 2.13 of this Agreement.
(b) FAILURE OF BORROWERS TO ELECT.
If no Interest Period is specified in any Credit Request or
any Rate Conversion/Continuation Request for any LIBOR Rate Loans, the
Borrowers shall be deemed to have selected an Interest Period with a
duration of one month. If the Borrower Representative shall not have given
notice in accordance with Section 2.11 of this Agreement to continue any
LIBOR Rate Loans into a subsequent Interest Period (and shall not have
otherwise delivered a Rate Conversion/Continuation Request in accordance
with Section 2.11 of this Agreement to convert such Loans), then, at the
end of the Interest Period applicable to such LIBOR Rate Loans (unless
such LIBOR Rate Loans are repaid pursuant to the terms hereof), the
Borrowers shall be deemed to have selected an Interest Period with a
duration of one month, except that LIBOR Rate Loans denominated in an
Alternate Currency shall, at the end of the Interest Period applicable
thereto, become due and payable.
2.16 FEES.
The following fees shall be payable as set forth below:
(a) UNDERWRITING, ARRANGEMENT AND STRUCTURING FEE
Each Borrower agrees to pay to the Administrative Agent on the
Closing Date for its sole account such Borrower's Ratable Borrower Share
of a one time fee for underwriting, arranging and structuring the
financing transaction contemplated by this Agreement in the amount
specified in the Agent Fee Letter.
(b) ANNUAL ADMINISTRATIVE AGENT'S FEE.
Each Borrower agrees to pay to the Administrative Agent for
its sole account such Borrower's Ratable Borrower Share of an annual
Administrative Agent fee as set forth in the Agent Fee Letter.
(c) UNUSED COMMITMENT FEE.
Each Borrower agrees to pay to the Administrative Agent for
the ratable benefit of the Banks, allocable to the Banks in accordance
with each Bank's Ratable Portion thereof, such Borrower's Ratable Borrower
Share of an unused commitment fee on the average daily unused portion of
the aggregate Revolving Credit Commitments (taking into consideration the
daily outstanding LC Exposure of the Banks as usage for purposes of
calculating such daily unused portion) of the Banks from the Closing Date
until the Revolving Credit Termination Date at a rate per annum equal to
the Applicable Fee Percentage then in effect, payable quarterly in arrears
on the first day of each January, April, July and October, commencing
January 1, 2000, and on the Revolving Credit Termination Date.
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(d) LETTER OF CREDIT FEES.
The Borrowers shall pay the following fees with respect to
Letters of Credit:
(i) ANNUAL STANDBY LETTER OF CREDIT FEE. Each Borrower agrees
to pay to the Administrative Agent for the ratable benefit of the
Banks, quarterly in advance on the Closing Date and on the first
Business Day of each calendar quarter thereafter, a risk
participation fee equal to: (A) in the case of Letters of Credit
other than Contract Guarantees or Demand Guarantees, (x) the
Applicable Fee Percentage then in effect multiplied by (y) the
aggregate face amount of all Letters of Credit then outstanding for
the account of such Borrower or such other Letter of Credit Obligor
being guaranteed by such Borrower and (B) in the case of Contract
Guarantees or Demand Guarantees, (x) 50% of the Applicable Fee
Percentage then in effect multiplied by (y) the aggregate face
amount of all such Letters of Credit then outstanding for the
account of such Borrower or such other Letter of Credit Obligor
being guaranteed by such Borrower (unless, in either case, such
amount attributable to such Letter of Credit Obligor has been
directly paid to the Designated Letter of Credit Issuer pursuant to
the applicable reimbursement agreement).
(ii) LETTER OF CREDIT FACING FEE. Each Borrower agrees to pay
to the Administrative Agent, for the sole account of the Designated
Letter of Credit Issuer designated for such Borrower, a facing fee
for all Letters of Credit issued by such Designated Letter of Credit
Issuer for the account of such Borrower or such other Letter of
Credit Obligor being guaranteed by such Borrower (unless such amount
attributable to such Letter of Credit Obligor has been directly paid
to the Designated Letter of Credit Issuer pursuant to the applicable
reimbursement agreement) equal to one-eighth of one percent (0.125%)
per annum of the average daily maximum amount available to be drawn
under all Letters of Credit issued by such Designated Letter of
Credit Issuer while outstanding, payable quarterly in arrears on the
first day of each calendar quarter.
(iii) OTHER FEES RELATING TO LETTERS OF CREDIT. Each Borrower
agrees to pay to the Designated Letter of Credit Issuer designated
for such Borrower, for its sole account, upon issuance by such
Designated Letter of Credit Issuer of any Letters of Credit for the
account of such Borrower or such other Letter of Credit Obligor
being guaranteed by such Borrower (unless such amount attributable
to such Letter of Credit Obligor has been directly paid to the
Designated Letter of Credit Issuer pursuant to the applicable
reimbursement agreement), any standard amendment and modification
fees, issuance fees, draw fees and any other standard fees and
charges charged by such Designated Letter of Credit Issuer in
connection with Letters of Credit.
(e) APPLICABLE FEE PERCENTAGES.
So long as no Event of Default shall have occurred which is
continuing and has not been waived in accordance with Section 14.1 hereof,
each Applicable Fee
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Percentage shall be calculated as herein specified as of the Closing Date
and as of the first day of the calendar month of each Fiscal Year
commencing on April 1, 2000 (each such date, a "Fee Percentage Adjustment
Date"), if at least three (3) Business Days prior to such Fee Percentage
Adjustment Date, the Administrative Agent shall have received: (A) the
financial statements required by Section 7.1(a) for the Fiscal Quarter
ending immediately prior to such Fee Percentage Adjustment Date or, where
the Fiscal Quarter ending prior to such Fee Percentage Adjustment Date is
a Fiscal Year end, the financial statements required by Section 7.1(b) for
such Fiscal Year ending immediately prior to such Fee Percentage
Adjustment Date (each such Fiscal Quarter end and Fiscal Year end, a "Fee
Percentage Determination Date") and (B) a certificate complying with
Section 7.1(c) certifying the Consolidated Total Funded Debt to EBITDA
Ratio of Instron Corporation and its consolidated Subsidiaries as of such
Fee Percentage Determination Date. On each Fee Percentage Adjustment Date,
each Applicable Fee Percentage shall be the percentage set forth in the
definition of "Applicable Fee Percentage" which corresponds to the
Borrowers' Consolidated Total Funded Debt to EBITDA Ratio as of the Fee
Percentage Determination Date applicable to such Fee Percentage Adjustment
Date. The Applicable Fee Percentage effective as of a particular Fee
Percentage Adjustment Date shall remain effective only until the next
succeeding Fee Percentage Adjustment Date, at which time the Applicable
Fee Percentage shall be recalculated pursuant to this Section 2.16(e);
provided, however, that, if an Event of Default shall have occurred which
is continuing and has not been waived in accordance with Section 14.1
hereof, or if the Borrowers shall not have delivered as of such Fee
Percentage Adjustment Date the financial statements in accordance with
Sections 7.1(a) and 7.1(b) of this Agreement, then, upon the election of
the Required Banks, the Applicable Fee Percentage shall be the highest per
annum percentage appearing in the tables incorporated into the
definitions.
(f) PAYMENT OF FEES; NONREFUNDABLE.
All fees set forth in this Section 2.16 shall be paid in
Dollars on the date due, in immediately available funds, to the
Administrative Agent for distribution, if and as appropriate, to the
Banks, the Designated Swing Line Lenders or the Designated Letter of
Credit Issuers. Once paid, to the extent permitted by applicable Law, none
of such fees shall be refundable under any circumstances.
2.17 MANNER AND APPLICATION OF PAYMENTS; CONTROL ACCOUNT MAINTENANCE;
COMPUTATIONS.
(a) MANNER OF PAYMENT.
Each of the Borrowers shall make all payments to be made under
this Agreement by such Borrower with respect to the Obligations hereunder,
not later than 12:00 noon (local time at the Payment Office of the
Administrative Agent or the applicable Designated European Administrative
Agent) on the day on which such payment shall become due in immediately
available funds and without setoff, counterclaim, defense or deduction of
any kind, to the Administrative Agent's or the applicable Designated
European Administrative Agent's account maintained at the Payment Office
of the Administrative Agent or the applicable Designated European
Administrative Agent, as the case may be, for distribution by the
Administrative Agent or the applicable Designated European Administrative
Agent to the Banks and application thereof by the Banks to such Borrowers'
Loan Account.
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(b) APPLICATION OF PAYMENTS.
After receipt of any payment by the Administrative Agent or
the applicable Designated European Administrative Agent, as the case may
be, the Administrative Agent or the applicable Designated European
Administrative Agent will cause to be distributed on the day of such
receipt like funds relating to such payment (other than amounts payable
pursuant to Section 2.16(a) and (b) of this Agreement solely to the
Administrative Agent and amounts payable pursuant to Section 2.16(d)(ii)
and 2.16(d)(iii) of this Agreement solely to a Designated Letter of Credit
Issuer) ratably to each of the Banks for the account of its respective
Lending Office. At the time of a Borrowers' making payment hereunder, the
Borrower Representative shall specify to the Administrative Agent or the
applicable Designated European Administrative Agent, as the case may be,
the Obligations of such Borrower to which such payment is to be applied.
If the Borrower Representative does not specify an application or if an
Event of Default has occurred which is continuing and has not been waived
in accordance with Section 14.1 hereof, the Administrative Agent or such
applicable Designated European Administrative Agent shall, subject to
Section 2.19 and 9.4(d)(iv) of this Agreement, distribute such payment to
the Banks for application to such Loans (or participations therein) as the
Administrative Agent or such applicable Designated European Administrative
Agent, in its sole discretion, elects or as the Required Banks shall have
directed; provided, however, the Administrative Agent or such applicable
Designated European Administrative Agent will use reasonable efforts to
avoid an application of a payment which causes early prepayment of a LIBOR
Rate Borrowing prior to expiration of its applicable Interest Period.
(c) ADMINISTRATIVE AGENT MAINTENANCE OF CONTROL ACCOUNT.
The Administrative Agent shall maintain on its books and
records a control account (the "Control Account") in respect of each
Borrower which shall reflect: (i) with respect to Revolving Credit
Borrowings: (w) the outstanding Revolving Credit Loans to each Borrower,
(x) the Ratable Portion of each Bank in the outstanding Revolving Credit
Borrowings to each Borrower, (y) the Ratable Portion of each Bank in all
payments made in respect of such Revolving Credit Loans and (z) accrued
interest on the Revolving Credit Loans to each Borrower, (ii) with respect
to outstanding Term Loans, (x) the outstanding principal amount to such
Borrower by each of the Banks, (y) all payments made to each Bank in
respect of such Term Loans to such Borrower and (z) accrued interest on
such Term Loan owing by such Borrower, (iii) with respect to Swing Line
Loans: (x) the outstanding Swing Line Loans to each Borrower by each
Designated Swing Line Lender, (y) the Swing Line Exposure of each Bank
and, to the extent applicable, the participating interests thereof in
outstanding Swing Line Loans and (z) to the extent applicable, the
participating interest of each Bank in all payments made and all accrued
interest on Swing Line Loans in which such Bank has a participating
interest, (iv) all Letter of Credit drawings and (v) all other Obligations
of any Borrower that have become payable hereunder. Each entry by the
Administrative Agent in the Control Account shall be, absent manifest
error, prima facie evidence of the data entered. Such entries by the
Administrative Agent shall not be a condition to any Borrower's obligation
to repay the Obligations.
(d) DESIGNATED EUROPEAN ADMINISTRATIVE AGENT MAINTENANCE OF
DESIGNATED EUROPEAN CONTROL ACCOUNT.
Each Designated European Administrative Agent shall maintain
on its books and records a control account (the "Designated European
Control Account") in
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respect of each Borrower for which such Designated European Administrative
Agent has been designated which shall reflect: (i) with respect to
Revolving Credit Borrowings for such Borrowers: (w) the outstanding
Revolving Credit Loans to each such Borrower, (x) the Ratable Portion of
each Bank in the outstanding Revolving Credit Borrowings to each Borrower,
(y) the Ratable Portion of each Bank in all payments made in respect of
such Revolving Credit Loans and (z) accrued interest on the Revolving
Credit Loans to each Borrower, (ii) with respect to Swing Line Loans: (x)
the outstanding Swing Line Loans to each such Borrower by each Designated
Swing Line Lender, (y) the Ratable Portion (or participating interest ) of
each Bank in such outstanding Swing Line Loans and (z) to the extent
applicable, the participating interest of each Bank in all payments made
and all accrued interest on Swing Line Loans in which such Bank has a
participating interest, (iii) all Letter of Credit drawings and (iv) all
other Obligations of any Borrower that have become payable hereunder. Each
entry by such Designated European Administrative Agent in the Designated
European Control Account shall be, absent manifest error, prima facie
evidence of the data entered. Such entries by such Designated European
Administrative Agent shall not be a condition to any Borrower's obligation
to repay the Obligations. If requested by the Administrative Agent, the
Designated European Administrative Agent shall notify the Administrative
Agent, on a weekly basis, of the information reflected in the Designated
European Control Account as of the end of the prior week.
(e) CONTROL ACCOUNT CHARGES AND CREDITS; ADMINISTRATIVE AGENT
REPORTS.
The Control Account and Designated European Control Account
maintained by the Administrative Agent and each Designated European
Administrative Agent, as the case may be, in respect of each Borrower will
be charged with all Revolving Credit Loans, Term Loans and all Swing Line
Loans made by the Banks or the applicable Designated Swing Line Lender to
such Borrower and all other Obligations of such Borrower under this
Agreement or any other Loan Document. Each of the Borrowers hereby
authorizes each Bank to charge its Loan Account in respect of such
Borrower with such Obligations. The Control Account and each Designated
European Control Account in respect of a Borrower will be credited in
accordance with this Section (b) with all payments received by the
Administrative Agent and the Designated European Administrative Agent, as
the case may be, directly from such Borrower or for the account of such
Borrower. The Administrative Agent and each Designated European
Administrative Agent shall send the Borrower Representative statements for
the Borrowers in accordance with the Administrative Agent's and such
Designated European Administrative Agent's standard procedures. Any and
all such periodic or other statements or reconciliations of the Control
Account and Designated European Control Account shall be final, binding
and conclusive upon the Borrowers in all respects, absent manifest error,
unless the Administrative Agent or the applicable Designated European
Administrative Agent, as the case may be, receives specific written
objection thereto from the Borrower Representative within thirty (30)
Business Days after such statements or reconciliation shall have been sent
to the Borrower Representative by the Administrative Agent or such
Designated European Administrative Agent. The Loan Accounts of each Bank
shall reflect the activity in the Control Account applicable to such Bank.
(f) AUTHORIZATION TO CHARGE BANKING ACCOUNTS.
If and to the extent any payment owed by a Borrower to the
Administrative Agent, any Designated European Administrative Agent, any
Bank or any Designated Swing Line Lender is not made when due hereunder or
under the Notes, each of the Borrowers hereby authorizes the
Administrative Agent, such Designated European
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Administrative Agent, such Bank and such Designated Swing Line Lender, as
the case may be, to charge from time to time against any or all of the
accounts of the Borrowers or any Borrower with the Administrative Agent,
such Designated European Administrative Agent, such Bank or such
Designated Swing Line Lender, as the case may be, any amount so due,
provided, however, that in no case shall any Foreign Borrower be liable
for any amounts owing by any other Borrower. Notice of any such charge
shall be given promptly to the Borrower Representative by the
Administrative Agent, such Designated European Administrative Agent, such
Bank or such Designated Swing Line Lender, as the case may be.
(g) COMPUTATIONS OF INTEREST AND FEES.
All computations of interest on LIBOR Rate Loans hereunder and
of fees and other compensation hereunder shall be made by the
Administrative Agent on the basis of a year of 360 days in each case for
the actual number of days elapsed (commencing on the date such Loan was
advanced but excluding the date such Loan shall be paid in full) occurring
in the period for which such interest or fees are payable; provided, that
all computations of interest on Alternate Base Rate Loans which are based
on NCB's "prime rate" shall be made by the Administrative Agent on the
basis of a year of 365 or 366 days, as the case may be, for the actual
number of days elapsed. Each determination by the Administrative Agent or
the applicable Designated European Administrative Agent, as the case may
be, of interest, fees or other amounts of compensation due hereunder shall
be rebuttably presumed to be correct.
(h) PAYMENT NOT ON BUSINESS DAY.
Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day. Any such extension or reduction
of time shall in such case be included in the computation of payment of
interest, fees or other compensation, as the case may be.
(i) FAILURE TO PAY IN ALTERNATE CURRENCY.
If it is impossible or illegal for any Borrower to effect
payment of a LIBOR Rate Loan denominated in an Alternate Currency in the
same Alternate Currency as such Loan was borrowed, as required by Section
2.10(a), or if any Borrower shall default in the payment when due of any
payment in an Alternate Currency, the Required Banks may, at their option,
require such payment to be made to the Administrative Agent or applicable
Designated European Administrative Agent, as the case may be, in Dollars
in the Dollar equivalent of such Alternate Currency. In any case in which
such Borrower shall make such payment in Dollars in the amount of the
Dollar equivalent, such Borrower agrees to hold the Banks harmless from
any loss incurred by the Banks arising from any change in the value of
Dollars in relation to such Alternate Currency between the date such
payment became due and the date of payment thereof, including, without
limitation the costs of conversion and any other costs related thereto.
The Borrowers' obligations under this Section (i) shall survive
termination of this Agreement with respect to amounts requested by any
Bank within thirty (30) days after such termination.
(j) ALTERNATE CURRENCY AMOUNTS.
Notwithstanding anything contained herein to the contrary, the
Administrative Agent or applicable Designated European Administrative
Agent, as the case
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may be, may with respect to Credit Requests by the Borrower Representative
for Borrowings comprised of LIBOR Rate Loans denominated in an Alternate
Currency or notices of voluntary prepayments of less than the full amount
of a LIBOR Rate Loan denominated in an Alternate Currency, engage in
mutually agreeable rounding of the Alternate Currency amounts requested to
be advanced or repaid; and, in such event, the Administrative Agent or
such Designated European Administrative Agent shall promptly notify the
Banks of such rounded amounts, and the Borrower Representative's Credit
Request or notice shall thereby be deemed to reflect such rounded amounts.
(k) PRESUMPTION OF PAYMENT IN FULL BY THE BORROWERS.
Unless the Administrative Agent or the applicable Designated
European Administrative Agent, as the case may be, shall have received
notice from a Borrower or the Borrower Representative on behalf of a
Borrower prior to the date on which any payment is due to the Banks
hereunder that such Borrower will not make such payment in full, the
Administrative Agent or such applicable Designated European Administrative
Agent may assume that such Borrower has made such payment in full to the
Administrative Agent on such date. In reliance upon such assumption, the
Administrative Agent and such Designated European Administrative Agent, as
applicable, may, but shall not be obligated to, distribute to each Bank on
such due date the amount then due such Bank. If and to the extent a
Borrower shall not have made such payment in full to the Administrative
Agent or such Designated European Administrative Agent, each Bank shall
repay to the Administrative Agent or such Designated European
Administrative Agent promptly upon demand the amount distributed to such
Bank, together with interest thereon (except to the extent otherwise paid
by such Borrower) for each day from the date such amount is distributed to
such Bank until the date such Bank repays such amount to the
Administrative Agent or such Designated European Administrative Agent at
the Federal Funds Effective Rate or the Cost of Funds Rate, as applicable,
if the failure to pay relates to Revolving Credit Loans or Term Loans, or
the Cost of Funds Rate of such Designated European Administrative Agent,
if the failure to pay relates to Money Market Rate Swing Line Loans. All
amounts payable under this Section 2.17(k) shall be payable in Dollars or
the applicable Alternate Currency, as the case may.
2.18 LIBOR RATE LOANS: UNASCERTAINABLE RATE; ILLEGALITY; INCREASED COSTS.
(a) UNASCERTAINABLE RATE; ILLEGALITY; INCREASED COSTS.
In the event that (x) in the case of clause (i) below, the
Administrative Agent or, with respect to Swing Line Loans or other LIBOR
Rate Loans to a Borrower for which a Designated European Administrative
Agent has been designated, the applicable Designated European
Administrative Agent or (y) in the case of clauses (ii) and (iii) below,
any Bank or Designated Swing Line Lender, shall have determined on a
reasonable basis (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto):
(i) on any date for determining the LIBOR Rate for LIBOR Rate
Loans for any Interest Period that, by reason of any changes arising
after the Effective Date affecting the London interbank
eurocurrrency market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for
in the definition of the "London Interbank Offered Rate"; or
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(ii) at any time, that such Bank or Designated Swing Line
Lender shall incur increased costs or reductions in the amounts
received or receivable hereunder in an amount which such Bank or
Designated Swing Line Lender deems material with respect to any
LIBOR Rate Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a
change in the rate of taxes or similar charges) to a Borrower
because of any change since the Effective Date in any applicable
law, governmental rule, regulation, guideline, order or request
(whether or not having the force of law), or in the interpretation
or administration thereof and including the introduction of any new
law or governmental rule, regulation, guideline, order or request
(such as, for example, but not limited to, a change in official
reserve requirements, but, in all events, excluding reserves
includable in the "London Interbank Offered Rate" pursuant to the
definition thereof); or
(iii) at any time, that the making or continuance of any
Eurocurrency Loan denominated in Dollars or in an Alternate Currency
has become unlawful by compliance by such Bank or Designated Swing
Line Lender in good faith with any change since the Effective Date
in any law, governmental rule, regulation, guideline or order, or
the interpretation or application thereof, or would conflict with
any thereof not having the force of law but with which such Bank
customarily complies;
THEN, and in any such event, such Bank or Designated Swing Line Lender (or
the Administrative Agent or such Designated European Administrative Agent,
as applicable, in the case of clause (i) above) shall (x) on such date and
(y) within 10 Business Days of the date on which such event no longer
exists give notice (by telephone confirmed in writing) to the Borrower
Representative and to the Administrative Agent and such Designated
European Administrative Agent, as the case may be, of each such
determination (which notice the Administrative Agent or Designated
European Administrative Agent, as the case may be, shall promptly transmit
to each of the other applicable Banks). Thereafter (x) in the case of
clause (i) above, LIBOR Rate Loans shall no longer be available until such
time as the Administrative Agent or Designated European Administrative
Agent, as applicable, notifies the Borrower and the applicable Banks that
the circumstances giving rise to such notice by the Administrative Agent
or such Designated European Administrative Agent no longer exist, and any
Credit Request or Rate Conversion/Continuation Request given by the
Borrower Representative with respect to LIBOR Rate Loans which have not
yet been incurred or converted shall be deemed rescinded by the Borrower
or, in the case of a Credit Request, shall, at the option of the Borrower,
be deemed converted into a Credit Request for Alternate Base Rate Loans to
be made on the date of Borrowing contained in such Credit Request, (y) in
the case of clause (ii) above, the affected Borrower shall pay to such
Bank or Designated Swing Line Lender, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Bank or Designated
Swing Line Lender shall determine) as shall be required to compensate such
Bank or Designated Swing Line Lender, for such increased costs or
reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Bank or Designated Swing Line Lender,
showing the basis for the calculation thereof, which basis must be
reasonable, submitted to the Borrower by such Bank or Designated Swing
Line Lender shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) and (z) in the case of clause (iii)
above,
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the Borrower shall take one of the actions specified in section 2.18(b) as
promptly as possible and, in any event, within the time period required by
law.
(b) CANCELLATION OF REQUESTS; CONVERSION OF OUTSTANDINGS.
At any time that any LIBOR Rate Loan is affected by the
circumstances described in Section 2.18(a)(ii), the Borrower to which the
affected Bank or Designated Swing Line Lender has advanced such LIBOR Rate
Loan may, and, in the event any LIBOR Rate Loan is affected by the
circumstances described in Section 2.18(a)(iii), such affected Borrower
shall, either (i) if the affected LIBOR Rate Loan is then being made
pursuant to a Borrowing, by causing the Borrower Representative to give
the Administrative Agent or the applicable Designated European
Administrative Agent, as the case may be, telephonic (confirmed promptly
in writing if requested) notice thereof on the same date that the Borrower
Representative was notified by a Bank or a Designated Swing Line Lender
pursuant to Section 2.18(a)(ii) or (iii), cancel said Borrowing, convert
the related Credit Request into one requesting a Borrowing of Alternate
Base Rate Loans or require the affected Bank to make its requested Loan as
a Alternate Base Rate Loan, or (ii) if the affected LIBOR Rate Loan is
then outstanding, upon at least one Business Day's notice from the
Borrower Representative to the Administrative Agent or such Designated
European Administrative Agent, as the case may be, require the affected
Bank or Designated Swing Line Lender to convert each such LIBOR Rate Loan
into an Alternate Base Rate Loan or, in the case of the Designated Swing
Line Lender, into a Money Market Rate Loan with such conversion to be
effective on the last day of the Interest Period currently applicable to
such LIBOR Rate Loan, if the affected Bank or such Designated Swing Line
Lender may lawfully continue to maintain and fund such Loan until such
last day, or immediately, if the affected Bank or such Designated Swing
Line Lender is not legally permitted to maintain and fund such Loan until
such last day; provided, that, in the case of the Banks, if more than one
Bank is affected at any time, then all affected Banks must be treated the
same pursuant to this Section 2.18(b).
2.19 PRO RATA TREATMENT OF BANKS.
Except as set forth in Sections 2.7, 2.16 and 9.6 of this Agreement,
and except as set forth in the Administrative Agent Fee Letter, each Borrowing
and participating interest hereunder, each payment or prepayment of principal of
any Borrowing, any reduction of commitments, each payment of interest on the
Loans, and each payment of the fees provided for hereunder shall be allocated
among the Banks ratably in accordance with each Bank's Ratable Portion thereof.
2.20 EUROPEAN ECONOMIC AND MONETARY UNION.
(a) EFFECTIVENESS OF PROVISIONS.
The provisions of paragraphs (b) through (g) of this Section shall
be effective from and after January 1, 1999; provided that, if and to the extent
that any such provision relates to any state (or the currency of such state)
that is not a Participating Member State on the date hereof, such provision
shall become effective in relation to such state (and the currency of such
state) at and from the date on which such state becomes a Participating Member
State.
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(b) REDENOMINATION OF ALTERNATIVE CURRENCIES.
Each obligation under this Agreement of a party to this Agreement
which has been denominated in the National Currency Unit of a Participating
Member State shall be denominated, or redenominated into, the Euro Unit in
accordance with EMU Legislation, provided that if and to the extent that any EMU
Legislation provides that an amount denominated either in the Euro or in the
National Currency Unit of a Participating Member State and payable within the
Participating Member State by crediting an account of the creditor can be paid
by the debtor either in the Euro Unit or in that National Currency Unit, any
party to this Agreement shall be entitled to pay or repay any such amount either
in the Euro Unit or in such National Currency Unit.
(c) PAYMENTS BY THE ADMINISTRATIVE AGENT GENERALLY.
With respect to the payment of any amount denominated in the Euro or
in a National Currency Unit, neither the Administrative Agent nor any Designated
European Administrative Agent shall be liable to any Borrower or any of the
Banks in any way whatsoever for any delay, or the consequences of any delay, in
the crediting to any account of any amount required by this Agreement to be paid
by the Administrative Agent or such Designated European Administrative Agent, if
the Administrative Agent or such Designated European Administrative Agent shall
have taken all relevant steps to achieve, on the date required by this
Agreement, the payment of such amount in immediately available, freely
transferable, cleared funds (in the Euro Unit or, as the case may be, in a
National Currency Unit) to the account of such Borrower or any Bank, as the case
may be, in the principal financial center in the Participating Member State
which such Borrower or, as the case may be, such Bank shall have specified for
such purpose. In this paragraph (c), "all relevant steps" shall mean all such
steps as may be prescribed from time to time by the regulations or operating
procedures of such clearing or settlement system as the Administrative Agent or
such Designated European Administrative Agent may from time to time determine
for the purpose of clearing or settling payments of the Euro.
(d) BASIS OF ACCRUAL.
If the basis of accrual of interest or fees expressed in this
Agreement with respect to the Alternate Currency of any state that becomes a
Participating Member State shall be inconsistent with any convention or practice
in the applicable interbank market for the basis of accrual of interest or fees
in respect of the Euro, such convention or practice shall replace such expressed
basis effective as of and from the date on which such state becomes a
Participating Member State; provided that, if any Loan denominated in the
Alternate Currency of such state is outstanding immediately prior to such date,
such replacement shall take effect, with respect to such Loan, at the end of the
then current Interest Period (if any) for such Loan.
(e) ROUNDING.
Without prejudice and in addition to any method of conversion or
rounding prescribed by the EMU Legislation, each reference in this Agreement to
a minimum amount (or a multiple thereof) in a National Currency Unit to be paid
to or by the Administrative Agent or the applicable Designated European
Administrative Agent shall be replaced by a reference to such reasonably
comparable and convenient amount (or a multiple thereof) in the Euro Unit as the
Administrative Agent or such Designated European Administrative Agent may from
time to time specify.
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(f) OTHER CONSEQUENTIAL CHANGES.
Each provision of this Agreement or the other Loan Documents shall
be subject to such reasonable changes of construction as the Administrative
Agent may from time to time specify to be necessary or appropriate to reflect
the introduction of or changeover to the Euro in Participating Member States.
SECTION 3 CONDITIONS OF LENDING.
3.1 CONDITIONS PRECEDENT TO INITIAL LOANS.
The effectiveness of this Agreement, the obligation of each Bank to
make a Loan on the occasion of each Borrowing, the obligation of each Designated
Swing Line Lender to make a Swing Line Loan, and the obligation of each
Designated Letter of Credit Issuer to issue any Letters of Credit, are subject
to the condition precedent that: (i) the conditions set forth in Annex III,
attached hereto and incorporated herein by reference, shall have been satisfied,
as determined by the Administrative Agent, in its sole discretion, on or before
the Closing Date of this Agreement and (ii) the Administrative Agent shall have
received on or before the Closing Date of this Agreement the documents and
deliveries set forth on said Annex III (which, in the case of exhibits to this
Agreement, shall be in the forms attached hereto, with blanks completed).
3.2 CONDITIONS PRECEDENT TO ALL LOANS.
The obligation of each Bank to make a Loan on the occasion of each
Borrowing, Rate Conversion and Rate Continuation, the obligation of each
Designated Swing Line Lender to make a Swing Line Loan, and the obligation of
each Designated Letter of Credit Issuer to issue or renew any Letter of Credit,
is subject to the conditions precedent that:
(a) REPRESENTATION BRINGDOWN.
As of the date of any Credit Event, and before and after
giving effect thereto, the representations and warranties contained in
this Agreement and all other Loan Documents are (i) to the extent such
representations and warranties are not otherwise subject by their terms to
a materiality or Material Adverse Effect threshold, true and correct in
all material respects on and as of the date of such Credit Event with the
same effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier date,
and (ii) to the extent such representations and warranties are otherwise
subject by their terms to a materiality or Material Adverse Effect
threshold, true and correct in all respects on and as of the date of such
Credit Event with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate
to an earlier date; and
(b) NO DEFAULT; COMPLIANCE WITH TERMS.
As of the date of any Credit Event, and before and after
giving effect thereto, each of the Borrowers shall be in compliance with
all other terms and provisions set forth herein and in each other Loan
Document on its part to be observed or performed, and at the time of and
immediately after such Credit Event, no Potential Default or Event of
Default shall have occurred and be continuing; and
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(c) NO MATERIAL ADVERSE CHANGE.
As of the date of any Credit Event, and before and after
giving effect thereto, there shall have been no event which has had, or
could reasonably be expected to have, a Material Adverse Effect.
(d) CONFIRMATION OF BORROWING BASE.
The Borrowers shall have delivered to the Administrative Agent
a Borrowing Base Certificate required to have been delivered for the
period in which such Credit Event occurs.
(e) OTHER DELIVERIES.
The Administrative Agent shall have received such other
approvals or documents as the Administrative Agent may reasonably request
consistent with the terms of this Agreement.
Each Credit Event shall constitute a representation and warranty by each of the
Borrowers that on the date of such Credit Event, the statements in clauses (a)
through (c) above are true and correct as of such date and that the actions
required under clauses (d) and (e) above have in fact been taken as of such
date.
SECTION 4 SECURITY INTEREST IN COLLATERAL; COLLATERAL REQUIREMENTS.
4.1 GRANT OF SECURITY INTEREST.
(a) DOMESTIC BORROWER COLLATERAL.
To secure the prompt payment and performance of: (w) the Obligations
(including Obligations of any Borrower as a Borrower Guarantor to pay the
Guaranteed Obligations of other Borrowers owing to the Banks, the Swing Line
Exposure of the Banks and the LC Exposure of the Banks), (x) the Swing Line
Obligations of any Borrower owing to a Designated Swing Line Lender, the Letter
of Credit Obligations of any Borrower owing to a Designated Letter of Credit
Issuer and (z) the Designated Hedge Obligations owing by any Borrower to a
Designated Hedge Creditor, as the case may be, each Domestic Pledging Borrower
hereby grants (or, by executing the Additional Borrower Addendum hereto, grants)
to the Administrative Agent for itself and for the benefit of the Banks, each
Designated Swing Line Lender, each Designated Letter of Credit Issuer and the
Designated Hedge Creditor, a continuing security interest in and to and a pledge
of all of the tangible and intangible, real property and personal property and
assets of such Borrower (collectively, the "Domestic Borrower Collateral"),
whether now owned or existing or hereafter acquired or arising and wheresoever
located including, without limitation: (a) all Accounts, (b) all Inventory, (c)
all Equipment, (d) all General Intangibles, (e) all Investment Property
(provided, no capital stock in Foreign Subsidiaries of Instron Corporation will
be taken as Collateral except to the extent specified in the Pledge and Security
Agreements attached hereto as Exhibit D-2 and D-3), (f) any and all deposits or
other sums at any time credited by or due from the Banks to such Borrower,
whether in a depository account or other account, (g) all Instruments,
documents, documents of title, policies and certificates of insurance,
securities, goods, choses in action, Chattel Paper, cash or other property, to
the extent owned by such Borrower or in which such Borrower has an interest, (h)
all Collateral of such Borrower which now or hereafter is at any time in the
possession or control of any of the Banks or in transit by mail or carrier to or
from any of the Banks or in the
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possession of any Person acting in a Bank's behalf, without regard to whether
such Bank received the same in pledge, for safekeeping, as Administrative Agent
for collection or transmission or otherwise or whether such Bank had
conditionally released the same, and any and all balances, sums, proceeds and
credits of such Pledging Borrower with such Bank, (i) all accessions to,
substitutions for, and all replacements, Products and Proceeds of the herein
above-referenced property of such Borrower described in this Subsection
including, but not limited to, proceeds of insurance policies insuring such
property and (j) all books, records, and other property (including, but not
limited to, credit files, programs, printouts, computer software, programs, and
disks, magnetic tape and other magnetic media, and other materials and records)
of such Borrower pertaining to any such above-referenced property of such
Borrower. Such continuing security interest and pledge in the Domestic Borrower
Collateral shall be in addition to any other security interest or Lien in the
tangible or intangible, real and personal property and assets of any Person
securing the Obligations and/or the Designated Hedge Obligations; provided,
however, that, with respect to General Intangibles or Equipment of a Pledging
Domestic Borrower, to the extent that:
(i) any such General Intangible is subject by reason of the
terms of the instrument or agreement creating such General
Intangible itself (and not any third party agreement) to a valid and
effective contractual restriction prohibiting the creation or a
security interest without the consent of another Person or otherwise
requires the consent of such Person to permit such creation or
(ii) any such item of Equipment is subject to a purchase money
security interest permitted by Section 7.3(d) of this Agreement
prohibiting the creation of any other security interest in such item
of Equipment without the consent of another Person,
THEN, the above stated grant of a security interest to the Administrative Agent
shall not be effective as to such General Intangible or item of Equipment until
such time as consent has been obtained from such Person; provided, further that,
upon the occurrence of an Event of Default which is continuing and has not been
waived in accordance with Section 14.1 hereof, such Domestic Pledging Borrower
will, upon the written request of the Administrative Agent, obtain such consent.
(b) U.K. COLLATERAL.
Pursuant to the U.K. Collateral Documents, Instron, Ltd. shall
grant to the Administrative Agent for the benefit of the Banks, the
Designated U.K. Swing Line Lender, the Designated U.K. Letter of Credit
Issuer and any Designated Hedge Creditor, effective as of the Closing Date, a
Lien on the U.K. Collateral to secure the prompt payment and performance of
all Obligations of Instron, Ltd. to the Banks, the Swing Line Obligations
owing from Instron, Ltd. to the Designated U.K. Swing Line Lender, the Letter
of Credit Obligations owing by Instron, Ltd. to the Designated U.K. Letter of
Credit Issuer, and Instron, Ltd.'s Ratable Borrower Share of Designated Hedge
Obligations.
(c) GERMAN COLLATERAL.
Pursuant to the German Collateral Documents, Instron Xxxxxxx Testing
Systems, GmbH and Instron Xxxxxxx GmbH shall each grant to the Administrative
Agent for the benefit of the Banks, the Designated German Swing Line Lender, the
Designated German Letter of Credit Issuer and any Designated Hedge Creditor,
effective as of the Closing Date, a Lien on the German Collateral to secure the
prompt payment and performance of all Obligations of Instron
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Xxxxxxx Testing Systems, GmbH and Instron Xxxxxxx GmbH to the Banks, the Swing
Line Obligations owing from Instron Xxxxxxx Testing Systems, GmbH and Instron
Xxxxxxx GmbH to the Designated German Swing Line Lender, the Letter of Credit
Obligations owing by Instron Xxxxxxx Testing Systems, GmbH and Instron Xxxxxxx
GmbH to the Designated German Letter of Credit Issuer, and Instron Xxxxxxx
Testing Systems, GmbH and Instron Xxxxxxx GmbH Ratable Borrower Share of
Designated Hedge Obligations.
4.2 PERFECTION.
Each Pledging Borrower shall execute such financing or other similar
statements as are provided for by applicable law, and otherwise take such other
action and execute such assignments or other instruments, control agreements or
documents, in each case as the Administrative Agent may request to evidence,
perfect, or record the Administrative Agent's security interest in the
Collateral or to enable the Administrative Agent to exercise and enforce its
rights and remedies under this Agreement and the other Loan Documents with
respect to any Collateral. Each Pledging Borrower hereby authorizes the
Administrative Agent on behalf of the Banks, each Designated Letter of Credit
Issuer and the Designated Hedge Creditor to execute and file any such financing
statement or continuation statement on such Borrower's behalf. Each Domestic
Pledging Borrower acknowledges that a carbon, photographic, or other
reproduction of this Agreement shall be sufficient as a financing statement to
the extent permitted by law.
4.3 CHANGES AFFECTING PERFECTION.
No Domestic Pledging Borrower shall, without giving the
Administrative Agent at least twenty (20) days prior written notice thereof: (a)
make any change in any location within the domestic United States where
Inventory or Equipment of such Borrower is maintained (other than a change in
location which relocates such Collateral to a location previously disclosed in
the Supplemental Schedule), or locate any of such Inventory or Equipment at any
new locations (other than in connection with (i) Inventory relocated without
such conveyance of ownership to locations of Foreign Borrowers or Foreign
Subsidiaries in connection to processing of such Inventory thereby to the extent
permitted by proviso (X)(V) of Section 7.3(a)(xii) hereof, or (ii) Inventory or
Equipment used in connection with a Sales Office relocated pursuant to the
addition, closure or relocation of such Sales Office) provided that this
limitation on changes in location of Inventory and Equipment is not applicable
to changes in the location of (A) Inventory sold in the ordinary course of its
business, (B) Equipment the ownership of which is conveyed to the extent
permitted by Section 7.3(a)(ii), 7.3(a)(xi) or 7.3(a)(xii)(D) hereof or proviso
(X)(I), (X)(III) and (X)(IV) of Section 7.3(a)(xii) hereof or (C) Inventory the
ownership of which is conveyed to Foreign Borrowers or Foreign Subsidiaries in
connection with the processing of such Inventory thereby to the extent permitted
by Section 7.3(a)(xii)(C) hereof, (b) make any change in the location of its
chief executive office, principal place of business or the office where its
records pertaining to its Accounts and General Intangibles are kept, (c) add any
new places of business or close of any of its existing places of business
(except that no notice hereunder shall be required with respect to the addition,
relocation or closure of any Sales Office), (d) make any change in its name or
corporate structure, adopt new trade names, assumed names or fictitious names or
otherwise add any name under which it does business, or (e) make any other
change (excluding from the calculation of the limitation provided in this clause
(e), the creation or suffering to exist of Liens permitted by Section 7.3(d)
hereof), and changes in location without notification required by clause (a)
hereof shall not be a violation of this Section unless, such other changes and
changes in location without notice would reasonably be expected to affect the
perfection or priority of the Administrative Agent's Lien in Collateral with a
fair market value exceeding Two Million Dollars ($2,000,000) in the aggregate
during the term of this Agreement.
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4.4 INSPECTION; VERIFICATION.
During regular business hours and after reasonable notice to the
Borrower Representative, the Administrative Agent (by any of its officers,
employees, Administrative Agents, representatives, or designees, including a
Bank) shall have the right, at the applicable Pledging Borrower's expense, to
inspect the Collateral and to inspect and audit, all books, records, journals,
orders, receipts, or other correspondence related thereto (and to make extracts
or copies thereof as the Administrative Agent may request) and to inspect the
premises upon which any of the Collateral is located for the purpose of
verifying the amount, quality, quantity, value, and condition of, or any other
matter relating to, the Collateral; provided, however, that subject to the
following proviso, the aggregate number of such inspections shall not exceed one
(1) in any calendar year; provided, further, that during any period commencing
upon the occurrence of an Event of Default and continuing until such Event of
Default no longer continues or has been waived in accordance with Section 14.1
hereof, the Administrative Agent may exercise such access and other rights, at
the applicable Pledging Borrower's expense, at any time and as often as the
Administrative Agent deems such action necessary or desirable. In addition to
inspections as outlined above (and only to the extent exercised concurrently
with such inspection and to a reasonable extent), the Administrative Agent or
its designee shall have the right, upon reasonable notice to and consultation
with the Borrower Representative, to make test verifications of the Accounts and
other Collateral and physical verifications of the Inventory and other tangible
items of the Collateral at the expense of the applicable Pledging Borrower and
in any manner and through any commercially reasonable medium that the
Administrative Agent considers advisable, and each of the Pledging Borrowers
agrees to furnish all such assistance and information as the Administrative
Agent may require in connection therewith. Any inspection pursuant hereto shall,
at the option of the applicable Pledging Borrower, occur in the presence of an
officer of a Borrower. In addition, the Administrative Agent shall be entitled
to conduct, at the Borrowers' expense, an (i) inventory audit and receivable
testing and (ii) an asset based field examination and collateral audit of each
of the Borrowers, which shall be in each case conducted promptly after the
Closing Date and shall otherwise be in substance satisfactory to the
Administrative Agent, in its reasonable discretion.
4.5 REINSTATEMENT.
The provisions of Section 4 and Section 5 of this Agreement shall
remain in full force and effect and continue to be effective in respect of a
Borrower should any petition be filed by or against such Borrower for
liquidation or reorganization, should such Borrower become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any part of such Borrower's assets or should any other
Financial Impairment relating to such Borrower occur, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
4.6 TERMINATION OF SECURITY INTEREST; RELEASE OF COLLATERAL.
Upon the payment in full of all Obligations, Swing Line Obligations,
and Letter of Credit Obligations, and the termination of the Commitments of each
of the Banks and all LC Exposure and Swing Line Exposure thereof: (a) the
security interests and the other Liens and licenses granted by the Pledging
Borrowers to the Administrative Agent under this Agreement
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and under any other Loan Documents shall terminate, (b) all rights to the
Collateral shall revert to the Borrower with rights therein, (c) the
Administrative Agent will, at such Borrower's expense, (x) execute and deliver
to such Borrower all documents as such Borrower may reasonably request to
evidence the termination of such security interests and the release of such
Domestic Borrower Collateral, and (y) take such other actions with respect to
this Agreement, the other Loan Documents, the Liens created thereby, and the
Obligations as such Borrower shall reasonably request, and (d) this Agreement
and all of the other Loan Documents will be terminated, and such Borrower will
have no further liabilities or obligations thereunder (except any liabilities
and/or obligations which under the terms of this Agreement or any Loan Document
survive termination thereof). Notwithstanding the foregoing:
(i) the pledge by Instron, Ltd. of the U.K. Collateral shall
secure only the Obligations of Instron, Ltd. to the Banks, its Swing
Line Obligations to the Designated U.K. Swing Line Lender, its
Letter of Credit Obligations to the Designated U.K. Letter of Credit
Issuer and its Ratable Borrower Share of any Designated Hedge
Obligations and any fees and expenses owing to the Banks hereunder
and, upon the payment in full of all such Obligations, Swing Line
Obligations, Letter of Credit Obligations and its Ratable Borrower
Share of Designated Hedge Obligations and fees and expenses
hereunder owing by Instron, Ltd. and the termination of the
Commitments of the Banks and the obligation of the Designated U.K.
Swing Line Lender pursuant to the Aggregate Swing Line Commitment to
the extent applicable thereto to Instron, Ltd. and all Swing Line
Exposure related thereto and all LC Exposure attributable to Letters
of Credit issued to Instron, Ltd. or any of its Subsidiaries, the
U.K. Collateral Documents shall terminate, all rights in the U.K.
Collateral shall revert to Instron, Ltd., and the Administrative
Agent will, at the expense of Instron, Ltd., execute and deliver to
thereto all documents as Instron, Ltd. may reasonably request to
evidence the termination of such security interests and the release
of the U.K. Collateral and
(ii) the pledge by Instron Xxxxxxx Testing Systems, GmbH and
Instron Xxxxxxx GmbH of the German Collateral shall secure only the
Obligations of Instron Xxxxxxx Testing Systems, GmbH and Instron
Xxxxxxx GmbH to the Banks, its Swing Line Obligations to the
Designated German Swing Line Lender, its Letter of Credit
Obligations to the Designated German Letter of Credit Issuer and its
Ratable Borrower Share of any Designated Hedge Obligations and any
fees and expenses owing to the Banks hereunder and, upon the payment
in full of all such Obligations, Swing Line Obligations, Letter of
Credit Obligations and its Ratable Borrower Share of Designated
Hedge Obligations and fees and expenses hereunder owing by Instron
Xxxxxxx Testing Systems, GmbH and Instron Xxxxxxx GmbH and the
termination of the Commitments of the Banks and the obligation of
the German Swing Line Lender pursuant to the Aggregate Swing Line
Commitment to the extent applicable thereto to Instron Xxxxxxx
Testing Systems, GmbH and Instron Xxxxxxx GmbH and all Swing Line
Exposure related thereto and all LC Exposure attributable to Letters
of Credit issued to Instron Xxxxxxx Testing Systems, GmbH or Instron
Xxxxxxx GmbH or any Subsidiaries of either thereof, the German
Collateral Documents shall terminate, all rights in the German
Collateral shall revert to Instron Xxxxxxx Testing Systems, GmbH or
Instron Xxxxxxx GmbH, as the case may be, and the Administrative
Agent will, at
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the expense of Instron Xxxxxxx Testing Systems, GmbH or Instron
Xxxxxxx GmbH, execute and deliver thereto all documents as Instron
Xxxxxxx Testing Systems, GmbH or Instron Xxxxxxx GmbH may reasonably
request to evidence the termination of such security interests and
the release of the German Collateral.
SECTION 5 REPRESENTATIONS, WARRANTIES AND COVENANTS RELATING TO COLLATERAL.
5.1 GENERAL REPRESENTATIONS AS TO COLLATERAL.
The Supplemental Schedule sets forth: (a) the principal place of
business of each of the Borrowers and its Subsidiaries and the office where the
chief executive offices and accounting offices of each of the Borrowers and such
Subsidiaries are located, (b) the office where each of the Domestic Pledging
Borrowers keeps its records concerning Accounts and General Intangibles, (c) the
location of each Domestic Pledging Borrower's registered office and (d) all
locations of each Domestic Pledging Borrower's material production operations
and facilities (other than locations constituting Sales Offices) and whether
such location is owned or leased and each location at which Inventory, Equipment
or other tangible Collateral (other than Inventory and Equipment located at a
Sales Office and whose location at such office does not disqualify such office
from constituting a Sales Office) of each Domestic Pledging Borrower is located
other than undisclosed locations the aggregate fair market value of all
Collateral at all such undisclosed locations of all Domestic Pledging Borrowers
shall not exceed Two Million Five Hundred Thousand Dollars $2,500,000 unless
prompt disclosure of such excess is made to the Administrative Agent, and all
reasonable assistance is given to the Administrative Agent by such Borrower in
reasonably perfecting the Administrative Agent's security interests at,
sufficient locations to eliminate such excess undisclosed Collateral value)
including, without limitation, the location of any warehouse, bailee or
consignee at which such Collateral is located (with respect to any such
Collateral not located at a specified main location owned by such Borrower, the
Supplemental Schedule shall expressly indicate to the reasonable satisfaction of
the Administrative Agent (1) the type of location of the Collateral (e.g.,
warehouse, bailee, consignee or otherwise); (2) the type of Collateral located
at each such location (e.g., whether the Collateral is Equipment, Inventory or
other tangible Collateral; (3) whether the Collateral is segregated or otherwise
identifiable at each such location; and (4) the approximate dollar value of the
Collateral located at each such location), (e) the locations and addresses of
all owned or leased real property (other than property leased in connection with
a Sales Office) of each Domestic Pledging Borrower, including the name of the
record owner of such property and its respective legal description in each case
where the Equipment Collateral located thereon has a fair market value exceeding
Two Million Five Hundred Thousand Dollars $2,500,000 (each, a "Material Owned or
Leased Real Property"), (f) the locations of each of the Domestic Pledging
Borrowers registered offices, Administrative Agents, other offices and places of
business (other than Sales Offices) during the five (5) years prior to the
Closing Date, and (g) all trade names, assumed names, fictitious names and other
names used by each of the Pledging Borrowers during the five (5) years prior to
the Closing Date. Other than as set forth in the Supplemental Schedule attached
hereto, no Pledging Borrower keeps any Collateral owned by it on any property
not owned in fee simple by such Borrower, except (i) for Collateral consisting
of Inventory and Equipment located at a Sales Office and whose location at such
office does not disqualify such office from constituting a Sales Office and (ii)
other Collateral the fair market value of which at all such locations does not
at any time exceed in the case of all such Pledging Borrowers does not at any
time exceed in the aggregate Two Million Five Hundred Thousand Dollars
($2,500,000).
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5.2 REPRESENTATIONS AND WARRANTIES REGARDING ACCOUNTS.
Each of the Domestic Pledging Borrowers agrees and represents that
each Account and each invoice representing any Account will: (a) cover a bona
fide sale or lease and delivery of merchandise sold or leased in the ordinary
course of business of such Borrower or the rendition by such Borrower of
services to customers in the ordinary course of business, (b) be for a
liquidated amount maturing as stated in the schedule thereof and in the
duplicate invoice covering said sale, and (c) other than the Administrative
Agent's security interest therein, not be subject to any Lien except for those
permitted by proviso (i) or (v) of Section 7.3(d) or to any offset, deduction or
counterclaim; provided, however, that the Borrowers shall not be deemed to have
violated clause (a) or (b) of this section unless the representations therein
are untrue as to Accounts the unpaid obligation of which in the aggregate
exceeds One Million Dollars ($1,000,0000. Each Domestic Pledging Borrower will
use all commercially reasonable efforts consistent with sound business practice
to avoid backdating, postdating or redating of invoices.
5.3 TREATMENT OF ACCOUNTS AND GENERAL INTANGIBLES.
Each of the Domestic Pledging Borrowers shall use commercially
reasonable efforts consistent with sound business practice to settle or adjust
all disputes and claims regarding Accounts. Each of the Domestic Pledging
Borrowers shall use all commercially reasonable efforts consistent with sound
business practice: (i) to grant discounts, credits or allowances only in the
ordinary course of business or on a commercially reasonable basis and (ii) to
enter into extensions, compromises or settlements to any customer or Account
Debtor, and to allow returns of merchandise thereby, only in the ordinary course
of business consistent with past practices or on a commercially reasonable
basis. Each of the Domestic Pledging Borrowers will perform and comply in all
material respects with all obligations in respect of Accounts, Chattel Paper,
General Intangibles and under all other contracts and agreements to which it is
a party or by which it is bound relating to the Collateral where failure to so
comply would result in a Material Adverse Effect.
5.4 LIEN PRIORITY.
From and after the Closing Date, by reason of the filing of
financing statements, assignments of financing statements and termination
statements in all requisite governmental offices, this Agreement and the other
Loan Documents (other than the U.K. Collateral Documents and German Collateral
Documents) will create and constitute a valid and perfected first priority
security interest (except as permitted by this Agreement or the other Loan
Documents) in and Lien on that portion of the Domestic Borrower Collateral which
can be perfected by such filing and by the execution and delivery of this
Agreement and the other Loan Documents (other than the U.K. Collateral Documents
and German Collateral Documents), which security interest will be enforceable
against each of the Domestic Pledging Borrowers and all third parties as
security for payment of all Obligations; except, that the absence of such
perfection and priority will not constitute a violation of this Agreement with
respect to Inventory, Equipment or other tangible Collateral of Domestic
Pledging Borrowers: (x) located at a Sales Office and whose location at such
office does not disqualify such office from constituting a Sales Office or (y)
all such Collateral has an aggregate fair market value not exceeding Two Million
Five Hundred Thousand Dollars ($2,500,000) without prompt disclosure and filings
against Collateral having sufficient fair market value to eliminate such excess
unperfected value). From and after the Closing Date, by reason of the recording
of the mortgages contemplated by this Agreement, this Agreement and the other
Loan Documents (including such mortgages) will create and constitute a valid
first priority Lien in favor of the Administrative Agent on the real property of
Instron Realty Trust II, a Massachusetts business trust, located in Canton,
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Massachusetts and which property is the only real property on which Instron
Corporation's Canton, Massachusetts manufacturing facility is located.
5.5 LIEN WAIVERS, LANDLORD WAIVERS, WAREHOUSE RECEIPTS.
Upon the occurrence of an Event of Default which is continuing and
has not been waived in accordance with Section 14.1 hereof, to the extent any
Inventory or Equipment of a Domestic Pledging Borrower is at any time located on
any real property not owned by such Borrower, such Borrower will, upon the
Administrative Agent's request therefor, obtain and maintain valid and effective
lien waivers in form and substance satisfactory to the Administrative Agent,
whereby each owner, landlord and mortgagee having an interest in such real
property shall disclaim any interest in such Inventory or Equipment, as the case
may be, and shall agree to allow the Administrative Agent reasonable access to
such real property in connection with any enforcement of the security interest
granted hereunder, provided, however, that, notwithstanding the foregoing,
Instron Corporation shall, within ninety (90) days after the Closing Date,
obtain and maintain in effect at all times thereafter such a landlord waiver
with respect to the real property located at Binghamton, New York and on which
its Binghamton, New York manufacturing facility is located. None of the Domestic
Pledging Borrowers shall store Inventory with fair market value exceeding Two
Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate at bailee,
warehouseman or similar party locations without the Administrative Agent's prior
written consent (such consent not to be unreasonably withheld or delayed) and,
if the Administrative Agent gives such consent and requires such action, such
Borrower will concurrently therewith cause any such bailee, warehouseman or
similar party to issue and deliver to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent, warehouse receipts therefor
in the Administrative Agent's name for Inventory so stored having a value in
excess of such aggregated amount.
5.6 MAINTENANCE OF INSURANCE.
Each of the Borrowers and the Subsidiaries thereof will maintain
with financially sound and reputable companies, insurance policies: (a) insuring
the Equipment, the Inventory, and all equipment subject to any lease, against
loss by fire, explosion, theft and such other casualties as are usually insured
against by companies engaged in the same or similar businesses, and (b) insuring
such Borrower and the Administrative Agent against liability for personal injury
and property damage relating to such Equipment, Inventory and equipment covered
by any equipment lease, such policies to be in such form and in such amounts and
coverage as may be reasonably satisfactory to the Administrative Agent (but in
any event be upon such terms as are usual for companies engaged in the same or
similar businesses as such Borrower), with losses payable to such Borrower and
the Administrative Agent as their respective interests may appear, subject to
Section 2.10(c)(i) of this Agreement and in the case of Foreign Borrowers and
the Subsidiaries thereof, to Section 1.8 hereof. All such insurance with respect
to the Equipment and Inventory shall (i) contain a breach of warranty clause in
favor of the Administrative Agent, and (ii) provide that no cancellation,
reduction in amount, change in coverage or expiration thereof shall be effective
until at least thirty (30) days after written notice to the Administrative Agent
thereof.
SECTION 6 GENERAL REPRESENTATIONS AND WARRANTIES.
To induce the Banks to advance or convert Loans hereunder, the Designated
Swing Line Lenders to advance Swing Line Loans hereunder, and the Designated
Letter of Credit Issuers to issue Letters of Credit hereunder, and so long as
the Obligations shall remain outstanding or the Banks shall have any Commitment,
Swing Line Exposure or LC Exposure hereunder, each of the Borrowers represents
and warrants to the Administrative Agent and the Banks as follows:
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6.1 EXISTENCE.
Each of the Borrowers and each Subsidiary thereof is duly organized,
validly existing and in good standing under the laws of their respective states
of incorporation. None of the Borrowers has any Subsidiaries other than as
listed in the Supplemental Schedule. Each of the Borrowers and each of the
Subsidiaries thereof has all requisite corporate power and governmental licenses
and approvals necessary to own its assets and carry on its business as now being
or proposed to be conducted except in the case of such licenses and approvals as
to which the failure to obtain would not have a Material Adverse Effect. Each of
the Borrowers and each Subsidiary thereof is duly qualified or licensed to
transact business in their respective jurisdictions of organization and in each
additional jurisdiction where such qualification or licensure is necessary
except where failure to so qualify or be licensed is not having, and would not
have, a Material Adverse Effect.
6.2 AUTHORIZATION; ENFORCEABILITY
The execution, delivery, and performance of this Agreement, the
other Loan Documents, the Merger Agreement, the other Merger Documents, the
Senior Subordinated Note Indenture, the Senior Subordinated Notes and the other
Senior Subordinated Note Documents to which any Borrower (or any of its
Subsidiaries) is a party: (a) are within such Borrower's or Subsidiary's
corporate powers and (b) have been duly authorized. This Agreement, the other
Loan Documents, the Merger Agreement, the other Merger Documents, the Senior
Subordinated Note Indenture, the Senior Subordinated Notes and the other Senior
Subordinated Note Documents to which any Borrower (or any of its Subsidiaries)
is a party constitute the legal, valid and binding obligations of such Borrower
or Subsidiary, as the case may be, enforceable against such Borrower or
Subsidiary, as the case may be, in accordance with the terms thereof, subject to
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
6.3 NO VIOLATION.
Neither the execution, delivery and performance by any of the
Borrowers of this Agreement, the other Loan Documents, the Merger Agreement, the
other Merger Documents, or the Senior Subordinated Note Indenture or the Senior
Subordinated Notes to which it is party nor compliance with the terms and
provisions thereof, nor consummation of the Merger or the issuance of the Senior
Subordinated Notes pursuant to the Offering (i) will contravene any provision of
any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality applicable to such Borrower of the
Subsidiaries thereof or its properties and assets, (ii) except as set forth in
the Supplemental Schedule, will conflict with or result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (other than the Liens created pursuant to this Agreement and
the other Loan Documents) upon any of the property or assets of any Borrower or
any Subsidiaries thereof pursuant to the terms of any promissory note, bond,
debenture, indenture, mortgage, deed of trust, credit or loan agreement, or any
other material agreement or other instrument, to which such Borrower or
Subsidiaries are a party or by which such Borrower or Subsidiaries or any
property or assets thereof are bound or to which it may be subject, or (iii)
will violate any provision of the certificate or articles of incorporation, code
of regulations or by-laws, or other charter documents of such Borrower or any
Subsidiaries thereof.
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6.4 LITIGATION; PROCEEDINGS.
As of the Closing Date, except as set forth in the Supplemental
Schedule, there are no actions, suits, investigations or proceedings, and no
orders, writs, injunctions, judgments or decrees, now pending, existing or, to
the knowledge of any Borrower, threatened against any of the Borrowers or any
Subsidiaries thereof, which are deemed by management of the Borrowers to be
material to the Borrowers and the Subsidiaries thereof on a consolidated basis
or which affect materially any property material to the Borrowers and the
Subsidiaries thereof on a consolidated basis. There is no such action, suit,
investigation, proceeding, order, writ, injunction, or decree pending against,
or, to the knowledge of any Borrower, threatened against any or all of the
Borrowers that: (i) when taken individually or with all other actions, suits,
investigations, proceedings, orders, writs, injunctions or decrees, is having,
or could reasonably be expected to have, a Material Adverse Effect or (ii) in
any manner, draws into question the validity or enforceability of the this
Agreement, the other Loan Documents, the Merger or the Senior Subordinated
Notes.
6.5 TAXES.
Each of the Borrower and each of the Subsidiaries thereof have filed
all material federal, state and local tax returns which are required to be filed
by any of them, and, except to the extent permitted by Section 7.2(i) of this
Agreement, have paid all taxes and assessments due as shown on such returns,
including interest, penalties and fees. The Borrowers and each of the
Subsidiaries thereof has established on its books such charges, accruals and
reserves in respect of taxes, assessments, fees and other governmental charges
for all fiscal periods as are required by GAAP. None of the Borrowers knows of
any proposed assessment for additional federal, foreign or state taxes for any
period, or of any basis therefor, which, individually or in the aggregate,
taking into account such charges, accruals and reserves in respect thereof as
the Borrowers and the Subsidiaries thereof have made, could reasonably be
expected to have a Material Adverse Effect.
6.6 TITLE.
Each of the Borrowers and each of the Subsidiaries thereof has good
title to all personal property assets reflected as being owned thereby in, and
good and marketable title to all real property assets reflected as being owned
thereby in, the financial statements referred to in Section 6.13 of this
Agreement (other than the Third Party Intellectual Property) and in the
consolidated financial statements delivered from time to time pursuant to
Section 7.1 of this Agreement. All such assets are free of all Liens other than
those in favor of the Administrative Agent and those otherwise disclosed in the
Supplemental Schedule or permitted by Section 7.3(d) of this Agreement or the
other Loan Documents.
6.7 CONSENTS; APPROVALS.
Except as set forth on the Supplemental Schedule, no action, consent
or approval of, registration or filing with or any other action by any
governmental authority or other Person is or will be required in connection with
the transactions contemplated by this Agreement, the other Loan Documents, the
Merger Agreement, the other Merger Documents, the Offering, the Senior
Subordinated Note Indenture, Senior Subordinated Notes and the other Senior
Subordinated Note Documents, except such as have been made or obtained and are
in full force and effect and except for the filings required to create or
perfect the Liens in favor of the Administrative Agent that are contemplated
hereby and by the other Loan Documents.
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6.8 LAWFUL OPERATIONS.
The operations of each of the Borrowers and each of the Subsidiaries
thereof are in compliance with applicable requirements imposed by Law, including
without limitation occupational safety and health laws and zoning ordinances,
except to the extent any such noncompliance, when taken individually or with all
other such noncompliance is not having, and could not reasonably be expected to
have a Material Adverse Effect.
6.9 ENVIRONMENTAL COMPLIANCE.
Each parcel of real property in which a Borrower or any Subsidiary
of a Borrower has a real property interest (whether as fee owner, operator,
lessor (directly or indirectly), lessee (directly or indirectly), mortgagee or
otherwise) (collectively, "Properties") is in compliance with Environmental Laws
except for any noncompliance, when taken individually or with all other such
noncompliance, is not having, and would not reasonably be expected to have, a
Material Adverse Effect. With respect to each of the Properties, (a) there is no
pending or, to the knowledge of the Borrowers, threatened Environmental Claim
against any Borrower or any Subsidiaries thereof or any other environmental
condition with respect to any Property which Environmental Claim or condition,
when taken individually or with all other such Environmental Claims or
conditions, is resulting in, or would reasonably be expected to result in, a
Material Adverse Effect and (b) each of the Borrowers and the Subsidiaries
thereof are in compliance with all Environmental Permits, except to the extent
any such noncompliance, when taken individually or together with all other
instances of such noncompliance, is not resulting in, and would not reasonably
be expected to result in, a Material Adverse Effect. Except as disclosed on the
Supplemental Schedule, no Property is listed or, to the best knowledge of the
Borrowers, proposed for listing on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar federal or state list of sites
requiring investigation or clean-up. Except as disclosed in the Supplemental
Schedule, the Borrowers are not aware: (i) of any underground storage tanks,
active or abandoned, including petroleum storage tanks, landfills, lagoons,
surface impoundments, disposal areas or disposal ponds on or under any Property
that are in violation of any applicable Environmental Law, (ii) any
polychlorinated biphenyls or friable asbestos present at any Property in
violation of any applicable Environmental Law, (iii) any prior use of any
Property by any Persons that constitutes a violation of any Environmental Laws
or has resulted in a release of Hazardous Materials into the environment such as
would give rise to a cleanup obligation or other Environmental Claim, (iv) of
any event, condition or activity which may interfere with or prevent continued
compliance by each Borrower and any Subsidiaries thereof with all Environmental
Laws, (v) of any generation, manufacture, storage, treatment, transportation or
disposal of Hazardous Material which has occurred or is occurring on or from any
Property except in compliance with all applicable Environmental Laws or on any
property adjoining such Property, or (vi) that any of the Borrowers or any
Subsidiaries thereof has directly transported or directly arranged for the
transportation of any Hazardous Material to any location which is listed or
proposed for listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar federal or state list or which is the subject of any
federal, state or local enforcement actions or other investigations which would
reasonably be expected to lead to claims against any or all of the Borrowers or
any Subsidiaries thereof for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA provided, however, that, whether
or not disclosed in the Supplemental Schedule, such environmental property
conditions, materials, prior use, or other condition, events or activities,
generation, manufacture, treatment, storage or transportation, when taken
individually or together with all other such matters, is not resulting in, and
would not reasonably be expected to result in, a Material Adverse Effect.
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6.10 ENVIRONMENTAL LAWS AND PERMITS.
Without limiting the representations made in Section 6.9 above, to
the best knowledge of the Borrowers, there are no circumstances with respect to
any Property or the operations of the Borrowers or any Subsidiaries thereof that
would reasonably be expected to: (i) form the basis of an Environmental Claim
against any or all of the Borrowers or any Subsidiaries thereof which would
constitute a violation of Section 7.2(e) hereof, or (ii) cause any Property
owned, leased or funded by any Borrower or any Subsidiaries thereof and material
thereto to be subject to any material restrictions on ownership, occupancy, use
or transferability under any applicable Environmental Law.
6.11 ERISA.
The Supplemental Schedule sets forth a list of all of the Employee
Benefit Plans of each of the Borrowers, all Subsidiaries thereof and each ERISA
Affiliate thereof as of the Closing Date. Compliance by the Borrower with the
provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or section 4975 of the
Internal Revenue Code. Each of the Borrowers and the Subsidiaries thereof, (i)
have fulfilled all obligations under minimum funding standards of ERISA and the
Code with respect to each Employee Benefit Plan that is not a Multiemployer Plan
or a Multiple Employer Plan, (ii) has satisfied all respective contribution
obligations in respect of each Multiemployer Plan and each Multiple Employer
Plan, (iii) is in compliance in all material respects with all other applicable
provisions of ERISA and the Code with respect to each Employee Benefit Plan,
each Multiemployer Plan and each Multiple Employer Plan. No Accumulated Funding
Deficiency exists in respect of any Employee Benefit Plan that is subject to
Code Section 412 and no Reportable Event has occurred in respect of any Employee
Benefit Plan that is subject to Title IV of ERISA which is continuing and which,
in the case of such Accumulated Funding Deficiency or Reportable Event, when
taken individually or with all other such Reportable Events or Accumulated
Funding Deficiencies, is resulting in, or could reasonably be expected to result
in, material liabilities or claims against the Borrowers and the Subsidiaries
thereof taken as a whole. No "prohibited transactions" (as defined in Section
406 of ERISA or Section 4975 of the Code), have occurred which, when taken
individually or with all other such "prohibited transactions," is resulting in,
or could reasonably be expected to result in, material liabilities or claims
against the Borrowers and the Subsidiaries thereof taken as a whole. None of the
Borrowers, nor any of the Subsidiaries thereof, nor any ERISA Affiliate thereof,
has: (i) had an obligation to contribute to any Multiemployer Plan except as
disclosed in the Supplemental Schedule or (ii) incurred or reasonably expects to
incur any liability for the withdrawal from such a Multiemployer Plan which
withdrawal liability, when taken individually or with all other such withdrawal
liabilities, is resulting in, or could reasonably be expected to result in,
material liabilities or claims against the Borrowers and the Subsidiaries
thereof taken as a whole.
6.12 AGREEMENTS; ADVERSE OBLIGATIONS; LABOR DISPUTES.
The Supplemental Schedule sets forth a list of all Material Business
Agreements of each Borrower and each of its Subsidiaries as of the Closing Date.
As of the Closing Date, the Material Business Agreements of each Borrower are in
full force and effect and have not been revoked or otherwise modified in any
material respect since the execution thereof, except as disclosed on the
Supplemental Schedule. Each Borrower is in material compliance with the terms of
the Material Business Agreements to which it is a party. None of the Borrowers,
nor any of their respective Subsidiaries, is subject to any contract, agreement,
or corporate restriction which could reasonably be expected to have a Material
Adverse Effect. None of the Borrowers, nor any of their respective Subsidiaries,
is a party to any labor dispute (including any strike, slowdown, walkout or
other concerted interruptions by its employees, but excluding grievance
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disputes) which, individually or in the aggregate, is resulting in, or would
reasonably be expected to result in, a Material Adverse Effect. There are no
material strikes, slow downs, walkouts or other concerted interruptions of
operations by employees of any Borrower or its Subsidiaries whether or not
relating to any labor contracts.
6.13 FINANCIAL STATEMENTS; PROJECTIONS.
(a) FINANCIAL STATEMENTS.
The Borrowers have furnished to the Administrative Agent
complete and correct copies of (i) the audited balance sheets of Instron
Corporation and its consolidated Subsidiaries for the Fiscal Year ending
December 31, 1998, and the related statements of income, shareholder's
equity, and cash flows, and, as applicable, changes in financial position
or cash flows for such Fiscal Year, and the notes to such financial
statements, reported upon by PricewaterhouseCoopers, L.L.P., certified
public accountants, and (ii) the internal unaudited financial statements
consisting of a balance sheet and statements of income, shareholder's
equity and cash flows as of July 31, 1999, certified by an executive
officer of Instron Corporation. All such financial statements (a) have
been prepared in accordance with GAAP, applied on a consistent basis
(except as stated therein), with Instron Corporation's financial
statements from prior Fiscal Years and (b) fairly present in all material
respects the financial condition of Instron Corporation and its
consolidated Subsidiaries as of the respective dates thereof and the
results of operations for the respective fiscal periods then ending,
subject in the case of any such financial statements which are unaudited,
to the absence of any notes to such financial statement and to normal
audit adjustments, none of which will involve a Material Adverse Effect.
As of the Closing Date, none of the Borrowers has experienced a Material
Adverse Effect since the December 31, 1998 financial statements, nor has
there been any material change in the any Borrower's accounting procedures
used therein. Instron Corporation and its consolidated Subsidiaries did
not as of December 31, 1998, and will not as of the Closing Date, after
giving effect to the Loans made on the Closing Date and the consummation
of the Merger and the Offering, have any material contingent liabilities,
material liabilities for taxes, unusual and material forward or long-term
commitments or material unrealized or anticipated losses from any
unfavorable commitments, except those reflected in such financial
statements or the notes thereto in accordance with GAAP or, to the extent
not required by GAAP to be reflected therein, were incurred in the
ordinary course of business consistent with past practice, and which
reflected or ordinary course matters in any such case will not be material
in relation to the business, operations, properties, assets or condition
(financial or otherwise) of the Borrower and the Subsidiaries thereof
considered on a consolidated basis.
(b) FINANCIAL PROJECTIONS.
The Borrowers have delivered to the Banks prior to the execution and
delivery of this Agreement (i) a copy of Instron Corporation's Report on
Form 10-K as filed (without Exhibits) with the SEC for its fiscal year
ended December 31, 1998, which contains a general description of the
business and affairs of the Borrowers and the Subsidiaries thereof, and
(ii) financial and business projections prepared by Instron Corporation
with respect to Instron Corporation and its Subsidiaries for the fiscal
years therein covered which take into account, on a pro forma basis, the
recapitalization pursuant to the Merger, the Offering and the transactions
contemplated hereby (the "Financial Projections"). Such Financial
Projections for Instron Corporation and its Subsidiaries submitted to the
Administrative Agent were prepared in good faith and were based upon
assumptions
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which the Borrowers believed to be reasonable (as of the dates of the
Financial Projections).
6.14 INTELLECTUAL PROPERTY.
Each of the Borrowers and each of the Subsidiaries thereof owns or
has the legal and valid right to use all Intellectual Property necessary for the
operation of its business as presently conducted, free from any Lien not
permitted under Section 7.3(d) and free of any restrictions material to the
operation of its business as presently conducted except as set forth in the
Supplemental Schedule. The Supplemental Schedule sets forth Intellectual
Property of Instron Corporation and Instron, Ltd. consisting of patents, patent
applications, trademarks, trademark applications, copyrights and copyright
applications deemed by management in its good faith judgment to be material to
the Borrowers. Except as set forth in the Supplemental Schedule, none of the
Borrowers nor any of the Subsidiaries thereof: (a) licenses as licensee any
material Intellectual Property to any third party or (b) is a party to any
Material License Agreement with respect to Third Party Intellectual Property.
6.15 MERGER; OFFERING.
Prior to the execution and delivery of this Agreement, (a) the
Merger became and is now effective and (b) the transactions contemplated by the
Merger Agreement and the other Merger Documents have each been consummated
strictly (i) in accordance with the respective terms thereof, without any
amendment, waiver, modification or termination of any provision thereof except
for such amendment, waiver, modification, termination or noncompliance therewith
as to which the Administrative Agent has been notified in writing prior to such
consummation and (ii) in compliance with all applicable Law. The Merger
Agreement and the other Merger Documents constitute the legal, valid and binding
obligations of each party thereto, enforceable against such party in accordance
with the terms thereof, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). The Merger has been
consummated in compliance with all applicable material laws. The Offering has
been consummated in accordance with all applicable material laws and the holders
of Senior Subordinated Notes will not be able to assert successfully any
applicable rescission rights with respect to the purchase by such holders of the
Senior Subordinated Notes.
6.16 MERGER DOCUMENTS.
The Borrowers shall have delivered to the Administrative Agent true
and correct copies of each of the Merger Agreement, the other Merger Documents
and, to the extent requested by the Administrative Agent, each other instrument,
agreement or document regarding the Merger. Each party to each Merger Document
has performed and/or satisfied all obligations and conditions required of it
prior to or as a condition to the consummation of the transactions contemplated
by and consummated under the applicable Merger Documents except for such
nonperformance or nonsatisfaction as to which the Administrative Agent has been
notified in writing prior to such consummation.
6.17 STRUCTURE; CAPITALIZATION.
By reason of consummation of the Merger, Kirtland Capital, together
with the Affiliates thereof, are the record and beneficial owner of
approximately eighty seven (87%( of the issued and outstanding capital stock of
Instron Corporation. Instron Corporation is the record and beneficial owner of
all issued and outstanding equity interests of each of Instron Xxxxxxx
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Testing Systems, GmbH and Instron, Ltd. Instron Corporation has elected to be,
and as of the Closing Date is, a C Corporation for federal tax purposes. By
reason of consummation of the Merger, the authorized and issued capital stock,
as well as issued and outstanding warrants for such stock, of Instron
Corporation as of the Closing Date is as set forth on the Supplemental Schedule.
The authorized and issued capital stock of each of Instron, Ltd., Instron
Xxxxxxx Testing Systems, GmbH and of Instron Xxxxxxx GmbH as of the Closing Date
is as set forth on the Supplemental Schedule. Except as set forth on the
Supplemental Schedule and other than the Stockholder Agreement, after giving
effect to the Merger, there are no options, warrants or other rights to acquire
any of the capital stock of Instron Corporation or any of the other Borrowers
and no redemption rights or other repurchase obligations with respect to the
capital stock of Instron Corporation. Instron Corporation and its consolidated
Subsidiaries have and will continue to have a Fiscal Year end on the last day of
December in each calendar year.
6.18 VALUE; SOLVENCY.
Each of the Borrowers has received fair consideration and reasonably
equivalent value for the obligations and liabilities it has incurred to the
Banks, the Designated Swing Line Lenders and the Designated Letter of Credit
Issuers hereunder. After giving effect to the Merger, the Offering and the
Obligations of the Borrowers hereunder as of the Closing Date, each of the
Borrowers is as of the Closing Date Solvent. Instron Corporation and its
consolidated Subsidiaries will at all times hereafter remain Solvent on a
consolidated basis. No Borrower will incur additional Obligations to the Banks,
Swing Line Obligations to the Designated Swing Line Lenders or Letter of Credit
Obligations to the Designated Letter of Credit Issuers if at the time of
incurrence of such additional Indebtedness, or as a result of the incurring of
such additional Indebtedness, such Borrower is or would be rendered not Solvent.
6.19 INVESTMENT COMPANY ACT STATUS.
None of the Borrowers nor any Subsidiaries thereof is an "investment
company", or an "affiliated person" of, or a "promoter" or "principal
underwriter" for an "investment company" (as such terms are defined in the
Investment Company Act of 1940, as amended (15 U.S.C. Section 80(a)(1), et
seq.).
6.20 REGULATION U/REGULATION X COMPLIANCE.
None of the Borrowers nor any Subsidiaries thereof owns any "margin
stock", as that term is defined in Regulation U and Regulation X of the Board of
Governors of the Federal Reserve System ("Margin Stock"). The proceeds of Loans
made to the Borrowers pursuant to this Agreement will be used only for the
purposes contemplated by Section 7.2(g)hereof. No part of the proceeds of Loans
made to any of the Borrowers pursuant to this Agreement will be used, directly
or indirectly, to purchase or carry any Margin Stock (as defined above) for a
purpose which violates any applicable law, rule, or regulation including,
without limitation, the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System, as amended.
6.21 YEAR 2000 COMPLIANCE.
Each of the Borrowers has: (i) conducted a comprehensive review and
assessment of all areas of its business and its Subsidiaries' business that
would reasonably be expected to be materially and adversely affected by the
"Year 2000 Problem" (that is, the risk that Technology is not Year 2000
Compliant), (ii) developed a detailed plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan
materially in accordance with that timetable. Each of the Borrowers reasonably
anticipates that all Technology that is
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material to its business and the business of its Subsidiaries will on a timely
basis be Year 2000 Complaint. Each of the Borrowers has made inquiry of each of
the "key suppliers, vendors, and customers" which are material to the business
of such Borrower and its Subsidiaries with respect to such entities' being Year
2000 Compliant and, based on that inquiry, believes that each of them will on a
timely basis be Year 2000 Compliant in all respects which are material to the
business of such Borrower and its Subsidiaries. For the purposes of this
paragraph, (a) "Technology" means computer, manufacturing, electronic equipment
and telecommunications hardware, software and firmware, whether in computer
systems, in embedded microchips or otherwise, which are material to a Borrower's
and its Subsidiaries' businesses and financial operations, (b) "Year 2000
Compliant" means, with respect to the Technology of a Borrower and its
Subsidiaries, such Technology (x) accurately processes date/time data
(including, but not limited to calculating, comparing and sequencing) from, into
and between the twentieth and twenty-first centuries and the years 1999 and 2000
and (y) accurately performs leap year calculations and (c) "key suppliers,
vendors and customers" refers to those suppliers, vendors and customers of such
Borrower and its Subsidiaries the business failure of which would with
reasonable probability result in a Material Adverse Effect.
6.22 FULL DISCLOSURE.
All factual information (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of the Borrowers or any Subsidiaries
thereof in writing to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated herein is, other
than the Financial Projections (as to which representations are made only as
provided in Section 6.13(b) hereof) and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of such person in writing
to any Bank will be, true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by omitting
to state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided, except that any such future information consisting of
financial projections prepared by the Borrowers is only represented herein as
being based on good faith estimates and assumptions believed by such persons to
be reasonable at the time made, it being recognized by the Banks that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
materially from the projected results.
SECTION 7 COVENANTS OF THE BORROWERS.
So long as any of the Obligations shall remain outstanding or the Banks
shall have any Commitments, Swing Line Exposure or LC Exposure hereunder, each
of the Borrowers shall comply, and will cause any Subsidiaries thereof to
comply, with the following provisions:
7.1 REPORTING AND NOTICE COVENANTS.
(a) QUARTERLY FINANCIAL STATEMENTS.
The Borrowers shall furnish to the Administrative Agent, as
soon as practicable and in any event within forty five (45) days after the
end of each Fiscal Quarter of Instron Corporation, an unaudited
consolidated and consolidating balance sheet of Instron Corporation and
its consolidated Subsidiaries as at the end of such Fiscal Quarter and the
related statements of operations, retained earnings and cash flow for such
Fiscal Quarter, prepared on an unaudited comparative basis with the
comparable period during the prior year and the annual business plan
required by Section 7.1(d) for such
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period and in accordance with GAAP, all in reasonable detail and
certified, subject to normal year-end audit adjustments, by a Responsible
Officer of Instron Corporation.
(b) ANNUAL FINANCIAL STATEMENTS.
The Borrowers shall furnish to the Administrative Agent, as
soon as practicable and in any event within ninety (90) days after the end
of each Fiscal Year of Instron Corporation, (i) a complete copy of the
annual audit report of Instron Corporation and the Subsidiaries thereof
(including, without limitation, all consolidated and consolidating
financial statements of Instron Corporation and its consolidated
Subsidiaries and notes thereto) for such Fiscal Year, all of which shall
be in reasonable detail: (A) prepared on a comparative basis with the
prior year and in accordance with GAAP and (B) accompanied by the opinion
with respect to such financial statements of by independent public
accountants of recognized national standing selected by the Borrowers,
which opinion shall be unqualified and shall (i) state that such
accountants audited such consolidated financial statements in accordance
with generally accepted auditing standards, that such accountants believe
that such audit provides a reasonable basis for their opinion, and that in
their opinion such consolidated financial statements present fairly, in
all material respects, the consolidated financial position of Instron
Corporation and its consolidated Subsidiaries as at the end of such fiscal
year and the consolidated results of their operations and cash flows for
such fiscal year in conformity with generally accepted accounting
principles, or (ii) contain such statements as are customarily included in
unqualified reports of independent accountants in conformity with the
recommendations and requirements of the American Institute of Certified
Public Accountants (or any successor organization).
(c) OFFICER'S CERTIFICATE; MANAGEMENT DISCUSSION; STATEMENTS
OF OPERATIONS.
The Borrowers shall furnish to the Administrative Agent:
(i) concurrently with the financial statements delivered in
connection with Sections 7.1(a) and 7.1(b) above, a certificate of a
Responsible Officer of Instron Corporation, in his or her capacity
as a Responsible Officer, setting forth the computations necessary
to determine whether the Borrowers are in compliance with Section
7.4 of this Agreement and satisfaction of the financial standards
required in connection with the determination of the Applicable
Margin and the Applicable Fee Percentage and certifying that: (A)
those financial statements fairly present in all material respects
the financial condition and results of operations of the Borrowers
subject (in the case of interim financial statements to routine
year-end audit adjustments) and (B) no Potential Default or Event of
Default then exists or, if any Potential Default or Event of Default
does exist, a brief description of the Potential Default or Event of
Default and the Borrowers' intentions in respect thereof, and
(ii) Promptly after receipt thereof, any accountants'
management report and any management letters relating to the
financial statement referenced above or the condition of the
Borrowers.
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(iii) as soon as practicable and in any event within thirty
(30) days after the end of each Fiscal Month of Instron Corporation,
a certificate executed by a Responsible Officer of Instron
Corporation reflecting the calculation of the Borrowers' Borrowing
Base, substantially in the form attached hereto as Exhibit H-1 (each
a "Borrowing Base Certificate") and satisfactory in substance to the
Administrative Agent, together with any supporting documentation as
may be reasonably requested by the Administrative Agent.
(d) ANNUAL BUSINESS PLAN.
The Borrowers will furnish to the Administrative Agent the
final budget or business plan approved by the Board of Directors of
Instron Corporation no later than the sixtieth (60th) day after
commencement of each such Fiscal Year, and shall furnish promptly to the
Administrative Agent during each such Fiscal Year, all revisions thereto
approved by the Board of Directors of Instron Corporation and (if and to
the extent prepared by management of the Borrower) for any subsequent
fiscal years, as customarily prepared by management for its internal use,
setting forth the forecasted balance sheet, income statement, operating
cash flows and capital expenditures of Instron Corporation and its
consolidated Subsidiaries for the period covered thereby, and the
principal assumptions upon which forecasts and budget are based.
(e) OTHER INFORMATION.
The Borrowers shall furnish to the Administrative Agent,
promptly upon the Administrative Agent's written request, such other
information about the financial condition, properties and operations of
the Borrowers and the Subsidiaries thereof and any of their Employee
Benefit Plans as the Administrative Agent may from time to time reasonably
request.
(f) NOTICES.
The Borrowers will cause the Responsible Officer of Instron
Corporation to give the Administrative Agent (and in the case of the
circumstance referenced in clause (v) below, to each of the Banks) prompt
written notice whenever (and in any event within ten (10) Business Days
after): (i) any of the Borrowers or any Subsidiaries thereof receives
notice from any court, agency or other governmental authority of any
alleged non-compliance with any Law or order which could reasonably be
expected to have or result in, if such noncompliance is found to exist, a
Material Adverse Effect, (ii) the Internal Revenue Service or any other
federal, state or local taxing authority shall allege any default by any
or all of the Borrowers or the Subsidiaries thereof in the payment of any
tax material in amount or shall threaten or make any assessment in respect
thereof which, if resulting in a determination adverse to the Borrowers,
could reasonably be expected to have or result in a Material Adverse
Effect, (iii) any litigation or proceeding shall be brought against any or
all of the Borrowers or the Subsidiaries thereof before any court or
administrative agency which could, if successfully brought against the
Borrower, reasonably be expected to have or result in a Material Adverse
Effect, (iv) any material adverse change or development in connection with
any such litigation proceeding, or (v) such Responsible Officer reasonably
believes that any Potential Default or Event of Default has occurred or
that any other representation or warranty made herein shall for any reason
have ceased to be true and complete in any material respect.
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(g) NOTICE OF DEFAULT UNDER ERISA.
If any or all of the Borrowers shall receive notice from any
ERISA Regulator or otherwise have knowledge that a Default under ERISA
exists with respect to any Employee Benefit Plan, the Borrowers shall
notify the Administrative Agent of the occurrence of such Default under
ERISA, within ten (10) Business Days after receiving such notice or
obtaining such knowledge (the disclosures contained in the Supplemental
Schedule being such notice of each Default under ERISA disclosed therein
to the extent of the disclosure therein) and shall: (i) so long as the
Default under ERISA has not been corrected to the satisfaction of, or
waived in writing by the party giving notice, the Borrowers shall
thereafter treat as a current liability (if not otherwise so treated) all
liability of such Borrower or Borrowers or the Subsidiaries thereof that
would arise by reason of the termination of or withdrawal from such
Employee Benefit Plan if such plan was then terminated, and (ii) within
forty-five (45) days of the receipt of such notice or obtaining such
knowledge, furnish to the Administrative Agent a current consolidated
balance sheet of the Borrowers with the amount of the current liability
referred to above.
(h) ENVIRONMENTAL REPORTING.
Each of the Borrowers shall promptly deliver to the
Administrative Agent, and in any event within ten (10) Business Days after
receipt or transmittal by any Borrower or the Subsidiaries thereof, as the
case may be, copies or, in the case of investigations or proceedings
having no written embodiment, notice of all Environmental Claims brought
against such Borrower or Subsidiaries which would, either individually or
in the aggregate with all Environmental Claims against the Borrowers and
the Subsidiaries thereof, reasonably be expected to result in a Material
Adverse Effect.
(i) MULTIEMPLOYER PLAN WITHDRAWAL LIABILITY.
The Borrowers shall (i) once in each calendar year beginning
in 1999, request a current statement of withdrawal liability from each
Multiemployer Plan to which any of the Borrowers or any ERISA Affiliate is
or has been obligated to contribute during such year and (ii) within
fifteen (15) days after the Borrowers receive the such current statement,
transmit a copy of such statement to the Administrative Agent.
(j) SEC REPORTS AND REGISTRATION STATEMENTS.
The Borrowers shall deliver to the Administrative Agent,
promptly after transmission thereof or other filing with the SEC, copies
of all registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and all annual,
quarterly or current reports that the Instron Corporation files with the
SEC on Form 10-K, 10-Q or 8-K (or any successor forms).
(k) ANNUAL, QUARTERLY AND OTHER REPORTS TO SENIOR SUBORDINATED
NOTEHOLDERS PURSUANT TO SENIOR SUBORDINATED NOTE INDENTURE.
The Borrowers shall deliver to the Administrative Agent,
promptly after transmission thereof to holders of Senior Subordinated
Notes, copies of all annual, quarterly and other reports that Instron
Corporation furnishes to holders of Senior Subordinated Notes pursuant to
any requirements of the Senior Subordinated Note Indenture.
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(l) PRESS RELEASES.
The Borrowers shall deliver to the Administrative Agent,
promptly after the release thereof to any news organization or news
distribution organization, copies of any press releases and other similar
statements intended to be made available generally by Instron Corporation
to the public concerning material developments relating to Instron
Corporation or any of its Subsidiaries.
7.2 AFFIRMATIVE COVENANTS.
(a) CORPORATE EXISTENCE.
Each of the Borrowers shall, and shall cause each of the
Subsidiaries thereof to, at all times maintain its respective corporate
existence, rights and franchises, except as permitted under Section
7.3(a), maintain its good standing in the jurisdiction of its
incorporation, and qualify as a foreign corporation in each jurisdiction
where failure to qualify would reasonably be expected to result in a
Material Adverse Effect.
(b) FINANCIAL RECORDS.
The Borrowers shall maintain at all times, correct and
complete financial records in accordance with GAAP, consistently applied,
and, without limiting the generality of the foregoing, make appropriate
accruals to reserves for estimated and contingent losses and liabilities
as required under GAAP.
(c) FINANCIAL EXAMINATION AND REVIEW.
Each of the Borrowers shall, at such Borrower's expense, upon
reasonable prior written or oral notice from the Administrative Agent to
the Borrower Representative permit, and shall cause each of its
Subsidiaries to permit, designated representatives of the Administrative
Agent and the Banks during normal business hours in the presence of an
officer of such Borrower: (i) to examine, with the guidance and
supervision of such Borrower, the Borrower's financial records and to make
copies of and extracts from such records and (ii) to consult with such
Borrower's and Subsidiaries' officers, directors, accountants, actuaries,
trustees and plan administrators, as the case may be, in respect of such
Borrower's and Subsidiaries' financial condition, each of which parties is
hereby authorized by such Borrower to make such information available to
the designated representatives of the Administrative Agent and the Banks
to the same extent that it would to such Borrower.
(d) COMPLIANCE WITH LAW.
Each of the Borrowers will comply, and will cause each of its
Subsidiaries to comply, in all respects with all applicable provisions of
all Laws (whether statutory, administrative, judicial or other and whether
federal, state or local and excluding Environmental Laws to the extent
addressed in Section 7.2(e) of this Agreement) and every lawful
governmental order; provided, however, that any alleged noncompliance
shall not be deemed to be a violation of this Section 7.2(d) so long as:
(i) such noncompliance by such Borrower or such Subsidiaries has not
resulted or could not reasonably be expected to result in a Material
Adverse Effect.
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(e) COMPLIANCE WITH ENVIRONMENTAL LAWS.
Each of the Borrowers will use and operate its facilities and
properties, and cause each of its Subsidiaries to use and operate its
respective facilities and properties, in such a manner that no obligation
shall arise under any Environmental Law, including a clean-up obligation,
which, when taken individually or with all other such obligations, would
result in, or would reasonably be expected to result in, a Material
Adverse Effect; provided, however, that, if any Environmental Claim (even
if such claim will not have a Material Adverse Effect is made or any such
obligation (even if such obligation would not have a Material Adverse
Effect) arises, such Borrower and the Subsidiaries thereof shall, at its
own cost and expense, timely satisfy such claim or obligation, provided,
however, that no such claim or obligation need be satisfied if it is being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if appropriate reserves or other appropriate
provision, if any, as shall be required by GAAP have been made on the
books of such Borrower or the Subsidiaries of such Borrower, as the case
may be. Each of the Borrowers will keep, and will cause each of its
Subsidiaries to keep, all necessary Environmental Permits in effect and
remain in therewith, and handle all Hazardous Materials in compliance with
all applicable Environmental Laws, except to the extent that any such lack
of effectiveness or non-compliance, when taken individually or with all
other instances of lack of effectiveness or non-compliance, would not
result in, and would not reasonably be expected to result in, a Material
Adverse Effect. None of the Borrowers shall suffer to exist, or permit any
of their respective Subsidiaries to suffer to exist, an environmental
condition which, when taken individually or with all other such
conditions, would result in, or would reasonably be expected to result in,
a Material Adverse Effect. The Borrowers shall not suffer or permit the
aggregate of all liabilities or claims against the Borrowers for any
noncompliance with Environmental Laws, any Environmental Claims, any
environmental condition, the above-stated obligations under Environmental
Laws, or any lack of effectiveness of Environmental Permits referenced in
this Section and Section 6.9 hereof, when taken individually or together
with all other such noncompliance, Environmental Claims, environmental
conditions, above-stated obligations under Environmental Laws, and lack of
effectiveness, to result in, or be reasonably expected to result in, a
Material Adverse Effect.
(f) PROPERTIES.
Subject to Sections 5.2 and 7.3(a) of this Agreement, each of
the Borrowers shall maintain, in all material respects, and shall cause
each of its Subsidiaries to maintain, in all material respects, all assets
necessary to its continuing operations in good working order and
condition, ordinary wear and tear excepted, and shall refrain, and shall
cause each of its Subsidiaries to refrain, from wasting or destroying any
such assets or any part thereof.
(g) USE OF PROCEEDS.
The proceeds of (i) the Term Loans shall be used on the
Closing Date by Instron Corporation to finance the portion of the Merger
not otherwise financed by the Senior Subordinated Notes and (ii) the
Revolving Credit Loans and Swing Line Loans, as the case may be, shall be
used (A) on the Closing Date by Instron Corporation to finance any portion
of the Merger not otherwise financed by the Senior Subordinated Notes and
the Term Notes and (B) on the Closing Date, by all of the Borrowers to
repay and refinance all or a portion of the Existing Bank Indebtedness of
such Borrower under the Existing Credit Facilities; provided, however,
that the maximum drawing on the
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Revolving Credit Commitments of the Banks on the Closing Date for all
purposes including the purposes specified in clause (A) and (B) hereof
shall not exceed $30,000,000, (iii) to fund the Borrowers' working capital
requirements provided such use of proceed to fund working capital
requirements involving purchase of material assets shall involve purchases
of assets consistent with past practices and sound and prudent business
requirements and (iv) for transaction costs and other general corporate
purposes of such Borrower (including Permitted Acquisitions and purchasing
management stock as permitted by Section 7.3(c) hereof).
(h) COMPLIANCE WITH TERMS OF ALL MATERIAL CONTRACTS.
Each of the Borrowers shall perform and observe, and shall
cause each of its Subsidiaries to perform and observe, all the material
terms and provisions of each of the Material Business Agreements and the
Material License Agreements to which they are a party.
(i) TAXES.
Each of the Borrowers shall pay in full, and shall cause each
of its Subsidiaries to pay in full, prior in each case to the date when
penalties for the nonpayment thereof would attach, all taxes, assessments
and governmental charges and levies for which it may be or become subject
and all lawful claims which, if unpaid, could reasonably be expected to
become a Lien upon its property; provided, however, that no such tax,
assessment, charge or levy need be paid so long as and to the extent that:
(i) it is contested in good faith and by timely and appropriate
proceedings effective, during the pendency of such proceedings, to stay
the enforcement of such taxes, assessments and governmental charges and
levies and (x) such stay prevents the creation of any Lien (other than
inchoate Liens for property taxes) or (y) a bond has been provided which
prevents the creation of any Lien (other than inchoate Liens for property
taxes) and (ii) appropriate reserves, as required by GAAP, are made on the
books of such Borrower and its Subsidiaries, as applicable; provided,
further, that that the Borrower will not be considered to be in default of
this section the Borrowers or any Subsidiary thereof fails to pay any such
amount which, individually or in the aggregate, is immaterial.
(j) INSURANCE.
Each of the Borrowers shall, on the Closing Date and within
five (5) Business Days of the request by the Administrative Agent
thereafter, provide evidence satisfactory to the Administrative Agent that
such Borrower has adequate personal and real property, casualty,
liability, business interruption and product liability insurance, with the
Administrative Agent listed as loss payee and additional insured (as
applicable), such adequacy to be determined based on insurance maintained
generally by companies in the same business as such Borrower.
(k) LICENSE TO THIRD PARTIES AND SUBSIDIARIES.
Except as disclosed in the Supplemental Schedule, none of the
Borrowers nor any Subsidiary thereof has any existing license agreement as
licensor with respect to Intellectual Property of such Borrower or
Subsidiaries that does not provide, and neither such Borrower nor such
Subsidiary will execute any license agreement as licensor with any Person
(including, without limitation, any Subsidiary of such Borrower) with
respect to any such Intellectual Property that does not provide that (i)
upon an Event of Default and the acceleration of the Obligations, such
license agreement shall, upon the written
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request of the Administrative Agent, terminate and (ii) such agreement may
only be amended in any material respect with the express written consent
of the Administrative Agent, such consent not to be unreasonably withheld
or delayed.
(l) CERTAIN SUBSIDIARIES TO JOIN IN SUBSIDIARY GUARANTY AND STOCK
PLEDGE.
(i) If at any time after the Closing Date (a) any Borrower
creates or acquires any Material Subsidiary or (b) any non-Borrower
Subsidiary of a Borrower that was not a party to a Subsidiary
Guaranty and Subsidiary Security Agreement on the Closing Date
becomes a Material Subsidiary, then the Borrowers shall (x) notify
the Administrative Agent promptly in writing of such event,
identifying the Subsidiary in question and referring specifically
to the rights of the Administrative Agent and the Banks under this
Section, and (y) cause such Material Subsidiary to execute and
deliver to the Administrative Agent for the benefit of the Banks,
within thirty (30) days after the occurrence of such event, (A)
either (I) subject to the satisfaction of all the requirements set
forth in Section 1.4, an Additional Borrower Addendum, or (II) only
in the case of a Material Subsidiary that is also a Domestic
Subsidiary, a joinder supplement, in form and substance
satisfactory to the Administrative Agent and the Required Banks, to
the Subsidiary Guaranty pursuant to which such Material Subsidiary
joins in the Subsidiary Guaranty as a guarantor thereunder and in
the Subsidiary Security Agreement as a grantor thereunder, and (B)
such evidence of the authority of such Material Subsidiary to
execute and deliver such documents as the Administrative Agent
shall reasonably request and (z) cause Instron Corporation to
execute a supplement, in form and substance satisfactory to the
Administrative Agent and the Required Banks, to the Subsidiary
Pledge Agreement pursuant to which the stock of such Material
Subsidiary is pledged by Instron Corporation thereunder.
(ii) If at any time after the Closing Date, any non-Borrower
Subsidiary of a Borrower that is not a party to a Subsidiary
Guaranty or a Subsidiary Security Agreement has, during any Testing
Period, consolidated earnings before interest, taxes, depreciation
and amortization which, when aggregated with the consolidated
earnings before interest, taxes, depreciation and amortization of
all other non-Borrower Subsidiaries of a Borrower that are not
parties to a Subsidiary Guaranty or a Subsidiary Pledge Agreement,
would exceed 15% of Instron Corporation's Consolidated Adjusted
EBITDA for such Testing Period, then the Borrowers shall (x) notify
the Administrative Agent promptly in writing of such event,
identifying all of the Subsidiaries in question and referring
specifically to the rights of the Administrative Agent and the
Banks under this Section, and (y) cause a sufficient number of such
Subsidiaries to execute and deliver to the Administrative Agent for
the benefit of the Banks, within thirty (30) days after the
occurrence of such event, (A) either (I) subject to the
satisfaction of all the requirements set forth in Section 1.4, an
Additional Borrower Addenda, or (II) only in the case of
Subsidiaries that are also a Domestic Subsidiaries, a joinder
supplement, in form and substance satisfactory to the
Administrative
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Agent and the Required Banks, to the Subsidiary Guaranty pursuant to
which such Subsidiary joins in the Subsidiary Guaranty as a
guarantor thereunder and in the Subsidiary Security Agreement as a
grantor thereunder, and (B) such evidence of the authority of such
Material Subsidiary to execute and deliver such documents as the
Administrative Agent shall reasonably request, to ensure that the
consolidated earnings before interest, taxes, depreciation and
amortization of such Subsidiaries is less than or equal to 15% of
Instron Corporation's Consolidated Adjusted EBITDA. and (y) cause
Instron Corporation to execute a supplement, in form and substance
satisfactory to the Administrative Agent and the Required Banks, to
the Subsidiary Pledge Agreement pursuant to which the stock of such
Subsidiaries is pledged by Instron Corporation thereunder.
(m) MOST FAVORED COVENANT STATUS.
The Senior Subordinated Notes, and any indenture, guaranty or
other similar instrument evidencing the Senior Subordinated Notes, shall
not include any affirmative or negative business or financial covenants
(or any events of default or other type of restriction which would have
the practical effect of any affirmative or negative business or financial
covenant, including, without limitation, any 'put' or mandatory prepayment
of such Indebtedness upon the occurrence of a 'change of control')
applicable to the Borrowers which are more restrictive than those set
forth herein or in any of the other Loan Documents. To the extent any
amendment, extension, renewal or refinancing of the Senior Subordinated
Notes, or any indenture, guaranty or other similar instrument evidencing
such amendment, extension, renewal or refinancing of the Senior
Subordinated Notes includes affirmative or negative business or financial
covenants (or any events of default or other type of restriction which
would have the practical effect of any affirmative or negative business or
financial covenant, including, without limitation, any 'put' or mandatory
prepayment of such Indebtedness upon the occurrence of a 'change of
control') applicable to the Borrowers which are more restrictive than
those set forth herein or in any of the other Loan Documents, the
Borrowers shall promptly so notify the Administrative Agent and, if the
Administrative Agent shall so request by written notice to the Borrowers
(after a determination has been made by the Required Banks that any of the
above-referenced documents or instruments contain any such provisions,
which either individually or in the aggregate, are more favorable to the
Banks than any of the provisions set forth herein), the Borrowers, the
Administrative Agent and the Banks shall promptly amend this Agreement to
incorporate some or all of such provisions, in the discretion of the
Administrative Agent and the Required Banks, into this Agreement and, to
the extent necessary and reasonably desirable to the Administrative Agent
and the Required Banks, into any of the other Loan Documents, all at the
election of the Administrative Agent and the Required Banks.
(n) HEDGE AGREEMENTS.
Within sixty (60) day after the Closing Date, the Borrowers
will enter, and will cause the Subsidiaries thereof to enter, into Hedge
Agreements (i) in order to provide protection to the Borrowers and such
Subsidiaries from fluctuations and other changes in interest rates and
currency exchange rates, as and to the extent considered reasonably
necessary by the Borrowers, but without exposing the Borrowers or such
Subsidiaries to predominantly speculative risks unrelated to the amount of
Indebtedness or assets intended to be subject to coverage on a notional
basis under all such Hedge Agreements; and (ii) in the case of any Hedge
Agreement entered into after the Effective Date, only if the proposed form
thereof (including any proposed pricing or other material terms) has
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been provided to the Administrative Agent contemporaneously with the entry
into such Hedge Agreement.
7.3 NEGATIVE COVENANTS.
(a) CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS .
None of the Borrowers shall, nor permit any Subsidiaries
thereof to, (x) merge or consolidate with or into, or enter into any
agreement to merge or consolidate with or into, any other Person or
otherwise be a party to any merger or consolidation; (y) purchase all or
substantially all of the assets and business of another Person (purchases
of inventory and materials in the ordinary course of business being
permitted and leases and purchases of equipment in the ordinary course of
business being permitted subject to Sections 7.3(d) and 7.4(g) hereof), or
(z) except as set forth in the Supplemental Schedule, lease as lessor,
sell, sell-leaseback, license or otherwise convey record or beneficial
ownership (whether in one transaction or a series of transactions) of any
of its property or assets (whether now owned or hereafter acquired);
except that:
(i) each of the Borrowers and any Subsidiaries thereof may
sell or otherwise dispose of its Inventory in the ordinary course of
its business;
(ii) each of the Borrowers and any Subsidiaries thereof may
sell or otherwise dispose of its Equipment that is obsolete, worn
out, unnecessary or no longer used or useful in such Borrower's or
Subsidiaries' business, so long as the Net Proceeds of any such
sales of Equipment shall be applied to repay the Loans to the extent
required by Section 2.10(c) of this Agreement;
(iii) any Domestic Borrower may merge or consolidated with or
into any other Domestic Borrower and any Foreign Borrower (other
than Instron, Ltd.) may merge with or into any other Foreign
Borrower;
(iv) any Domestic Subsidiary of a Borrower may merge or
consolidate with or into, or be liquidated into, a Domestic Borrower
or any Domestic Subsidiary which is a Wholly-Owned Subsidiary of a
Domestic Borrower so long as such Domestic Borrower or such Domestic
Subsidiary is the surviving corporation, or may dispose of its
properties or assets to such Domestic Borrower or such Domestic
Subsidiary (whether such disposal is by means of lease, sale or
other type of transfer except transfers of a type otherwise provided
for in this Section 7.3(a));
(v) any Foreign Subsidiary of a Borrower may merge or
consolidate with or into, or be liquidated into, a Foreign Borrower
or a Domestic Borrower or any Subsidiary which is a Wholly-Owned
Subsidiary of a Foreign Borrower or Domestic Borrower so long as
such Foreign Borrower or Domestic Borrower, as the case may be, or
such Wholly-Owned Subsidiary is the surviving corporation, or may
dispose of its properties or assets to such Foreign Borrower or
Domestic Borrower or such Wholly-Owned Subsidiary (whether such
disposal is by means of lease, sale or other type of transfer except
transfers of a type otherwise provided for in this Section 7.3(a));
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(vi) each of the Borrowers and any Subsidiaries thereof may
make Acquisitions, so long as (A) no Potential Default or Event of
Default then exists or would result therefrom and (B) such
Acquisition constitutes a Permitted Acquisition;
(vii) each of the Borrowers and any Subsidiaries thereof may
lease (as lessee) real or personal property in the ordinary course
of business; provided that (A) any such lease does not create a
Capitalized Lease Obligation not otherwise permitted by Section
7.3(d)(xii) or (B) any such lease constituting an operating lease
does not cause the aggregate rental payments under all operating
leases to exceed the amount otherwise permitted by Section
7.3(d)(x);
(viii) each of the Borrowers and any Subsidiaries thereof may
license or sublicense Intellectual Property owned thereby in the
ordinary course of business; provided that (A) such licenses or
sublicenses shall not interfere in any material respect with the
business of any Borrower or any Subsidiary and (B) the rights of the
licensee under any such license shall be subject to the security
interest granted hereunder in favor of the Administrative Agent;
(ix) each of the Borrowers and any Subsidiaries thereof may
effect sale-leaseback transactions with respect to real property
thereof; provided that (A) the aggregate Net Proceeds of all such
sale-leaseback transactions by all of the Borrowers and the
Subsidiaries thereof shall not exceed $7,500,000, (B) no Default or
Event of Default is then in existence or would result thereby, (C)
each such sale shall be in an amount at least equal to the fair
market value thereof (as determined in good faith by the Board of
Directors of Instron Corporation) and shall be for a consideration
not less than seventy five percent (75%) of which shall be cash
proceeds, (D) the lease obligations created thereby are otherwise
permitted under this Agreement, and (E) to the extent the Required
Lenders consent to sale-leaseback transactions exceeding in the
aggregate the Net Proceeds limits hereof, the Net Proceeds from such
transactions in excess of $7,500,000 are contemporaneously therewith
applied to repay the Loans to the extent required by Section 2.10(c)
of this Agreement;
(x) each of the Borrowers and any Subsidiaries thereof may
grant leases or subleases to other Persons in the ordinary course of
business; provided that such leases or subleases do not interfere in
any material respect with the business of a Borrower or any
Subsidiaries thereof and any interest or title of a lessor under any
lease in violation of this Agreement;
(xi) each of the Borrowers and any Subsidiaries thereof may
sell or otherwise dispose (for purposes of this clause, the granting
of Liens shall not be considered to be a disposition of the asset
secured thereby) of Equipment or Cash Equivalents to Persons (which
are neither Borrowers nor Subsidiaries) not otherwise permitted by
this Section 7.3(a) hereof; provided that (A) the aggregate Net
Proceeds received from all such sales and dispositions by all of the
Borrowers and the Subsidiaries thereof permitted by this clause (xi)
shall not exceed
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$2,000,000 in any Fiscal Year of Instron Corporation, (B) no Default
or Event of Default is then in existence or would result thereby,
(C) each such sale shall be in an amount at least equal to the fair
market value thereof (as determined in good faith by the Board of
Directors Instron Corporation) and for all cash proceeds and (D) the
Net Proceeds of any such sale are contemporaneously therewith
applied to repay the Loans to the extent required by Section 2.10(c)
of this Agreement, and
(xii) Instron Corporation and the Domestic Subsidiaries
thereof may convey ownership of tangible personal property of
Instron Corporation and such Domestic Subsidiaries to Foreign
Borrowers and Foreign Subsidiaries to the extent that: (A) such
personal property does not consist of Accounts, General Intangibles,
or Investment Property (other than Cash Equivalents to the extent
permitted by clause (B) of this Section), (B) any conveyance of cash
and Cash Equivalents are otherwise permitted as intercompany loans
or investments pursuant to Sections 7.3(b) and 7.3(e) hereof; (C)
ownership of any Inventory delivered to such Foreign Borrowers or
Foreign Subsidiaries for processing may be conveyed to such Foreign
Borrower or Foreign subsidiaries only to the extent such conveyance
is consistent with the customary practice of the Borrowers with
respect to the conveyancing of title to Inventory being processed by
such affiliated processors and not otherwise materially adverse to
the financial condition of Instron Corporation and such Domestic
Subsidiaries, taken as a whole, and (D) ownership of Equipment may
be conveyed to Foreign Borrowers or Foreign Subsidiaries in an
amount the fair market value of which (as determined in good faith
by the Board of Directors of Instron Corporation) shall not to
exceed in the aggregate $5,000,000; provided, however, that (X) the
restrictions on conveyances of tangible personal property specified
in this Section 7.3(a) and this Subsection 7.3(a)(xii) are not
applicable to (I) conveyances of Equipment and Inventory with
respect to which fair consideration (as determined in good faith by
the Board of Directors of Instron Corporation) is paid to Instron
Corporation or such Domestic Subsidiaries by such Foreign Borrower
or Foreign Subsidiaries, (II) transfers of Equipment which do not
involve the conveyance of ownership to the extent such transfers are
otherwise permitted by Section 4.3 hereof, (III) conveyances thereof
from any Domestic Borrower or Domestic Subsidiary to any other
Domestic Borrower or any Domestic Subsidiary which is a Wholly-Owned
Subsidiary, (IV) conveyances thereof from any Foreign Borrower or
Foreign Subsidiary to any Domestic Borrower or any Domestic
Subsidiary which is a Wholly-Owned Subsidiary or (V) transfers of
Inventory which do not involve the conveyance of ownership to the
extent such transfers are consistent with the customary practice of
the Borrowers with respect to Inventory being processed by such
affiliated processors and not otherwise materially adverse to the
financial condition of Instron Corporation and such Domestic
Subsidiaries, taken as a whole, and (Y) all conveyances permitted in
this Subsection 7.3(a)(xii) are be undertaken, in good faith, for
commercially sound and prudent business reasons and consistent with
the customary business practices of the Borrowers.
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(xiii) Instron Corporation and the Domestic Subsidiaries
thereof may convey ownership of intangible personal property of
Instron Corporation and such Domestic Subsidiaries to Foreign
Borrowers and Foreign Subsidiaries to the extent that such
transfers: (A) are not materially adverse to the financial condition
of Instron Corporation and such Domestic Subsidiaries, taken as a
whole, and (B) are undertaken, in good faith, for commercially sound
and prudent business reasons and consistent with the customary
business practices of the Borrowers.
(b) CREDIT EXTENSIONS; PREPAYMENTS; PAYMENTS OF SUBORDINATED DEBT.
None of the Borrowers shall, nor permit any Subsidiaries
thereof to, (x) make prepayments or advance payments in respect of
Indebtedness to others (except to the Administrative Agent for the benefit
of the Banks in accordance with this Agreement) or (y) loan any money to,
assume any Indebtedness of or any other obligation of, or undertake any
Guaranty Obligations with respect to the Indebtedness of, any other Person
or (z) make any payments of principal or interest on Subordinated Debt,
except for:
(i) receivables owing to them held or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms;
(ii) loans and advances to employees for business-related
travel expenses, moving expenses, costs of replacement homes and
other similar expenses, in each case incurred in the ordinary course
of business;
(iii) loans and advances by any Subsidiary (including any
Foreign Borrower) to Instron Corporation; provided, however, that
the Indebtedness represented thereby constitutes unsecured
Subordinated Debt;
(iv) loans and advances (A) by Instron Corporation to any
Domestic Subsidiary, (B) by Instron Corporation to any Foreign
Borrower or any Foreign Subsidiary, (C) by any Domestic Subsidiary
to any Foreign Borrower, any Foreign Subsidiary or Domestic
Subsidiary, or (D) by any Foreign Borrower or Foreign Subsidiary to
any Foreign Subsidiary, any other Foreign Borrower or any Domestic
Subsidiary; provided, that the cumulative aggregate amount of all
such loans and advances outstanding after the Effective Date (other
than Permitted Assumed Acquisition Indebtedness and Permitted
Subordinated Acquisition Indebtedness in connection with Permitted
Acquisitions and excluding from treatment as a loan or advance, for
purposes of this clause (iv), any intercompany trade payables
incurred in the ordinary course of business consistent with past
practice) by Instron Corporation and Domestic Subsidiaries to
Foreign Borrowers and Foreign Subsidiaries shall not exceed (when
aggregated with all investments by Instron Corporation made therein
after the Effective Date other than Permitted Acquisition
Investments) Ten Million Dollars ($10,000,000) in the aggregate.
(v) unsecured Guaranty Obligations of (A) Instron Corporation
or any Domestic Subsidiary thereof in respect of leases of any
Borrower or any
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Subsidiary thereof which are not prohibited by this Agreement, (B)
any Foreign Borrower or any Foreign Subsidiary thereof in respect of
leases of any such Foreign Borrower or any Foreign Subsidiary
thereof which are not prohibited by this Agreement and (C) a
Borrower or any Subsidiary thereof in respect of any other Person
(other than in respect of indebtedness for borrowed money) arising
as a matter of applicable law because the Borrower or such
Subsidiary is or is deemed to be a general partner of such other
person; provided that no Foreign Borrower or Foreign Subsidiary
shall guaranty any obligations of such Person to the extent such
guaranty would cause U. S. tax recognition by Instron Corporation of
foreign income;
(vi) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the normal
course of business;
(vii) any unsecured Guaranty Obligations consisting of (A) the
Guaranty Obligations of a Borrower Guarantor consisting of its
obligation to pay Guaranteed Obligations hereunder as provided by
Section 10 hereof, (B) the Guaranty Obligations of any Borrower as
the guarantor of any Letter of Credit Obligor as provided in Section
2.12(l) hereof and (C) other Guaranty Obligations of any Borrower or
any Subsidiary in respect of Obligations of any other Borrower or
Subsidiary thereof;
(viii) any unsecured Guaranty Obligations of the unsecured
Indebtedness of any Subsidiaries (including Foreign Borrowers) of
the Indebtedness permitted in Sections 7.3(c)(xii) and 7.3(c)(xiii)
hereof not otherwise permitted under the foregoing clauses; provided
no Foreign Borrower or Foreign Subsidiary shall guaranty any
obligations of Instron Corporation or any Domestic Subsidiary to the
extent such guaranty would cause U. S. tax recognition by Instron
Corporation of foreign income;
(ix) any loan or advance by any Borrower or Subsidiary for the
benefit of any other Borrower or Subsidiary evidenced by such
Borrower's or Subsidiary's being the account party in respect of
Existing Letters of Credit issued for the benefit of such other
Borrower or other Subsidiary to the extent such Existing Letters of
Credit are permitted by Section 2.12(c) hereof;
(x) any Permitted Assumed Acquisition Indebtedness and
Permitted Subordinated Acquisition Indebtedness;
(xi) loans and advances to employees for purposes deemed
prudent by the Board of Directors of Instron Corporation in an
aggregate amount not to exceed $500,000 during any Fiscal Year, and
any renewals, extensions or replacement thereof;
(xii) so long as such payments are not prohibited pursuant to
the Senior Subordinated Note Indenture at the time such payments
become due, payments by Instron Corporation to the holders of the
Senior Subordinated Notes an amount
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(the "Permissible Senior Subordinated Note Amount") which may not
exceed, during any Fiscal Year, the sum of all regularly scheduled
payments of interest required to be made by Instron Corporation
under the Senior Subordinated Note Documents; except that Instron
Corporation shall not make, nor permit any of its Subsidiaries to
make, any voluntary or optional payment or prepayment or redemption
or acquisition for value (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities
before due for the purpose of paying when due) of the Senior
Subordinated Notes, or effect any mandatory repurchase of the Senior
Subordinated Notes pursuant to a "change of control" (as defined in
the Senior Subordinated Note Indenture), or exchange of, or
refinance or refund, any Senior Subordinated Notes of the Borrower
permitted hereunder; provided, however, that the Borrowers may
refinance or refund any such Subordinated Debt if the aggregate
principal amount thereof is not increased or the weighted average
life to maturity thereof is not reduced by more than 10% (computed
in accordance with standard financial practice) and there is no
change in the subordination provisions applicable thereto which is
materially adverse to the Banks, the Designated Swing Line Lenders
or the Designated Letter of Credit Issuers; and
(xiii) so long as such payments are not prohibited pursuant to
the applicable Subordination Agreement at the time such payments
become due, payment by Instron Corporation or any Subsidiaries
thereof to the holders of Subordinated Debt (other than payments
with respect to the Senior Subordinated Notes) of an amount (the
"Permissible Subordinated Amount") which may not exceed, during any
Fiscal Year, the sum permitted by the applicable Subordination
Agreement; except that Instron Corporation shall not make, nor
permit any of its Subsidiaries to make, any voluntary or optional
payment or prepayment or redemption or acquisition for value
(including, without limitation, by way of depositing with the
trustee with respect thereto money or securities before due for the
purpose of pay or redemption or acquisition for value (including,
without limitation, by way of depositing with the trustee with
respect thereto money or securities before due for the purpose of
paying when due), or effect any mandatory repurchase, or exchange
of, or refinance or refund, any such Subordinated debt except to the
extent permitted in the applicable Subordination Agreement.
(c) INDEBTEDNESS.
None of the Borrowers shall, nor permit any Subsidiaries
thereof to, create, assume, incur, suffer to exist or have outstanding at
any time any Indebtedness or other debt of any kind or be or become a
Guarantor of or otherwise undertake or assume any Guaranty Obligation with
respect to any Indebtedness of any other Person; except that this Section
7.3(c) shall not prohibit:
(i) the Obligations, Swing Line Obligations, Letter of Credit
obligations and Designated Hedge Obligations hereunder;
(ii) ordinary course trade accounts payable or customer
deposits;
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(iii) unsecured Indebtedness of Instron Corporation to any
Subsidiary (including a Foreign Borrower); provided, however, that
such Indebtedness constitutes Subordinated Debt;
(iv) Indebtedness of (A) any Domestic Subsidiary of Instron
Corporation to Instron Corporation, (B) any Foreign Borrower or any
Foreign Subsidiary to Instron Corporation, (C) any Foreign Borrower,
any Foreign Subsidiary or Domestic Subsidiary to any Domestic
Subsidiary, (D) any Foreign Borrower, Foreign Subsidiary or Domestic
Subsidiary to any Foreign Borrower or other Foreign Subsidiary;
provided, however, that the cumulative aggregate amount of all such
Indebtedness outstanding after the Effective Date (other than
Permitted Assumed Acquisition Indebtedness and Permitted
Subordinated Acquisition Indebtedness in connection with Permitted
Acquisitions and excluding from treatment as Indebtedness, for
purposes of this clause (iv), any intercompany trade payables
incurred in the ordinary course of business consistent with past
practice) owing by all Foreign Borrowers and Foreign Subsidiaries to
Instron Corporation and Domestic Subsidiaries shall not at any time
exceed (when aggregated with all investments therein made after the
Effective Date other than Permitted Acquisition Investments) Ten
Million Dollars ($10,000,000) in the aggregate;
(v) Indebtedness under Hedge Agreements or in respect of
currency rate swaps or similar transactions;
(vi) Indebtedness secured by a Lien permitted by clauses (ix),
(x) or (xii) of Section 7.3(d) and up to the amount permitted
therein;
(vii) Indebtedness of a Borrower Guarantor consisting of its
obligation to pay Guaranteed Obligations hereunder as provided by
Section 10 of this Agreement or as the guarantor of any Letter of
Credit Obligor as provided in Section 2.12(l) hereof;
(viii) Indebtedness evidenced by Guaranty Obligations
otherwise permitted by Sections 7.3(b)(v) and 7.3(b)(viii) hereof;
(ix) Indebtedness of Instron Corporation to the holders of the
Senior Subordinated Notes under the Senior Subordinated Note
Documents, to the extent subject to the Senior Subordinated Note
Indenture;
(x) Indebtedness in connection any repurchase of capital stock
of Instron Corporation from management in an amount not to exceed
(when aggregated with cash repurchases of such capital stock by
Instron Corporation permitted by Section 7.3(e)(viii) and 7.3(f)
hereof) $1,000,000 during any Fiscal Year and only to the extent no
Event of Default has occurred which is continuing which has not been
waived in accordance with Section 14.1 hereof or would result by
reason of such repurchase;
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(xi) the existing Indebtedness as of July 3, 1999, to the
extent not otherwise permitted pursuant to the foregoing clauses
(and any refinancing, extension, renewal, or refunding thereof not
involving an increase in the principal amount of such Indebtedness
or a reduction of more than ten percent (10%) in the remaining
weighted average life to maturity thereof (computed in accordance
with standard financial practice) except to the extent such
Indebtedness is required to be refinanced and terminated pursuant to
Section 3.1 hereof;
(xii) unsecured Indebtedness not otherwise permitted pursuant
to the foregoing clauses incurred by Domestic Borrowers and
non-Borrower Domestic Subsidiaries of any Borrower in amount not to
exceed at any time Two Million Five Hundred Thousand Dollars
($2,500,000) in the aggregate;
(xiii) unsecured Indebtedness not otherwise permitted pursuant
to the foregoing clauses incurred by Foreign Borrowers and
non-Borrower Foreign Subsidiaries of any Borrower in an amount not
to exceed at any time Ten Million Dollars ($10,000,000) in the
aggregate;
(xiv) Permitted Subordinated Acquisition Indebtedness
incurred in connection with Permitted Acquisitions and Permitted
Assumed Acquisition Indebtedness, in each case, to the extent
permitted to be incurred in connection with each such Permitted
Acquisitions;
(xv) in connection with Permitted Acquisitions, to the extent
not otherwise permitted by the forgoing clauses, unsecured,
unsubordinated Indebtedness to the extent permitted to be incurred
in connection with a particular Permitted Acquisition in an amount
outstanding not to exceed at any time Two Million Dollars
($2,000,000) in the aggregate; and
(xvi) to the extent not otherwise permitted by the foregoing
clauses, Subordinated Debt of the Borrowers and the Subsidiaries
thereof.
(d) LIENS.
None of the Borrowers shall, nor permit any Subsidiaries
thereof to, (x) acquire or hold any property subject to any Lien, (y) sell
or otherwise transfer any Accounts, whether with or without recourse, or
(z) suffer or permit any property now owned or hereafter acquired by it to
be or become encumbered by a Lien; provided, however, that this Subsection
shall not prohibit:
(i) any lien for a tax, assessment or government charge or
levy for taxes, assessments or charges not yet due and payable or
not yet required to be paid pursuant to Section 7.2(i);
(ii) any deposit or cash pledges securing only workers'
compensation, unemployment insurance or similar obligations (other
than Liens arising under ERISA) in the ordinary course of business;
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(iii) any mechanic's, carrier's, landlord's or similar common
law or statutory lien incurred in the ordinary course of business
for amounts that are not yet due and payable or which are being
diligently contested in good faith, so long as the Administrative
Agent has been notified thereof and adequate reserves are maintained
by such Borrower for their payment;
(iv) zoning or deed restrictions, public utility easements,
rights of way, minor title irregularities and similar matters
relating to real property of such Borrower or its Subsidiaries, in
all such cases having no material adverse effect as a practical
matter on the ownership or use of any of the real property in
question, as such property is used in the ordinary course of
business of such Borrower or its Subsidiaries;
(v) any Lien (1) which arises in connection with judgments or
attachments the occurrence of which does not constitute an Event of
Default under Section 8.12, (2) the execution or other enforcement
of such Lien is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate
proceedings and (3) which is junior in priority to the Liens of the
Administrative Agent securing the Obligations from time to time
outstanding;
(vi) deposits or cash pledges securing performance of
contracts, bids, tenders, leases (other than Capitalized Leases),
statutory obligations, surety and appeal bonds (other than contracts
for the payment of Indebtedness for borrowed money) arising in the
ordinary course of business;
(vii) any Lien in favor of the Administrative Agent created
under the Loan Documents or any existing Lien fully disclosed in the
Supplemental Schedule;
(viii) Liens securing the replacement, extension or renewal of
any Indebtedness permitted to be refinanced by Section 7.3(c) so
long as such Lien is upon the same property previously subject
thereto;
(ix) any Lien (including any Permitted Acquisition Lien in
connection with a Permitted Acquisition) created or assumed in
purchasing, constructing or improving any real property or to which
any real property is subject when purchased; provided, however,
that: (x) the mortgage, security interest or other lien is confined
to the property in question and (y) the Indebtedness secured thereby
does not exceed the total cost of the purchase, construction or
improvement and (z) the aggregate outstanding Indebtedness of such
Borrower secured by such Liens (when taken together with any secured
Indebtedness permitted to be secured pursuant to clause (xii) of
this subsection and when taken together with the aggregate
Indebtedness of the other Borrowers secured by Liens permitted by
this clause (ix) of this subsection) shall not at any time exceed
Five Million Dollars ($5,000,000) in the aggregate;
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(x) any operating lease entered into by such Borrower as
lessee; provided; however, that the scheduled rental payments in
respect to all such leases of such Borrower (when taken together
with all such leases of the Borrower and all other Borrowers) shall
not at any time exceed Ten Million Dollars ($10,000,000) in the
aggregate during any Fiscal Year of Borrowers;
(xi) any transfer of a check or other medium of payment for
deposit or collection, or any similar transaction in the ordinary
course of business;
(xii) any Lien (including any Lien in respect of a Capitalized
Lease of personal property and any Permitted Acquisition Lien in
connection with a Permitted Acquisition) which is created in
connection with the purchase of personal property; provided,
however, that: (x) the Lien is confined to the property in question,
(y) the Indebtedness secured thereby does not exceed the total cost
of the purchase, and (z) the aggregate outstanding Indebtedness
secured by such Liens (when taken together with any secured
Indebtedness permitted to be secured pursuant to clause (ix) of this
subsection and when taken together with the aggregate Indebtedness
of such Borrower and the other Borrowers secured by Liens permitted
by this clause (xii) of this subsection) shall not at any time
exceed Five Million Dollars ($5,000,000) in the aggregate;
(xiii) security deposits to secure the performance of
operating leases and deposits received from customers, in each case
in the ordinary course of business; and
(xiv) lease and subleases permitted by Section 7.3(a) hereof;
and
(e) INVESTMENTS.
None of the Borrowers shall, nor permit any of its
Subsidiaries to, (x) make or hold any investment in any common stocks,
bonds or securities of any Person, or make any further capital
contribution to any Person or (y) become a party to any partnership or
non-limited liability Person, other than:
(i) investments in the capital of its Subsidiaries existing as
of the Effective Date and the capital contributions therein
outstanding as of the Effective Time(and any increases thereof
attributable to increases in retained earnings);
(ii) investments notes or securities issued by a customer of
such Borrower or its Subsidiaries in connection with a proceeding in
respect of the Financial Impairment of such customer,
(iii) investments in cash and Cash Equivalents;
(iv) investments by Instron Corporation and Domestic
Subsidiaries made after the Effective Date in the capital of
Wholly-Owned Subsidiaries which are not Foreign Subsidiaries (and
any increases thereof attributable to increases in retained
earnings);
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(v) investments (excluding for purposes of calculating the
limitations herein, Permitted Acquisition Investments) by Instron
Corporation and Domestic Subsidiaries made after the Effective Date
in the capital of Foreign Borrowers and Foreign Subsidiaries in an
amount not to exceed (when aggregated with loans and advances made
to such Subsidiaries by Instron Corporation or the Subsidiaries
thereof after the Effective Date other than Permitted Assumed
Acquisition Indebtedness and Permitted Subordinated Acquisition
Indebtedness) at any time Ten Million Dollars ($10,000,000) in the
aggregate (and any increases thereof attributable to increases in
retained earnings);
(vi) investments acquired by Instron Corporation or any
Subsidiaries thereof (A) in exchange for any other investment held
by the Borrower or any such Subsidiary in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other investment, or (B) as a result of a
foreclosure by Instron Corporation and the Subsidiaries thereof with
respect to any secured investment or other transfer of title with
respect to any secured investment in default;
(vii) investments of Instron Corporation and any Subsidiaries
thereof in Hedge Agreements;
(viii) any repurchase of capital stock of Instron Corporation
from management in an amount not to exceed (when aggregated with
Indebtedness of Instron Corporation to the seller of such capital
stock in connection with such repurchase permitted by Section
7.3(c)(x) hereof) $1,000,000 per annum and only to the extent no
Event of Default has occurred which is continuing which has not been
waived in accordance with Section 14.1 hereof or would result by
reason of such repurchase, and
(ix) any other existing investments to the extent not
otherwise permitted by the forgoing clauses described on the
Supplemental Schedule.
(f) DISTRIBUTIONS; MANAGEMENT FEE.
Other than in a writing made expressly subject to the
Administrative Agent's written consent under this Agreement, Instron
Corporation shall not make or commit itself to make, nor permit any
of its Subsidiaries to make or commit to make, any Distribution
(other than stock dividends) to its shareholders or members at any
time or pay or commit itself to pay any management fee to any
Affiliate of such Borrower or its Subsidiaries at any time; except,
that: (x) each Subsidiary of Instron Corporation may make or commit
itself to make Distributions to its shareholders or members at any
time, (y) the Borrowers may pay management fees and board of
directors fees in an aggregate amount not to exceed $600,000 during
any Fiscal Year to the extent paid pursuant to and in accordance
with the Management Agreement and (z) any repurchase of capital
stock of Instron Corporation from management in an amount not to
exceed during any Fiscal Year (when aggregated with Indebtedness
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incurred during such Fiscal Year by Instron Corporation to the
sellers of such capital stock permitted by Section 7.3(e)(viii)
hereof) $1,000,000 and only to the extent no Event of Default has
occurred which is continuing which has not been waived in accordance
with Section 14.1 hereof or would result by reason of such
repurchase;
(g) CHANGE IN NATURE OF BUSINESS.
None of the Borrowers shall, nor permit any Subsidiaries
thereof to, make any material change in the nature of its business as
carried on at the date hereof.
(h) CHARTER AMENDMENTS.
None of the Borrowers shall amend any of its Charter Documents
or permit amendment of the Charter Documents of any of its Subsidiaries if
such amendment would conflict with or cause and Event of Default or a
Potential Default under this Agreement.
(i) COMPLIANCE WITH ERISA.
None of the Borrowers shall, nor permit any ERISA Affiliate
to: (i) engage in any transaction in connection with which such Borrower
or any ERISA Affiliate could reasonably be expected to be subject to
either a civil penalty assessed pursuant to section 502(i) of ERISA or a
tax imposed by section 4975 of the Internal Revenue Code, terminate or
withdraw from any Employee Benefit Plan (other than a Multiemployer Plan)
in a manner, or take any other action with respect to any such Employee
Benefit Plan (including, without limitation, a substantial cessation of
business operations or an amendment of an Employee Benefit Plan within the
meaning of section 4041(e) of ERISA), which could reasonably be expected
to result in any liability of any or all of the Borrowers or any ERISA
Affiliate to the PBGC, to the Department of Labor or to a trustee
appointed under section 4042(b) or (c) of ERISA, incur any liability to
the PBGC on account of a withdrawal from or a termination of an Employee
Benefit Plan under section 4063 or 4064 of ERISA, incur any liability for
post-retirement benefits under any and all welfare benefit plans (as
defined in section 3(1) of ERISA) other than as required by applicable
statute, fail to make full payment when due of all amounts which, under
the provisions of any Employee Benefit Plan or applicable Law, such
Borrower or any ERISA Affiliate is required to pay as contributions
thereto, or permit to exist any Accumulated Funding Deficiency, whether or
not waived, with respect to any Employee Benefit Plan (other than a
Multiemployer Plan); provided, however, that such engagement, termination,
withdrawal, action, incurrence, failure or permitting shall not be deemed
to have violated this clause (i) unless any such engagement, termination,
withdrawal, action, incurrence, failure or permitting has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect; (ii)
at any time permit the termination of any defined benefit pension plan
intended to be qualified under section 401(a) and 501(a) of the Internal
Revenue Code; provided, however, that such termination shall not be deemed
to have violated this clause (ii) unless (A) the value of any benefit
liability (as defined in section 4001(a)(16) of ERISA) upon the
termination date of any such terminated defined benefit pension plans of
such Borrower, such Borrower's Subsidiaries and their ERISA Affiliates
exceeds the then current value (as defined in section 3 of ERISA) of all
assets in all such terminated defined benefit pension plans by an amount
in excess of Two Million Dollars ($2,000,000), or (B) the payment of such
amount could reasonably be expected to result in a Material Adverse
Effect; or (iii) if such Borrower or
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any ERISA Affiliate becomes obligated under a Multiemployer Plan (except
with respect to the potential liabilities now existing as disclosed in the
Supplemental Schedule), effect a complete or partial withdrawal such that
such Borrower or such Borrower's Subsidiaries or their ERISA Affiliates
incur Withdrawal Liability under Title IV of ERISA with respect to
Multiemployer Plans or otherwise have liability under Title IV of ERISA;
provided, however, that the incurrence of such Withdrawal Liability or
other liability under Title IV of ERISA shall not be deemed to be a
violation of this clause (iii) unless (A) the amount the payment by any or
all of the Borrowers of such Withdrawal Liability or other liability could
reasonably be expected to result in a Material Adverse Effect.
(j) REGULATION U COMPLIANCE.
None of the Borrowers shall use any portion of the proceeds of
any Loan for the purpose of purchasing or carrying any Margin Stock, or
for any other purpose, in violation, in each case, of any requirement of
Law or of the terms and conditions of this Agreement.
(k) ACCOUNTING CHANGES.
None of the Borrowers will, nor permit any of its Subsidiaries
to, make or permit any change in its accounting policies or financial
reporting practices and procedures, except as required or permitted by
GAAP or as required by applicable law, in each case as to which such
Borrower shall have delivered to the Administrative Agent prior to the
effectiveness of any such change a report prepared by a Responsible
Officer of Instron Corporation describing such change and explaining in
reasonable detail the basis therefor and effect thereof.
(l) ARM'S-LENGTH TRANSACTIONS.
Except for (i) indemnification of directors and officers, (ii)
transactions contemplated by the Stockholder Agreement, (iii) transactions
contemplated by the Registration Rights Agreement (as defined in the
Merger Agreement), (iv) employment agreements, (v) transactions with
Affiliates otherwise permitted pursuant to this Agreement and (vi) as set
forth on the Supplemental Schedule, none of the Borrowers will, nor permit
any of its Subsidiaries to, enter into or permit to exist any transaction
(including, without limitation, any transaction involving the investment,
purchase, sale, lease, transfer or exchange of any property or the
rendering of any service) with any Affiliate of such Borrower except in
the ordinary course of the business of such Borrower and its Subsidiaries
and upon fair and reasonable terms not less favorable to such Borrower or
any of its Subsidiaries than would be usual and customary in transactions
with persons who are not such Affiliates; provided, however, that any
payment in connection with the Management Agreement to the extent
permitted by Section 7.3(f) shall be permitted by this Section 7.3(l).
7.4 FINANCIAL COVENANTS.
(a) MINIMUM CONSOLIDATED NET WORTH.
The Borrowers shall not permit the Consolidated Net Worth of
Instron Corporation and its consolidated Subsidiaries: (x) as of December
31, 1999, to be less than an amount equal to the sum one hundred and
fifteen percent (115%) of the Consolidated Net Worth of Instron
Corporation and its consolidated Subsidiaries as of
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September 30, 1999, plus seventy-five percent (75%) of the
Consolidated Net Income (if any and only to the extent a positive
number) of Instron Corporation and its consolidated Subsidiaries for
the Fiscal Quarter commencing October 1, 1999 and ending as of
December 31, 1999, and (y) as at any date of determination ending
after December 31,1999, to be less than the sum of:
(i) the amount specified in clause (x) above, plus
(ii) in respect of Fiscal Years ended after December 31, 1999
and ending on or prior to such date of determination, an aggregate
amount equal to seventy-five percent (75%) of the Consolidated Net
Income of Instron Corporation and its consolidated Subsidiaries (if
any and only to the extent a positive number) attributable to each
such Fiscal Year (which aggregate amount shall not be reduced by
consolidated net losses (if any) reported for any such Fiscal Year);
plus
(iii) in respect of Fiscal Quarters ended prior to the Fiscal
Year end of the Fiscal Year during which such date of determination
is occurring, an aggregate amount equal to seventy-five percent
(75%) of the Consolidated Net Income (if any and only to the extent
a positive number) of Instron Corporation and its consolidated
Subsidiaries for each such Fiscal Quarter ending on or prior to such
date of determination (which aggregate amount shall not be reduced
by consolidated net losses (if any) reported for any such Fiscal
Quarter); plus
(iv) an amount equal to one hundred percent (100%) of the sum
of: (A) the amount of any capital contribution to Instron
Corporation or its consolidated Subsidiaries after the Closing Date,
plus (B) the cash proceeds (net of customary fees, costs and
expenses including, without limitation, underwriters' or placement
Administrative Agents' discounts and commissions and transfer and
similar taxes) from the sale or issuance of equity securities of
Instron Corporation or its consolidated Subsidiaries after the
Closing Date (other than any sale or issuance to management or
employees pursuant to employee benefit plans of general
application), plus (C) the principal amount of any Indebtedness
converted to or exchanged into equity securities of Instron
Corporation or its consolidated Subsidiaries after the Closing Date.
(b) MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO.
The Borrowers shall not permit the Consolidated Fixed Charge
Coverage Ratio of Instron Corporation and its consolidated Subsidiaries,
as of the end of any Fiscal Quarter ending during the periods set forth
below, to be less than the Consolidated Fixed Charge Coverage Ratio (in
each case, for the Testing Period (as defined below) ending as of such
Fiscal Quarter end) corresponding to such period as set forth below:
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Period Consolidated Fixed
------ ------------------
Charge Coverage Ratio
---------------------
October 1, 1999 through December 31, 2000 1.05 1.00
January 1, 2001 and thereafter 1.10 to 1.00
(c) MINIMUM CONSOLIDATED EBIT TO CONSOLIDATED INTEREST EXPENSE RATIO.
The Borrowers shall not permit the Consolidated EBIT to
Consolidated Interest Expense Ratio of Instron Corporation and its
consolidated Subsidiaries as of the end of any Fiscal Quarter ending
during the periods set forth below to be less than the Consolidated EBIT
to Consolidated Interest Expense Ratio (in each case, for the Testing
Period (as defined below) ending as of such Fiscal Quarter end)
corresponding to such period as set forth below:
Minimum Consolidated
--------------------
Period EBIT to Interest Ratio
------ ----------------------
October, 1, 1999 through December 31, 1999 1.80 to 1.00
January 1, 2000 through December 31, 2000 2.00 to 1.00
January 1, 2001 through December 31, 2001 2.25 to 1.00
January 1, 2002 through December 31, 2002 2.50 to 1.00
January 1, 2003 through December 31, 2003 2.75 to 1.00
January 1, 2004 and thereafter 3.00 to 1.00
(d) CONSOLIDATED SENIOR FUNDED DEBT TO ADJUSTED EBITDA RATIO.
The Borrowers shall not permit the Consolidated Senior Funded
Debt to Adjusted EBITDA Ratio of Instron Corporation and its consolidated
Subsidiaries, as at the end of any Fiscal Quarter ending during the
periods set forth below, to exceed the Consolidated Senior Funded Debt to
Adjusted EBITDA Ratio (in each case, for the Testing Period ending as of
such Fiscal Quarter end) corresponding to such period as set forth below:
Period Consolidated Senior Funded
------ --------------------------
Debt to Adjusted EBITDA Ratio
-----------------------------
December 31, 1999 through March 31, 2000 3.50 to 1.00
April 1, 2000 through September 30, 2000 3.25 to 1.00
October 1, 1999 through December 31, 2000 3.00 to 1.00
January 1, 2001 through December 31, 2001 2.75 to 1.00
January 1, 2002 and thereafter 2.50 to 1.00
January 1, 2003and thereafter 2.25 to 1.00
(e) CONSOLIDATED TOTAL FUNDED DEBT TO ADJUSTED EBITDA RATIO.
The Borrowers shall not permit the Consolidated Total Funded
Debt to Adjusted EBITDA Ratio of Instron Corporation and its consolidated
Subsidiaries, as at the end of any Fiscal Quarter ending during the
periods set forth below, to exceed the Consolidated Total Funded Debt to
Adjusted EBITDA Ratio (in each case, for the
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Testing Period ending as of such Fiscal Quarter end) corresponding to such
period as set forth below:
Consolidated Total Funded
-------------------------
Period Debt to Adjusted EBITDA Ratio
------ -----------------------------
October 1, 1999 through December 31, 1999 5.75 to 1.00
January 1, 2000 through June 30, 2000 5.50 to 1.00
July 1, 2000 through September 30, 2000 5.25 to 1.00
October 1, 2000 through June 30, 2001 5.00 to 1.00
July 1, 2001 through June 30, 2002 4.75 to 1.00
July 1, 2002 and thereafter 4.50 to 1.00
(f) MINIMUM CONSOLIDATED ADJUSTED EBITDA.
The Borrowers shall not permit the Consolidated Adjusted
EBITDA of Instron Corporation and its consolidated Subsidiaries as of the
end of any Fiscal Quarter ending during the periods set forth below, to be
less than the Consolidated Adjusted EBITDA (in each case, for the Testing
Period ending as of such Fiscal Quarter end) corresponding to such period
as set forth below:
Period Consolidated Adjusted EBITDA
------ ----------------------------
October 1, 1999 through December 31, 1999 $22,500,000
January 1, 2000 through December 31, 2000 $25,500,000
January 1, 2001 through December 31, 2001 $28,000,000
January 1, 2002 through December 31, 2002 $30,000,000
January 1, 2003 through December 31, 2003 $31,000,000
January 1, 2004 and thereafter $32,000,000
(g) MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES.
The Borrowers shall not permit the Consolidated Capital
Expenditures (including any purchase money Indebtedness permitted under
Section 7.3(c) of this Agreement) of Instron Corporation and its
consolidated Subsidiaries to exceed, during any Fiscal Year, Eight Million
Dollars ($8,000,000) in the aggregate.
SECTION 8 EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall constitute
an "Event of Default":
8.1 PAYMENT.
Failure by any Borrower (a) to make payment of principal or interest
on the Notes executed by such Borrower when due or (b) to pay any other
Obligation payable by such Borrower when required to be paid hereunder to the
extent such failure is not remedied within three (3) Business Days after such
required date of payment hereunder or thereunder; or
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8.2 REPRESENTATIONS AND WARRANTIES.
Any warranty or representation made or deemed made by a
Borrower in respect of any Borrower, any Subsidiary of a Borrower or any
Borrower Guarantor in this Agreement, any other Loan Document or any
certificate, document or financial or other written statement furnished at any
time in compliance with this Agreement shall prove to have been false or
inaccurate when made or deemed made; or
8.3 REPORTING AND NOTICE PROVISIONS; VIOLATION OF CERTAIN AFFIRMATIVE
COVENANTS.
Failure by a Borrower (in respect of any Borrower, any
Subsidiary of a Borrower or any Borrower Guarantor) to perform, keep or observe
any term, provision, condition or covenant contained in this Agreement (other
than those provisions, terms or conditions referenced in Sections 8.1, 8.2, and
8.4 of this Agreement) or any other Loan Document that is required to be kept or
observed by such Borrower (in respect of any Borrower, any Subsidiary of a
Borrower or any such Borrower Guarantor) and such failure shall continue without
remedy for a period of thirty (30) Business Days; or
8.4 VIOLATION OF NEGATIVE COVENANTS AND FINANCIAL COVENANTS.
Failure by a Borrower to perform, keep, or observe any term,
provision, condition or covenant contained in Sections 4.2, 4.3 or 5.4 of this
Agreement, or Sections 7.1(a) through 7.1(d) of this Agreement or Sections
7.2(a), 7.3 or 7.4 of this Agreement which is required to be performed, kept, or
observed by such Borrower (in respect of any Borrower, any Subsidiary of a
Borrower or any Borrower Guarantor); or
8.5 CROSS-DEFAULT.
(a) Default by a Borrower or any Subsidiary of a Borrower in
respect of: (i) any Indebtedness of such Borrower or such Subsidiary in excess
of Five Million Dollars ($5,000,000) in the aggregate or (ii) the Subordinated
Debt, where such default could permit the holder of such other Indebtedness to
accelerate such Indebtedness or any portion thereof to the extent such default
continues and has not been waived, or (b) default by a Borrower or any
Subsidiary of a Borrower in respect of any Material Business Agreement or any
Material License Agreement where such default (i) would permit the other party
or parties to such agreement to terminate such agreement and (ii) has resulted
or could reasonably be expected to result in a Material Adverse Effect or (c)
failure by any Borrower or any of its Subsidiaries to perform, keep, observe or
enforce any material terms, provisions, conditions or covenants contained in the
Merger Agreement or the Merger Documents to which it is a party; or
8.6 FALSE OR MISLEADING REPORTS.
The making or delivering to the Administrative Agent or the
Banks by a Borrower, or any officers, employees or Administrative Agents of such
Borrower, of any written statement, report, financial statement, or certificate
which is not true and correct in any material respect when made; or
8.7 DESTRUCTION OF COLLATERAL.
The loss, theft, damage or destruction of any portion of the
Collateral having an aggregate value in excess of Two Million Five Hundred
Thousand Dollars ($2,500,000), to the
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extent not insured by an insurance carrier which has acknowledged coverage in
the amount of the claim without any reservation of rights or which has been
ordered by a court of competent jurisdiction to pay such claim; or
8.8 CHANGE OF CONTROL.
The occurrence of a Change of Control; or
8.9 TERMINATION OF EXISTENCE.
The dissolution or termination of existence of any Borrower,
any Subsidiary of a Borrower, or any Borrower Guarantor of the Obligations, but
only to the extent not permitted under Section 7.3(a); or
8.10 FAILURE OF ENFORCEABILITY OF THIS AGREEMENT, CREDIT DOCUMENT;
SECURITY.
If: (a) any covenant, material agreement or any Obligation of
any Borrower, any Subsidiary of a Borrower or any Borrower Guarantor contained
in or evidenced by this Agreement or any of the other Loan Documents shall cease
to be enforceable, or shall be determined to be unenforceable, in accordance
with its terms, or (b) any Borrower, any Subsidiary of a Borrower or any
Borrower Guarantor shall deny or disaffirm its obligations under this Agreement
or any of the other Loan Documents or any of the Liens granted in connection
therewith, or (c) any Liens in favor of the Administrative Agent or the Banks
granted in this Agreement or any of the other Loan Documents shall be determined
to be void, voidable or invalid, or are subordinated or not otherwise given the
priority contemplated by this Agreement, or (d) any perfected Liens granted in
favor of the Administrative Agent or the Banks shall be determined to be
unperfected except in connection with sales of Inventory in the normal course of
the business of a Borrower or the Borrower Guarantor, as expressly contemplated
and permitted by this Agreement and the other Loan Documents, or (e) any
Borrower Guarantor of the Obligations of the Borrowers shall revoke or permit a
payment default under its Guaranty Obligations; or
8.11 ERISA.
If: (a) a Borrower, its Subsidiaries, or any of their ERISA Affiliates
or any other Person institutes any steps to terminate an Employee Benefit Plan
of such Borrower, such Subsidiaries, or such ERISA Affiliates, which Employee
Benefit Plan is subject to Title IV of ERISA and, as a result of such
termination, such Borrower, Subsidiary or ERISA Affiliate is required to make,
or could reasonably be expected to be required to make, a contribution to such
Employee Benefit Plan the payment of which (i) when taken together with all like
termination payments suffered by the Borrowers, the Subsidiaries of the
Borrowers or such ERISA Affiliates, either has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect or (b) such Borrower, such
Subsidiary or such ERISA Affiliate fails to make a contribution to any Employee
Benefit Plan which failure would be sufficient to give rise to a Lien under
Section 302(f) of ERISA; or
8.12 JUDGMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving an amount, when aggregated with all such money judgment, writ
or warrant of attachment or similar process outstanding at such time, in excess
of Five Million Dollars ($5,000,000), to the extent not insured by an insurance
carrier which has acknowledged coverage in the amount of the claim without any
reservation of rights or which has been ordered by a court of competent
jurisdiction to pay such claim) is entered or filed against any or all of the
Borrowers or any
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Subsidiary thereof or against any of their respective assets and is not
released, discharged, vacated, fully bonded or stayed within thirty (30) days
after such judgment, writ or warrant of attachment or similar proceeding is
entered; or
8.13 FORFEITURE PROCEEDINGS.
An adjudication against any Borrower or any Subsidiary of such
Borrower in any criminal proceedings requiring such Borrower's or such
Subsidiary's forfeiture of any asset or assets having, either individually or in
the aggregate, a value in excess of One Million Dollars ($1,000,000); or
8.14 FINANCIAL IMPAIRMENT.
The Financial Impairment of any Borrower or any Material
Subsidiary; provided, however, that, despite paragraph (b) of the definition of
"Financial Impairment," the lack of Solvency of any Material Subsidiary or any
Borrower (other than Instron Corporation and Instron, Ltd.) shall not be the
basis for the occurrence of an Event of Default under this Section 8.14 unless
(x) such other Borrower incurs additional Obligations hereunder after the
existence of such lack of Solvency in violation of the representation set forth
in Section 6.18 hereof or (y) such lack of Solvency has resulted in, or would
reasonably be expected to result in, a Material Adverse Effect on Instron
Corporation and its Subsidiaries on a consolidated basis.
SECTION 9 REMEDIES.
9.1 ACCELERATION; TERMINATION.
Upon the occurrence of an Event of Default described above in
Sections 8.1 through 8.13 above, inclusive, the Administrative Agent may, and at
the written request of the Required Banks shall, have the right to, without
notice: (a) declare all of the Obligations due or to become due from each
Borrower to the Administrative Agent and the Banks, whether under this
Agreement, the Notes or otherwise, immediately due and payable, anything in the
Notes or other evidence of the Obligations or in any of the other Loan Documents
to the contrary notwithstanding, (b) declare all of the Swing Line Obligations
due or to become due from any Borrower to the Designated Swing Line Lender
designated for such Borrower, whether under this Agreement, the Notes or
otherwise, immediately due and payable, anything in the Notes or other evidence
of the Swing Line Obligations or in any of the other Loan Documents to the
contrary notwithstanding (c) terminate each Bank's Revolving Credit Commitment
whereupon no Bank shall have any further obligation to make any Loan or issue
any Letter of Credit hereunder, (d) terminate each Designated Swing Line
Lender's Swing Line Commitment whereupon no Designated Swing Line Lender shall
have any further obligation to make any Swing Line Loan hereunder, (e) terminate
each Designated Letter of Credit Issuer's obligation to issue Letters of Credit
whereupon no Designated Letter of Credit Issuer shall have any further
obligation to issue any Letter of Credit hereunder and (f) terminate each Bank's
obligation to participate in Swing Line Loans and Letters of Credit, as the case
may be, made or issued after such termination of the Swing Line Commitments and
obligations to issue Letters of Credit.
9.2 AUTOMATIC ACCELERATION AND TERMINATION.
If any Event of Default referred to in Section 8.14 above
shall occur, (a) each Bank's Commitments shall automatically and immediately
terminate (if not already expired or terminated by the Borrowers or terminated
pursuant to this Section 9) whereupon no Bank shall have any obligation
thereafter to make any Loan hereunder, (b) each Designated Swing Line Lender's
Designated German Swing Line Lender Commitment and Designated U.K. Swing Line
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Lender Commitment, as the case may be, shall automatically and immediately
terminate (if not already expired or terminated by the Borrowers or otherwise
terminated pursuant to this Section 9.1 hereof) whereupon no Designated Swing
Line Lender shall have any obligation thereafter to make any Swing Line Loan
hereunder, (c) each Designated Letter of Credit Issuer's obligation to issue
Letters of Credit shall immediately terminate whereupon no Designated Letter of
Credit Issuer shall have any obligation thereafter to issue any Letters of
Credit hereunder, and (d) all of the Obligations and all other Indebtedness, if
any, then owing to the Banks, any Designated Swing Line Lenders or any
Designated Letter of Credit Issuer (other than Indebtedness, if any, already due
and payable) shall thereupon become and thereafter be immediately due and
payable in full, all without any presentment, demand or notice of any kind,
which are hereby waived by the Borrowers.
9.3 GENERAL RIGHTS AND REMEDIES OF ADMINISTRATIVE AGENT AND THE BANKS.
With respect to the Collateral, the Administrative Agent shall
have all of the rights and remedies of a secured party under the UCC or under
other applicable Law. The Administrative Agent, the Banks, Designated Swing Line
Lenders and the Designated Letter of Credit Issuers shall have all other legal
and equitable rights to which each may be entitled, all of which rights and
remedies shall be cumulative, and none of which shall be exclusive, to the
extent permitted by law, in addition to any other rights or remedies contained
in this Agreement or in any of the other Loan Documents. Each Bank, Designated
Swing Line Lender and Designated Letter of Credit Issuer hereby expressly agrees
that, unless requested by the Administrative Agent, upon the concurrence of the
Required Banks, such Bank, Designated Swing Line Lender and Designated Letter of
Credit Issuer will not take or cause to be taken, in respect of the Loans or the
other Obligations or the Collateral, any action or remedy that is independent
from the actions or remedies taken or to be taken by the Administrative Agent,
except for any actions taken by any Bank, Designated Swing Line Lender or
Designated Letter of Credit Issuer necessary to preserve its rights in
connection with any Event of Default described in Section 8.14 of this
Agreement.
9.4 ADDITIONAL REMEDIES.
After the Obligations shall have been declared by the
Administrative Agent to be or shall have otherwise hereunder become immediately
due and payable, the Administrative Agent may, and upon direction of the
Required Banks shall, exercise the following rights and remedies to the extent
permitted by applicable law and in addition to any other right or remedy
provided for in this Agreement:
(a) POSSESSION OF COLLATERAL.
The Administrative Agent shall have the right to take
immediate possession of the Collateral and all Proceeds relating to
such Collateral and: (i) require each of the Borrowers, at such
Borrower's expense, to assemble the Collateral of such Borrower and
make it available to the Administrative Agent at such manufacturing
facilities of the Borrowers as the Administrative Agent shall designate
or (ii) enter any of the premises of such Borrower or wherever any
Collateral shall be located and to keep and store the same on such
premises until sold. If the premises on which the Collateral is located
is owned or leased by a Borrower, then such Borrower shall not charge
the Administrative Agent for storage of such Collateral on such
premises.
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(b) FORECLOSURE OF LIENS.
The Administrative Agent shall have the right to
foreclose the Liens created under this Agreement and each of the other
Loan Documents or under any other agreement relating to the Collateral.
(c) DISPOSITION OF COLLATERAL.
The Administrative Agent shall have the right to sell
or to otherwise dispose of all or any Collateral in its then condition,
or after any further manufacturing or processing thereof, at public or
private sale or sales, wholesale dispositions, or sales pursuant to one
or more contracts, with such notice as may be required by law, in lots
or in bulk, for cash or on credit, all as the Administrative Agent, in
its discretion, may deem advisable. Each of the Borrowers acknowledges
and covenants that ten (10) days written notice to the Borrower
Representative of any public or private sale or other disposition of
Collateral shall be reasonable notice thereof, and such sale shall be
at such Borrower's premises or at such other locations where the
Collateral then is located, or as otherwise determined by the
Administrative Agent. The Administrative Agent shall have the right to
conduct such sales on such Borrower's premises, without charge
therefor, and such sales may be adjourned from time to time in
accordance with applicable law without further requirement of notice to
the Borrowers. Each Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer shall have the right to bid or credit bid any
such sale on its own behalf.
(d) APPLICATION OF COLLATERAL; APPLICATION OF LIQUIDATION
PROCEEDS.
The Administrative Agent, with or without proceeding
with sale or foreclosure or demanding (or having the Designated Swing
Line Lender demand) payment of the Obligations, Swing Line Obligations
or Letter of Credit Obligations shall have the right, without notice,
at any time, to appropriate and apply to any Obligations, Swing Line
Obligations or Letter of Credit Obligations any and all Collateral of a
Borrower in the possession of the Administrative Agent, the Banks, any
Designated Swing Line Lender or Designated Letter of Credit Issuer. All
monies received by the Administrative Agent or any Bank, Designated
Swing Line Lender or Designated Letter of Credit Issuer from the
exercise of remedies under this Agreement or the other Loan Documents
shall, unless otherwise required by the terms of the other Loan
Documents or by applicable law, be applied as follows:
(i) First, to the payment of all reasonable expenses
(to the extent not otherwise paid by the Borrowers) incurred
by the Administrative Agent and the Banks in connection with
the exercise of such remedies, including, without limitation,
all reasonable costs and expenses of collection, reasonable
documented attorneys' fees, court costs and any foreclosure
expenses;
(ii) Second, to the payment pro rata of interest then
accrued (x) in the case of a Foreign Borrower, on the
outstanding Obligations of such Foreign Borrower, and (y) in
the case of a Domestic Borrower, on the outstanding
Obligations of all Borrowers;
(iii) Third, to the payment pro rata of any fees then
accrued and payable to the Administrative Agent or any Bank
under this Agreement in respect
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of the Loans, provided, however, that in no case shall
proceeds of Collateral of any Foreign Subsidiary or monies
received from any Foreign Subsidiary be applied to any
Obligations of any other Borrower;
(iv) Fourth, to the payment pro rata of: (A) the
principal balance then owing on the outstanding Term Loans,
(B) the principal balance then owing on the outstanding
Revolving Credit Loans or (the amount of any participations in
lieu thereof) and (C) the Designated Hedge Obligations then
due under Designated Hedge Agreements to Designated Hedge
Creditors of the Borrowers or any Subsidiary, subject to
confirmation by the Administrative Agent of any calculations
of termination or other payment amounts being made in
accordance with normal industry practice, provided, however,
that in no case shall any proceeds of Collateral of any
Foreign Borrower or Foreign Subsidiary or monies received from
any Foreign Borrower or Foreign Subsidiary be applied to any
Obligations, Swing Line Obligations or Letter of Credit
Obligations or Designated Hedge Obligations of any other
Borrower;
(v) Fifth, to the payment pro rata of all other
amounts owed by the Borrowers to the Administrative Agent or
any Bank, Designated Swing Line Lender or Designated Letter of
Credit Issuer under this Agreement or any other Loan Document,
and to any counterparties under Designated Hedge Agreements of
the Borrowers and the Subsidiaries thereof, and if such
proceeds are insufficient to pay such amounts in full, to the
payment of such amounts pro rata, provided, however, that in
no case shall proceeds of Collateral of any Foreign Subsidiary
or monies received from any Foreign Subsidiary be applied to
any Obligations of any other Borrower; and
(vi) Finally, any remaining surplus after all of the
Obligations and Designated Hedge Obligations have been paid in
full, to the Borrowers or to whomsoever shall be lawfully
entitled thereto.
9.5 APPOINTMENT OF ATTORNEY-IN-FACt.
The Administrative Agent shall hereby have the right, and each
of the Borrowers hereby irrevocably makes, constitutes, and appoints the
Administrative Agent (and all officers, employees, or Administrative Agents
designated by the Administrative Agent) as its true and lawful attorney-in-fact
and Administrative Agent, with full power of substitution, to, from time to time
(but only to the extent following the occurrence of an Event of Default which is
continuing and has not been waived in accordance with Section 14.1 hereof) (a)
effectuate, in the Borrower's name, the Borrower's obligations under this
Agreement, (b) in the Borrower's or Administrative Agent's name: (i) demand
payment of the Accounts, (ii) enforce payment of the Accounts, by legal
proceedings or otherwise, (iii) exercise all of the Borrower's rights and
remedies with respect to the collection of the Accounts and any other
Collateral, (iv) settle, adjust, compromise, extend, or renew the Accounts, (v)
settle, adjust, or compromise any legal proceedings brought to collect the
Accounts, (vi) if permitted by applicable law, sell or assign the Accounts and
other Collateral upon such terms, for such amounts, and at such time or times as
the Administrative Agent deems advisable, (vii) discharge and release the
Accounts and any other Collateral, (viii) take control, in any manner, of any
item of payment or Proceeds relating to any Collateral, (ix) prepare, file, and
sign the Borrower's name on a proof of claim in
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bankruptcy or similar document against any Account Debtor, (x) prepare, file,
and sign the Borrower's name on any notice of Lien, assignment, or satisfaction
of Lien or similar document in connection with the Accounts, (xi) do all acts
and things reasonably necessary, in the Administrative Agent's good faith
discretion, to fulfill the Borrower's obligations under this Agreement, (xii)
endorse the name of the Borrower upon any of the items of payment or Proceeds
relating to any Collateral and deposit the same to the account of the
Administrative Agent on account of the Obligations, (xiii) endorse the name of
the Borrower upon any Chattel Paper, document, Instrument, invoice, freight
xxxx, xxxx of lading, or similar document or agreement relating to the Accounts,
Inventory and any other Collateral, (xiv) use the Borrower's stationery and sign
the name of the Borrower to verifications of the Accounts and notices thereof to
Account Debtors, (xv) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the
Accounts, Inventory, and any other Collateral to which the Borrower has access,
(xvi) make and adjust claims under such policies of insurance, receive and
endorse the name of such Borrower on any check, draft, instrument or other item
of payment for the proceeds of such policies of insurance, and make all
determinations and decisions with respect to such policies of insurance and
(xvii) notify post office authorities to change the address for delivery of the
Borrower's mail to an address designated by the Administrative Agent, receive
and open all mail addressed to the Borrower, and, after removing all collections
and other remittances and Proceeds of Collateral, forward the mail to the
Borrower. Each of the Borrowers hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.
9.6 SET-OFF.
If any Event of Default referred to in Section 8 of this
Agreement shall occur which is continuing and has not been waived in accordance
with Section 14.1 hereof, each Bank, Designated Swing Line Lender, Designated
Letter of Credit Issuer, and any Lending Installation thereof on behalf thereof,
shall have the right (in addition to such other rights as it may have by
operation of Law or otherwise but subject to Section 9.12 of this Agreement) at
any time to set off against and to appropriate and apply toward the payment of
the Obligations, Swing Line Obligations or Letter of Credit Obligations, as
applicable, and all other liabilities under this Agreement and the other Loan
Documents then owing to it (and any participation purchased or to be purchased
pursuant to this Agreement including Section 9.12 below) whether or not the same
shall then have matured, any and all deposit (general or special) and any other
Indebtedness at any time held or owing by such Bank, Designated Swing Line
Lender or Designated Letter of Credit Issuer (including branches and agencies
thereof wherever located) to or for the credit or account of a Borrower, all
without notice to or demand upon such Borrower or any other Person, all such
notices and demands being hereby expressly waived, provided, however, that in no
case shall any such amounts obtained by setoff or otherwise received from any
Foreign Borrower or any Foreign Subsidiary thereof be applied toward payment of
any Obligations, Swing Line Obligations or Letter of Credit Obligations of any
other Borrower other than such Foreign Borrower.
9.7 TERMINATION; EFFECT ON BORROWER OBLIGATIONS.
Any termination by the Administrative Agent and/or any Bank,
Designated Swing Line Lender or Designated Letter of Credit Issuer pursuant to
this Section 9 of its performance shall not absolve, release, or otherwise
affect the liability of the Borrowers in respect of transactions prior to such
termination or affect any of the Liens, rights, powers, and remedies of the
Administrative Agent or such Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer which such Liens, rights, powers and remedies shall, in
all events, continue until all Obligations, Swing Line Obligations, Letter of
Credit Obligations and all other liabilities
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hereunder of the Borrowers to the Administrative Agent and to the Banks, the
Designated Swing Line Lenders and the Designated Letter of Credit Issuers are
satisfied.
9.8 ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT.
Upon the occurrence of an Event of Default which is continuing
and has not been waived in accordance with Section 14.1 hereof, to the extent
that any Letters of Credit have been issued which then are outstanding, the
Administrative Agent, for the benefit of the Designated Letter of Credit Issuers
and the Banks, may, and upon the direction of the Required Banks shall (whether
in addition to taking any of the actions described in this Section 9 or
otherwise), make demand upon Borrowers to, and forthwith upon such demand the
Borrowers will, pay to the Administrative Agent in same day funds and in the
currency in which such Letter of Credit is denominated, for deposit in a special
cash collateral account (the "Letter of Credit Collateral Account"), to secure
(x) in the case of a Foreign Borrower, the Letter of Credit Obligations of such
Foreign Borrower in respect of any outstanding Letters of Credit (including,
without limitation, any such obligations arising under Section 2.12(l)), and (y)
in the case of a Domestic Borrower, the Letter of Credit Obligations of all
Borrowers in respect of any outstanding Letters of Credit (including, without
limitation, any such obligations arising under Section 2.12(l)), to be
maintained at such office of the Administrative Agent as Administrative Agent
shall direct, an amount equal to the maximum amount available to be drawn under
the Letters of Credit. In the event that the Borrowers shall not deposit such
funds upon demand by the Administrative Agent, the Administrative Agent may, in
its sole discretion, deposit any funds of the Borrowers in the possession of the
Administrative Agent to the Letter of Credit Collateral Account until the amount
deposited in such account equals the maximum amount available to be drawn under
the Letters of Credit. The Letter of Credit Collateral Account shall be in the
name of Administrative Agent (as a cash collateral account), but under the sole
dominion and control of the Administrative Agent and subject to the terms of
this Agreement.
9.9 LETTER OF CREDIT COLLATERAL ACCOUNT.
(a) APPLICATION.
The Administrative Agent may, at any time or from
time to time after funds are deposited in the Letter of Credit
Collateral Account, apply funds then held in the Letter of Credit
Collateral Account to the payment of any amounts, in such order as the
Administrative Agent may elect or shall be directed by the Banks, as
shall have become or shall become due and payable by the Borrowers to
the Designated Letter of Credit Issuers under this Agreement or any
Reimbursement Agreement first, in respect of the Letters of Credit and
second, after the occurrence and during the continuance of any Event of
Default, in respect of all other amounts constituting Obligations,
provided, however, that in no case shall proceeds of Collateral of any
Foreign Borrower or any Foreign Subsidiary thereof or monies deposited
into the Letter of Credit Cash Collateral Account by such Foreign
Borrower of any Foreign Subsidiary thereof be applied to any Letter of
Credit Obligations or any other Obligations of any Borrower other than
such Foreign Borrower.
(b) NO BORROWER OR THIRD PARTY CLAIMS.
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Neither the Borrowers nor any Person claiming on
behalf of or through Borrowers shall have any right to withdraw any of
the funds held in the Letter of Credit Collateral Account.
(c) NO LIENS OR TRANSFERS OF ACCOUNT.
Each of the Borrowers agrees that it will not: (i)
sell or otherwise dispose of any interest in the Letter of Credit
Collateral Account or any funds held therein, or (ii) create or permit
to exist any lien, security interest or other charge or encumbrances
upon or with respect to the Letter of Credit Collateral Account or any
funds held therein, except as provided in or contemplated by this
Agreement.
9.10 AUTHORITY TO EXECUTE TRANSFERS.
Without limitation of any authorization granted to the
Administrative Agent hereunder, each of the Borrowers also hereby authorizes the
Administrative Agent, upon the occurrence of an Event of Default which is
continuing and has not been waived in accordance with Section 14.1 hereof, to
execute, in connection with the exercise by the Administrative Agent of its
remedies hereunder, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
9.11 LIMITED LICENSE TO LIQUIDATE.
Each of the Borrowers hereby grants to the Administrative
Agent for the benefit of the Banks, the Designated Swing Line Lenders and
Designated Letter of Credit Issuers: (a) a non-exclusive, royalty-free license
or other right to use, without charge, all of such Borrower's Intellectual
Property (including all rights of use of any name or trade secret) as it
pertains to the Collateral, in manufacturing, advertising for sale and selling
any Collateral; provided, however, that such license and right to use shall be
exercisable by the Administrative Agent for the benefit of the Banks only upon
request by the Administrative Agent after the occurrence of an Event of Default
which is continuing and has not been waived in accordance with Section 14.1
hereof, and (b) to the extent permitted thereunder, all of such Borrower's
rights under all licenses and all franchise agreements, which shall inure to the
Administrative Agent for the benefit of the Banks, the Designated Swing Line
Lenders and Designated Letter of Credit Issuers without charge but only upon
request by the Administrative Agent after the occurrence of an Event of Default
which is continuing and has not been waived in accordance with Section 14.1
hereof.
9.12 EQUALIZATION.
Each Bank agrees with the other Banks that if at any time it
shall obtain any Advantage over the other Banks or any thereof in respect of the
Loans it will purchase from such other Bank or Banks, for cash and at par, such
additional participation in the Loans owing to the other or others as shall be
necessary to nullify the Advantage. If any such Advantage resulting in the
purchase of an additional participation as aforesaid shall be recovered in whole
or in part from the Bank receiving the Advantage, each such purchase shall be
rescinded, and the purchase price restored (with interest and other charges if
and to the extent actually incurred by the Bank receiving the Advantage) ratably
to the extent of the recovery. During the existence of any Potential Default or
Event of Default, any payment (whether made voluntarily or involuntarily, by
offset of any deposit or other indebtedness or otherwise) of any Indebtedness
owing by a Borrower to any Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer shall be applied to the Obligations, Swing Line
Obligations or Letter of Credit Obligations, as the case may be, owing to such
Bank, Designated Swing Line Lender or Designated Letter of Credit Issuer until
the same shall have been paid in full before any thereof shall be applied to
other
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Indebtedness owing to that Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer.
9.13 REMEDIES CUMULATIVE.
The above-stated remedies are not intended to be exhaustive
and the full or partial exercise of any of such remedies shall not preclude the
full or partial exercise of any other remedy by the Administrative Agent under
this Agreement, under any Loan Document, or at equity or under law.
SECTION 10 BORROWER GUARANTY.
10.1 DOMESTIC BORROWER CROSS-GUARANTY.
To induce the Banks to make the Loans to the Borrowers, the
Designated Swing Line Lenders to make Swing Line Loans to the designated
Borrowers, and the Designated Letter of Credit Issuers to issue Letters of
Credit, and in consideration thereof, each of the Borrower Guarantors hereby
unconditionally and irrevocably: (a) guarantees, jointly and severally, to the
Administrative Agent and the Banks the due and punctual payment in immediately
available funds of all Obligations owing by all Borrowers, all Swing Line
Exposure and LC Exposure of the Banks with respect to all Borrowers, all Swing
Line Obligations owing by all Borrowers to the Designated Swing Line Lenders,
all Letter of Credit Obligations owing by all Borrowers owing to the Designated
Letter of Credit Issuers, all Designated Hedge Obligations owing by all
Borrowers and of all other sums now or hereafter owed by any other Borrower to
the Administrative Agent or any of the Banks, Designated Swing Line Lenders or
Designated Letter of Credit Issuers under this Agreement or any of the Loan
Documents (whether by acceleration or otherwise) and (b) agrees, jointly and
severally, to pay any and all expenses which may be incurred by the
Administrative Agent in enforcing its rights with respect to such Obligations
(collectively, the "Guaranteed Obligations").
10.2 MAXIMUM LIABILITY.
Solely in the event it is necessary for the enforceability of
a Borrower Guaranty, the maximum liability of a Borrower Guarantor under its
Borrower Guaranty for Guaranteed Obligations of the other Borrowers or their
Subsidiaries shall be the greatest amount which, after taking into consideration
all other valid and enforceable debts and liabilities of such Borrower Guarantor
(but giving full effect in such consideration to the subordinated status of the
Senior Subordinated Notes pursuant to the Senior Subordinated Note Indenture),
an applicable court has determined (after any appeals) would not render such
Borrower Guarantor insolvent, unable to pay its debts as they become due,
inadequately capitalized for the business which it intends to conduct (in all
such cases, within the meaning of Section 548 of the Bankruptcy Code, 11 U.S.C.
Section 101, et. seq., or any other similar state law), or unable to pay a
judgment rendered upon a claim that is the subject of an action or proceeding
pending at the time when the obligations of this Borrower Guaranty are incurred
or increased.
10.3 GUARANTY UNCONDITIONAL.
The obligations of the Borrower Guarantors under this Borrower
Guaranty shall be, joint and several, irrevocable, unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by (i) any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of any advance under
this Agreement or any Loan Document by operation of Law or otherwise; (ii) any
modification or amendment of or supplement to this Agreement or any Loan
Document; (iii) any
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modification, amendment, waiver, release, non-perfection or invalidity of any
direct or indirect security, or of any guarantee or other liability of any third
party, of the Guaranteed Obligations of any Borrower or its Subsidiary; (iv) any
change in the corporate existence, structure, or ownership of, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting any
Borrower Guarantor or its assets or any resulting release or discharge of any of
the Obligations of the Borrower Guarantors contained in this Agreement or any
Loan Document; (v) the existence of any claim, set-off or other rights which any
Borrower Guarantor may have at any time against the Administrative Agent, any
Bank, any Designated Swing Line Lender, Designated Letter of Credit Issuer,
Designated Hedge Creditor or any other Person, whether or not arising in
connection with this Agreement or any Loan Document, provided, however, that
nothing herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim; (vi) any invalidity or unenforceability relating to or
against any Borrower or its Subsidiary for any reason of this Agreement or any
Loan Document or any provision of applicable law or regulation purporting to
prohibit the payment by any Borrower under this Agreement or any Loan Document;
or (vii) to the extent permitted by applicable Law, any other act or omission to
act or delay of any kind by a Borrower Guarantor, the Administrative Agent, any
Bank, any Designated Swing Line Lender, any Designated Letter of Credit Issuer,
any Designated Hedge Creditor or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the Guaranteed Obligations of any Borrower under
this Section 10.
10.4 DISCHARGE; REINSTATEMENT.
The Guaranteed Obligations of each Borrower Guarantor under
this Section 10 shall remain in full force and effect until the Revolving Credit
Commitments of the Banks, the Aggregate Swing Line Commitment of the Designated
Swing Line Lenders and the obligations of the Designated Letter of Credit Issuer
are terminated, and the Obligations, Swing Line Obligations and Letter of Credit
Obligations and all amounts payable by any Borrower or any Subsidiary of any
Borrower under this Agreement or any other Loan Document have been paid in full.
If at any time any payment of any amount payable by Borrower Guarantor under
this Section 10, any other section of this Agreement or other Loan Document is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of any Borrower Guarantor or otherwise, the other
Borrower Guarantor's obligations under this Section 10 with respect to such
payment shall be reinstated at such time as though such payment had become due
but had not been made at such time. This Section 10 shall survive the
termination of this Agreement until the payment in full of all amounts payable
under this Agreement and any Loan Documents.
10.5 WAIVER.
No Borrower Guarantor shall be entitled to enforce any remedy
which the Administrative Agent, any Designated Swing Line Lender, any Designated
Letter of Credit Issuer or any Bank now has or may hereafter have against any
Borrower, any endorser or any Guarantor or other Borrower Guarantor in respect
of all or any part of the Guaranteed Obligations paid by such Borrower Guarantor
until all of the Obligations, Swing Line Obligations and Letter of Credit
Obligations shall have been fully and finally paid to the Administrative Agent
for the benefit of the Banks, the Designated Swing Line Lenders and the
Designated Letter of Credit Issuers and all commitments of the Banks, the
Designated Swing Line Lenders and the Designated Letter of Credit Issuers to the
Borrowers terminated. Each Borrower Guarantor hereby waives any benefit of, and
any right to participate in, any security or collateral given to the
Administrative Agent for the benefit of the Banks, the Designated Swing Line
Lenders or the Designated Letter of Credit Issuers to secure payment of the
Guaranteed Obligations or any other liability of any Borrower, any Guarantor or
any Borrower Guarantor to
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the Administrative Agent or any Designated Swing Line Lender, Designated Letter
of Credit Issuer or Bank. Each Borrower Guarantor also waives all setoffs and
counterclaims and all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this Borrower Guaranty. Each Borrower Guarantor further waives
all notices of the existence, creation or incurring of additional Obligations by
any other Borrower, and also waives all notices that the principal amount, or
any portion thereof, and/or any interest on any instrument or document
evidencing all or any part of the Guaranteed Obligations is due, notices of any
and all proceedings to collect all or any part of the Guaranteed Obligations,
and, to the extent permitted by law, notices of exchange, sale, surrender or
other handling of any Collateral given to the Administrative Agent for the
benefit of the Banks, the Designated Swing Line Lenders or the Designated Letter
of Credit Issuers to secure payment of the Guaranteed Obligations.
10.6 STAY OF ACCELERATION.
If acceleration of the time for payment of any amount payable
by any Borrower Guarantor under this Agreement or other Loan Document in respect
of a Guaranteed Obligation is stayed upon the insolvency, bankruptcy or
reorganization of any Borrower Guarantor all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by
the other Borrower Guarantors hereunder forthwith on demand by the
Administrative Agent.
10.7 SUBROGATION AND CONTRIBUTION RIGHTS.
If any Borrower Guarantor makes a payment in respect of the
Guaranteed Obligations, it shall be subrogated to the rights, if any, of the
payees against the other Borrower Guarantors with respect to such payment and
shall have the rights of contribution set forth below against the other Borrower
Guarantors; provided, however, that such Borrower Guarantor shall not enforce
its rights to any payment by way of subrogation or by exercising its right of
contribution until all the Obligations, Swing Line Obligations and Letter of
Credit Obligations, as the case may be, owing to the Banks, the Designated Swing
Line Lenders and the Designated Letter of Credit Issuers shall have been finally
paid in full and may not under applicable insolvency laws be required to be
repaid by the Banks, the Designated Swing Line Lenders or the Designated Letter
of Credit Issuers, as the case may be.
(a) GUARANTEED OBLIGATION AND CONTRIBUTION PAYMENTS.
Subject to all of the Obligations, Swing Line
Obligations and Letter of Credit Obligations, as the case may be, owing
to the Banks, the Designated Swing Line Lenders and the Designated
Letter of Credit Issuers having been finally paid in full and not
subject to required repayment under applicable insolvency laws, each
Borrower Guarantor shall make, and agrees with each of the other
Borrower Guarantors (and the successors and assigns of such Borrower
Guarantors) to make, payments in respect of the Obligations of such
Borrower Guarantor to which such other Borrower Guarantors are
subrogated or contribution payments to which such other Borrower
Guarantors are entitled, such that, taking into account all such
payments on account of subrogation or contribution rights:
(i) each Borrower Guarantor shall have paid to the
other Borrower Guarantors on account of such subrogation and
contribution rights at some time after the date hereof, (A)
all Obligations the benefit of which has
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been received by such Borrower Guarantor or which relate to
Obligations the benefit of which has been received by such
Borrower Guarantor or (B) if the aggregate of all such
payments by all Borrower Guarantors to all other Borrower
Guarantors would exceed the outstanding Obligations, such
Borrower Guarantor's pro rata share of the outstanding
Obligations, in accordance with the amount of the benefit
received by the Borrower Guarantor as described under
subsection (a)(i)(A) hereinabove; and
(ii) if there remain Obligations unpaid after
application of the payments referred to above, the deficiency
shall be shared among the Borrower Guarantors pro rata in
proportion to their respective net worth on the effective date
of this Agreement.
(b) JOINDER; WAIVER.
By executing an Additional Borrower Addendum, each
signatory thereby becoming an additional Domestic Borrower shall be
deemed to have agreed to all of the terms of this Section 10 as if an
original signatory to this Agreement. No failure or delay by any
Borrower Guarantor in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and nonexclusive of any
rights or remedies provided by law.
SECTION 11 THE AGENTS.
11.1 THE ADMINISTRATIVE AGENT.
Each Bank, Designated Swing Line Lender and Designated Letter
of Credit Issuer irrevocably appoints the Administrative Agent to act as
Administrative Agent under this Agreement and the other Loan Documents for the
benefit of such Bank, Designated Swing Line Lenders and Designated Letter of
Credit Issuers with full authority to take such actions, and to exercise such
powers, on behalf of such Bank, Designated Swing Line Lenders and Designated
Letter of Credit Issuers in respect of this Agreement and the other Loan
Documents as are herein and therein respectively delegated to the Administrative
Agent or as are reasonably incidental to those delegated powers. The
Administrative Agent in such capacity shall be deemed to be an independent
contractor of the Banks, the Designated Swing Line Lenders and the Designated
Letter of Credit Issuers. Each Designated Swing Line Lender, Designated Letter
of Credit Issuer and each Bank hereby expressly agrees that, without first
obtaining the prior written consent of the Administrative Agent or the Required
Banks, no Designated Swing Line Lender, Designated Letter of Credit Issuer or
Bank will take or cause to be taken, in respect of the Loans or the other
Obligations hereunder, the Swing Line Obligations, the Letter of Credit
Obligations or the Collateral, any enforcement or remedial action or remedy that
is independent from the actions or remedies taken or to be taken by the
Administrative Agent, except for any actions taken by a Designated Swing Line
Lender, Designated Letter of Credit Issuer or any Bank which are necessary to
preserve its rights in connection with any Event of Default described in Section
8.14 of this Agreement.
11.2 DESIGNATED EUROPEAN ADMINISTRATIVE AGENTS.
Each Bank, Designated Swing Line Lender and Designated Letter
of Credit Issuer irrevocably authorizes, and hereby confirms the appointment of,
each Designated European Administrative Agent selected by the Administrative
Agent, after consultation with the Borrower
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Representative, to act as agent under this Agreement and the other Loan
Documents for the benefit of such Bank, Designated Swing Line Lender and
Designated Letter of Credit Issuer with full authority to take such actions, and
to exercise such powers, on behalf of such Bank, Designated Swing Line Lender
and Designated Letter of Credit Issuer in respect of this Agreement and the
other Loan Documents as are herein and therein expressly delegated to each such
Designated European Administrative Agent or as are reasonably incidental to
those delegated powers. Each Designated European Administrative Agent acting in
such capacity shall be deemed to be an independent contractor of the Banks, the
Designated Swing Line Lenders and the Designated Letter of Credit Issuers.
11.3 SYNDICATION AGENT.
Each Bank and each of the Borrowers hereby irrevocably
designates and appoints NCB as Syndication Agent to act as specified herein and
in the other Loan Documents, and each such Bank hereby irrevocably authorizes
the Syndication Agent to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform during the Syndication Period such duties as are expressly delegated to
the Syndication Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
11.4 NATURE OF APPOINTMENT.
The Agents shall have no fiduciary relationship with any Bank,
Designated Swing Line Lender or Designated Letter of Credit Issuer by reason of
this Agreement and the other Loan Documents. The Agents shall not have any duty
or responsibility whatsoever to any Bank, Designated Swing Line Lender or
Designated Letter of Credit Issuer except those expressly set forth in this
Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, each Bank, Designated Swing Line Lender or Designated Letter of
Credit Issuer acknowledges that the Agents are acting as such solely as a
convenience to the Banks and not as a manager of the commitments or the
Obligations evidenced by the Notes. This Section 11 does not confer any rights
upon the Borrowers or anyone else (except the Banks, the Designated Swing Line
Lenders and the Designated Letter of Credit Issuers), whether as a third party
beneficiary or otherwise.
11.5 AGENTS AS BANKS; OTHER TRANSACTIONS.
Each Agent's rights as a Bank under this Agreement and the
other Loan Documents shall not be affected by its serving as an Agent hereunder.
Each of the Agents and its Affiliates may generally transact any banking,
financial, trust, advisory or other business with the Borrowers (including,
without limitation, the acceptance of deposits, the extension of credit and the
acceptance of fiduciary appointments) without notice to the Banks, Designated
Swing Line Lenders or Designated Letter of Credit Issuers, without accounting to
the Banks, Designated Swing Line Lenders or Designated Letter of Credit Issuers
and without prejudice to such Agent's rights as a Bank under this Agreement and
the other Loan Documents except as may be expressly required under this
Agreement.
11.6 INSTRUCTIONS FROM BANKS.
No Agent shall be required to exercise any discretion or take
any action as to matters not expressly provided for by this Agreement and the
other Loan Documents (including, without limitation, collection and enforcement
actions in respect of any Obligations under the Notes or this Agreement and any
collateral therefor) except that the Administrative Agent and Designated
European Administrative Agent, as the case may be, shall take such action or
omit to
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take such action as may be reasonably requested of it in writing by the Required
Banks with instructions to the extent consistent with the terms of this
Agreement and the other Loan Documents and which actions and omissions shall be
binding upon all of the Banks, Designated Swing Line Lenders or Designated
Letter of Credit Issuers; provided, however, that no such Agent shall be
required to act (or omit any act) if, in its judgment, any such action or
omission might expose such Agent to personal liability or might be contrary to
this Agreement, any Loan Document or any applicable Law.
11.7 BANK'S DILIGENCE.
Each Bank, Designated Swing Line Lender and Designated Letter
of Credit Issuer: (a) represents and warrants that it has made its decision to
enter into this Agreement and the other Loan Documents and (b) agrees that it
will make its own decision as to taking or not taking future actions in respect
of this Agreement and the other Loan Documents; in each case without reliance on
the Agents or any other Bank, Designated Swing Line Lender and Designated Letter
of Credit Issuer and on the basis of its independent credit analysis and its
independent examination of and inquiry into such documents and other matters as
it deems relevant and material.
11.8 NO IMPLIED REPRESENTATIONS.
The Agents shall not be liable for any representation,
warranty, agreement or obligation of any kind of any other party to this
Agreement or anyone else, whether made or implied by the Borrowers in this
Agreement or any Loan Document or by a Bank, a Designated Swing Line Lender or a
Designated Letter of Credit Issuer in any notice or other communication or by
anyone else or otherwise.
11.9 SUB-AGENTS.
The Administrative Agent may employ agents and shall not be
liable (except as to money or property received by it or its agents) for any
negligence or willful misconduct of any such agent selected by it with
reasonable care.
11.10 AGENTS' DILIGENCE.
No Agent shall not be required: (a) to keep itself informed as
to anyone's compliance with any provision of this Agreement or any Loan
Document, (b) to make any inquiry into the properties, financial condition or
operation of the Borrowers or any other matter relating to this Agreement or any
Loan Document, (c) to report to any Bank, Designated Swing Line Lender and
Designated Letter of Credit Issuer any information (other than which this
Agreement or any Loan Document expressly requires to be so reported) that such
Agent or any of its Affiliates may have or acquire in respect of the properties,
business or financial condition of the Borrowers or any other matter relating to
this Agreement or any Loan Document or (d) to inquire into the validity,
effectiveness or genuineness of this Agreement or any Loan Document.
11.11 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge
of any Potential Default or Event of Default unless and until it shall have
received a written notice describing it and citing the relevant provision of
this Agreement or any Loan Document. The Administrative Agent shall give each
Bank reasonably prompt notice of any such written notice except, of course, to
any Bank, Designated Swing Line Lender and Designated Letter of Credit Issuer
that shall have given the written notice.
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11.12 LIABILITY OF AGENTS.
No Agent (acting in its capacity as an Agent) nor any of its
directors, officers, employees, attorneys, and other agents acting for such
Agent in such capacity shall be liable for any action or omission on their
respective parts except for gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each of the Agents: (a) may treat
the payee of any Note as the holder thereof until such Agent receives a fully
executed copy of any assignment with respect thereto, signed by such payee and
in form satisfactory to such Agent; (b) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts which have
been selected by such Agent with reasonable care; (c) makes no warranty or
representation to any Bank and shall not be responsible to any Bank, Designated
Swing Line Lender or Designated Letter of Credit Issuer for any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document, including, without limitation, the truth of the
statements made in any certificate delivered by the Borrowers under Section 2 or
Section 3 of this Agreement or in any Credit Request, Rate
Continuation/Conversion Request, Reimbursement Agreement or any other similar
notice or delivery, such Agent being entitled for the purposes of determining
fulfillment of the conditions set forth therein to rely conclusively upon such
certificates; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement, the Notes or any other Loan Document or to inspect the property
(including the books and records) of the Borrowers; (e) shall not be responsible
to any Bank, Designated Swing Line Lender or Designated Letter of Credit Issuer
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, or collateral covered by any agreement
or any other Loan Document and (f) shall incur no liability under or in respect
of this Agreement, the Notes or any other Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy, cable or telex) believed by it in good faith to be genuine
and correct and signed or sent by the proper party or parties.
No Agent nor any of its directors, officers, employees or
agents shall have any responsibility to the Borrowers on account of the failure
of or delay in performance or breach by any Bank, Designated Swing Line Lender
or Designated Letter of Credit Issuer of any of its obligations hereunder or to
any Bank on account of the failure of or delay in performance or breach by any
other Bank, Designated Swing Line Lender or Designated Letter of Credit Issuer
or the Borrowers of any of their respective obligations hereunder or under any
Loan Document or in connection herewith or therewith. The Banks, the Designated
Swing Line Lenders and the Designated Letter of Credit Issuers each hereby
acknowledge that no Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement,
the Notes or any other Loan Document unless it shall be requested in writing to
do so by the Required Banks.
11.13 INDEMNITY OF AGENTS.
The Banks, Designated Swing Line Lender or Designated Letter
of Credit Issuer shall indemnify each of the Agents, in its capacity as an Agent
(to the extent such Agent is not otherwise reimbursed by the Borrowers), from
and against: (a) any loss or liability (other than any caused by such Agent's
gross negligence or willful misconduct) incurred by such Agent (in its capacity
as an Agent) as such in respect of this Agreement, the Notes or any Loan
Document and (b) any out-of-pocket expenses incurred by such Agent in defending
itself or otherwise related to this Agreement, the Notes or any Loan Document
(other than any caused by such Agent's gross negligence or willful misconduct)
including, without limitation, reasonable fees and disbursements of legal
counsel of its own selection (including, without limitation, the
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reasonable interdepartmental charges of its salaried attorneys) in the defense
of any claim against it or in the prosecution of its rights and remedies as such
Agent (other than the loss, liability or costs incurred by such Agent in the
defense of any claim against it by the Banks, the Designated Swing Line Lenders
or the Designated Letter of Credit Issuers arising in connection with its
actions in its capacity as an Agent); provided, however, that each Bank,
Designated Swing Line Lender or Designated Letter of Credit Issuer shall be
liable for only its Ratable Portion (calculated to include the commitments or
outstandings of such Designated Swing Line Lender or Designated Letter of Credit
Issuer, as the case may be) of the whole loss or liability.
11.14 RESIGNATION OF AGENT.
The Administrative Agent may resign as Administrative Agent
for any reason effective twenty (20) Business Days after giving notice thereof
to each Designated European Administrative Agent, Bank, Designated Swing Line
Lender and Designated Letter of Credit Issuer and the Borrower Representative.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement, the Required Banks shall appoint from among the Banks (other than the
Bank that has resigned) a successor Administrative Agent for the Banks, the
Designated Swing Line Lenders and the Designated Letter of Credit Issuers which
successor Administrative Agent shall be reasonably acceptable to the Borrower
Representative. If, however, in the case of resignation by the Administrative
Agent, no successor Administrative Agent shall have been appointed by the time
such resignation becomes effective, then the retiring Administrative Agent may,
on behalf of the Banks, the Designated Swing Line Lenders and the Designated
Letter of Credit Issuers, appoint a successor Administrative Agent from among
the remaining Banks. Upon appointment (whether effected by the Required Banks or
the retiring Administrative Agent on behalf of the Banks) and acceptance of such
appointment as "Administrative Agent," the successor Administrative Agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
terms "Administrative Agent" and "Agent," as the case may be, shall mean such
successor Administrative Agent, effective upon its appointment and acceptance,
and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holder of the Notes. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of Section
11.13 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement.
11.15 RESIGNATION OF DESIGNATED EUROPEAN ADMINISTRATIVE AGENTS.
A Designated European The Administrative Agent may resign as
such for any reason effective twenty (20) Business Days after giving notice
thereof to the Administrative Agent, and each Bank, Designated Swing Line Lender
and Designated Letter of Credit Issuer and the Borrower Representative. If a
Designated European Administrative Agent shall resign as such Agent under this
Agreement, the Administrative Agent shall appoint from among the Banks (other
than the Bank that has resigned) a successor Designated European Administrative
Agent. which successor Designated European Administrative Agent shall be
reasonably acceptable to the Borrower Representative. Upon appointment and
acceptance of such appointment as "Designated European Administrative Agent,"
the successor Designated European Administrative Agent shall succeed to the
rights, powers and duties of the resigning Designated European Administrative
Agent, and the terms "Designated European Administrative Agent" and "Agent," as
the case may be, shall mean such successor Designated European Administrative
Agent, effective upon its appointment and acceptance, and the former Designated
European Administrative Agent's rights, powers and duties as such shall be
terminated, without any other or further act or deed on the part of such former
Designated European Administrative Agent or any of the parties to this Agreement
or any holder of the Notes. After any retiring
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Designated European Administrative Agent's resignation hereunder as such, the
provisions of Section 11.13 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Designated European Administrative
Agent under this Agreement.
SECTION 12 TRANSFERS AND ASSIGNMENTS.
12.1 TRANSFER OF COMMITMENTS.
Each Bank shall have the right at any time or times to
transfer to another financial institution that is an Eligible Assignee, without
recourse, all or, if less than all, any fixed percentage of (which percentage,
with the consent of the Administrative Agent to be exercised in its sole
discretion but uniformly with respect to all of the Banks, does not have to be
pro rata and may vary in percentage among the Revolving Credit Commitment and
outstanding Revolving Credit Loans of such Bank and the outstanding Term Loan of
such Bank but the assigned portion resulting therefrom must in each case be at
least equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof), such Bank's rights and obligations under this Agreement and the other
Loan Documents, including, without limitation, such Bank's Commitments, any Loan
made by such Bank, any Note executed in favor of such Bank, any participations
in Letters of Credit and any participations purchased by the Bank pursuant to
Section 9.12 of this Agreement; provided, however, in each such case, that the
transferor and the transferee shall have complied with the following
requirements:
(a) PRIOR CONSENT.
Transfers (other than transfers by any Bank to any
Affiliate of such Bank or to any other Bank which is not a Defaulting
Lender) to any Eligible Assignee may be consummated pursuant to this
Section 12 only upon the prior written consent of the Administrative
Agent and, unless an Event of Default has occurred which is continuing
and has not been waived in accordance with Section 14.1 hereof, the
Borrower Representative on behalf of the Borrowers, which shall not be
unreasonably withheld or delayed. Notwithstanding anything to the
contrary, any Bank may at any time (i) assign all or any portion of its
rights under this Agreement and its Notes to a Federal Reserve Bank, or
(ii) create a security interest in all or any portion of such rights in
favor of any Federal Reserve Bank, in each case in accordance with
Regulation A or the Board of Governors of the Federal Reserve System,
and no such assignment or creation shall release such assigning Bank
from its obligations hereunder.
(b) AGREEMENT; TRANSFER FEE.
The transferor: (i) shall remit to the Administrative
Agent an administrative fee of Three Thousand Five Hundred Dollars
($3,500) and (ii) shall cause the transferee to execute and deliver to
the Borrower Representative, the Administrative Agent and each Bank (A)
an Assignment Agreement, substantially in the form of Exhibit J
attached hereto, and otherwise in form and substance satisfactory to
the Administrative Agent and its counsel (an "Assignment Agreement"),
together with the consents and releases referenced therein and (B) such
additional amendments, assurances and other writings as the
Administrative Agent may reasonably require to effect such transfer.
(c) NO PROHIBITED TRANSACTION.
The transferee shall be required to represent and
warrant that its purchase shall not constitute a "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code).
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(d) NOTES.
The Borrowers shall execute and deliver: (i) to the
Administrative Agent, the transferor and the transferee, any consent or
release (of all or a portion of the obligations of the transferor) to
be delivered in connection with the Assignment Agreement, (ii) if a
Bank's entire interest in its Commitments and in all of its Loans have
been transferred, to the transferee appropriate Notes against return of
the Notes (each marked "replaced") held by the transferor and (iii) if
only a portion of a Bank's interest in its Commitments and Loans has
been transferred, new Notes to each of the transferor and the
transferee against return of the original such Notes of the transferor
(each marked "replaced") held by the transferor; provided, that,
simultaneously with the Borrower's delivery of new Notes pursuant to
this Section 12(c), the transferor Bank will deliver to the Borrowers
any note being replaced in whole or in part, and each such note
delivered by the transferor Bank shall be conspicuously marked
"replaced" when so delivered.
(e) PARTIES.
Upon satisfaction of the requirements of this Section
12.1, including the payment of the fee and the delivery of the
documents set forth in Section 12.1(b) above, (i) the transferee shall
become and thereafter be deemed to be a "Bank" for the purposes of this
Agreement and (ii) the transferor (A) shall continue to be a "Bank" for
the purposes of this Agreement only if and to the extent that the
transfer shall not have been a transfer of its entire interest in its
Commitments and Loans, (B) shall cease to be and thereafter shall no
longer be deemed to be a "Bank" in the case of any transfer of its
entire interest in its Commitments and Loans and (C) the signature
pages hereto and Annex I hereto shall be automatically amended, without
further action, to reflect the result of any such transfer.
12.2 SALE OF PARTICIPATIONS.
Each Bank shall have the right at any time or times to sell
one or more participations or subparticipations to a financial institution in
all or, if less than all, any constant fixed percentage of: such Bank's
Commitments, any Loan made by such Bank, any Note executed in favor of such
Bank, any participation by such Bank in a Letter of Credit and any
participations, if any, purchased by such Bank pursuant to 9.12 of this
Agreement or this Section 12; provided, however, in each such case, that the
transferor and the transferee shall have complied with the following
requirements:
(a) BENEFITS OF PARTICIPANT.
The provisions of Section 13 of this Agreement shall
inure to the benefit of each purchaser of a participation or
subparticipation (provided that (i) each such participant shall look
solely to the seller of its participation for those benefits, (ii) no
such seller (whether or not a Bank) shall have a claim against the
Borrowers of any kind whatsoever resulting from such benefits, and
(iii) the Borrowers' liabilities, if any, under any of those sections
shall not be increased as a result of the sale of any such
participation) and Administrative Agent shall continue to distribute
payments pursuant to this Agreement as if no participation has been
sold.
(b) RIGHTS RESERVED.
In the event any Bank shall sell any participation or
subparticipation, that Bank shall, as between itself and the purchaser,
retain all of its rights (including, without
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limitation, rights to enforce against the Borrowers this Agreement and
the other Loan Documents) and duties pursuant to this Agreement and the
other Loan Documents, including, without limitation, that Bank's right
to approve any waiver, consent or amendment pursuant to Section 14.1 of
this Agreement and such purchaser shall not be a Bank for any purposes
of this Agreement and the other Loan Documents, except if and to the
extent that any such waiver, consent or amendment would (A) reduce any
fee or commission allocated to the participation or subparticipation,
as the case may be, (B) reduce the amount of any principal payment on
any Loan allocated to the participation or subparticipation, as the
case may be, or reduce the principal amount of any Loan so allocated or
the rate of interest payable thereon, (C) extend the time for payment
of any amount allocated to the participation or subparticipation, as
the case may be, or (D) result in the release of a substantial portion
of the Collateral.
(c) NO DELEGATION.
No participation or subparticipation shall operate as
a delegation of any duty of the seller of such participation or
subparticipation. Under no circumstance shall any participation or
subparticipation be deemed a novation in respect of all or any part of
the selling Bank's obligations pursuant to this Agreement.
(d) NO PROHIBITED TRANSACTION.
Each purchaser of a participation or subparticipation
shall be required to represent and warrant that its purchase shall not
constitute a "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Code).
12.3 CHANGE OF LENDING OFFICE; REPLACEMENT OF BANKS.
(a) CHANGE OF LENDING OFFICE.
Each Bank, Designated Swing Line Lender and Designated Letter
of Credit Issuer agrees that, upon the occurrence of any event giving rise to
the operation of any of Sections 2.12(k), 2.18, 13.1 or 13.3 with respect to
such Bank, Designated Swing Line Lender and Designated Letter of Credit Issuer
it will, if requested by a Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank, Designated Swing Line Lender and Designated
Letter of Credit Issuer) to designate another Lending Office for any Loans or
Commitment affected by such event, provided that such designation is made on
such terms that such Bank and its Lending Office suffer no material economic,
legal or regulatory disadvantage, with the object of avoiding the consequence of
the event giving rise to the operation of any such section. All terms of this
Agreement shall apply to any Lending Office and the Loans and any Notes issued
hereunder shall be deemed held by each Bank, Designated Swing Line Lender and
Designated Letter of Credit Issuer for the benefit of its Lending Office.
(b) REPLACEMENT OF BANKS.
If any Bank, Designated Swing Line Lender and Designated
Letter of Credit Issuer requests any compensation, reimbursement or other
payment under any of Sections 2.12(k), 2.18 or 13.1 with respect to such Bank,
Designated Swing Line Lender or Designated Letter of Credit Issuer, or if the
Borrower is required to pay any additional amount to any Bank, Designated Swing
Line Lender or Designated Letter of Credit Issuer or governmental authority
pursuant to Section 13.3, or if any Bank is a "Defaulting Lender" hereunder, or
if any Bank otherwise fails to fund its Ratable Portion of Revolving Credit
Borrowings or the participation purchase price payable by such Bank for its
participating interest hereunder as
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specified in Section 2.5 hereof, or if any Bank notifies the Administrative
Agent that it is exercising any right under this Agreement not to fund or
maintain a LIBOR Rate Loan denominated in Dollars or in an Alternative Currency
which the other Banks are willing or prepared to fund or maintain, then the
Borrowers may, at their sole expense and effort, upon notice to such Bank,
Designated Swing Line Lender or Designated Letter of Credit Issuer and the
Administrative Agent, require such Bank, Designated Swing Line Lender or
Designated Letter of Credit Issuer, as the case may be, to assign and delegate,
without recourse (in accordance with the restrictions contained in Section
12.1), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Bank,
if a Bank accepts such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent, which consent
shall not be unreasonably withheld, (ii) such Bank, Designated Swing Line Lender
or Designated Letter of Credit Issuer shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrowers (in the case of all other amounts, including any breakage
compensation under Section 13.4 hereof), and (iii) in the case of any such
assignment resulting from a claim for compensation, reimbursement or other
payments required to be made under any of Sections 2.12(k), 2.18 or 13.1 with
respect to such Bank, Designated Swing Line Lender or Designated Letter of
Credit Issuer, or resulting from any required payments to any Bank or
governmental authority pursuant to Section 13.3, such assignment will result in
a reduction in such compensation, reimbursement or payments. No Bank, Designated
Swing Line Lender or Designated Letter of Credit Issuer shall be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Bank, Designated Swing Line Lender or Designated Letter of Credit
Issuer or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
(c) EFFECT ON RIGHTS AND OBLIGATIONS.
Nothing in this Section 12.3 shall affect or postpone any of
the obligations of any Borrower or the right of any Bank, Designated Swing Line
Lender or Designated Letter of Credit Issuer provided in any of Sections
2.12(k), 2.18 13.1 or 13.3.
12.4 CONFIDENTIALITY.
The Administrative Agents, each Designated Swing Line Lender,
each Designated Letter of Credit Issuer and each Bank hereby agree to use
reasonable efforts to hold all non-public information obtained pursuant to the
requirements of this Agreement and the other Loan Documents and appropriately
designated in writing to the Administrative Agent by the Borrower Representative
as being confidential information in accordance with the customary procedure of
the Administrative Agents, such Designated Swing Line Lender, Designated Letter
of Credit Issuer or Bank, as the case may be, for handling confidential
information of this nature and in accordance with safe and sound banking
practices, except that this Section shall not preclude any Administrative Agent,
any Designated Swing Line Lenders, any Designated Letter of Credit Issuer or any
Bank from furnishing any such confidential information: (i) subject to the
Borrower Representative's receipt of prior notice from such Administrative
Agent, such Designated Letter of Credit Issuer or such Bank, as the case may be,
if permitted under applicable law and such legal proceedings, to the extent
which may be required by subpoena or similar order of any court of competent
jurisdiction, (ii) to the extent such information is required to be disclosed to
any regulatory or administrative governmental agency or commission having any
regulatory authority over such Administrative Agent, such Designated Swing Line
Lender, such Designated Letter of Credit Issuer or Bank or its securities, (iii)
to any other party to this Agreement, (iv) to any Affiliate of the such
Administrative Agent, such Designated Swing Line
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Lender, such Designated Letter of Credit Issuer or Bank so long as such
Affiliate agrees to be bound in writing by the provisions of this Section 12.4
prior to the time of such disclosure and so long as such information is received
in connection with customary banking practices, (v) to any actual or prospective
transferee, participant or subparticipant of all or part of a Bank's rights
arising out of or in connection with the Loan Documents and this Agreement or
any thereof so long as such prospective transferee, participant or
subparticipant to whom disclosure is made agrees in writing to be bound by the
provisions of this Section 12.4 prior to the time of such disclosure, (vi) to
anyone if it shall have been already publicly disclosed (other than by such
Administrative Agent, any other Administrative Agent, such Designated Swing Line
Lender, such Designated Letter of Credit Issuer or such Bank, as the case may
be, in contravention of this Section 12.4) prior to the time of such disclosure,
(vii) to the extent reasonably required in connection with the preparation,
negotiation or administration of this Agreement and the other Loan Documents or
the exercise of any right or remedy under this Agreement or any other Loan
Document, to the counsel, auditors, professional advisors and consultants, and
accountants to such Administrative Agent, such Designated Swing Line Lender,
such Designated Letter of Credit Issuer or the Banks, who have a need to know
such information in accordance with customary banking practices and requirements
and who receive the information having been made aware of the restrictions set
forth herein and (ix) to the extent reasonably required in connection with any
legal proceedings instituted by or against such Administrative Agent, such
Designated Swing Line Lender, such Designated Letter of Credit Issuer or any
Bank in its respective capacities as such Administrative Agent, the Designated
Letter of Credit Issuer or a Bank under this Agreement; provided, further that
for any disclosure pursuant to clauses (i), (ii), (vii) or (ix) hereof, such
Administrative Agent, such Designated Swing Line Lender, such Designated Letter
of Credit Issuer or such disclosing Bank, as the case may be, shall (x) use
reasonable efforts to disclose only that portion of the confidential information
as it is legally required, in the opinion of counsel, to disclose and (y) to the
extent possible under the applicable proceeding, at the Borrowers' expense,
request a protective order as to the confidentially thereof.
SECTION 13 INDEMNITIES.
13.1 INCREASED COSTS.
If, after the Effective Date of this Agreement, (a) the
introduction of any Law, rule or regulation or any change therein, (b) any
change in the interpretation or administration of any Law, rule or regulation by
any central bank or other governmental authority or (b) the compliance by any
Bank, Designated Swing Line Lender or Designated Letter of Credit Issuer with
any guideline, request or directive from any central bank or other governmental
authority (whether or not having the force of Law) shall increase the cost to
any Bank or Designated Swing Line Lender (other than any increase in the cost of
the overhead of such Bank or Designated Swing Line Lender) of agreeing to make
or making, funding or maintaining Loans to a Borrower or the cost to any
Designated Letter of Credit Issuer or Bank of issuing, maintaining or
participating in any Letter of Credit, then such Borrower shall from time to
time, upon demand by such Bank (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Bank, Designated
Swing Line Lender or Designated Letter of Credit Issuer additional amounts
sufficient to indemnify such Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer for such increased cost.
13.2 RISK-BASED CAPITAL.
If any Bank, Designated Swing Line Lender or Designated Letter
of Credit Issuer shall have determined that after the Effective Date, the
adoption 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
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charged by law with the interpretation or administration thereof, or compliance
by such Bank, Designated Swing Line Lender or Designated Letter of Credit Issuer
or the parent corporation of any thereof 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, in each case made subsequent to the
Effective Date, has or would have the effect of reducing by an amount reasonably
deemed by such Bank, Designated Swing Line Lender or Designated Letter of Credit
Issuer to be material to the rate of return on the capital or assets of such
Bank, Designated Swing Line Lender or Designated Letter of Credit Issuer or the
parent corporation of any thereof as a consequence of the commitments or
obligations of such Bank, Designated Swing Line Lender or Designated Letter of
Credit Issuer hereunder to a level below that which such Bank, Designated Swing
Line Lender or Designated Letter of Credit Issuer or the parent corporation of
any thereof could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration policies of such Bank, Designated Swing
Line Lender or Designated Letter of Credit Issuer or the parent corporation of
any thereof with respect to capital adequacy), then from time to time, within 15
days after demand by such Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer (with a copy to the Administrative Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank, Designated Swing Line Lender or Designated Letter of Credit Issuer or the
parent corporation of any thereof for such reduction. Each Bank, Designated
Swing Line Lender or Designated Letter of Credit Issuer upon determining in good
faith that any additional amounts will be payable pursuant to this section 13.2,
will give prompt written demand therefor.
13.3 TAXES.
(a) TAXES; WITHHOLDING.
Any and all payments by the Borrowers hereunder,
under the Notes or the other Loan Documents shall be made, in
accordance with the provisions of Section 2, free and clear of and
without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank, Designated Swing
Line Lender and Designated Letter of Credit Issuer taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under
the Laws of which such Bank is organized or is doing business, or any
political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrowers shall be required
by Law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Bank, any Designated Swing Line
Lender, any Designated Letter of Credit Issuer or any Administrative
Agent: (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 13.3) such
Bank receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrowers shall make such
deductions and (iii) the Borrowers shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance
with applicable Law. All such Taxes shall be paid by the Borrowers
prior to the date on which penalties attach thereto or interest accrues
thereon; provided, however, that, if any such penalties or interest
become due, the Borrowers shall make prompt payment thereof to the
appropriate governmental authority. The Borrowers shall indemnify each
of the Administrative Agents and each Bank, Designated Swing Line
Lender, Designated Letter of Credit Issuer for the full amount of such
Taxes (including any Taxes on amounts payable under this Section
13.3(a) paid by such Bank, Designated Swing Line Lender, Designated
Letter of Credit Issuer and any Administrative Agent and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally
asserted. Any indemnification
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payment shall be made within thirty (30) days from the date such Bank,
Designated Swing Line Lender, Designated Letter of Credit Issuer or any
such Administrative Agent makes written demand therefor.
(b) STAMP TAXES.
The Borrowers agree to pay, and will indemnify each
Bank, Designated Swing Line Lender, Designated Letter of Credit Issuer
and the Administrative Agents for, any present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under the
Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to
as "Other Taxes").
(c) OTHER TAXES.
Except as specifically limited by Section 13.3(a),
the Borrowers will indemnify each Bank, Designated Swing Line Lender,
Designated Letter of Credit Issuer and Administrative Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 13.3) paid by such Bank, Designated Swing Line
Lender, Designated Letter of Credit Issuer or Administrative Agent (as
the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Any
indemnification payment shall be made within 30 days from the date such
Bank, Designated Swing Line Lender, Designated Letter of Credit Issuer
or such Administrative Agent (as the case may be) makes written demand
therefor.
(d) REQUEST FOR REFUND.
At the reasonable request of the Borrower
Representative, each Bank, Designated Swing Line Lender, Designated
Letter of Credit Issuer or Administrative Agent, as the case may be,
shall apply at the applicable Borrower's expense for a refund in
respect of Taxes or Other Taxes previously paid by such Borrowers
pursuant to this Section 13.3 if in the opinion of such Bank,
Designated Swing Line Lender, Designated Letter of Credit Issuer or
Administrative Agent there is a reasonable basis for such refund.
Notwithstanding the foregoing, none of the Banks, Designated Swing Line
Lenders, Designated Letter of Credit Issuers or Administrative Agent
shall be obligated to pursue such refund if, in its sole good faith
judgment, such action would be disadvantageous to it, but shall be
required to cooperate in good faith with the Borrowers if the Borrowers
should choose to pursue such refund. If any Bank, Designated Swing Line
Lender, Designated Letter of Credit Issuer or Administrative Agent
subsequently receives from a taxing authority a refund of any Tax
previously paid by the Borrowers and for which the Borrowers has
indemnified the Bank pursuant to this Section 13.3, such Bank,
Designated Swing Line Lender, Designated Letter of Credit Issuer or
Administrative Agent shall within thirty (30) days after receipt of
such refund, and to the extent permitted by applicable law, pay to the
Borrowers the net amount of any such recovery after deducting taxes and
expenses attributable thereto.
(e) EXEMPTION CERTIFICATE.
Not later than: (a) the Closing Date, (b) in the case
of any bank or financial institution that becomes a Bank, Designated
Swing Line Lender or Designated Letter of Credit Issuer after the
Closing Date, the date of the instrument of assignment
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pursuant to which such bank or financial institution became a Bank,
Designated Swing Line Lender or Designated Letter of Credit Issuer, (c)
annually on each Anniversary Date thereafter or (d) such other times as
the Administrative Agent or the Borrower Representative may reasonably
request: (i) each Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer organized under the laws of a jurisdiction
outside the United States shall provide the Administrative Agent and
the Borrower Representative with duly completed copies of Form 1001 or
Form 4224 or any successor form prescribed by the Internal Revenue
Service of the United States certifying that such Bank, Designated
Swing Line Lender or Designated Letter of Credit Issuer is exempt from
United States withholding taxes with respect to all payments to be made
to such Bank hereunder or other document satisfactory to the Borrowers
and the Administrative Agent indicating that all payments to be made to
such Bank, Designated Swing Line Lender or Designated Letter of Credit
Issuer hereunder are not subject to such taxes and (ii) each other
Bank, Designated Swing Line Lender or Designated Letter of Credit
Issuer shall provide the Administrative Agent and the Borrower
Representative with a written statement which certifies that such Bank,
Designated Swing Line Lender or Designated Letter of Credit Issuer is
not a non-resident alien or foreign corporation and which otherwise
satisfies Treasury Regulation Section 1.1441-5(b) or any successor
regulation under the Internal Revenue Code (each such certificate or
statement, an "Exemption Certificate"). Unless the Administrative Agent
and the Borrower Representative have received an Exemption Certificate
from such Bank, Designated Swing Line Lender or Designated Letter of
Credit Issuer, the Borrowers, or the Administrative Agent if the
Borrowers have not withheld, may withhold taxes from such payments at
the applicable statutory rate (subject, in the case of the Borrowers to
the requirements of Section 13.3(a) above); provided, however, that, if
the Borrowers have withheld, the Borrower Representative shall so
notify the Administrative Agent. Any Bank, Designated Swing Line Lender
or Designated Letter of Credit Issuer which ceases to be exempt from
United States withholding taxes shall notify the Administrative Agent
and the Borrower Representative promptly thereof.
(f) FURNISHING OF CERTIFICATE.
Within 30 days after the date of any payment of
Taxes, the Borrower Representative will furnish to the Administrative
Agent, at its address referred to in Section ERROR! REFERENCE SOURCE
NOT FOUND. of this Agreement, the original or a certified copy of a
receipt evidencing payment thereof. If Taxes ever become payable in
respect of any payment hereunder or under the Notes made during a
Fiscal Quarter, thereafter the Borrower Representative will furnish to
the Administrative Agent, within thirty (30) days after the end of such
Fiscal Quarter, at such address, a certificate from the Borrowers
stating that any payments made during such Fiscal Quarter are exempt
from or not subject to Taxes.
(g) FILINGS TO CLAIM U.K. WITHHOLDING EXEMPTION OR REDUCTION.
The Banks listed on the signature pages hereof as
Banks on the Closing Date agree to submit promptly after the Closing
Date to the taxing authority of the country in which such Bank is
resident for tax purposes (with a copy to the Administrative Agent and
Instron, Ltd.), for certification and forwarding by such taxing
authority to the appropriate United Kingdom taxing authority, two
copies of Form "Claim on Behalf of a United States Domestic Corporation
to Relief from United Kingdom Income Tax on Interest and Royalties
Arising in the United Kingdom" (or its counterpart for jurisdictions
other than the United States), or any successor forms (wherein such
Bank claims entitlement to complete exemption from or reduced rate of
United Kingdom withholding tax on interest paid by such Borrower
hereunder) and to provide successor
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forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the
obsolescence of any previously delivered form. Each Bank, Designated
Swing Line Lender and Designated Letter of Credit Issuer becoming such
after the Closing Date that is managed and controlled from or
incorporated under the laws of any jurisdiction other than the United
Kingdom and which is making a Loan to Instron, Ltd. through a lending
branch or lending office located outside the United Kingdom agrees to
submit on or before the time of becoming such a Bank, Designated Swing
Line Lender or Designated Letter of Credit Issuer to the taxing
authority of the country in which such Bank is resident for tax
purposes on or prior to becoming Bank, Designated Swing Line Lender and
Designated Letter of Credit Issuer to the taxing authority of the
country in which such Bank is resident for tax purposes (with a copy to
the Administrative Agent and Instron, Ltd.), for certification and
forwarding by such taxing authority to the appropriate United Kingdom
taxing authority, two copies of Form "Claim on Behalf of a United
States Domestic Corporation to Relief from United Kingdom Income Tax on
Interest and Royalties Arising in the United Kingdom" (or its
counterpart for jurisdictions other than the United States), or any
successor forms (wherein such Bank claims entitlement to complete
exemption from or reduced rate of United Kingdom withholding tax on
interest paid by such Borrower hereunder) and to provide successor
forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the
obsolescence of any previously delivered form. Unless the
Administrative Agent and the Borrower Representative have received a
copy of the Claim on behalf of a United States Domestic Corporation to
Relief from United Kingdom Income Tax on Interest and Royalties Arising
in the United Kingdom" (or its counterpart for jurisdictions other than
the United States) from such Bank, Designated Swing Line Lender or
Designated Letter of Credit Issuer, Instron, Ltd., or the Designated
European Administrative Agent if Instron, Ltd. has not withheld, may
withhold taxes from such payments at the applicable statutory rate
(subject, in the case of Instron, Ltd. to the requirements of Section
13.3(a) above); provided, however, that, if Instron, Ltd. have
withheld, the Borrower Representative shall so notify the
Administrative Agent or, if applicable, the Designated European
Administrative Agent. Any Bank, Designated Swing Line Lender or
Designated Letter of Credit Issuer which ceases to be exempt from
United Kingdom withholding taxes shall notify the Administrative Agent
or such Designated European Administrative Agent and the Borrower
Representative promptly thereof.
(h) RELATED TAX EXEMPTION FILINGS.
Upon the written request of any Borrower, each Bank
promptly will provide to such Borrower and to the Administrative Agent,
or file with the relevant taxing authority (with a copy to the
applicable Administrative Agent) such form, certification or similar
documentation that it is legally able to provide (each duly completed,
accurate and signed) as is required by the relevant jurisdiction in
order to obtain an exemption from, or reduced rate of Taxes or Other
Taxes to which such Bank or the Administrative Agent is entitled
pursuant to an applicable tax treaty or the law of the relevant
jurisdiction; provided, however, such Bank will not be required to (i)
disclose information which in its reasonable judgment it deems
confidential or proprietary or (ii) incur a disadvantage if such
disadvantage would, in its reasonable judgment, be substantial.
(i) U.K. TAX CREDITS
If and to the extent that any Bank that is either a
Non-UK Lender or a UK Lender is able, in its sole opinion, to apply or
otherwise take advantage of any offsetting
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Tax credit or other similar Tax benefit out of or in conjunction with
any deduction, withholding or payment which gives rise to an obligation
on Instron, Ltd. to pay any additional amount pursuant to paragraph (a)
or (b) of this Section 13.3 such Bank shall, to the extent that in its
sole opinion it can do so without prejudice to the retention of the
amount of such credit or benefit and without any other adverse Tax
consequences for that Bank, reimburse to Instron, Ltd., at such time as
such Tax credit or benefit shall have actually been received by that
Bank such amount as that Bank shall, in its sole opinion, have
determined to be attributable to the relevant deduction, withholding or
payment and as will leave it in no better or worse position in respect
of its worldwide Tax liabilities than it would have been in if the
payment of such additional amount had not been required.
(j) SURVIVAL OF PROVISION.
Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the agreements and liabilities of
the Borrowers contained in this Section 13.3 shall survive the payment
in full of the Obligations.
13.4 LOSSES.
If any payment of principal of, or Rate Conversion or Rate
Continuation of, any LIBOR Rate Loan or Money Market Rate Loan, as the case may
be, is not paid when due or is made on a day other than on the last day of an
Interest Period relating to such Loan, as a result of a payment or Rate
Conversion or Rate Continuation pursuant to the provisions of Section 2.11 of
this Agreement or acceleration of the maturity of the Revolving Credit Notes or
Swing Line Notes pursuant to Section 9 of this Agreement or for any other
reason, the Borrowers shall, upon demand by any Bank or Designated Swing Line
Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Bank or Designated Swing Line
lender, as the case may be, any amounts required to compensate such Bank or
Designated Swing Line Lender for any additional losses, costs or expenses which
it may reasonably incur as a result of such payment or Rate Conversion or Rate
Continuation, including, without limitation, any loss, cost or expense (other
than any expenses directly attributable to loan origination efforts) incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Bank or Designated Swing Line Lender to fund or maintain such Loan.
13.5 INDEMNIFICATION FOR REQUESTS.
Whenever a Borrower: (a) shall revoke any Credit Request or
Rate Conversion/Continuation Request involving any LIBOR Rate Loan, (b) shall
for any other reason fail to borrow pursuant to any such Credit Request, Swing
Line Request or Rate Conversion/Continuation Request or otherwise comply
therewith, (c) shall fail to fulfill, on or before the date specified in any
such request, the applicable conditions set forth in Section 3 of this Agreement
or (d) shall fail to honor any prepayment notice with respect to LIBOR Rate
Loans, then, in each case on any Bank's or Designated Swing Line Lender's
demand, such Borrower shall indemnify each Bank, Designated Swing Line Lender
and Administrative Agent against any loss, cost or expense incurred by such
Bank, Designated Swing Line Lender or Administrative Agent as a result of any
such failure by such Borrower, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank, Designated Swing Line Lender or
Administrative Agent to fund the LIBOR Rate Loan or Money Market Rate Loans, as
the case may be, to be made by such Bank, Designated Swing Line Lender or
Administrative Agent in connection with such request when such LIBOR Rate Loan,
as a result of such failure by such Borrower, is not made on such date.
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13.6 GENERAL INDEMNITY.
The Borrowers shall indemnify and hold harmless the each
Administrative Agent and each Bank, Designated Swing Line Lender and Designated
Letter of Credit Issuer, and the respective directors, officers, employees and
Affiliates thereof, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever including, without limitation,
reasonable fees and disbursements of counsel and settlements costs, which may be
imposed on, incurred by, or asserted against any such Administrative Agent, any
Bank, Designated Swing Line Lender or Designated Letter of Credit Issuer, or the
respective directors, officers, employees and Affiliates thereof in connection
with any investigative, administrative or judicial proceeding (whether such
Administrative Agent or such Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer is or is not designated as a party thereto) directly or
indirectly relating to or arising out of this Agreement or any other Loan
Document, the transactions contemplated thereby, or any actual or proposed use
of proceeds hereunder or thereunder, except that none of the Administrative
Agents nor any Bank, Designated Swing Line Lender or Designated Letter of Credit
Issuer, nor any such directors, officers, employees and Affiliates thereof shall
have the right to be indemnified hereunder for its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
13.7 ENVIRONMENTAL INDEMNITY.
Each of the Borrowers shall, at its sole cost and expense,
indemnify, defend and save harmless each of the Administrative Agents, each
Bank, Designated Swing Line Lender and Designated Letter of Credit Issuer (and
each of their respective officers, directors, employees, Administrative Agents,
representatives and contractors and any subsequent owner of the Collateral who
purchases Collateral through the Bank or pursuant to any enforcement action by
the Bank) from and against any and all damages, losses, liabilities,
obligations, penalties, claims, litigations, demands, defenses, judgments,
suits, actions, proceedings, costs, disbursements and/or expenses (including,
without limitation, reasonable attorneys' and experts' fees, expenses and
disbursements) of any kind or nature whatsoever which may at any time be imposed
upon, incurred by or asserted against any of such indemnified Persons directly
or indirectly relating to, resulting from or arising out of: (i) Environmental
Claims against such Borrower, (ii) a material misrepresentation or inaccuracy in
any representation or warranty contained in this Agreement relating to any
environmental matters applicable to such Borrower or (iii) a breach or failure
to perform any covenant made by such Borrower in this Agreement with respect to
environmental matters which continues uncured after the expiration of any
applicable grace period. Each of the Borrowers will pay any sums owing by such
Borrower to each Administrative Agent and each Bank, Designated Swing Line
Lender and Designated Letter of Credit Issuer pursuant to this indemnification
obligation five (5) days after demand by the Administrative Agent, on behalf of
any such Administrative Agent, Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer, together with interest on such amount accruing from and
after the expiration of such period at the default rate of interest hereunder.
13.8 CERTIFICATE FOR INDEMNIFICATION.
Each demand by an Administrative Agent, or a Bank, Designated
Swing Line Lender or Designated Letter of Credit Issuer for payment pursuant to
this Section 13 shall be accompanied by a certificate setting forth the reason
for the payment, the amount to be paid, and the computations and assumptions in
determining the amount, which certificate shall, absent manifest error, be
presumed to be correct. In determining the amount of any such payment
thereunder, each Administrative Agent and each Bank, Designated Swing Line
Lender and Designated Letter of Credit Issuer may use reasonable averaging and
attribution methods, so
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long as such methods are set forth in the certificate referred to in the
preceding sentence. The failure to give any such notice shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 13 upon the subsequent receipt of such notice.
13.9 DUTY TO MITIGATE; STANDARD TREATMENT; REIMBURSEMENT LIMITATION
PERIOD.
Each Administrative Agent and each Bank, Designated Swing Line
Lender or Designated Letter of Credit Issuer seeking payment pursuant to this
Section 13 shall use reasonable efforts and take all reasonable actions to avoid
the cause of the payment and to minimize the amount thereof. Each Bank agrees
that it will not seek compensation or reimbursement provided for in this Section
13 unless such Administrative Agent, Bank, Designated Swing Line Lender or
Designated Letter of Credit Issuer, as the case may be, as a matter of policy
intends generally to seek comparable compensation or reimbursement from other
borrowers similarly situated and similarly documented financial accommodations.
Notwithstanding anything in this Agreement to the contrary, none of the
Administrative Agents nor any Bank, Designated Swing Line Lender or Designated
Letter of Credit Issuer, as the case may be, shall be entitled to compensation
or payment or reimbursement of other amounts under Sections 2.18, 13.1 or 13.2
for any amounts incurred or accruing more than 180 days prior to the giving of
notice to the Borrower Representative of additional costs or other amounts of
the nature described in such Sections.
SECTION 14 GENERAL.
This Agreement and the other Loan Documents shall be governed by the
following provisions:
14.1 AMENDMENTS AND WAIVERS.
No amendment or waiver of any provision of this Agreement or
the Notes or any other Loan Document, nor consent to any departure by the
Borrowers therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Banks (or, if unanimous consent of all Banks
is required herein, all of the Banks (other than a Bank which is a Defaulting
Lender), the Administrative Agent, the Designated European Administrative Agent,
the Borrowers, and, only with respect to amendments and waivers of, or consents
regarding, provisions of this Agreement directly affecting the rights of any
Designated Swing Line Lender or any Designated Letter of Credit Issuer, by such
Designated Swing Line Lender or Designated Letter of Credit Issuer, as the case
may be, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. Unanimous consent of all
Banks (other than a Bank which is a Defaulting Lender) shall be required with
respect to (a) the extension of maturity of any Note, or the extension of the
payment date for interest, principal and/or fees thereunder, or (b) any
reduction in fees hereunder or the rate of interest on the Notes (other than a
reduction by virtue of a waiver of an Event of Default, as contemplated in
Sections 2.16(e) and 2.13(b)), or in any amount of principal or interest due on
any Note, or in the manner of pro rata application of any payments made by the
Borrowers to the Banks hereunder, or (c) any change in any percentage voting
requirement in this Agreement, or (d) any amendment changing the dollar amount
or percentage of the Banks' Commitments or any Bank's Commitment, or (e) any
change in the amount of, or extension of the payment date for, any fees payable
under Section 2.16 of this Agreement, or (f) any change in the definitions
"Collateral" or "Required Banks" under this Agreement, or (g) any change in any
provision of this Agreement which requires all of the Banks to take any action
under such provision, (h) the release of all or any substantial portion of the
Collateral, or (i) the release of all or substantially all of the Collateral or
the release of any Borrower Guarantor, any Guaranty by a Borrower of any Letter
of Credit Obligor or any other Guarantor or (j) any change in Section 11,
Sections 12.1 or 12.2,
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Section 13 or this Section 14.1 itself. Notice of amendments or consents
ratified by the Banks hereunder shall immediately be forwarded by the
Administrative Agent to the Borrower Representative, any Designated European
Administrative Agent and to all Banks. Each Bank or other holder of a Note,
Designated European Administrative Agent, Designated Swing Line Lender and
Designated Letter of Credit Issuer shall be bound by any amendment, waiver or
consent obtained as authorized by this Section 14.1, regardless of its failure
to agree thereto.
14.2 GENERAL APPOINTMENT AS ATTORNEY-IN-FACT.
In addition to the provisions of Sections 9.5 of this
Agreement, each of the Borrowers hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or Administrative Agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Borrower and in
the name of such Borrower or in its own name, from time to time following the
occurrence of an Event of Default which is continuing (unless waived in
accordance with Section 14.1 of this Agreement), in the Administrative Agent's
reasonable discretion, for the purpose of carrying out the terms of this
Agreement, without notice (except as specifically provided herein) to or assent
by the Borrowers, to take to the extent permitted by law any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement, including,
without limiting the generality of the foregoing, the power and right, on behalf
of such Borrower, to do the following: (a) to pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against the Collateral, to effect any repairs or any insurance, called for by
the terms of this Agreement and to pay all or any part of the premiums therefor
and the costs thereof, and otherwise to itself perform or comply with, or
otherwise cause performance or compliance with, any of the covenants or other
agreements of such Borrower contained in this Agreement which such Borrower has
failed to perform or with which such Borrower has not complied; (b) upon notice
to such Borrower, to commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any part thereof and to enforce any other right in respect of any
Collateral; (c) upon notice to such Borrower, to defend any suit, action or
proceeding brought against such Borrower with respect to any Collateral; (d)
upon notice to such Borrower, to settle, compromise or adjust any suit, action
or proceeding described above and, in connection therewith, to give such
discharges or releases as the Administrative Agent may deem appropriate; (e) to
sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral generally as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes; and (f)
to do, at the Administrative Agent's option and such Borrower's expense, at any
time, or from time to time, all acts and things which the Administrative Agent
reasonably deems necessary to protect, preserve or realize upon the Collateral
and the Administrative Agent's security interest therein, in order to effect the
intent of this Agreement, all as fully and effectively as such Borrower might
do. Each of the Borrowers hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
(a) ADMINISTRATIVE AGENT NOT LIABLE.
The powers conferred on the Administrative Agent
hereunder are solely to protect its interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. The
Administrative Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and
neither it nor any of its officers, directors, employees or
Administrative Agents shall be responsible to the Borrowers for any act
or failure to act, except for its own gross negligence or willful
misconduct.
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(b) PERFORMANCE BY ADMINISTRATIVE AGENT OF THE BORROWERS'
OBLIGATIONS.
If a Borrower fails to perform or comply with any of
its agreements contained herein and an Event of Default shall have
occurred which is continuing and has not been waived in accordance with
Section 14.1 hereof, and the Administrative Agent shall itself perform
or comply, or otherwise cause performance or compliance, with such
agreement, the expenses of the Administrative Agent incurred in
connection with such performance or compliance, together with interest
thereon at the highest rate of interest that would from time to time
apply to any Type of Borrowing under Section 2.14, shall be payable by
such Borrower to the Administrative Agent on demand and upon the
expiration of five (5) calendar days after such demand such Borrower
shall be deemed to have delivered a Deemed Credit Request in the
relevant amounts. The Administrative Agent will notify the Borrower
Representative as soon as it is practicable of any action taken by it
of the nature referred to herein.
14.3 JUDGMENT CURRENCY.
(a) CONVERSION.
If, for the purpose of obtaining judgment in any
court, it is necessary to convert a sum owing hereunder in one currency
into another currency, each party hereto agrees, to the fullest extent
that it may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such
other currency on the Business Day immediately preceding the day on
which final judgment is given.
(b) DISCHARGE.
The obligations of each Borrower in respect of any
sum due to any party hereto or any holder of the obligations owing
hereunder (the "Applicable Creditor") shall, notwithstanding any
judgment in a currency (the "Judgment Currency") other than the
currency in which such sum is stated to be due hereunder (the
"Agreement Currency"), be discharged only to the extent that, on the
Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor
may in accordance with the normal banking procedures in the relevant
jurisdiction purchase the Agreement Currency with the Judgment
Currency; if the amount of the Agreement Currency so purchased is less
than the sum originally due the Applicable Creditor in the Agreement
Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor
against such loss. The obligations of the Borrowers contained in this
Section 14.3 shall survive the termination of this Agreement and the
payment of all other amounts owing hereunder.
(c) COSTS OF CONVERSION.
For purposes of determining the equivalent in one
currency as provided in this section, such amount shall include any
premium and costs payable in connection with the conversion into or
from the Judgment Currency.
14.4 CUMULATIVE PROVISIONS.
Each right, power or privilege specified or referred to in
this Agreement is in addition to and not in limitation of any other rights,
powers and privileges that the
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Administrative Agent and the Banks may otherwise have or acquire by operation of
Law, by other contract or otherwise.
14.5 EFFECTIVE AGREEMENT; BINDING EFFECT.
This Agreement shall become effective on the date and as of
the time (the "Effective Date") on and as of which each of the Borrowers, each
of the Banks, Designated Swing Line Lenders and Designated Letter of Credit
Issuers, and any European Administrative Agents shall have signed a copy hereof
(whether the same or different copies) and, in the case of each of the Borrowers
shall have delivered the same to the Administrative Agent at the address
specified in Section 14.13 or, in the case of the Banks, the Designated Swing
Line Lenders, the Designated Letter of Credit Issuers, and any European
Administrative Agents, shall have given to the Administrative Agent telephonic
(confirmed in writing), written telex or facsimile transmission notice (actually
received) at such office that the same has been signed and mailed to it. As of
the Effective Time, this Agreement shall be binding upon and inure to the
benefit of the Borrowers, the Administrative Agents, the Banks, the Designated
Swing Line Lenders and the Designated Letter of Credit Issuers, and their
respective successors and assigns, except that the Borrowers shall not have the
right to assign its rights hereunder or any interest herein without the prior
unanimous written consent in accordance with Section 14.1 hereof of the
Administrative Agent, the Banks, the Designated Swing Line Lenders and the
Designated Letter of Credit Issuers.
14.6 COSTS AND EXPENSES.
Each of the Borrowers agrees to pay on demand all reasonable
costs and expenses of: (a) the Administrative Agent (including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent) in connection with (i) the preparation, execution,
delivery, administration, modification, amendment and waiver of this Agreement
or the other Loan Documents and (ii) the arrangement on or after the Closing
Date of a syndicate of Banks to purchase a portion of the Commitments (including
travel and administration expenses of the Administrative Agent and Syndication
Agent); provided, however, that the Borrowers shall not be responsible to pay
for any costs or expenses of the Designated Swing Line Lenders, the Designated
Letter of Credit Issuers or the Banks (including, without limitation, the fees
and out-of-pocket expenses of counsel to the Designated Swing Line Lenders, the
Designated Letter of Credit Issuers and the Banks) in connection with any of the
matters specified in clauses (a)(i) and (ii) above and (b) the Administrative
Agent, any other Agent, the Designated Swing Line Lenders, the Designated Letter
of Credit Issuers and the Banks (including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel to the Administrative Agent, such
other Agents, the Designated Swing Line Lenders, the Designated Letter of Credit
Issuers and the Banks) in connection with the enforcement of, the exercise of
remedies under, or the preservation of rights and remedies under this Agreement
or any of the other Loan Documents (including any collection, bankruptcy or
other enforcement proceedings arising with respect to such Borrower, this
Agreement, or any Event of Default under this Agreement).
14.7 SURVIVAL OF PROVISIONS.
All representations and warranties made in or pursuant to this
Agreement shall survive the execution and delivery of this Agreement and of the
Notes. The provisions of Section 12.4 and Section 13 of this Agreement shall
survive the payment of the Obligations and any other Indebtedness owed by the
Borrowers hereunder and the termination of this Agreement (whether by
acceleration or otherwise).
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14.8 CAPTIONS.
The several captions to different Sections and the respective
subsections thereof are inserted for convenience only and shall be ignored in
interpreting the provisions of this Agreement.
14.9 SHARING OF INFORMATION.
Subject to the provisions of Section 12.4, each Bank,
Designated Swing Line Lender and Designated Letter of Credit Issuer shall have
the right to furnish to its Affiliates, its accountants, its employees, its
officers, its directors, its legal counsel, potential participants, and to any
governmental agency having jurisdiction over such Bank, Designated Swing Line
Lender and Designated Letter of Credit Issuer information concerning the
business, financial condition, and property of the Borrowers, the amount of the
Loans of the Borrowers hereunder, and the terms, conditions and other provisions
applicable to the respective parts thereof.
14.10 INTEREST RATE LIMITATION.
Notwithstanding anything herein to the contrary, if at any
time the applicable interest rate, together with all fees and charges that are
treated as interest under applicable law as provided for herein or in any other
document executed in connection herewith, or otherwise contracted for, charged,
taken, received or reserved by any Bank or any Designated Swing Line Lender
shall exceed the maximum lawful rate that may be contracted for, charged, taken,
received or reserved by the Bank in accordance with applicable law (the "Maximum
Lawful Rate"), then so long as the Maximum Lawful Rate would be so exceeded, the
rate of the rate of interest and all such charges payable, contracted for,
charged, taken, received or reserved in respect of the Loans of the Banks or the
Designated Swing Line Lenders to the Borrowers shall be equal to the Maximum
Lawful Rate; provided, that, if any time thereafter the applicable interest
rate, together with all fees and charges that are treated as interest under
applicable law as provided for herein or in any other document executed in
connection herewith, or otherwise contracted for, charged, taken, received or
reserved by the Banks shall be less than the Maximum Lawful Rate, the Borrowers
shall continue to pay such interest and fees hereunder at the Maximum Lawful
Rate until such time as the total interest received by the Administrative Agent
for the benefit of the Banks and the Designated Swing Line Lenders, is equal to
the total interest and fees that would have been received had the interest rate
payable hereunder been (but for the operation of this Section 14.10) the
interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest payable hereunder shall be paid at the rate(s)
of interest and the charges provided in Section 2.13 of this Agreement, unless
and until the rate of interest again exceeds the Maximum Lawful Rate, and at
that time this Section 14.10 shall again apply. In no event shall the total
interest, together with all fees and charges that are treated like interest,
received by any Bank or Designated Swing Line Lender pursuant to the terms
hereof exceed the amount which such Bank or Designated Swing Line Lender could
lawfully have received had the interest and such fees and charges due hereunder
been calculated for the full term hereof at the Maximum Lawful Rate. If,
notwithstanding the provisions of this Section 14.10, a court of competent
jurisdiction shall finally determine that a Bank or Designated Swing Line Lender
has received interest, or fees and charges that are treated like interest,
hereunder in excess of the Maximum Lawful Rate, the Administrative Agent shall,
to the extent permitted by applicable Law, promptly apply such excess to the
principal amounts owing to such Bank or Designated Swing Line Lender and
thereafter shall refund any excess to the Borrowers or as a court of competent
jurisdiction may otherwise order.
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14.11 LIMITATION OF LIABILITY.
To the extent permitted by applicable law, no claim may be
made by the Borrowers, the Administrative Agent, any other Agent, any Designated
Swing Line Lender, any Designated Letter of Credit Issuer, any Bank or any other
Person against the Administrative Agent, any such Designated Swing Line Lender,
Designated Letter of Credit Issuer or Bank, or the Affiliates, directors,
officers, employees, Administrative Agents, attorneys and consultants of any of
them, for any special, indirect, consequential or punitive damages in respect of
any claim for breach of contract or any other theory of liability arising out of
or related to the transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and the Administrative
Agent, the Designated Swing Line Lenders, the Designated Letter of Credit
Issuers, the Borrowers and the Banks hereby waive, release and agree not to xxx
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
14.12 ILLEGALITY.
If any provision in this Agreement or any other Loan Document
shall for any reason be or become illegal, void or unenforceable, that
illegality, voidness or unenforceability shall not affect any other provision.
14.13 NOTICES.
All notices, requests, demands and other communications
provided for hereunder shall be in writing and shall be given solely: (a) by
hand delivery or by overnight courier delivery service, with all charges paid,
(b) by facsimile transmission, if confirmed same day in writing by first class
mail mailed, or (c) by registered or certified mail, postage prepaid and
addressed to the parties. For the purposes of this Agreement, such notices shall
be deemed to be given and received: (i) if by hand or by overnight courier
service, upon actual receipt, (ii) if by facsimile transmission, upon receipt of
machine-generated confirmation of such transmission (and provided the
above-stated written confirmation is sent) or (iii) if by registered or
certified mail, upon the first to occur of actual receipt or the expiration of
48 hours after deposit with the U.S. Postal Service; provided, however, that
notices from the Borrower Representative to Administrative Agent, the Designated
European Administrative Agent the Banks, the Designated Swing Line Lenders or
the Designated Letter of Credit Issuers pursuant to any of the provisions
hereof, including without limitation Section 2 and Section 7.1 of this
Agreement, shall not be effective until actually received by the Administrative
Agent, the Designated European Administrative Agent, the Banks, the Designated
Swing Line Lenders or the Designated Letter of Credit Issuers, as the case may
be. Notices or other communications hereunder shall be addressed, if to the
Borrowers, to the address specified on the signature pages of this Agreement; if
to the Administrative Agent, to the Notice Office of the Administrative Agent
specified on the signature pages of this Agreement; if to any Designated
European Administrative Agent, to the Notice Office of such Designated European
Administrative Agent specified on the signature pages of the joinder agreement
pursuant to which such Designated European Administrative Agent is selected and
becomes a party to this Agreement; if to a Bank, to the Notice Office of such
Bank specified on the signature pages of this Agreement or, if such Bank shall
have become a party hereto pursuant to Section 12.1, in the most recent
Assignment Agreement to which such Bank is a party; if to the Designated Swing
Line Lender, to the Notice Office of such Designated Swing Line Lender specified
on the signature pages of this Agreement and, if to the Designated Letter of
Credit Issuer, to the Notice Office of such Designated Letter of Credit Issuer
specified on the signature pages of this Agreement.
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14.14 GOVERNING LAW.
This Agreement and the other Loan Documents and the respective
rights and obligations of the parties hereto shall be governed by and construed
in accordance with the internal laws of the State of Ohio (without giving effect
to the conflict of laws rules thereof and except to the extent perfection of the
Administrative Agent's security interests and Liens and the effect thereof are
otherwise governed pursuant to the UCC or the applicable Law of any foreign
jurisdiction).
14.15 ENTIRE AGREEMENT.
This Agreement and the other Loan Documents referred to in or
otherwise contemplated by this Agreement set forth the entire agreement of the
parties as to the transactions contemplated by this Agreement.
14.16 JURY TRIAL WAIVER.
EACH OF THE BORROWERS, THE ADMINISTRATIVE AGENT, EACH OF THE
DESIGNATED SWING LINE LENDERS, EACH OF THE DESIGNATED LETTER OF CREDIT ISSUERS
AND EACH OF THE BANKS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE
BORROWERS, THE ADMINISTRATIVE AGENT, THE DESIGNATED SWING LINE LENDERS, THE
DESIGNATED LETTER OF CREDIT ISSUERS AND THE BANKS, OR ANY THEREOF, ARISING OUT
OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED THERETO.
14.17 JURISDICTION.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY OHIO STATE COURT OR FEDERAL COURT OF THE UNITED STATED OF
AMERICA SITTING IN CUYAHOGA COUNTY, OHIO, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES OR ANY LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH OHIO STATE OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT,
THE NOTES OR ANY LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION.
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14.18 VENUE; INCONVENIENT FORUM.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO
SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES OR ANY OTHER LOAN DOCUMENT IN ANY OHIO STATE OR FEDERAL COURT SITTING IN
OHIO. EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT. EACH OF THE BORROWERS CONFIRMS THAT THE
FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.
14.19 EXECUTION IN COUNTERPARTS; EXECUTION BY FACSIMILE.
This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed counterpart
hereof by facsimile shall be effective as manual delivery of such counterpart;
provided, however, that, each party hereto will promptly thereafter deliver
counterpart originals of such counterpart facsimiles delivered by or on behalf
of such party.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or Administrative Agents thereunto duly
authorized, as of the date first above written.
INSTRON CORPORATION
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Xxxx X. Xxxxxxx, Vice President
ADDRESS FOR NOTICES:
Instron Corporation
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Kirtland Capital Partners III L.P.
0000 XXX Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
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INSTRON, LTD.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx, Duly Authorized Attorney
ADDRESS FOR NOTICES:
Instron Corporation, as Borrower Representative
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Instron, Ltd.
Xxxxxxxxxx Xxxx
Xxxx Xxxxxxx
Xxxxx, XX00 0XX
Xxxxxx Xxxxxxx
Attention: Managing Director
Telephone: 00-0000-000-000
Telecopy: 44-1494-456-123
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INSTRON XXXXXXX TESTING SYSTEMS, GMBH
By: /s/Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx, Duly Authorized Attorney
ADDRESS FOR NOTICES:
Instron Corporation, as Borrower Representative
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Instron Xxxxxxx Testing Systems, GmbH
Xxxxxxxxxxxxxxx 00
Xxxxxxxxx X00000
Xxxxxxx Xxxxxxxx of Germany
Attention: ________________
Telephone: _______________
Telecopy: ________________
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INSTRON XXXXXXX GMBH
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx, Duly Authorized Attorney
ADDRESS FOR NOTICES:
Instron Corporation, as Borrower Representative
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Instron Xxxxxxx GmbH
Xxxxxxxxxxxxxxx 00
Darmstadt D64293
Federal Republic of Germany
Attention: Managing Director
Telephone: 00-00-0000-000-000
Telecopy: 49-69-6151-324-900
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THE ADMINISTRATIVE AGENT
NATIONAL CITY BANK, as Administrative Agent
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Xxxxxx X. Xxxxx, Senior Vice President
PAYMENT OFFICE:
National City Bank, as Administrative Agent
National City Bank, Administrative Agent Services
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxx Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy (000)-000-0000
NOTICE OFFICE:
National City Bank, as Administrative Agent
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx, SVP.
Telephone (000) 000-0000
Telecopy: (000) 000-0000
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NATIONAL CITY BANK, as the Designated
U.S. Letter of Credit Issuer
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Xxxxxx X. Xxxxx, Senior Vice President
LENDING OFFICE:
National City Bank, as the Designated U.S. Letter
of Credit Issuer
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxx Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy (000)-000-0000
NOTICE OFFICE:
National City Bank, as the Designated U.S. Letter
of Credit Issuer
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx, SVP.
Telephone (000) 000-0000
Telecopy: (000) 000-0000
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THE BANKS
NATIONAL CITY BANK, as a Bank
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx, Senior Vice President
LENDING OFFICE:
National City Bank, as a Bank
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxx Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy (000)-000-0000
NOTICE OFFICE:
National City Bank, as a Bank
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx, SVP.
Telephone (000) 000-0000
Telecopy: (000) 000-0000
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143
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144
ANNEX I
TO
CREDIT AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 29, 1999,
AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT (AND THE DESIGNATED EUROPEAN
ADMINISTRATIVE AGENTS, THE BANKS, THE DESIGNATED SWING LINE LENDERS AND THE
DESIGNATED LETTER OF CREDIT ISSUERS, AS DESIGNATED HEREUNDER)
REVOLVING CREDIT COMMITMENTS AND PERCENTAGES OF THE BANKS
Bank Revolving Credit Percentage Term Loan Commitment Percentage Total
Commitment
National City Bank $50,000,000 100% $30,000,000 100% 100%
Totals: $50,000,000 100% $30,000,000 100% $80,000,000
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145
ANNEX II
TO
CREDIT AND SECURITY AGREEMENT
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"ACCOUNTS" means "accounts" (as defined in the UCC) including,
without limitation, all present and future rights to payment for goods
sold or leased or for services rendered, which are not evidenced by
Instruments or Chattel Paper, and whether or not they have been earned
by performance.
"ACCOUNT DEBTOR" means any Person who is or becomes obligated
to a Borrower under, with respect to, or on account of an Account.
"ACCUMULATED FUNDING DEFICIENCY" has the meaning ascribed
thereto in section 302(a)(2) of ERISA.
"ACQUISITION" means and includes (i) any acquisition on a
going concern basis (whether by purchase, lease or otherwise) of any
facility and/or business operated by a Person which is not a Subsidiary
of a Borrower and (ii) any acquisition of all or a majority interest in
the outstanding equity or other similar interests in any corporate
Person or limited liability company Person (whether by merger, stock
purchase, creation of a corporate joint venture or otherwise).
"ACQUISITION COMPANY" means ISN Acquisition Corporation, a
Massachusetts corporation.
"ADDITIONAL BORROWER ADDENDUM" means the Additional Borrower
Addendum , the form of which is set forth as Annex V to this Agreement,
whereby a signatory thereto becomes Borrower hereunder pursuant to
Section 1.4 of this Agreement.
"ADMINISTRATIVE AGENT" means National City Bank, a national
banking association, in its capacity as Administrative Agent for the
Banks, each Designated Swing Line Lender, each Designated Letter of
Credit Issuer and any Designated Hedge Creditor.
"ADVANTAGE" means any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other Indebtedness or
otherwise) received by a Bank in respect of the Obligations if the
payment results in any other Bank's having more than its Ratable
Portion of the Obligations in question.
"AFFILIATE" means, with respect to a specified Person, any
other Person: (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with such specified Person, (b) which beneficially owns or
holds with power to vote five percent (5%) or more of any class of the
voting stock of such specified Person, (c) five percent (5%) or more of
the voting stock of which other Person is beneficially owned or held by
such specified Person, or (d) who is an executive officer or director
of such specified Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
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"AGENTS" means any and all of the Administrative Agent, any
Designated European Administrative Agent and the Syndication Agent.
"AGENT FEE LETTER" means that certain letter executed by the
Borrowers and the Administrative Agent, dated May 3, 1999.
"AGGREGATE SWING LINE COMMITMENT" has the meaning specified in
Section 2.7(a) of this Agreement.
"AGREEMENT" means this Credit and Security Agreement and each
amendment, supplement or modification, if any, to this Credit and
Security Agreement.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the higher of: (a) the rate of interest which is established
from time to time by NCB at its principal office in Cleveland, Ohio as
its "prime rate" or "base rate" in effect, such rate to be adjusted
automatically, without notice, as of the opening of business on the
effective date of any change in such rate (it being agreed that: (i)
such rate is not necessarily the lowest rate of interest then available
from NCB on fluctuating rate loans and (ii) such rate may be
established by NCB by public announcement or otherwise) and (b) the
Federal Funds Effective Rate in effect on such day plus one half of one
percent (1/2 of 1%) per annum.
"ALTERNATE BASE RATE LOAN" means a Loan, denominated in
Dollars, which bears interest as provided in Section 2.13(a)(i) of this
Agreement.
"ALTERNATE BASE RATE BORROWING" means a Borrowing consisting
of Alternate Base Rate Loans.
"ALTERNATE CURRENCY" means and includes:
(i) German Marks, Pounds Sterling and Euros, if at the
time of any Credit Request applicable thereto, such
currency is readily and freely transferable and
convertible into Dollars; and
(ii) any other lawful currency other than Dollars which at
the time of any Credit Request applicable thereto is
readily and freely transferable and convertible into
Dollars and which (A) in the case of any Revolving
Loans to be denominated in such Alternate Currency,
is acceptable to all of the Banks with Revolving
Credit Commitments, (B) in the case of any Swing Line
Loans to be denominated in such Alternate Currency,
is acceptable to the applicable Designated Swing Line
Lender and all of the Banks, and (C) in the case of
any Letter of Credit which is payable in such
Alternate Currency, is acceptable to applicable
Designated Letter of Credit Issuer and all of the
Banks.
"ALTERNATE CURRENCY LC EXPOSURE" means, with respect to any
Bank, at any time of determination, such Bank's Ratable Portion of the
sum of: (a) the aggregate undrawn amount of all Letters of Credit
outstanding at such time that are issued in Alternate Currency
denominations, plus (b) the aggregate amount that has been drawn under
such Letters of Credit issued in Alternate Currency denominations for
which the applicable Designated Letter of Credit Issuer or the Banks,
as the case may be, have not at such time been reimbursed by the
Borrower.
"ALTERNATE CURRENCY SWING LINE EXPOSURE" means, with respect
to any Bank, at any time of determination, such Bank's Ratable Portion
of the aggregate principal
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147
amount of Swing Line Loans denominated in Alternate Currencies
outstanding at such time that have been advanced by all of the
Designated Swing Line Lenders to all of the Borrowers
"ALTERNATE CURRENCY SUBLIMIT" has the meaning specified in
Section 2.1(a).
"APPLICABLE FEE PERCENTAGE" means, (a) from the Closing Date
until April 1, 2000, a percentage equal to (i) 3.00% per annum with
respect to the risk participation fee payable on outstanding Letters of
Credit under Section 2.16(d)(i), and (ii) 0.50% per annum with respect
to the unused commitment fee payable under Section 2.16(c), and (b)
with respect to any Fee Percentage Adjustment Date commencing on and
after April 1, 2000, the applicable percentage corresponding to the
Consolidated Total Funded Debt to Adjusted EBITDA Ratio set forth below
(determined on the basis of the Consolidated Total Funded Debt to
Adjusted EBITDA Ratio for the Testing Period ending on the Fee
Percentage Determination Date applicable to such Fee Percentage
Adjustment Date):
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Consolidated Total Applicable Unused Applicable Letter
Funded Debt to Commitment Fee of Credit Fee
Adjusted EBITDA Ratio Percentage Percentage
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> 3.75 to 1 0.500% 3.00%
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> 3.00 to 1 but 0.50% 2.75%
3.75 to 1 3.00% 1.50%
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> 3.00 to 1 but 2.75% 1.25%
